Not delaying Cairn deal, says oilmin

The petroleum ministry has once again put the ball in Cairn Energy's court over the delay in the proposed US $9.6-billion deal with Vedanta Resources over which British Prime Minister David Cameron had shot off a letter to Indian Prime Minister Manmohan Singh.

Cameron had stated in his letter that "unexpected regulatory hurdles" were delaying the deal that the Indian subsidiary of the UK company had struck with Anil Aggarwal-run Vedanta Resources for the majority stake sale in the Rajasthan oilfield and some oil and gas exploration blocks.

The petroleum ministry, however, has informed the Prime Minister's Office (PMO) that the delay has occurred because Cairn Energy India had applied for the mandatory clearances a good three months after it had announced the deal.

Cairn Energy faces unexpected regulatory hurdles, which are causing delay and could block the deal entirely (which is very time sensitive), thus preventing Cairn investors from legitimately exiting the market, Cameron had stated in his letter to the Indian PM. The ministry is reported to have pointed out that the applications came in only in end-November, 2010, which was more than three months after the deal was announced on August 16.

It was also pointed out that under the terms of the production sharing contracts (PSC) signed by Cairn and its units, it was mandatory for them to take prior permission from the Indian government for the proposed stake transfer.

Courtesy: Mail Today