A meeting convened by the Petroleum Ministry with the management of Cairn Energy Plc and Vedanta Resources on Sunday to sort out the issues that are threatening the Cairn-Vedanta stake sale proposal remained inconclusive.

Some of the contentious issues included contractual rights of ONGC, royalty payment by ONGC, and Vedanta giving an undertaking that any future decisions by the Government will be final and binding and cannot be challenged. Sources in the know told Business Line that another round of meeting is expected on Monday.

The Petroleum Secretary, Mr S. Sundareshan, terming it as an “extremely constructive meeting” told newspersons that “We discussed several issues in a positive framework and hope to move forward and find a solution soon.”

Asked how soon the deal is expected to be sealed or has the Ministry given any timeline to Cairn-Vedanta to come back with their responses raised in Sunday's meeting, he said, “…will take the next step as necessary.”

In a separate statement, Cairn Energy said that “constructive discussion on the Cairn-Vedanta transaction took place with the Ministry of Petroleum and Natural Gas and the Director-General Hydrocarbons (DGH).”

It also said that “Cairn and Vedanta continue to work with the Indian Government to complete the proposed transaction before April 15, 2011”.

Cairn Energy is selling maximum of 51 per cent stake in its Indian arm, Cairn India Ltd, to Vedanta Resources for up to $8.48 billion.

Public sector ONGC, which is a joint venture partner in Cairn's three producing assets in India, had earlier said it will not exercise its pre-emptive rights for the deal. However, it wants the Government to resolve the issue of royalty, which it pays on behalf of Cairn for the prolific Rajasthan oil fields.

Related Topics
comment COMMENT NOW