ONGC will have the last word on the $9.6 billion Cairn-Vedanta deal as the oil ministry has made the firm’s approval mandatory even if the cabinet rules that the royalty dispute in the Rajasthan block should be settled independent of the transaction, government officials said.
The oil ministry has sought approval of the controversial deal and presented two options to the cabinet. In the first option, it has suggested that Cairn should accept its partner ONGC’s claims on royalty and abide by government directives on paying cess.
Alternatively, it has proposed that even if the government clears the deal, they must use legal means to enforce provisions of the contract that pertain to the recovery of the royalty cost from the field’s revenue before calculating the profit.
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