India undecided on state bid for Cairn oil assets

23rd August 2010, Comments 0 comments

Indian said Monday it was still undecided on whether to push for a state takeover of oil assets owned by Britain's Cairn Energy, which mining group Vedanta is seeking to buy.

Britain-based mining giant Vedanta announced last week an offer worth up to 9.6 billion dollars for 51-60 percent of Cairn India, whose most important asset is the oil-rich Mangala field in the western state of Rajasthan.

New Delhi has "not decided yet" on a counter-bid by state-run Oil and Natural Gas Corp (ONGC), Oil Minister Murli Deora told reporters in New Delhi.

The government has written to Cairn Energy seeking details of the proposed deal and is awaiting its response.

"(An) official reply from Cairn is awaited," Deora said.

The deal needs government approval because Cairn India has production-sharing contracts with it for oil and gas exploration.

Vedanta, controlled by billionaire entrepreneur Anil Agarwal, wants to make its first foray into the energy sector.

Indian business newspaper Mint reported Monday that the oil ministry may seek to scupper the deal because it wants to give ONGC a chance to buy a stake in Cairn India.

"The deal may not go through. They will have to give a choice to ONGC," the newspaper quoted an unnamed senior petroleum ministry official as saying.

ONGC has a 30-percent holding in Cairn India's Rajasthan oil block.

Vedanta is seeking to buy the Cairn stake to take advantage of India's and the company's rising demand for energy.

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

-- Dow Jones Newswires contributed to this report --

© 2010 AFP

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