Cairn wins key support for £5.9bn Indian sale

CAIRN Energy's hopes of getting approval for the sale of a stake in its Indian oilfield received a boost after the Securities and Exchange Board of India (SEBI) backed the deal.

However, the sale of 51 per cent of Cairn India to Vedanta Resources still requires the blessing of the Indian cabinet.

A draft cabinet note on the $9.6 billion (5.9bn) transaction has been circulated to key ministries such as finance, law and corporate affairs.

London-listed Vedanta had agreed to buy the stake in Cairn India last year and an additional 20 per cent is supposed to be acquired by Sesa Goa through an open offer.

Cairn Energy declined to comment.

Another Edinburgh explorer, Bowleven, produced a positive report on its latest drilling exercises yesterday which helped give its shares a lift.

The company has begun drilling a second well at its Douala Basin acreage off the coast of Cameroon as the company continues to assess the scope of what it has previously described as a "potentially transformational" find.

AIM-listed Bowleven said the primary objective of the Sapele-2 well will be to appraise discoveries from the Omicron section that were first found by the Sapele-1 exploration well located about five kilometres to the north-east.

It is estimated to contain between 65 and 430 million barrels of oil. Drilling, which will go down to depths of 3,724 metres under 25 metres of water, is expected to take between 50 and 60 days to complete.

Sapele-1 made several significant hydrocarbon discoveries before work was halted after drilling into a high-pressure gas reservoir at the beginning of February. A sidetrack well is now being drilled at Sapele-1, in addition to the start of work at Sapele-2.

Analysts are anticipating a further update towards the end of this month when Bowleven is due to issue an interim management statement.

"We remain confident in the petroleum potential of the offshore and onshore Douala Basin and remain buyers of the stock," analysts at Fox Davies said in a note to investors.

Shares in Bowleven, a favourite among private investors, closed more than 5 per cent higher yesterday at 337.75p. The company is currently valued at just shy of 730m.

Though headquartered in Edinburgh, Bowleven's exploration activities are focused on West Africa.

The company runs its Cameroon operations through its wholly-owned EurOil subsidiary.