India's oil ministry to seek millions from Cairn

Wednesday 07th April 2021 08:55 EDT

India's oil ministry will seek tens of millions of dollars from Vedanta’s Cairn Oil & Gas after the Delhi High Court held that the firm was liable to pay higher profit share to the government in lieu of its Rajasthan oil and gas block licence being extended beyond initial term, a top official said.

In the interim, the firm’s Barmer basin block licence, whose initial 25-year term ended on May15, 2020, has been given an eighth interim extension, the official said. “Now that the Delhi High Court has upheld the government policy, we will issue recovery notices seeking higher profit petroleum since May 15, 2020,” he said. “The exact amount is being calculated but it will be in tens of millions of dollars.”

When contacted, a company spokesperson said, “We are in the process of reviewing the court’s order, will assess any next course of action” after that. The Union Cabinet headed by Prime Minister Narendrea Modi had in March 2017 approved a policy for extension of production sharing contracts (PSCs) for oil and gas blocks beyond their initial term. This policy provided that the government's share of profit petroleum (earning from sale of oil and gas after deducting all expenses) would be 10% more during the extended period.

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