Cairn Energy struck a confident note on the Vedanta deal, telling the investor community that the final stages of the approval process could be wrapped up as early as next month.

“With a fair wind we could have them in place by the end of September,” Ms Jann Brown, Managing Director and Chief Finance Officer, Cairn Energy, told analysts on a conference call as the company published its half-year results.

However, the company confirmed the net value of the deal to be at $5.4 billion — $1.4 billion for the 10 per cent tranche and $4 billion for the second 30 per cent. It is substantially less than the $8 billion it had previously anticipated.

The results of the Cairn India shareholder vote on whether or not to accept the Indian government's conditions on cess and royalty are due on September 14, though the results determined by a simple majority are a foregone conclusion. Cairn Energy, which holds a 52 per cent stake in Cairn India, confirmed on Tuesday that it had voted to accept conditions. The next step is the receipt of a no-objection certificate from ONGC, which it has requested to receive on September 21.

The Indian government has imposed a 30-day deadline on gaining the necessary consents and approvals but Ms Brown said the company had applied for an extension formally, and had had informal indications that it would not be an issue. “But we have learnt not to make predictions,” added Ms Brown, who took over as Managing Director during the major overhaul of top management in June, when Mr Simon Thomson took over as CEO, replacing Sir Bill Gammell.

H1 revenue rises

It came as Cairn Energy reported that group revenue rose to $1.3 billion in the first half of 2011 against $333 million in the same period the year before, largely as a result of increased production in Rajasthan, which doubled its gross field production to 166,527 barrels of oil equivalent a day. The Mangala field currently produces 125,000 barrels of oil a day, and Bhagyam is scheduled to begin production in the last quarter of this year. The sale of the 40 per cent stake in Cairn India would allow the company to return “substantial funds” to shareholders, Ms Brown said, as well as an opportunity to re-shape its future.

The company is already beginning to look beyond the Vedanta transaction. On Tuesday, it announced that it has formed a consortium to bid for gas exploration rights off the coast of Lebanon as it tries to diversify its portfolio beyond Greenland, where it is the largest acreage holder.

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