Apparently making amends to past slip-ups, UK's Cairn Energy on Thursday courted the government and ONGC to clear-up "misgivings" on sale of majority stake in its Indian arm to Vedanta Resources.
Cairn Energy chief executive Bill Gammell, on his second visit to the capital since announcing sale of between 40 to 51 per cent stake in Cairn India to Vedanta for up to $8.48 billion on August 16, met Oil Secretary S Sundareshan and ONGC head R S Sharma to put the record straight on the transaction.
Gammell apologised for the deal getting leaked to the media. This forced the hurried announcement last month, which he said would have otherwise been made public after informing the government and partner Oil and Natural Gas Corp.
Government approvals, for which it has already applied, were central to the deal, he said, adding that the transaction was expected to conclude by end 2010 or early 2011.
Sundareshan said the government nod, needed for change of control in Cairn India-held seven exploration blocks, may take up to a month as the applications were being studied.
Gammell said there was no point of confrontation on the Vedanta deal with either the government or ONGC.
"I know it makes a good copy (to publish differences between Cairn Energy and Government/ONGC) but it is not a reality," Gammell told reporters.
"Our 15 year presence in India has been based on foundation of respect, relationship and responsibility and we continue to hold our association with government and ONGC on these."
Cairn Energy's August 16 announcement only mentioned about the deal being contingent upon "regulatory approvals" and did not mention the need for government nod, prompting the oil ministry to write two letters to the Edinburgh-based firm asking it to apply formally for consent for transfer of control in seven exploration blocks and three producing fields, including the giant Rajasthan oilfield, to Vedanta.
Gammell cleared-up this slip-up with Sundareshan and Sharma today, saying Cairn Energy will seek all regulatory and government approvals for the deal.
ONGC, by virtue of its 30-40 per cent stake in Rajasthan and Ravva oilfields, felt it had the pre-emption or right of first refusal, a claim rejected by Cairn Energy which said its deal was a corporate transaction involving shares transfer and not a sale of stake in a field which triggers such rights.
"The point that is being missed is that the technical capability of Cairn India is in the team led by (its CEO) Rahul Dhir and not in Cairn Energy Plc. Cairn India will continue to exist with all its intellectual capital and technical expertise," he said.
Vedanta Resources, he said, had a track record of supporting managements as displayed in previous acquisitions of Balco and Hindustan Zinc and will keep Cairn India independent.
Image: Cairn Energy chief executive Bill Gammell
