ONCC takes control of Vedanta-operated oil block: CB-OS/2 fields under interim control; Case is moving to Delhi HC – The Times of India

The State has ordered the State of oil and natural gas company (ONC) to take interim-operational control over an oil and gas block from Vedanta, after rejecting the company’s request to extend its contract.Vedanta, which produces about a fifth of India’s crude oil, has challenged the decision in the Delhi Supreme Court. On Monday, Justice Sachin Data has withdrawn from hearing the case, which will now be mentioned for another bank on Tuesday. This is the first instance of the government that refuses a contract renewal for an oil field operator, ET.The order includes the CB-O/2-block, located in front of the west coast of India. Ongc said in a legal submission that the relocation was a “Pure Interim measure of the government to maintain the continuity of petroleum activities in the public interest.” It added, as quoted by ET, that the step was aimed at “protecting petroleum reserves until the block is granted to another party.”Vedanta, which operated the block with an interest of 40%, said that the field contributed “less than 0.3%” to the total income. ORC owns 50% and Tata Petrodyne 10% in the block, including the Lakshmi and Gauri fields. The fields currently produce approximately 3,400 barrels of oil and 340,000 standard cubic meters of gas per day.The consortium received the block in 1998 under the Pre-New Exploration Licensing Policy (NELP) and received a mining rental agreement in 2002. Under this older system, the extension of mutual agreement with the government and payment of an additional share of 10% of the petroleum profits require.

Push on investments in oil and gas

The decision comes at a time when India tries to attract more private and foreign investments in its oil and gas sector. The industry has had to deal with stagnation in recent years, with falling production and no major discoveries. To stimulate the trust of investors, the government has passed a new law and launched a new licensing round for exploration blocks.