Episode du 9/03 = c'est pour la semaine prochaine
Posté: Mer 9 Mar 2011 12:00Energy
9 MAR, 2011, 02.41PM IST,PTI
Cabinet nod for Cairn-Vedanta deal likely soon
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Read more on »vedanta resources|united kingdom|psc|product recall|product issues|ongc|noc|london|ccea|cairn india ltd.|cairn energy plc . oil ministry|cabinet committee on economic affairs
Oil And Natural Gas Corporation Ltd.
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Vol:305678 shares traded
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Vol:4297416 shares traded
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NEW DELHI: The Cabinet is likely to consider giving approval to the Vedanta Resources' USD 9.6 billion buyout of Cairn India next week, officials said.
"Comments on the draft note that oil ministry circulated last month have not been received from all the ministries. A couple of ministries are yet to give their comments," an official with direct knowledge of the matter said.
Oil ministry will move Cabinet Committee on Economic Affairs (CCEA) once comments from ministries of finance, law, home, environment and corporate affairs are received.
In all probability, the CCEA is likely to give an in- principal nod to the deal where London-based mining group Vedanta, which has no prior experience in oil sector, is buying up to 51 per cent stake of UK's Cairn Energy Plc.
Oil Ministry has watered down its preconditions and has almost withdrawn its contention that Rs 21,802 crore in royalty and cess paid by ONGC on behalf of Cairn India from the Rajasthan oilfields should be equitably shared.
"In January, the Oil Ministry wanted the Cabinet to give its nod only after Cairn India agrees to equitable sharing of royalty and paying its share of cess," an official said.
"However, in the note that was finally circulated, the Oil Ministry has given an alternative that it will continue to legally pursue equitable sharing of royalty and cess, but will not make it a precondition for approval of the deal," he said.
The note lists two alternatives. In the first, it lists out five preconditions, instead of the 11 it had originally proposed to Cairn/Vedanta in January.
The five preconditions include royalty being made cost-recoverable, Cairn India withdrawing arbitration disputing its liability to pay cess, Cairn India obtaining partner ONGC's no-objection and Vedanta providing performance and financial guarantees, another official said.
As an alternative to the precondition of royalty and cess, the ministry has suggested that government shall pursue all legal recourse for establishing its rights under the Production Sharing Contract (PSC) in the case of cess. On royalty, it shall take appropriate decision to enforce the provisions of PSC to make royalty cost-recoverable.
Sources said it was unlikely that the Cabinet will go with the first option when an easier and least controversial option has been given in the second.
But the condition that Cairn India will have to obtain no objection certificate ( NOC )) from its partner Oil and Natural Gas Corp (ONGC) has been retained, an official said.
ONGC holds a stake in eight out of 10 properties held by Cairn India. The ministry is of the view that the change of control of Cairn India amounts to an indirect assignment or transfer of participating interest in the blocks so, there is a need for the government as well as the partner's nod.
9 MAR, 2011, 02.41PM IST,PTI
Cabinet nod for Cairn-Vedanta deal likely soon
StoryComments
Read more on »vedanta resources|united kingdom|psc|product recall|product issues|ongc|noc|london|ccea|cairn india ltd.|cairn energy plc . oil ministry|cabinet committee on economic affairs
Oil And Natural Gas Corporation Ltd.
BSE
271.10
-00.17%-00.45
Vol:305678 shares traded
NSE
271.20
-00.39%-01.05
Vol:4297416 shares traded
Prices|Financials|Company Info|Reports
NEW DELHI: The Cabinet is likely to consider giving approval to the Vedanta Resources' USD 9.6 billion buyout of Cairn India next week, officials said.
"Comments on the draft note that oil ministry circulated last month have not been received from all the ministries. A couple of ministries are yet to give their comments," an official with direct knowledge of the matter said.
Oil ministry will move Cabinet Committee on Economic Affairs (CCEA) once comments from ministries of finance, law, home, environment and corporate affairs are received.
In all probability, the CCEA is likely to give an in- principal nod to the deal where London-based mining group Vedanta, which has no prior experience in oil sector, is buying up to 51 per cent stake of UK's Cairn Energy Plc.
Oil Ministry has watered down its preconditions and has almost withdrawn its contention that Rs 21,802 crore in royalty and cess paid by ONGC on behalf of Cairn India from the Rajasthan oilfields should be equitably shared.
"In January, the Oil Ministry wanted the Cabinet to give its nod only after Cairn India agrees to equitable sharing of royalty and paying its share of cess," an official said.
"However, in the note that was finally circulated, the Oil Ministry has given an alternative that it will continue to legally pursue equitable sharing of royalty and cess, but will not make it a precondition for approval of the deal," he said.
The note lists two alternatives. In the first, it lists out five preconditions, instead of the 11 it had originally proposed to Cairn/Vedanta in January.
The five preconditions include royalty being made cost-recoverable, Cairn India withdrawing arbitration disputing its liability to pay cess, Cairn India obtaining partner ONGC's no-objection and Vedanta providing performance and financial guarantees, another official said.
As an alternative to the precondition of royalty and cess, the ministry has suggested that government shall pursue all legal recourse for establishing its rights under the Production Sharing Contract (PSC) in the case of cess. On royalty, it shall take appropriate decision to enforce the provisions of PSC to make royalty cost-recoverable.
Sources said it was unlikely that the Cabinet will go with the first option when an easier and least controversial option has been given in the second.
But the condition that Cairn India will have to obtain no objection certificate ( NOC )) from its partner Oil and Natural Gas Corp (ONGC) has been retained, an official said.
ONGC holds a stake in eight out of 10 properties held by Cairn India. The ministry is of the view that the change of control of Cairn India amounts to an indirect assignment or transfer of participating interest in the blocks so, there is a need for the government as well as the partner's nod.