Cairn To Declare Poll Results On Sept 14

[LesCrozes]

AUGUST 18, 2011, 6:06 A.M. ET
Cairn To Declare Poll Results On Government Conditions For Stake Sale Sept 14

MUMBAI (Dow Jones)--The India unit of Cairn Energy PLC (CRNCY) said Thursday it will announce Sept. 14 the results of a postal ballot of its shareholders on certain conditions set by the federal government about the proposal to sell a majority stake in the unit to London-listed miner Vedanta Resources Ltd. (VED.LN).

The Indian government approved June 30 Cairn Energy's proposal to sell the stake in Cairn India Ltd. (532792.BY) with conditions that the companies must agree to bearing a part of the royalty on crude output from a key block in the northwestern state of Rajasthan and withdraw arbitration against the government on tax on crude sales.

Currently, despite holding only a 30% stake in the Rajasthan block, state-run Oil & Natural Gas Corp. (500312.BY) pays the entire royalty on crude production from the block under old Indian laws to attract foreign investment in the hydrocarbon sector. The government wants the royalty to be recovered from revenue generated from the sale of crude oil.

Cairn Energy currently has a 52.2% stake in the India unit while Vedanta holds about 28.5%.

Bill Gammell, chairman of Cairn India, said in a prepared speech at an annual general meeting of shareholders that the company and ONGC are currently producing 125,000 barrels of oil a day from the Rajasthan block and have approved field development plans to produce up to 175,000 barrels a day.

-By Eric Yep and Santanu Choudhury, Dow Jones Newswires; +91-11-4356-3305; santanu.choudhury@dowjones.com