India's ONGC rules out counter-bid for Cairn India

23rd September 2010, Comments 0 comments

India's state-run Oil and Natural Gas Corp ruled out making a bid for the local arm of Britain's Cairn Energy on Thursday to counter a rival offer by mining group Vedanta.

"The counter offer date is gone. We made a conscious decision not to make a counter bid. We have done a very thorough evaluation," said ONGC chairman R.S. Sharma.

"We have done whatever should have been done to protect ONGC's interests," he added, after reports that the planned bid could have overstretched the public sector company's balance sheet.

The move paves the way for Edinburgh-based Cairn Energy to sell its controlling stake in its local unit Cairn India Ltd to the London-listed resources giant Vedanta, analysts said.

Last month, 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.

Reports suggested that Vedanta could buy up to 60 percent of Cairn India.

Vedanta has run into controversy over a mining project in the eastern state of Orissa, which was fiercely opposed by local tribal villagers, a swathe of environmental and human rights campaigners plus the Indian government.

Cairn India holds stakes in 10 oil and gas blocks in the country and has tie-ups with ONGC, which is energy-hungry India's largest oil producer by output.

-- Dow Jones Newswires contributed to this report --

© 2010 AFP

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