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Cairn seek Centre's approval for Vedanta deal
By siliconindia
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Wednesday, 25 August 2010, 15:27 IST
Bangalore: Cairn Energy, the UK-based company announced that it would seek government's 'endorsement and consent' for selling its majority stake in Cairn India to Vedanta Resources for $8.48 billion.
"For the Vedanta transaction, we will seek the Centre's endorsement and any necessary consent," said Cairn Energy Chief Executive Bill Gammell. "We continue to work closely with the Indian government, with whom we have built an enduring partnership, throughout this process."
Cairn India holds 70 percent operator interest in the 6.5 billion barrels Rajasthan block that is at the centre of its parent Cairn Energy's deal with Vedanta. Oil and Natural Gas Corporation (ONGC), which has 30 percent interest in the Rajasthan block, is of the view that it has the right of first refusal to buy Cairn India in case the company's ownership changed. The Mangala field, the biggest in the Rajasthan block, is producing 1.25 lakh barrels of oil a day.
The partial disposal of equity shares would allow Cairn Energy to focus on other areas with material growth potential, including its acreage offshore Greenland."Subject to government approval and further investment, the Rajasthan block has the potential to produce at least 2.40 lakh bpd," Gammell added.