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“They (Cairn Energy) have sought oil ministry’s approval to transfer three pre-Nelp blocks today (Thursday) afternoon,” a person close to the development told Financial Chronicle requesting anonymity.
All these three pre-Nelp blocks are on producing stage. They are located in Ravva in coastal Andhra Pradesh, Cambay basin in Gujarat and Barmer in Rajasthan. They produce nearly 160,000 barrels of oil equivalent per day.
Cairn India has 10 exploration blocks under its ambit. Out of these, seven blocks were bagged in auction under New Exploration Licensing Policy (Nelp). The company has already sought permission for selling them. Other three blocks are categorised as pre-Nelp.
According to an announcement on August 16, Anil Agarwal promoted Vedanta Resources wants to buy a 40-51 per cent in Cairn India for a value close to $8.5-9 billion. The deal is pending because of nod from oil ministry and market regulator Sebi. Vedanta, listed in London bourse, has already arranged loans for $6.5 billion to fund the deal.
After the announcement of the proposed deal, there was contention over whether Cairn Energy needs government approval for selling its stake to Vedanta or not. Oil Secretary S Sundareshan was quoted by media last week saying, “We wrote to (Cairn Energy and Cairn India) a few days back reminding them of contractual requirement of seeking government consent in all the properties. We cannot consider their case unless they comply with this contractual requirement.”
Global financial services firm UBS on Wednesday upgraded Cairn India to neutral from sell. According to UBS the stock is now fairly priced. Cairn India scrip underperformed the BSE index by 7.7 per cent since August.
Cairn India stock closed at Rs 313.25 on Thursday on the Bombay Stock Exchange, down 1.46 per cent from its previous close.
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