India’s Oil & Natural Gas Corporation makes new info call on Vedanta deal
India’s Oil & Natural Gas Corporation (ONGC) has again said Cairn Energy needs its consent to sell a controlling stake of its Indian unit to Vedanta Resources and asked the UK-based player to provide further information on the proposed sale.
Aleya Begum – In a statement to the Bombay Stock Exchange today, ONGC said it has asked Cairn to provide it with details of Vedanta’s “financial strength, technical capability, and past experience in the field of oil and gas”.
Cairn India holds stakes in 10 oil and gas blocks in India. It will need to get clearance from the Indian government on all the blocks before being able to go ahead with the deal.
Its key asset is the RJ-ON-90/1 oil block in Barmer in the northwestern state of Rajasthan, where it holds a 70% stake. ONGC holds the remaining 30%.
On 30 August, ONGC said the Cairn-Vedanta deal needed its consent and that it held pre-emptive rights over the blocks it jointly holds with Cairn India.
However, on 11 October, Cairn Energy chief executive Bill Gammell said that while ONGC has pre-emptive rights over the transfer of assets by Cairn India, it does not have any such rights in case of a stake sale in the company.
Today’s statement adds requests for information on Vedanta’s capabilities to previous requests for full details of the agreement.
“Cairn has always said that we will take the necessary consents and approvals and work in a consensual way to process this transaction,” a Cairn spokesperson said.
The deal, which could reach up to $9.6 billion, would be Vedanta Resources first move into the energy sector.