Govt could offer Vedanta stake in Rajasthan plant

The government is likely to offer a significant stake in its proposed refinery project in Rajasthan to UK-based Vedanta Resources, which is looking to enter the crude oil business in India by acquiring majority stake in Cairn India that controls the nation's largest onshore oilfield in the desert state. While Vedanta would fit into the central and state governments' scheme of things as a lead investor in the proposed refinery, it would be an opportunity for the London-listed mining major to integrate Cairn India's crude production with the much-needed refining capacity.
The refinery project, for which state-owned ONGC is already doing feasibility studies, is conceived to have the capability for processing the high-residue crude from Cairn's Barmer field in Rajasthan. The petroleum ministry is expected to probe whether Vedanta would be keen to invest in the project while processing Cairn Energy Plc's application for clearing its majority stake sale to Vedanta for $9.6 billion. It is yet to be decided if the offer is to be overtly presented as a condition for clearing the deal. For Vedanta, which wants to have a foothold in India's oil sector, the government's offer if it comes as a rider for clearing the deal would be a blessing in disguise.