Cairn tells government it will meet all obligations
28 Aug 2010
Seeking to allay the government's concern on its deal with Vedanta Resources for the Rajasthan oil fields, Cairn Energy has given a written assurance to the petroleum ministry that its subsidiary, Cairn India Ltd, will comply with all obligations arising out of its production sharing contracts.
In a letter addressed to petroleum secretary S Sundareshan on 26 August, Cairn Energy chief executive Bill Gammell has 'introduced' Vedanta Resources (giving details of Vedanta's business, audited accounts of Vedanta and Sesa Goa, etc) and tried to allay concerns of the ministry on the stake sale.
Gammell's letter is in response to some clarifications sought by the petroleum ministry. In a deal announced on 16 August, Vedanta had agreed to buy a 51-60 per cent stake in Cairn India, for $8.5-9.6 billion.
The government on Friday confirmed the development, saying it has received a response to its queries from UK's Cairn Energy, but did not commit itself on whether the deal shall be approved.
"We have received a response from Cairn. It shall be examined," petroleum secretary S Sundareshan said. When asked if the government would clear the deal, he said, "It is too early to say."
In his letter, Gammell said Vedanta, besides having a successful experience in executing and operating complex large scale industrial projects, has a culture of empowering management, as evident in its previous acquisitions.
