Decision only after formal application: Govt to Cairn

The petroleum ministry was today firm that it will consider approval for the $8.48-billion Cairn-Vedanta deal only after UK-based Cairn Energy makes a formal application for transfer of control in all its 10 properties in the country.

Cairn’s current application seeking government nod for the deal has left out the three producing properties, including the giant Rajasthan oilfields.

The government’s insistence that a formal application must be made for each of the 10 properties, conveyed through a letter to Cairn this month, may delay the approvals till January-February next year.

The ministry had earlier indicated that approvals could come by this year end.

“We wrote to (Cairn Energy and Cairn India) a few days back reminding them of contractual requirement of seeking government consent in all the properties,” said Oil Secretary S Sundareshan.

Cairn Energy in its August 16 announcement of sale of its stake in Cairn India to Vedanta Resources, did not say the deal was conditional on government approvals.

However, on being shown the relevant provisions of the contracts for exploration it has with the government, Cairn Energy about a month later made an application for permission that left out all of its three producing properties including its mainstay 6.5 billion barrels Rajasthan block.