Cairn-Vedanta deal heads for Cabinet

Following top-level diplomatic intervention from British prime minister David Cameron, the Union government is preparing to take the $9.6 billion (R43,200 crore) Cairn-Vedanta deal to the Cabinet some time this week for conditional approval.

Sources said the deal is finally being pushed through even as the two main issues concerning royalty and cess on crude oil produced from the Rajasthan oilfields remains undecided. These may be referred to a high-level inter-ministerial committee.

A meeting is likely on Tuesday among the top managment from Cairn Energy Plc and Vedanta led by Bill Gammell and Anil Agarwal respectively, and senior officials of the petroleum ministry and Prime Minister’s Office (PMO).

In a previous meeting with Gammell and Agarwal, petroleum minister Jaipal Reddy has assured that his ministry was processing the case expeditiously and a final decision would be taken very soon.

UK-based Cairn Energy Plc had sought the Indian government’s approval for selling its majority shareholding in Cairn India Ltd to NRI billionaire Anil Agarwal’s Vedanta Resources. The deal would give Vedanta Resources access to 10 oil and gas blocks in India including the coveted Rajasthan block, which is the largest on-land oil producing block in India.

As per earlier deadlines, Cairn Energy and Vedanta had to close the deal by April 15. With Cabinet nod likely by mid-March, Cairn and Vedanta will now approach their shareholders seeking extension of the April 15 deadline by a month, as conclusion of the deal is now a mere formality, sources said.