New Delhi

In the interim, the firm’s Barmer basin block licence, whose initial 25-year term ended on May 15, 2020, has been given an eighth interim extension, the official, who wished not to be identified, 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 Narendra 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 per cent more during the extended period.

Vedanta’s Cairn sought a 10-year extension of Rajasthan PSC, which the government approved. But the firm challenged in Delhi High Court the condition for additional profit petroleum. A single judge bench of the Delhi High Court in May 2018 upheld the company position that the extension has to be on same terms and conditions as the original licence.

The government challenged the order before a division bench, which on March 26 this year ruled that “there cannot be extension of the Production Sharing Contract unconditionally, on the same terms and conditions which were prevailing 25 years ago ie on 15th May, 1995, the effective date.”

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