India signals clear run for Cairn sale to Vedanta

An unnamed official told the Indian media that there was "no chance" that state-run Oil and Natural Gas Corporation (ONGC), GAIL India and Oil India would make a bid as the price offered was "already very high".

Last week, London-listed miner Vedanta said it had agreed to buy a majority stake in Cairn India from its Scottish parent, Cairn Energy, in a deal that could earn the Edinburgh-based firm as much as $8.5bn.

Some analysts said the official's comments did not necessarily mean Vedanta had a clear shot at the deal although admitted the threat of a rival bid emerging had reduced.

Deepak Pareek at Angel Broking, said: "The market will be satisfied only if they (the government] say it publicly."

Sir Bill Gammell's Cairn Energy plans to use some of the money from the sale to fund prospects off Greenland.

The oil explorer sparked protests in Edinburgh and in Greenland by environmental campaigners this week when it announced it had discovered evidence of a "working hydrocarbon system" in an area referred to as "Iceberg Alley".

Other major oil and gas firms interested in the area include BP, whose reputation for safety has been left in tatters following the Gulf of Mexico disaster.

Greenland is expected to name the winners of exploration licenses for 14 new blocks within weeks. Bidders are thought to include BP, Shell and Statoil.

Yesterday Greenland's premier said the discovery of gas off the Arctic island's coast is unlikely to lead to an oil rush that could damage the environment.

Kuupik Kleist said it was "a question of time" before oil is found but that Greenland is not "counting on any oil income in the next many years.