The meeting has led to reports that Mittal is interested in taking over Cairn India's assets, which includes prospective oil discovery in Rajasthan.
A spokesperson in the Prime Minister's Office confirmed the meeting between Mittal and Singh. However, the discussions have not been made public.
Mittal, who is the richest Indian, also met Petroleum Minister Murli Deora the same day. While confirming he met Mittal, Deora said there was no talk of a takeover of Cairn. "We did not discuss anything about Cairn," Deora said.
When contacted, a Cairn spokesperson said: "We do not comment on market speculations or rumours."
An analyst with a leading advisory firm said Mittal has been keen on a mid-sized exploration and production company. "He is also eyeing Prize Petroleum. It remains to be seen what he will buy," he said.
Another analyst said that Cairn's Rajasthan assets would fit the bill as Mittal already owns 49 per cent stake in Hindustan Petroleum Corporation's (HPCL's) upcoming 9 million-tonne per annum refinery at Bathinda in Punjab.
Production from Cairn's Rajasthan field is expected to begin in mid-2009. The Bathinda refinery would be completed by 2010-11. "The crude oil can be transported through a pipeline to Bathinda," said the analyst.
A source close to the development said that Mittal was likely to buy a substantial stake in Cairn, adding that it was also likely that the stake would be raised at a later date.
"It is typical of the way Mittal operates. He takes the local government into confidence before acquiring a company," said the source.
The Indian government has been supportive of Mittal. It not only supported him during his takeover of Luxembourg-based Arcelor, but also relaxed foreign direct investment norms to allow him to take 49 per cent in HPCL's Bathinda refinery. Currently, foreign investment in government-owned refineries is capped at 26 per cent.
Mittal is also partnering HPCL for another refinery refinery in Vishakapatnam. "With crude oil production assets in Rajasthan, along with the refinery in Punjab, Mittal would be present in the entire oil value chain," a Delhi-based analyst said.
Mittal is also reported to be interested in buying 50 per cent stake in Prize Petroleum, a subsidiary of HPCL. The 50 per cent stake is estimated to be valued at around Rs 200 crore (Rs 2 billion).
Mittal also owns a joint venture company with Oil and Natural Gas Corporation (ONGC), the country's largest exploration and production company. The joint venture, ONGC Mittal Energy Ltd (OMEL) owns oil fields in Nigeria.
