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• Arbitrary decisions on the $8.48 billion Cairn-Vedanta deal and BP's $7.2 billion stake buy in Reliance Industries' oil and gas properties has shaken investor confidence in the world's third-largest energy consumer in an eventful year.The way the government treated miner Vedanta Resources' proposal to buy majority of UK's Cairn Energy in Cairn India and RIL selling 30 per cent of its stake in 23 properties including the prolific KG-D6 gas block to BP, goes to the heart of the mistrust between India Inc and UPA-2 in 2011.First the government arm-twisted Cairn and Vedanta into accepting to pay royalty and cess on the all-important Rajasthan oilfields for conclusion of the deal.
• As it appeared that the 15-month long saga is over, Oil Ministry sent the proposal back to the Cabinet for approval citing bunch of red flags that Home Ministry, in its security clearance, had raised on alleged global and domestic "transgressions" by Vedanta and its subsidiaries.While Oil Ministry recommended allowing the share transaction as the concerns highlights had "no bearing whatsoever on the security aspects", for two companies who had earlier this month concluded the deal after protracted wrangling with the government, lays potential legal danger if any of the Cabinet ministers were to object.
• Billed as the largest foreign direct investment in the country, RIL-BP deal should have gone through as a matter of routine but the Oil Ministry sent the proposal to Cabinet for approval.But five months after the Cabinet approval, Europe's second largest oil firm is yet to get a finger in the pie as the ministry and its technical arm DGH used whimsical reasons like absence of fax number of BP's India head to delay signing of an amendment to the Production Sharing Contract.While BP inched to help check fall in output from KG-D6, the ministry went after RIL for output falling short of the target by seeking to disallow part of its already spent cost on the fields. RIL saw this has violation of the signed contract and slapped an arbitration notice.
• Its cause was also not helped by the ministry and DGH sitting on approvals for development of other fields in the KG-D6 block for months and even delaying declaring finds commercial.Not just in KG-D6, the ministry also blocked Cairn India from enhancing production from the Mangala oilfield in the Rajasthan block and starting output from other fields.For a nation which is net energy importer, not allowing exploitation of its own resources came as a shock to the investor community.What was shocking for the investor community was the inept handling of issues at the Oil Ministry, which early in the year saw a change of guard in self-claimed socialist democrat S Jaipal Reddy replacing industrialist-turn- politician Murli Deora as the Minister for Petroleum and Natural Gas.

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