India state oil firms plan no counterbid for Cairn: report

25th August 2010, Comments 0 comments

India's state-run fuel companies do not plan to bid for Indian oil assets owned by Britain's Cairn Energy, which British resource giant Vedanta is seeking to buy, a report said Wednesday.

The Press Trust of India said state-run companies Oil and Natural Gas Corp (ONGC), OIL India Ltd (OIL) and GAIL had decided it would be too costly to bid for Cairn India following earlier reports that they might make a counter-offer.

Last week, Vedanta announced an offer worth up to 9.6 billion dollars for a majority stake in Cairn India, whose most important asset is the oil-rich Mangala field in the western state of Rajasthan.

"There is no counterbid," an unnamed senior oil ministry official was quoted as saying by the news agency. "The price at which Vedanta is acquiring Cairn India already is too high."

The oil ministry had been reported to be concerned about Vedanta's bid as the London-listed metals and mining company, led by Indian billionaire tycoon Anil Agarwal, has no experience in the energy field.

Cairn Energy Chairman Bill Gammell held talks with Indian officials in New Delhi last week to pitch for the government's blessing for the deal.

Domestic media had said a counterbid might put too great a strain on the balance sheets of the public sector energy companies.

The report comes as good news for India-focused Vedanta after its plans for a mine in an area held sacred by tribespeople were blocked Tuesday by the government.

Vedanta had wanted to start an open-cast mine in the Niyamgiri Hills in eastern Orissa state to feed a nearby aluminium refinery, but the project was struck down by the environment ministry.

© 2010 AFP

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