Govt, Cairn, Vedanta to meet on Feb 6: Sources

India's oil secretary may meet Cairn Group and Vedanta Resources on Sunday, ministry and company sources said, to try to hammer out royalty payment issues that threaten the multi-billion dollar takeover of Cairn India.

It could be the last meeting with the parties to the deal before India's oil ministry firms up its view -- which will be the clincher for whether the deal goes ahead.

On January 31, Oil Minister Jaipal Reddy said that Oil Secretary S Sundareshan would meet all stakeholders for the planned acquisition deal at the end of this week.

"There will be one more interaction at the end of the first week of February. Situation in its final contours will be known then," Reddy said.

Cairn Energy agreed in August to sell 40-51% in Cairn India to Vedanta but the deal has been delayed on rumblings from the Indian government and its partner in the big Rajasthan block, Oil and and Natural Gas Corp.

State-owned ONGC, which has a 30% stake in Cairn-operated Rajasthan fields and pays royalty on the entire output, said it would not block the planned deal but wanted the royalty issue to be resolved at the earliest.

India's oil ministry has been mantaining that it has nothing against the deal but it would strive to protect ONGC's interest.

ONGC's then chairman R. S. Sharma on January 30. said his firm would end up paying a royalty of Rs 14,000 crore (USD 3.1 billion) on crude output from Rajasthan fields as per the production plan submitted by the private firm to the government.

Citing persons with direct knowledge of the matter, the Economic Times of India on Friday reported that Vedanta will terminate the $9.6-billion deal if Cairn India accepts the oil ministry's conditions like changing the royalty obligations in the Rajasthan block.

Cairn and Vedanta in London could not immediately be reached for comment.

Cairn shares in London traded down 2.76% at 1316 GMT, underperforming a 0.06% rise in the STOXX Europe 600 Oil and Gas index. Vedanta shares were up 1.18%.