Government maintains that ONGC has the first right of refusal in the $9.6-billion Cairn-Vedanta deal, but it will not allow the company to exercise this right as the price is very high.
The government is set to review the 15-year old production sharing contract (PSC) with Cairn Plc and will not approve , or even consider, the $9.6 billion Cairn-Vedanta deal.
“Co-operation in the field of energy is expected during President Obama’s visit,” said an Indian minister who did not wish to be named.
A consortium of India’s top state-run energy firms, led by exploration giant ONGC, is in talks to acquire a 25% stake in Australia’s Advent Energy for around $1 billion.
The new system will benefit institutional investors, whom the government will be wooing when shares of ONGC, IOC will be sold next year.
The simmering tensions between Cairn Energy and the government over the $9.6-billion deal to sell the British firm's Indian arm to Vedanta Resources has flared up again.
Currently, natural gas production from the KG-D6 block is stagnant at about 60 mmscmd since January this year.
OIL minister Murli Deora, who launched the ninth round of India’s New Exploration Licensing Policy last week, expects oil majors such as Exxon Mobil, Shell and Chevron to participate in the auction of oil and gas blocks. Global majors have largely kept away from NELP rounds although Britain’s Cairn Energy and Reliance Industries have made significant oil and gas discoveries in India.
State-owned Oil & Natural Gas Corp (ONGC) may join hands with the energy firm that gets the rights to develop Russia’s largest discovered fields Trebs and Titov, two officials with direct knowledge of the matter said.
Cairn’s India arm holds a 70% stake in the Rajasthan block that comprises about 85-90% of the $9.6 billion Cairn-Vedanta deal.
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