UK's Cairn Energy Plc today said delay in government approvals for its $8.48 billion deal to sell majority stake in its Indian unit to Vedanta Resources may hurt future foreign investments into India.
"We understand that the process will go its natural course, but it has to have a timeline," Cairn Energy Chief Executive Officer Bill Gammell told reporters here.
The government is closely vetting the transaction as an non-oil company is buying controlling stake in Cairn India, the owner of the nation's largest onland oil discovery.
"If it (the deal) is delayed, it won't help India's cause," Gammell said.
He said speedy clearance of the Cairn-Vedanta deal will send the right signals to prospective foreign investors for its upcoming oil and gas block licencing round.
"It is important that the process doesn't take long if you think of the foreign investor and if you think of the NELP (New Exploration Licensing Policy) round... You would want to sent the right kind of signal, you should not be taking too long," he said.
"I think this deal will send a good signal for India as an investment destination. The world is looking at this transaction...I am hopeful the deal will close by the end of this year," Gammell said.
The government is studying if the stake sale to a company that has never done oil exploration would compromise on the operations and if it will hurt interests of ONGC which is a partner in several blocks owned by Cairn India.
