<<This translates into a revenue of 600 billion dollars.It therefore does notstand to reason as to why the oil reserves should be allowed by the government to be transferred for around seven billion dollars to Vedanta when it has the right of first option of purchase>>
Will Mr. Agarwal explain why assets worth US $ 600 billion are being sold by Cairns for only $ 7 billion?
Why is Cairns, for whom the Rajasthan fields are their most valuable asset in a hurry to dispose them off, that too a pittance?
Isn't Cairns a British company and Vedanta an Indian owned company?
There is a lot more than meets the eye. The people of India have the right to know what is going on.
Dear Mr. Agarwal, it's quite some claim you have made. I wont comment on the irregularities, because I do not have full information at my disposal to make a comment, but I would like to certainly make a remark or two about the numbers that are wildly bandied about. If the Barmer field is worth US$ 600 bn as you say it is and contains 6 billion barrels of oil equivalent, all of the world's Oil companies would have bid to take it over from Cairn and ONGC. US$ 600 bn is a large sum of money, (close to 20 times the sum in the 2G scam) and most importantly it is more than the Market Capital of the World's Largest company--Exxon Mobil. Is it really the case that it has 6 bbl of Oil and is worth 600 bn US$?. Being in the Oil & Gas industry I can assure you Rajasthan would have turned into a modern day battlefield had this been the case. And you say the value is not notional but real. The field is only 'estimated' to have 6 billion barrels, it will have to be certified and produce so many barrels in order to be valuated at the amount you are quoting. As long as it is an 'estimate', the loss will remain notional and open to wild interpretation of the ever pliant media and our ignorant citizenry. While there may have been irregularities in the deal itself, between Cairn and Vedanta, the estimation of the loot is wrong and erroneous. Kindly review and republish the figures. And please dont quote ONGC sources, they will inflate figures just to attract bids for E & P activity. Reality is India does not figure in the Upstream plans of any major Oil Company barring BP. Perhaps ExxonMobil could be interested via their JV with ONGC in Sakahlin. But to what extent, nobody knows. Its not like we're sitting on huge oil reserves! So let's get back to reality.
Well said and Boldly taken up. Pursue the same till logical end. It is hightime the Government stop open loot of natural resources and public property. Any shareholder (ONGC) would have FROR. If it is not excersisig or is not otherwise objecting , it is shame. In past, in many cases, the objector got substantial compensation to let go FROR and alllow the deal to happen. Atleast that ONGC should get.
In India 'licence to mine' is synonymous to 'license to loot' there are n number of examples of mining companies in india which became filthily rich within a short span of time. The ruthless politicians get petty kickbacks and give 'license to loot' a stupendously large amount of resources. As an Indian I would like to thank Mr Agarwal for his effort to atleast to bring this issue to public, but of course we have Kapil, Pranab and MMS to save the wicked and corrupt, they'll very well nullify the whole issue.
ONGC holds 30% shares in Cairn India & is one of its promoters. It is natural that in such parternerships it will be written in to the contract that it will have right of first refusal. From what appeared in the media it looks like that Cairn Energy Plc did not offer it's majority shares to ONGC in the first place before entering in to an agreement with Vedanta. Right from the beginning the oil ministry & ONGC were ambiguous & never clearly stated if ONGC wants to excercise or forego it's right & why.
It is now apparent ONGC do have this option of first right. The transparent & fair thing to do would be tell the Cairn that it must first make an offer to ONGC who would decide it's options on pure commercial considerations. Only then Cairn -Vedanta deal would be considered. This curiously seem to have not happened.Cairn India is a listed company here in India. So do SEBI has a role to play?
So besides the valid points raised by Mr. Agarwal , in pure terms of practice & business norms, government looks to be dragging its feet.
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