Cairn Energy says extends deadline for Indian deal

19th May 2011, Comments 0 comments

Scottish oil and gas explorer Cairn Energy said on Thursday it had extended the deadline to sell a majority stake in its Indian unit to rival Vedanta, pending approval from the Indian government.

"The two companies have agreed to extend the closing date of their sale and purchase agreement in order to secure the necessary consents and approvals from the Government of India to complete the transaction," Cairn said.

However, Cairn did not specify a new date in its statement. The original deadline had been due to expire on Friday.

"Cairn has been informed that the Government of India Cabinet Committee on Economic Affairs, which met on 6 April 2011 to discuss the Cairn Vedanta transaction, has referred the matter to a Group of Ministers (GoM). The GoM has not yet met," the British company added on Thursday.

Back in August 2010, London-listed Vedanta announced that it would buy up to 60 percent of Cairn India for $9.6 billion, adding to its assets that already include aluminium, copper, iron ore and zinc mines.

But the deal ran into problems because India wanted to set conditions before allowing Vedanta to assume control over Cairn India, whose biggest holding is the Mangala deposit in Rajasthan -- the country's largest onshore oil field.

"Completion of the sale of Cairn Energy PLC's 40-percent shareholding in Cairn India to Vedanta is awaiting Government of India approval," Cairn added on Thursday.

"Following completion Cairn's residual holding would be approximately 22 percent in Cairn India."

The Edinburgh-based group also revealed on Thursday that it had the green light for its plans to drill up to four exploration wells off the coast of Greenland this summer.

"Approval has been received from the Greenland Government for the 2011 exploration programme offshore Greenland. Cairn plans to drill up to four wells this summer season."

Cairn added in a trading update that its first-quarter production stood at 161,194 barrels of oil equivalent per day (boepd).

© 2011 AFP

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