Vedanta Challenges Oil Block Extension Denial in Delhi High Court

Vedanta Ltd has challenged the central government’s denial of a 10-year extension for its CB-OS/2 oil and gas block in Gujarat’s Cambay Basin before the Delhi High Court. The mining major contends the rejection, upheld by a single judge, relies on unstated revenue-maximization criteria.

The Core Dispute

Vedanta’s legal team, led by senior advocates Mukul Rohatgi and Jayant Mehta, argued that any move to maximize revenue from oil and gas fields must come through formal amendments to the 2017 Extension Policy. They emphasized the company seeks fair consideration under existing rules, not an automatic extension.

• Vedanta boasts nearly 28 years of operational experience in the sector.
• The company has invested approximately $10 billion in India’s oil and gas sector.
• India’s oil import dependency stands at around 90%.

Policy and Precedent

Rohatgi highlighted the potential risks of replacing an experienced operator, considering India’s high import dependency and the limited number of companies capable of offshore drilling. Such a change could hinder production maximization by requiring fresh investment and facing new production risks.

Vedanta further asserted that the 2017 policy already accounts for increased government revenue through a 10% markup during an extension period. This provision, they argue, makes unstated revenue maximization an invalid reason for denial.

The company also pointed to similar extensions granted to other blocks, suggesting the 2017 policy remains active and should be applied consistently.

Origins of the Controversy

The government’s initial denial in September 2025 partly stemmed from Vedanta’s unilateral deduction of the government’s share of profit petroleum. This deduction was made to offset Vedanta’s special additional excise duty (SAED) liability.

A single judge of the Delhi High Court upheld the Centre’s decision on July 22, prompting Vedanta’s current appeal before a division bench. The court is now tasked with assessing the legal sustainability of the rejection, with the next hearing scheduled for August 18.