CAIRN’S Indian assets are certainly attractive. The sites bought for a mere $7m (£4.5m) from Shell in 1997 now trade on the Mumbai exchange at a market value of $14bn. Cairn’s flagship oilfields in Rajasthan are predicted to churn out 90,000 barrels a day in 2011, rising to 125,000 barrels the year after.

Vedanta is not the first resources group to set its eye on the diversifying properties of fuel exploration. BHP Billiton derives a decent chunk of its turnover from oil, and Brazil’s Vale is also looking to take stakes in energy assets. The aim is to flatten out revenues by hedging against high fuel costs during bull phases.

But Vedanta shareholders have every reason to feel nervous. The company is halfway through a monster capex programme and, after the $1.3bn purchase of Anglo Zinc in May, would probably need to raise either fresh debt or equity to fund the deal. Although it has $7.2bn on its balance sheet, Vedanta’s existing commitments mean it is far from cash-rich.

Until the market has clarity on price and funding, expect more pressure on Vedanta’s shares.