Delhi HC turns down Vedanta plea to export excess crude from Barmer

In 2016, the court had rejected Cairn's plea stating that the company would get the right to seek permission to export its share of excess crude from Barmer only after the country was self-sufficient

A division Bench of the Delhi High Court on Wednesday upheld the single-judge order rejecting Vedanta Cairn’s plea to export excess crude oil from its Barmer oil field in Rajasthan.

In 2016, a Bench had rejected Cairn’s plea stating the company would get the right to seek permission only after the country was self-sufficient. As the government had not declared itself to be self-sufficient, the firm could only claim compensation from the government under the dispute-resolution mechanism, the court had then said.

According to the production sharing contract (PSC) between Cairn India, and Oil and Natural Gas Corporation (ONGC), the former could sell crude oil only to the government or companies nominated by it. Under the PSC, Cairn has 70 per cent share in the total production from the Barmer block, while the rest belongs to ONGC, as it is holds the remaining 30 per cent.

Cairn India had sought permission to export the surplus alleging that domestic refiners were not offering competitive prices compared to global peers, and was being forced to sell it to Reliance Industries and Essar Oil at nearly 20 per cent discount.

Earlier this year, another judgment of the court had directed the Centre to extend its PSC with Vedanta till 2030. Vedanta had moved the court after it claimed that its request in 2009 to extend the PSC did not elicit any response from the government. The delay, Vedanta claimed, had prevented it from investing up to Rs 300 billion in the project. 

Vedanta had said the estimated recoverable reserves in the block were approximately 1.2 billion barrels of oil equivalent (BOE), of which, 466 million BOE can be recovered if the existing PSC was extended till 2030.