On the back of the brewing controversies related to the Vedanta-Cairn deal, Oil Minister Murli Deora gave an ultimatum on Monday that the Indian government will decide whether to permit Cairn Energy to sell a majority stake in its Indian unit to London-listed Vedanta Resources by the end of March 2011.

The Cairn-Vedanta deal is worth $9.6 billion and since Cairn Energy has agreed for a 40-51% stake sale in its Indian division to Anil Agarwal-led Vedanta, investors are eagerly waiting to know the final outcome so revised investment plans can be implemented for the new fiscal year.

Rajasthan Block
Rajasthan block is the heart of the billion dollar deal and Cairn India has already submitted necessary documents, confirming the financial strength and technical competence of its parent company. Plus, Cairn Energy has also provided the guarantee for its properties, indicating that the deal is ON.
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Meanwhile, state-run ONGC will be partnering Cairn in the exploration operations since ONGC claims to have the pre-emption rights over the Vedanta deal.

Vedanta has already gone through a major setback after Indian Environment Minister Jairam Ramesh rejected environment clearance to Vedanta’s bauxite mining project in Orissa, which is worth $1.7 billion. Vedanta, as a company, has already been criticized for violating the forest and environment laws and this negative publicity has hampered Vedanta’s ambitious dreamrun to be the biggest enterprise in India.