State-owned ONGC on Thursday said it was examining all the legal and contractual implications of the proposed majority stake sale in Cairn Energy-PLC?s Indian arm to Vedanta Resources announced last Monday.

?In the board meeting, I appraised the members of all the reports (about the Cairn-Vedanta deal) that came into public domain. We have been tracking the developments and the media coverage. We are closely examining all legal and contractual implications,? ONGC CMD R S Sharma told reporters after the company’s board meeting at its office in the Capital.

The company would hold its annual general meeting on September 23.

ONGC owns 30% in Cairn India?s prolific Rajasthan oilfields, which is at the centre of the $ 9.6-billion takeover deal by London-based Vedanta group.

When asked about the possibility of ONGC making a counter offer to Cairn Energy, Sharma said he would not like to comment. ?There are certain strategic issues for any corporate entity which I cannot share,? Sharma said.

The petroleum ministry says the deal needs the ?prior written consent? of the government according to the requirements of the production sharing contract (PSC).

Corporate affairs ministry sources told FE that ONGC?s right of first refusal in the case of sale of an asset cannot in any way help in blocking the deal as ownership-change in a company cannot be equated to the sale of assets. The government can shoot down the deal only if the PSC allows it to, they said.

ONGC also announced a new prospect discovery in the western onshore basin, which is now producing 278 barrels of oil a day. The block in the Tarapur area of the Western offshore basin is, fully owned by ONGC, and was won in the sixth round of auction under the new exploration licensing policy.

ONGC board also decided to invest Rs 372 crore for developing the east of Bombay High south field. ONGC stated that cumulative production of oil was 0.422 million metric tonnes and 0.529 billion cubic metres of gas a day over a period of eight years with peak production of 2,500 barrels of oil per day of oil and 2,50,000 cubic metres of gas.

The company aims to begin production from the two areas, BHE and BH-35, from March 2013, ONGC’s director for offshore operations, S Vasudeva, explained.