Govt may not discuss Cairn deal this week

NEW DELHI: The government's approval to the $9.6-billion Cairn-Vedanta deal is unlikely this week as the matter is not in the agenda of the cabinet which is meeting on Tuesday.

The cabinet is expected to consider the contentious issue of royalty payment for the oil produced from Cairn's Rajasthan block soon before giving its approval to the deal.

The oil ministry has recommended two options to the cabinet: Either the government should ask Cairn to accept ONGC's view that the royalty burden should be shared by all parties, or let the dispute be resolved legally.

ONGC holds 30% in the block but pays the entire royalty. ONGC says that according to the production sharing contract, royalty costs can be recovered from the revenue of the field, which is contested by Cairn.