Cairn Energy has sought no objection certificate from ONGC by September 21 to enable smooth transfer of its stake in Cairn India to Vedanta Resources.
This is while the company management prepares to face its shareholders for the first time on August 18 (annual general meeting) since receiving the Government's conditional approval.
On August 16, Cairn Energy wrote to ONGC citing the conditions laid down by the Government while approving the Cairn-Vedanta deal. The Edinburgh-based company said that to comply with all the conditions required by the Government, “we would request your NOC (no-objection certificate) by September 21.”
Cairn has 10 oil and gas blocks in India – three pre-NELP and seven NELP. Of the 10 blocks, ONGC is Cairn's partner in eight blocks. The company has sought NOC from ONGC for all blocks except Ravva and Cambay (CB-OS/2).
Cairn Energy proposes to sell a significant portion of its stake in Cairn India to Vedanta Resources. The board of Cairn India has sought shareholders nod on whether two of the most contentious conditions – royalty burden and withdrawal of cess arbitrations – set by the Government would be acceptable or not.
This is seen as a mere formality as majority shareholder in the company – Cairn Energy (52.2 per cent), Vedanta and its Group company (18.5 per cent) – seem to be in acceptance of the conditions.
The Government wanted the company to implement the decision within a month from July 26. Cairn Energy Chairman, Sir Bill Gammell, on August 3 wrote to the Petroleum Ministry seeking extension of the timeline to comply with the conditions. The results of the postal ballot will be known on September 14.