3 weeks ago
Vedanta challenges Centre's offshore extension rejection before Delhi High Court
A big company called Vedanta has been looking for oil and gas under the sea near the Indian state of Gujarat for almost 28 years.
The Indian government decides who may dig for oil and gas there.
Vedanta asked for 10 more years, but the government said no in September 2025.
Vedanta thinks that is unfair because the rules for saying yes or no were never written down.
Vedanta went to court in Delhi, called the High Court, to ask for a fair review.
Vedanta said it is not demanding the extension, just that its papers are considered properly under the government's own 2017 policy.
The company's lawyers said if the government wants more money from the oil field, it should change its policy first.
They also said India buys most of its oil from other countries, and very few other companies could take over the work.
The government said Vedanta took money that belonged to the government to pay its own tax bill.
The judge will hear the case again on August 18.
Vedanta Ltd told the Delhi High Court that the Centre cannot reject its contract extension application based on unstated criteria.
The company is appealing an order upholding the Centre's September 2025 decision to deny a 10-year extension for its CB-OS/2 block in Gujarat's Cambay Basin.
Vedanta's lawyers argued the government must formally amend its 2017 Extension Policy if it wants to maximise revenue instead of arbitrarily rejecting the application.
Vedanta cited its nearly 28-year operating record and around $10 billion of investment in India's oil and gas sector in support of fair consideration.
The Centre cited, among other reasons, Vedanta's unilateral deduction of the government's share of profit petroleum to offset its special additional excise duty (SAED) liability.
- Who
- Vedanta Ltd, represented by senior advocates Mukul Rohatgi and Jayant Mehta, and the Centre (Government of India), before the Delhi High Court.
- What
- Hearing of Vedanta's appeal against the rejection of its application for a 10-year extension of its CB-OS/2 offshore oil and gas block.
- Where
- Delhi High Court, India; the block is in the Cambay Basin off Gujarat.
- When
- The hearing took place on Wednesday, with the next hearing set for 18 August; the disputed denial was made in September 2025.
- Why
- Vedanta argues the rejection was based on unstated revenue-maximisation grounds rather than the 2017 Extension Policy, while the Centre cited, among other reasons, Vedanta's unilateral deduction of the government's share of profit petroleum to offset SAED liability.
Vedanta's Position
Centre's Position
Policy vs revenue maximisation
Vedanta's Position
The rejection must follow the stated 2017 Extension Policy; if the Centre wants higher revenue it should formally amend the policy rather than apply unstated criteria.
Centre's Position
The Centre can seek better returns, including by bringing in another operator, and revenue maximisation justifies denying the extension.
Replacing the operator
Vedanta's Position
India imports about 90% of its oil and only a handful of companies can do offshore drilling; a new operator would need fresh investment and carry production risks, so replacing a nearly 28-year operator would not maximise production.
Centre's Position
A different operator could deliver better returns for the government than extending Vedanta's contract.
Applicant's conduct
Vedanta's Position
Vedanta's record and $10 billion investment should earn fair consideration; the policy remains active and has been applied to other blocks, and the 10% markup already raises government revenue.
Centre's Position
The denial was partly based on Vedanta's unilateral deduction of the government's share of profit petroleum to offset its special additional excise duty (SAED) liability.
Key facts
- Company
- Vedanta Ltd
- Block
- CB-OS/2, Cambay Basin, Gujarat (offshore)
- Disputed decision
- Centre's September 2025 denial of a 10-year extension
- Governing policy
- 2017 Extension Policy
- Vedanta's India investment
- Around $10 billion in oil and gas
- Operating record
- Nearly 28 years
- Policy markup during extension
- 10%
- Next hearing
- 18 August
Quotes
Jayant Mehta
Senior advocate representing Vedanta
“"I have a right under the statutory policy to be fairly considered. I am not saying you must give it to me. But the consideration in the rejection is completely unfair."”
livemint.com
“"Once you have prescribed a policy, you can't at your will change course and adopt a new course unknown to everybody."”
livemint.com
Sources
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