The petroleum ministry is set to tell Cairn Energy that wants to sell its India business to Vedanta Resources for $9.6 billion that it should go by the well established precedent of give and take on the original contractual terms with the government when oil and gas assets change hands.
Give and take, govt to tell Cairn - Financial Express
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The proposed deal is now deadlocked as the government wants to protect the interests of Cairn's partner for its Rajasthan oilfields _ ONGC, which now pays 20% royalty on the entire Rajasthan output despite having only a 30% interest. The government's suggestion that the royalty be adjusted against revenues from the project as a cost item is not acceptable to Cairn Energy as it would depress the valuation of its Indian arm. The ministry is expected cite the example of a 2002 deal in which Enron Oil & Gas India sold its assets in Mumbai offshore at a price lower than it...Give and take, govt to tell Cairn - Financial Express
