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New Delhi, Jan. 24: The cabinet today gave its final approval to the Cairn-Vedanta deal. Cairn India, which operates the prolific Rajasthan oilfield, today announced a 12.5 per cent rise in net profit for the third quarter on higher crude price realisation.
The approval, officials said, is like a formality. Cairn and Vedanta had closed their $8.8-billion deal in December after agreeing to all the government preconditions.
The oil ministry has approached the cabinet for a fresh approval in view of the home ministry pointing to the alleged global and domestic “transgressions” by the Vedanta group.
The home ministry, while giving its security clearance to Vedanta buying a majority stake in Cairn India, had pointed out eight instances in which the mining group, or its affiliates, were involved in cases of default of payment, human rights violations or environmental damage.
The oil ministry approached the cabinet “to bring on record” the transgressions pointed out by the home ministry.
Cairn India said Vedanta Group held 59 per cent of the issued share capital in the company and consequent to the stake sale by Cairn Energy, three new directors — Navin Agarwal, Tarun Jain and Priya Agarwal — have been inducted on the board.
Rahul Dhir, managing director and CEO, said, “The commencement of production from the Bhagyam field is yet another significant milestone for the Cairn-ONGC joint venture in Rajasthan… (and) is well placed to further develop the hydrocarbon-rich Barmer Basin in Rajasthan, increase production and create value for our nation.”
Cairn India today reported net profit for the December quarter at Rs 2,261.9 crore compared with Rs 2,010.1 crore in the same period a year ago.
Revenue from operations remained flat at Rs 3,096.76 crore against Rs 3,096.44 crore in the year-ago quarter. Other income stood at Rs 112.35 crore compared with Rs 34.16 crore in the same quarter last year.
Gross production was 169,580 barrels per day (bpd), down from 174,282 bpd in the last fiscal. However, average oil price realisation during the quarter was $101.10 per barrel against $76 per barrel in the year-ago period.
