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Cairn-Vedanta deal in ONGC's court

Cairn-Vedanta deal in ONGC's court

The government’s law officers have held that Edinburgh-based firm needs ONGC’s consent to sell its majority stake in Cairn India to Vedanta Resources. The Cabinet Committee on Economic Affairs (CCEA) may decide on giving in-principle approval subject to Cairn making an unconditional application to the government and seeking no-objection from partner Oil and Natural Gas Corp. The equitable sharing of royalty that ONGC pays on behalf of Cairn India on oil produced from Rajasthan fields will be decided post completion of the transaction. Also, Cairn’s refusal to pay Rs 2,500 per tonne cess on its 70 per cent share of crude oil produced from Rajasthan fields will be enforced. The change of control of Cairn India amounts to an indirect assignment or transfer of participating interest in its 10 blocks and so there is a need of the government as well as the partner’s nod.

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