Oil & Natural Gas Corporation Ltd.

Following RIL’s footsteps, Oil & Natural Gas’ (ONGC) foreign arm ONGC Videsh is set to acquire shale gas assets in the US. OVL will enter into partnership instead of going for complete buyouts.

State-owned Indian Oil (IOC), Bharat Petroleum (BPCL) and Oil India (OIL) are also planning to acquire shale gas assets in the US and Australia. Shale gas is an unconventional source of natural gas trapped in hard rocks called shale. The US shale gas production is about one trillion cubic feet per year, which is about 14% of the country’s total gas production.

ONGC can make a counter-offer or exercise its self- claimed pre-emption right in certain properties of Cairn India before the Extraordinary General Meeting (EGM) called by Cairn Energy Plc in early October to ratify the sale to Vedanta.

While Vedanta's open offer to minority shareholders of Cairn India for acquisition of a further 20 per cent shares puts September 7 as the cut off date for any rival offer, ONGC can block the deal before EGM of Cairn Energy Plc approves the sale.

ONGC is using the clause in the JOA to state that it has pre-emption rights. Should ONGC decide to exercise ROFR or make a rival bid, it has to approach the UK based company's management before the shareholders meeting and then go to SEBI for blocking of Vedanta open offer which opens on October 11.