Petronas ups stake in Cairn India

Malaysia’s Petronas International Corporation Ltd, the overseas arm of Petroliam Nasional Berhad (Petronas), has increased its stake in Cairn India to 14.94 per cent. It acquired 43.6 million shares in Cairn India from Cairn Plc, representing a 2.3 per cent stake in the Indian company, marginally short of reaching the open offer threshold.

This is the third occasion when Petronas has increased its stake in the company. The deal is part of the terms Petronas had with Cairn Plc, with the aim of increasing cooperation in the exploration and production business.

Bill Gammell, chief executive officer, Cairn Energy PLC, said in a statement: “The acquisition of additional CIL shares by Petronas reflects our shared belief in the continuing growth potential of Rajasthan.”

Besides stake sale, Cairn has agreed to sell to PICL a 10 per cent interest in its existing six operated blocks offshore of Greenland, subject to the required government and partner approvals. PICL has an option to increase its interest to 20 per cent in these blocks, in return for payment of further consideration to reflect a market valuation of the additional 10 per cent interest.

Cairn and PICL have also agreed to cooperate on an 80/20 basis on any other Open Door or Bid Round initiatives in Greenland.

The total consideration to be paid by PICL in respect of the above transactions is $310 million. These funds will be targeted for additional investment in Greenland exploration.