Stop Vedanta from taking over Mangala oilfield: CPI-M MP

NEW DELHI: A demand for aborting the USD 9.6 billion Cairn-Vedanta deal to take over the Mangala oilfield in Rajasthan to avoid "another 2G kind of scam" was made by a CPI-M member in the Rajya Sabha today.

Raising the issue during Zero Hour, Tapan Kumar Sen said, "A multinational company (Vedanta) with dubious potential has been barred in bauxite mining exploration in Orissa. The same company is being allowed to take over the total control of the oilfield in the Mangala Oilfield in Rajasthan."

Alleging that the government was facilitating in the process because ONGC was having a 30 per cent stake in that field, he said ONGC was made not to assert their right on the plea that the price offered by Vedanta was overvalued.

"If the price offered by Vedanta is overvalued, whether Vedanta is coming to take over the Rajasthan Oilfield for philanthropy or for making business," he questioned.

Sen said that the matter should be seriously inquired into and the question of over-valuation which was "doubtable proposition" needed to be examined thoroughly by an independent agency.

Demanding that the whole matter of valuation of the "Mangala oilfield, resources and the Cairn India Limited share be examined by the CAG," he said "Vedanta must not be allowed to take over Cairn India Ltd, or, in that matter, the Mangala oilfield."

Insisting that the government should take steps "to avoid another 2G kind of scam to unfold and disturb the whole atmosphere," Sen said the metal and mining major should not be allowed to take over the Mangala oilfield and other oil resources and "ONGC must be made to assert its right."

London-listed Vedanta Group, is facing hurdles in completing USD 9.6 billion deal to acquire Cairn India and it is yet to be cleared by the government.

UK's Cairn Energy Plc is selling most of its 62.4 per cent stake in Cairn India to the mining group, which in August 2010 had announced buying out of Scottish independent Cairn Energy Plc's majority stake in its Indian unit.

However, the deal got mired in regulatory hurdles as Oil Ministry is insisting that Cairn needs government approval before transferring control in the 10 properties it has in the country. Besides, ONGC insists that it has pre-emption right by virtue of partnering Cairn in most of its properties including the mainstay Rajasthan oilfield.

ONGC has to pay 20 per cent royalty to the state government on entire output from Rajasthan block even though its share from production is only 30 per cent.