Contrary to reports, oil PSUs will not make a counter bid to Vedanta Resources' $9.6 billion offer to buy Cairn India, as the oil ministry is disinclined to a rival bid.
"There is no counter bid," a top oil ministry official said. "The price at which Vedanta is acquiring Cairn India already is too high." The change in stance possibly came about after Vedanta Resources Chairman Anil Agarwal spoke to Oil Minister Murli Deora at least on a couple of occasions this week.
There were also reports that Agarwal met Congress President Sonia Gandhi on Wednesday on issues relating to his India projects, but no confirmation could be obtained.
Also, the Prime Minister's Office is believed to have discussed the issue, sources said, adding that Cairn Energy is likely to respond to the ministry's queries by Friday.
The ministry, which till early this week was nudging state-owned Oil and Natural Gas Corp (ONGC) to cobble up an alliance with Oil India and gas utility GAIL for a rival bid, says that it is only awaiting clarifications from UK's Cairn Energy Plc on it selling majority stake in Cairn India.
This is what ONGC has been contending from August 16 when the deal was announced, but the ministry was pushing it to examine a counter bid.
"We are awaiting response to certain clarifications sought from Cairn Energy and will decide (on giving approval to the deal) after that," the official said.
Meanwhile, the board of ONGC, which is a 30 per cent partner of Cairn India in the prolific Rajasthan oilfields that are at the centre of its parent Cairn Energy's deal with Vedanta, is likely to be briefed about the possible scenarios.
"The matter is being taken to the board as a non-agenda and a status (report) would be presented," a source said.
Cairn Energy chief executive Bill Gammell had on Tuesday stated that his firm would seek "Government of India's endorsement and any necessary consent" for the Vedanta deal.
Cairn Energy is selling up to 51 per cent out of its 62.37 per cent stake in Cairn India to Vedanta, the mining company controlled by NRI billionaire Anil Agarwal.
The firm had last week written to the oil ministry detailing the Vedanta deal. The ministry was not satisfied with the details and wrote to Cairn Energy seeking explanation on provisions of the production sharing contract (PSC) in case of stake transfer.
The letter states that certain PSCs entered into by Cairn India for exploring for oil and gas, have parent company guarantees and some PSCs have explicit provision of prior government consent in case of change of ownership.
