The Delhi High Court today put on hold its single judge's order directing the Centre to extend till 2030 its production sharing contract (PSC) with the Vedanta Limited and ONGC to produce oil from a Rajasthan block.
While staying the order, a bench of Justices Sanjiv Khanna and Chander Shekhar asked the Centre to "decide or process" within two months Vedanta's application for extension of the PSC under its new policy of April 2017 for such contracts.
The order came on the Centre's appeal against the single judge's May 31 decision in favour of Vedanta, formerly Cairn India.
The government, in its plea filed through central government standing counsel Amit Mahajan, has claimed that the PSC with Vedanta will fall under the new policy. The contention has been opposed by the company.
The court will hear the matter next on November 15.
The single judge had held that Vedanta was entitled to extension of its contract, which is set to expire in 2020, for a further period of 10 years on the same terms and agreements when it was first entered into in 1995.
The direction by the court came on Vedanta's plea for extension of the PSC which the company and the Oil and Natural Gas Corporation (ONGC) have with the government to extract oil from the Barmer block in Rajasthan.
ONGC had communicated its approval for extension of the PSC in July 2016, after which the Centre had assured the court it would positively take a decision by October of the same year.
However, later it had sought more time as it was framing a uniform policy with regard to all such PSCs.
Vedanta had moved the court after its request to the government in 2009 to extend the PSC did not elicit any response. It had claimed that the delay in a decision by the government was preventing it from infusing further investment of over Rs 30,000 crore in the project.
It had also contended that when none of the state-run companies could find oil in the block, it had invested around Rs 10,000 crore in exploration back in 1995 when the PSC was entered into. It had also claimed that the government has earned around Rs 80,000 crore from commercial production out of the area.
In its plea, Vedanta had said that the estimated recoverable assets in the block were about 1.2 billion barrels of oil equivalent, of which 466 million barrels are expected to be recovered beyond current PSC period until 2030.
Besides, it was also producing natural gas from the block and supplying it to government companies, the company had told the court.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)