Cairn hasn’t sought, and finds no need for, Vedanta deal nod

Cairn India has not sought regulatory approval for its deal with Vedanta Resources, contrary to claims by unnamed oil ministry officials, according to sources in the know.

Ministry officials, including petroleum secretary S Sundareshan, have maintained that Cairn India requires their approval for changing its majority owner from London-based Cairn Energy to Vedanta Resources, based in the same city.

According to company sources, the deal does not need the approval of the oil ministry any more than an acquisition of a soap company would need the approval of the ministry of chemicals and fertilisers, nor has Cairn sought any such approval.

However, the oil ministry had soon shot off a letter to Cairn seeking clarifications about the deal after Bill Gammell, the chairman of Cairn Energy, personally apprised the ministry of its plans.

Cairn, however, is yet to reply to the ministry’s letter. “They have not yet come back,” said oil minister Murli Deora, when quizzed about whether the ministry was scrutinising the $9 billion deal.

“We have asked the company for clarification and an explanation of the production sharing contract,” he added.

In contrast, the oil secretary had said that the deal would need the approval of the government, soon after Vedanta announced it was taking a controlling stake in Cairn’s Indian subsidiary.

Sundareshan had also suggested that the state-owned oil producer, Oil and Natural Gas Corp (ONGC) might be encouraged to put in a counter bid to Vedanta’s.

Deora, however, said the government has not made any decision on a counter bid by ONGC.

ONGC chairman R S Sharma recently said the decision on a counter bid would be made on commercial merit and “we won’t be swayed by emotions”.