India-focused metal and mining group Vedanta Resources does not foresee regulatory hurdles for its plan to acquire control of Cairn India, Indian media reported Tuesday citing Vedanta's chairman and founder, Anil Agarwal.
Vedanta announced Monday plans to acquire up to 60% of Cairn India for as much as $9.6 billion, giving it control of a major onshore oil development in northwest India.
The deal requires government and shareholder approvals and has raised questions over a possible counter offer from India's state-owed Oil and Natural Gas Corp. (ONGC), Cairn India's partner developing its large Rajasthan
oil field.
"We don't foresee problems," Agarwal told the Times of India in an interview when asked if he foresaw any regulatory challenges for the deal.
Cairn India and ONGC are 70:30 joint venture partners in India's prolific Rajasthan oil block, where the Mangala field produces 125,000 b/d and has the
potential to exceed 240,000 b/d.
"ONGC is our 30% partner and will continue to remain so. Whatever approvals are needed, whatever needs to be done for such a deal, we'll do,"Agarwal told India's Economic Times in a separate interview.
"We have not yet spoken to the government so far. The whole intention is to not disturb the management," he said.
The newspaper also reported Indian oil minister S. Sundareshan as saying Tuesday that ONGC has not yet raised any concerns on the Cairn India-Vedanta
Resources deal, but that the government would "take into account ONGC's views."
Earlier this week, the Indian economic daily cited an unnamed government official suggesting potential hurdles for approval of Vedanta's deal on the grounds that the mining group has no experience in the oil industry.
"It is a matter of concern that a non-energy firm is to take over operatorship of these complex fields. World-over, governments insist on prior experience before companies are allowed even to explore. And here is a firm which has never even seen an oil field," the official was citing as saying.
Vedanta's deal will be contingent on government approval, as Cairn's three producing oil and gas assets, including the giant Rajasthan fields and seven exploration blocks, either have explicit provisions for seeking prior approval before transfer of interest or give pre-emption, or the right of first refusal, to partners like ONGC.
According to the report, the sale of a stake in Cairn India also offers the government an opportunity to settle the issue of the large losses that ONGC will incur over the life of the Rajasthan oil fields, as it has to pay statutory levies like cess and royalty on behalf of Cairn India.
Vedanta announced Monday plans to acquire up to 60% of Cairn India for as much as $9.6 billion, giving it control of a major onshore oil development in northwest India.
The deal requires government and shareholder approvals and has raised questions over a possible counter offer from India's state-owed Oil and Natural Gas Corp. (ONGC), Cairn India's partner developing its large Rajasthan
oil field.
"We don't foresee problems," Agarwal told the Times of India in an interview when asked if he foresaw any regulatory challenges for the deal.
Cairn India and ONGC are 70:30 joint venture partners in India's prolific Rajasthan oil block, where the Mangala field produces 125,000 b/d and has the
potential to exceed 240,000 b/d.
"ONGC is our 30% partner and will continue to remain so. Whatever approvals are needed, whatever needs to be done for such a deal, we'll do,"Agarwal told India's Economic Times in a separate interview.
"We have not yet spoken to the government so far. The whole intention is to not disturb the management," he said.
The newspaper also reported Indian oil minister S. Sundareshan as saying Tuesday that ONGC has not yet raised any concerns on the Cairn India-Vedanta
Resources deal, but that the government would "take into account ONGC's views."
Earlier this week, the Indian economic daily cited an unnamed government official suggesting potential hurdles for approval of Vedanta's deal on the grounds that the mining group has no experience in the oil industry.
"It is a matter of concern that a non-energy firm is to take over operatorship of these complex fields. World-over, governments insist on prior experience before companies are allowed even to explore. And here is a firm which has never even seen an oil field," the official was citing as saying.
Vedanta's deal will be contingent on government approval, as Cairn's three producing oil and gas assets, including the giant Rajasthan fields and seven exploration blocks, either have explicit provisions for seeking prior approval before transfer of interest or give pre-emption, or the right of first refusal, to partners like ONGC.
According to the report, the sale of a stake in Cairn India also offers the government an opportunity to settle the issue of the large losses that ONGC will incur over the life of the Rajasthan oil fields, as it has to pay statutory levies like cess and royalty on behalf of Cairn India.
