Aug. 26: The state-owned oil and gas major, Oil and Natural Gas Corporation (ONGC) on Thursday said it is examining legal and contractual implications of the Cairn-Vedanta deal, but refused to say if it will make a counter offer.
“We are examining legal and contractual implications of the Cairn-Vedanta deal on us,” the ONGC chairman and managing director, Mr R.S. Sharma, told reporters here. ONGC is a 30 per cent partner of Cairn India in the prolific Rajasthan oilfields, which is at the centre of a $9.6 billion takeover deal by London-based Vedanta group owned by Indian-origin billionaire, Mr Anil Agarwal.
“In the board meeting [conducted] on Thursday, I appraised the board members of the status ever since the Cairn-Vedanta deal was made public. We are tracking the developments closely. There are certain strategic issues for any corporate entity which I cannot share,” Mr Sharma said.
London-listed mining group Vedanta Resources has entered into a deal to acquire 60 per cent stake in Cairn India, the owner of India’s largest oilfield, for $9.6 billion. It will mark Vedanta’s entry in the oil business, but the deal is contingent on government approval. Asked if ONGC will make a counter offer, Mr Sharma said: “I would not like to comment.”
Sources in the oil ministry, which till early this week was nudging ONGC to cobble up an alliance with Oil India and gas utility GAIL for a rival bid, say that the ministry is only awaiting clarifications from UK’s Cairn Energy Plc on it selling majority stake in Cairn India. According to analysts, Vedanta is already offering a good price and any counter bid will be expensive.
The analysts also point out that it will be better for these public sector companies to utilise this amount to look for assets overseas as Cairn India will be selling the crude from its discoveries in the country only.
Separately, the Union corporate affairs minister, Mr Salman Khurshid, had said that “if shareholders approve, we have nothing to do.”