Oil and Natural Gas Corporation ONGC has sought legal opinion from the Solicitor General of India on its rights in the $9.6 billion Cairn-Vedanta deal.
ONGC sought opinion from the second highest law officer of the country after its partner Cairn Energy Plc stated that the UK firm's sale of majority stake in Cairn India to Vedanta Resources will not trigger pre-emption rights of the state- owned firm, a top oil ministry official said.
The state-owned firm believes that it has pre-emption or right of first refusal in all the three producing oil and gas fields operated by Cairn India and Edinburgh-based Cairn Energy needs its consent for sale of stake to Vedanta.
ONGC has 30 per cent interest in the giant Rajasthan oil block, 40 per cent in the Ravva oil and gas fields off the Andhra coast and 50 per cent in Gauri and Lakshmi gas fields in Cambay basin off the west coast.
Besides it has stake in some of seven exploration acreage with Cairn India.
Cairn Energy has stated it is selling up to 51 per cent out of its 62.38 per cent holding in Cairn India to London-listed Vedanta at the corporate level and the deal does not trigger pre-emption rights of ONGC as the transaction was at shareholder level and not a sale of interest in a particular oilfield.
"ONGC is not in agreement with the position taken by Cairn Energy and has so sought opinion of SGI,"
The UK firm earlier this month applied to the government for a formal nod in respect of only the seven exploration blocks Cairn India had won in New Exploration Licensing Policy rounds.
It stated that only the NELP blocks had provisions for prior government nod in case of transfer of ownership and pre- NELP RJ-ON-90/1 Rajasthan block, Ravva oil and gas fields and Cambay basin CB/OS-2 gas fields off Gujarat coast 'do not require prior consent' of the government.
"We are not buying the Cairn Energy argument. We believe it needs prior approval in all the 10 (properties)," the official said, adding future action will depend on what SGI has to say.
The SGI has been submitted the provisions of the Production Sharing Contract for the exploration blocks and the Joint Operating Agreement in respect of the production ones.
Cairn Energy had initially sought government concurrence for the entire deal but the oil ministry insisted it apply for approvals for each of the 10 properties Cairn India has.
The company followed and applied for approvals as per the provisions of the PSC for each of the 10 property.
© 2024 Rediff.com -