Cabinet to meet over Cairn-Vedanta deal next week

The government's approval to $9.6-billion Cairn-Vedanta deal is expected next week as the cabinet is unlikely to meet this week. A cabinet meeting is expected on Tuesday, government officials said. Agenda of the meeting would be decided next week, they added. The cabinet will consider the contentious issue of royalty payment for the oil produced from Cairn's Rajasthan block.

The oil ministry has put forward two options: 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, while Cairn disputes this.