Petronas sells Cairn stake for $2.1 billion

April 19, 2011
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, KUALA LUMPUR, Apr 19 – Malaysia\’s state energy firm Petronas on Tuesday said it had sold its near 15-percent stake in Cairn India for $2.1 billion, while British resources group Vedanta confirmed it was the main buyer.

"The transaction brings to a close a successful association as a shareholder with Cairn India since 2006," oil and gas explorer Petronas said in a statement.

Separately, Vedanta said its subsidiary Sesa Goa had acquired 200 million shares amounting to a 10.4 percent stake in of Cairn India from Petronas.

India\’s CNBC-TV 18 said the remaining 3.9 percent stake went to unnamed financial institutions.

Vedanta, controlled by Indian-born billionaire Anil Agarwal, last August said it wanted to buy up to 60 percent of Cairn India to add to its numerous India-focused assets.

But the sale has been beset by difficulties caused by differences between Cairn and its Indian state-owned partner Oil and Natural Gas Corp (ONGC) over the payment of royalties involving India\’s biggest onshore oilfields.

The Indian cabinet has been split over whether the royalty row should be settled before or after the sale goes through, and the matter was referred earlier this month to a panel of ministers for review.

The impasse comes at a bad time for India as foreign investment has slumped, with investors worrying about a slew of corruption scandals that have shaken the government, including a huge suspected telecoms licensing fraud.

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