ONGC official said that the deal required, "consent of ONGC besides other governmental approvals to consummate the proposed sale of up to a 51 percent stake in Cairn India to Vedanta."
The state owned company's (ONGC) claim is based on the pre-emptive rights in oilfields like Rajasthan, where it is an equity partner with Cairn India.
The pre-emptive right is to maintain current shareholder's fractional ownership of a company by buying a proportional number of shares of any future issue of common stock.
ONGC, which owns 30 percent in the 6.5 billion barrels Rajasthan block, believes that with the stake, it has the pre-emptive right of first refusal to buy Cairn India in case the company's ownership changed.
However, Cairn maintains that the Vedanta deal was a controlling stake transfer and not an asset transfer, which would have required a government approval.
Though the oil ministry maintains that since the PSCs for some of Cairn's other blocks have a provision for prior consent, the whole deal is contingent on government approval.