English
Arabic
Chinese (Simplified)
Gujarati
Hindi
Marathi
Persian
New Delhi: The government has gone to court to secure dues of about $500 million from Vedanta, whose refusal to pay so far has delayed the renewal of the contract for its prolific Rajasthan block.
“We have filed a petition in Delhi HC seeking to recover and secure our dues,” Petroleum Secretary Tarun Kappor told ET. “We want to support private sector companies working in the sector and are aware that they have to make large investments in exploration and production of crude oil and gas. The extension case is under consideration of the Government as per the Government policy.”
Vedanta has been seeking a ten years extension for its block in Barmer, Rajasthan after its initial 25-year production sharing contract ended on May 14 this year. For extension, Vedanta needs to clear all government dues, as per the policy.
The government demand for about $500 million was triggered after the audit flagged discrepancy in cost recovery claims by Vedanta. The company has disputed the government demand and approached an arbitration tribunal for resolution.
Since the arbitration process can take long to resolve the dispute, the government has approached the court to secure its dues. Some of the disputes in the Indian oil and gas sector have remained unresolved for almost a decade with the matter being tossed between arbitrational tribunal and the courts year after year.
The arbitration rules provide for securing of disputed amounts, which can either be placed with the court or in an escrow account. If the court helps secure the government dues, it would pave the way for a ten-year extension for Vedanta’s contract. After the initial contract expired mid-May, the government has been extending Vedanta’s contract by months. The latest extension of three months will last until January-end.
Meanwhile, the production at Barmer block has been declining. The Barmer block, which was discovered by Cairn Energy of the UK and later acquired by mining baron Anil Agarwal’s Vedanta, has seen its output drop by a fifth in two years.
ETEW