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| Cairn Energy chief executive Bill Gammell (left) and Vedanta chairman Anil Agarwal: obstructed by protocol, bureaucracy and a jealous rival |
When Vedanta Resources announced its intention to buy a controlling stake in the Indian oil interests of Cairn Energy on August 16 for up to $9.6 billion it looked like a rare and much-needed triumph for New Delhi. Here was a classic win-win outcome. Mining company Vedanta, London listed but India oriented, was desperate to make a splash in the country’s oil and gas sector. Its billionaire founder and executive chairman, Anil Agarwal, saw Cairn India, 62.4% owned by its Edinburgh-based parent, as his destiny.
Buying between 51% and 60% of Cairn India at Rs355 ($8) a share (a hefty premium to Cairn India’s share price) would catapult Vedanta into the big league, creating, the company grandiloquently promised, an "Indian natural resources champion".
Cairn Energy coveted cash, plain and simple. Its founder/chief executive, Sir Bill Gammell, chair of Cairn India and a former Scottish rugby union international, was a pioneer in India’s energy sector. Cairn India’s Barmer block in the northwestern state of Rajasthan pumps out 125,000 barrels of crude a day and its parent was keen to cash in its chips: Cairn Energy was bullish about exploiting oil reserves off the coast of Greenland and wanted to focus on the next hydrocarbon frontier.
