Cairn hoping for Indian approval

The group agreed in August to sell up to 51 per cent of Cairn India for up to £5.8bn, in a closely-watched deal which is still awaiting Indian government approval.

“Cairn continues to believe the necessary approvals to complete the Vedanta transaction will be received and is working with the Government of India in a positive and constructive manner,” chief executive Bill Gammell said.

Cairn said earlier this month it hoped to complete the divestment, which will see it return substantial amounts of cash to shareholders and enable it to focus on exploration in Greenland, by April 15.

“It’s a sensitive issue and therefore the timeline is difficult to say. The only thing I would say is under the sales purchase agreement, by April 15 we need to know whether that approval is happening or not,” Mr Gammell said.

“We continue to believe that both parties are committed to the deal and that the April 15 deadline would be extended in the event of Government of India approval either being granted, or at the very least, imminent,” Royal Bank of Scotland analyst Phil Corbett said.

Cairn, which in 2010 drilled three wells north of the Arctic Circle as part of the first exploration campaign in Greenland for a decade, said it would also look to drill south of the Arctic Circle in 2011.

The company is hoping to open up a new oil province in Greenland.