Companies

ONGC's ‘rights' will dominate Ministry's meeting with Cairn, Vedanta

Richa Mishra New Delhi | Updated on February 05, 2011

Off-shore oil rigs of ONGC Sagar Shakti.(file photo)





The issue of ONGC's contractual rights is likely to dominate the meeting convened by the Petroleum Ministry on Sunday with managements of Cairn Energy plc and Vedanta Resources.

Cairn could be asked to define “first right of refusal” with reference to the three pre-NELP blocks, including the prolific Rajasthan fields where ONGC is its partner, sources in the know said.

ONGC has been maintaining that it has contractual rights on the fields, whereas Cairn has been stating that ONGC does not enjoy any pre-emptive rights.

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.

The Petroleum Ministry is also likely to ask Vedanta to prove its capability as a hydrocarbon major, sources told Business Line.

Vedanta will be expected to reaffirm that it will take over or replace the financial and performance guarantees provided by Cairn Energy in accordance with the production sharing contracts. Discussion is likely on the royalty issue raised by ONGC and the Government is expected to back the company.

Published on February 05, 2011

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