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[phili675]

Cairn Vedanta file sent to Cabinet: Jaipal Reddy
Submitted by Prashant Duggal on Mon,

06/20/2011 - 16:52

Petroleum minister Jaipal Reddy has said that the file of the Cairn-Vedanta deal has been sent to the Cabinet for approval.

"The group of ministers have given their recommendation.. What the recommendation is, I cannot tell you. But it has been sent to the Cabinet for its final decision.. It has gone to the Cabinet," he said.

His statement implies that the $10 billion acquisition of India's biggest private sector oil producer -- Cairn India -- by the London-based Vedanta Resources, may get a red or green signal this week or during the next one.

The deal has been caught in the red tape of the oil ministry for several months after officials in the ministry expressed consternation about not being told in advance about the deal and its negotiations. They also claimed that the deal was not in India's interest etc..

[OlaV Ouafouaf]

The deal has been caught in the red tape of the oil ministry for several months after officials in the ministry expressed consternation about not being told in advance about the deal and its negotiations. They also claimed that the deal was not in India's interest etc..

Je sens que l'accord ne sera pas favorable à Ved, et qu'il devra se retourner contre Cairn (india ou energy) pour baisser le prix d'achat.

[frédéric]

The Cabinet Committee on Economic Affairs (CCEA) may this week consider giving nod to Vedanta Resources’ USD 9.4 billion takeover of Cairn India after imposing stringent conditions.

Oil Minister Jaipal Reddy said the CCEA, chaired by Prime Minister Manmohan Singh, may meet this week to consider giving the government nod based on recommendations of a Group of Ministers (GoM) that went into the issue of granting approval to Cairn India’s parent firm, Cairn Energy, selling its stake to Vedanta.

“It is my attempt to take it to the Cabinet this week,” he told reporters. The GoM headed by Finance Minister Pranab Mukherjee had on May 27 suggested the government nod only if Cairn or its successor agrees to bear a portion of royalty payable on its mainstay Rajasthan oil fields and also accepts its liability to pay cess on the oil produced. If imposed, these conditions will materially affect the deal.

Sources said the GoM wants Cairn or its successor to agree to make royalties paid by state-owned Oil and Natural Gas Corp (ONGC) on its most important Rajasthan oilfields cost recoverable from oil sales.

ONGC owns 30 per cent interest in the Rajasthan oilfields, but has to pay royalty at the rate of 20 per cent of the crude oil price realised on all of the 240,000 barrels per day of peak output expected from the fields.

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