Cairn Energy is expected to yet again extend the deadline for its long-delayed $9.6bn (£5.9bn) deal to sell its Indian assets to the mining giant Vedanta. The oil explorer, which is looking to focus on drilling off Greenland, is expected to confirm the news today as it faces questions over the delays at its annual meeting.
The two FTSE 100 companies had hoped to seal the deal by last month, but without clearance from the Indian Government they were forced to move the deadline forward to this Friday.
But reports in the Indian press suggest that the ministerial panel charged with studying the proposal will not meet until next week, and Cairn is likely to confirm yet another postponement today.
Phil Corbett, an RBS analyst, said: "Given news flow in recent days that the group of ministers which is being convened to vet the deal will meet on 27 May, it is highly likely in our view that having come this far, both Cairn and Vedanta will agree to extend the long stop date further."
The transaction, which would see Vedanta take control of Cairn India, has been caught up in a dispute over royalty payments from the state-run Oil and Natural Gas Corporation (ONGC), which owns a minority interest in Cairn India's oilfields in the northern state of Rajasthan, but which pays 100 per cent of the output royalties due to the Government.
ONGC is said to be seeking a reviewed of the royalty arrangement in the wake of the Cairn-Vedanta pact. But Cairn and Vedanta have opposed moves to link their deal, which was announced last summer, with the royalty issue.
The two have repeatedly signalled their intent to proceed with the transaction. Last month, for instance, Vedanta bought 10.4 per cent of Cairn India in a £920m deal with the Malaysian company Petronas, which is scaling back its overseas portfolio.Reuse content