Vedanta, Cairn guarded on takeover nod
Vedanta Resources PLC and Cairn Energy have responded noncommittally to a June 30 report by the Indian government of conditional approval of Vedanta’s acquisition of a controlling interest in Cairn India Ltd.
By OGJ editors
HOUSTON, July 1 -- Vedanta Resources PLC and Cairn Energy have responded noncommittally to a June 30 report by the Indian government of conditional approval of Vedanta’s acquisition of a controlling interest in Cairn India Ltd.
Vedanta, a mining conglomerate based in London, offered in August 2010 to buy up to 60% of Cairn India for $9.6 billion and has since bought minority interests (OGJ, Apr. 25, 2011, Newsletter). Cairn India holds several exploration and production licenses in India and is developing a complex of fields in Rajasthan with production climbing toward an approved peak of 175,000 b/d.
The deal has been complicated by a dispute over handling of royalty payments in the Rajasthan operation by state-owned Oil & Natural Gas Corp., a 30% partner.
On June 30, the Ministry of Petroleum and Natural Gas reported that the Cabinet Committee on Economic Affairs approved the transaction subject to several conditions, including approval by ONGC, settlement of the royalty dispute in favor of ONGC, and withdrawal of an arbitration case over the proposal.
“Cairn has not yet received formal confirmation of any conditions or of further consents attaching to the approval,” Cairn Energy, Edinburgh, said in a statement. “Cairn and Vedanta continue to work towards concluding this transaction.”
Vedanta said, “Vedanta awaits official intimation of the approval and details of the preconditions from the government of India in order to consider further course of action.”