Backlash for Vedanta as government denies the extension for Cambay Basin Oil, Gas Block

New -Delhi, September 22 (PTI), in a setback for the group of Baron Anil Agarwal exploitation, the government rejected the Vedanta group firm’s application to contract for an important oil and gas block of Cambay Basin. Vedanta Cairn Oil and Gas, a unit of Mumbai-listed Vedanta Ltd, was the operator of the Gujarat outdoor block CB OS/2 with a 40 percent stake. The state-owned oil and natural gas corporation (ongc), which has 50 percent interest in the block, told a Petroleum and Natural Gas in a Stock Exchange, in a letter of September 19, told the partners that the application for extension of the production contract (PSC) was not accepted for CB-OS/2. Ongc, which was asked to take over the operations in the interim period, did not mention the reason for the move. PSC is an agreement between the government and a resource extraction business. It gives the company’s time -specified right to explore, develop and produce resources in exchange for a preceding share in the produced production (known as profit petroleum) once the cost is recovered. The CB OS/2 block, which contains lakshmi and gauri fields and currently produces 3,400 barrels of oil per day and 3.4 lakh standard cubic meters of gas per day, was one of the three properties operating by Cairn India when Agarwal’s group acquired the firm in 2011 for USD 8.67 billion. The other assets of Cairn India were the barmer oil fields in Rajasthan and the RAVVA oil and gas fields in the Krishna Godavari coming to the Andhra. Cairn India was joined in 2017 in Vedanta Ltd. In 2023, Vedanta Group suggested that the company’s operations in five separate, publicly listed companies for aluminum, oil and gas, power, iron and steel and a restructured Vedanta Ltd that would own the zinc and silver companies. During a hearing on the Demerger before the National Company Law Tribunal (NCLT) earlier this month, the Petroleum Ministry raised objections to the Demerger plan on the grounds that it made insufficient disclosure of the company’s obligations, especially with regard to the Rajasthan block. An important concern was the recovery of the government fees of the estimated oil and gas business, which became virtually impossible in the likely event of the company that does liquidation. Vedanta denied all the allegations of the ministry. The government and Vedanta Cairn are concluded in disputes, including calculating profit petroleum from the Rajasthan block. CB OS/2 is a second setback for Vedanta to the ministry’s stand in NCLT. Tata Petrodyne Ltd originally held the 10 percent remaining stake in the CB OS/2 block. Invenire Energy, a private-kept Indian upstream oil and gas business, acquired Tata Petromine Limited (TPL) of Tata Sons in a USD 100 million deal in February 2019. He commented on the move of the Vedanta Cairn Oil & Gas spokesperson, said: “The contractors of the said block were Ongc, Vedanta and Invenire. The remaining stake was shared between Vedanta and the block contributed less than 0.3 percent to the total ebitda of Vedanta. expired on June 30, 2023. Government’s nominee. As a result, the company controls the block, “the company said in the filing, adding that the takeover of the block of” pure interim benchmark “was to retain until the continued block is granted to other interest and the petrol reserve is awarded to the block”. Prior to denial of the expansion for CB OS/2, the government expanded the contracts for Vedanta Cairn’s two other blocks-a 10-year PSC expansion was approved for the Rajasthan block RJ-on-90/1 to 14 May 2030, and a similar period was given for the PKGM-1 block, more known as the RAVVA field, to October 27, 2029. Reserve report on behalf of Vedanta Cairn in 2019, CB-OS/2 Block’s two discoveries, Gauri and Lakshmi, had a total reserves at the place of 13.6 million barrels of oil and oil equivalent gas. While the block of PSC expired, Vedanta Cairn continued its development plan for the discoveries in the shallow water block of 3,314 square kilometers.