Cairn ruling 'in the pipeline'

THE Indian government said it would decide within the next two weeks whether Edinburgh-based Cairn Energy's local unit would be allowed to recover the cost of laying a pipeline from its crude oil sales.

Oil secretary MS Srinivasan said the issue had been considered by a panel of top officials called the Empowered Group of Secretaries.

"The decision will come very shortly. In the next two weeks," Srinivasan said.

Cairn's recently spun-off Cairn India unit had offered to lay the 600km Mangala-Salaya pipeline in western India after the government's plan to build the pipeline was delayed.

The firm, headed overall by former Scotland rugby international Sir Bill Gammell, has already placed orders for the pipeline and has asked the Indian government to allow it to recover about £400 million in costs by reducing the government's share of future oil sales.

Cairn India spokesman David Nisbet said: "As far as we are concerned, we are still awaiting confirmation and look forward to receiving clarification in due course."