ONGC may counter Vedanta's $9.6-billion bid for Cairn India
23 Aug 2010
The ministry of petroleum and natural gas is reported to be trying to put a damper in Vedanta's acquisition of Cairn India's assets by demanding that state-run Oil and Natural Gas Corporation (ONGC) be given the first right of refusal, reports said on Monday.
Vedanta had agreed to acquire up to 60 per cent stake in Cairn Energy's Indian assets, including the oil block in western Rajasthan, for around $9.6 billion.
ONGC owns a 30 per cent stake in the Rajasthan oil field while UK's Cairn Energy Plc owns a majority 62.37 per cent interest in the oil asset.
Reports said the petroleum ministry's objection to the takeover deal is that Vedanta is a non-oil company and since Cairn India's skill base is India, Vedanta may not be making the right asset pick.
The petroleum ministry is also reported to be looking for legal options to block a Vedanta-Cairn deal, reports quoting sources close to the development said.
To counter Vedanta's offer, the ONGC-OIL-GAIL consortium may have to quote above the Rs405 a share offered by Vedanta.