Oil and Natural Gas Corp (ONGC) chairman R. S. Sharma said on Thursday that the firm had "consciously decided" not to put a bid against Vendanta Resources for the Cairn India- operated Rajasthan oilfields, as it was fully aware of its legal rights and commercial interests.
ONGC owns a 30 per cent share in the Rajasthan oilfield and claimed it has the right of first refusal in case of any sale of assets by Cairn India.
"The counter- offer date has gone (September 7). If ONGC did not make an offer it has consciously not done it," Sharma said at a press conference after the company's annual general meeting (AGM.) "That has been a conscious decision considering all legal and commercial aspects & the interest of the firm.
ONGC has acted in a responsible manner when it did not put in a counteroffer," he added.
He said, "ONGC has intervened and asked Cairn Energy for clarifications.
When we get them we will act." According to Sharma, not putting in a counteroffer does not mean that ONGC has abdicated its right of first refusal for the Rajasthan oilfield and other Cairn India assets.
He added that the ONGC management was considering the legalities and commercial aspects from all angles and was taking a holistic view of the company's rights and responsibilities.
"We will act appropriately at the appropriate time," he said.
ONGC has 30 to 40 per cent stake in Cairn India's three producing assets, which include the Rajasthan oilfields, the Ravva oil and gas field in the eastern offshore KG basin and the CB/ OS- 2 oil & gas fields in Gujarat.
Sharma added, ONGC is not a passive spectator to the proposed $ 8.8- billion deal between Cairn India and Vedanta Resources for the majority stake sale in the Rajasthan oilfield.
"We have done a thorough evaluation of the Rajasthan oilfield.
Since, we have the in- house expertise we do not need the help of merchant bankers to evaluate hydrocarbon assets," he said.
However, Sharma said he could not divulge much on the issue as any loose statement could have very serious legal implications.
Cairn Energy chief executive officer (CEO) Bill Gammel has been on the backfoot since the news of his proposed deal with Vedanta was leaked to the press before it informed ONGC or the Indian government about it.
Although ONGC has a 30 per cent share in the Rajasthan oilfield it has been paying the entire royalty and taxes on the oil that is produced. ONGC's outgo on this account would go up to $ 2 billion through the entire life of the field.
Sharma said the government has assured that ONGC would get its money back. The process has been initiated, he added.
London- listed Vedanta Resources has offered to buy 40- 51 per cent stake in Cairn India from its parent Cairn Energy Plc of UK. It is making a further open offer for another 30 per cent stake.