The Oil Ministry today said the delay in deciding on Vedanta Resources’ $9.6 billion acquisition of Cairn India will not have any impact on the 9th round of auction of oil and gas areas under the New Exploration Licencing Policy (NELP).
“The ministry has said it have no position (on the deal). It is neither for or against the deal,” said Vivek Kumar, Joint Secretary (International Cooperation), Ministry of Petroleum and Natural Gas, at a CII round table on Overseas Energy Acquisitions today.
UK-based Cairn Energy had on August 16 announced the sale of a 40 to 51 per cent stake in its India unit to London-based mining group Vedanta and had expected to close the transaction by December-end. The delays, Kumar said, were on Cairn’s end, as it did not submit the requisite applications seeking the government’s nod for transfer of ownership in its 10 properties, including the prime Rajasthan oilfields.
“The government will decide (the case) by February-end or March after considering all aspects,” he said, adding the issue involved inter-ministerial and inter-disciplinary consultations, including with the law ministry and SEBI. He said the deal will not impact the auction of 34 exploration blocks in the ninth licensing round.
“Vedanta deal is not going to any effect on NELP-IX. We are aware of all aspects (involved in the deal) and a decision will be taken on merit,” he said.
Cairn Energy CEO Bill Gammell had on October 11 stated the delay in government approvals for the Vedanta deal may hurt future foreign investment in India. “If the deal is delayed, it won’t help India’s cause,” Gammell said even before Cairn fulfilled the prerequisite of making formal applications for government approval. It only made the formal applications on November 23.
Kumar today rejected claims that the delay was on the part of the oil ministry, saying Cairn did not submit proper applications on time. “We are aware of all aspects, including the right of an investor to have exit option,” he said, referring to the freedom to any firm investing in oil and gas sector to sell its holding and exit. However, in case of the Cairn-Vedanta deal, technical, financial and legal aspects need to be considered to take a “comprehensive view”, he said.
