Oil Min retains option

[bingogo]

Ignoring the Solicitor General’s opinion, the Petroleum Ministry has retained the option of approving the Cairn-Vedanta deal without insisting on equitable sharing of royalty payments between Oil & Natural Gas Corp (ONGC) and Vedanta Resources.

Solicitor General Gopal Subramanium’s legal view is categorical that the transfer of Cairn India shares to Vedanta be allowed only if the latter agrees to treat the royalty paid by ONGC in Rajasthan block as a cost recoverable from its revenue.

“If the competent authority does accord its consent to the transfer of participating interest from Cairn to Vedanta, the same should be granted subject to the stipulation/condition regarding the recoverability of the cost of the royalty,” he wrote on March 24 after the ministry sought his opinion.

Ads by Google

“…Vedanta must be asked to agree to the stand of the government of India and ONGC regarding the same as a pre-condition for transfer of participating interest (from Cairn to Vedanta),” he added.

However, the ministry’s Cabinet note retains the second option of approving the share transfer following which the ministry “shall pursue all legal recourses for establishing its rights under the PSC in the case of cess” and “take appropriate decision to enforce the provisions of the PSC in case of cost recovery of royalty by ONGC”