Cairn can’t set deadlines for government: Reddy
18 Feb 2011
Petroleum minister Jaipal Reddy today said that while the government will expedite a decision on the Cairn-Vedanta deal, it can't follow any deadline set by Cairn Energy PLC for approving a proposal of the Edinburgh-based explorer to sell a controlling stake in its local unit Cairn India to Vedanta Resources PLC for about $9.6-billion.
The deal, which has a shareholders' deadline of 15 April, has had a roller-coaster ride for about six months since it was announced in August, largely because of a tussle between Cairn and state-owned Oil & Natural Gas Commission, which has a 30 per cent interest in the block, over royalty costs.
Oil ministry officials said Cairn had requested the government earlier this month that a decision should be taken by 20 February and some reports said the company had written to the government this week to reiterate its view.
The company also needs time for the mandatory open offer before the transaction is completed.
Earlier this week, Reddy told reporters at Panipat that his ministry would take the matter to the cabinet in two to three weeks after seeking opinions of the finance and law ministries as well as the corporate affairs ministry, which is currently headed by former petroleum minister Murli Deora.
Reddy also endorsed ONGC's position that Cairn must share a part of the royalty burden.
