Delhi High Court Upholds Denial of Vedanta Contract Extension

The Delhi High Court upheld the decision by the Ministry of Petroleum and Natural Gas to deny Vedanta Limited a 10-year extension of its Production Sharing Contract for the CB/OS-2 offshore oil and gas block off the Gujarat coast. Justice Purushaindra Kumar Kaurav dismissed the company's petition on July 22, ruling that Vedanta became ineligible for the extension after unilaterally deducting approximately $9.33 million (roughly ₹88 crore) from the government's share of profit petroleum to offset its own Special Additional Excise Duty liabilities.

The court stated that the government cannot be "held ransom to the whims of a private company" and found that Vedanta breached the Public Trust Doctrine by using natural resources for its own benefit. This ruling cleared the way for the state-run Oil and Natural Gas Corporation (ONGC) to take over the block's assets and operations, which include the Lakshmi and Gauri gas fields producing roughly 3,400 barrels of oil and 340,000 cubic metres of natural gas daily.

On July 23, the court refused to grant immediate interim relief to Vedanta, allowing ONGC to proceed with the takeover. While Attorney General R. Venkataramani asserted that ONGC has completely taken over the site, Vedanta disputes this, claiming its employees remain on-site. The court agreed to hear Vedanta's appeal on July 27 and noted it could restore possession if a case for relief is established.