Delhi high court denies immediate relief to Vedanta against ONGC takeover of oil block

Mining company Vedanta Ltd will have to wait longer for relief in its fight to retain control of an oil and gas block off India’s west coast after the Delhi high court declined to grant it immediate interim relief but agreed to hear its appeal on 27 July.

A division bench of Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta refused Vedanta's request for an immediate status quo over the offshore block in Gujarat's Cambay Basin on Thursday. The bench observed that if Vedanta ultimately succeeds in its appeal, the court can restore possession of the block at that stage.

Appearing for the Centre, attorney general R. Venkataramani told the court that Oil and Natural Gas Corporation had already taken over the block and was fully capable of operating it.

“We will run it. Don't worry about it. ONGC has completely taken over. There is no question of giving it up," he submitted.

Senior advocate Mukul Rohatgi, appearing for Vedanta, disputed the Centre's claim and said Vedanta continues to remain in possession of the block as its operator and that hundreds of its employees are still working there.

In response to Mint's queries after the hearing, a Vedanta spokesperson said, "Operations of the block have not been taken over by any party. It is status quo as the matter remains sub judice."

Vedanta shares closed 0.9% higher at ₹264.65 on the NSE on Thursday. The shares have declined 56% so far in 2026.

According to a PTI report, the CB-OS/2 block, including the Lakshmi and Gauri fields, produces about 3,400 barrels of oil a day and 340,000 standard cubic metres of natural gas per day.

Earlier Thursday, Venkataramani told a division bench led by Delhi high court chief justice Devendra Kumar Upadhyaya that state-run ONGC had taken possession of the block a day after the Delhi high court denied a 10-year extension of Vedanta’s production-sharing contract.

Urgent mention

“There is no urgency in the matter. We have already taken possession. There is an affidavit on record," additional solicitor general Chetan Sharma, appearing for the Centre along with Venkataramani, told the division bench, which had taken up an urgent mention by Vedanta.

Vedanta, which filed its appeal overnight, sought interim relief to restrain the Centre from transferring the block and to protect its operations. Taking note of the submissions, the chief justice agreed to entertain the appeal and directed that the matter be listed for urgent hearing before another division bench later on Thursday.

On Wednesday, a single judge upheld the Centre's decision to deny the extension of Vedanta’s production-sharing contract (PSC). The judge dismissed Vedanta's challenge to the Centre's September 2025 rejection of its request for a 10-year extension under the 2017 PSC Extension Policy.

According to the single judge’s order, reviewed by Mint, the court held that while Vedanta's petition was maintainable, the company had no automatic right to an extension. It ruled that the Union government, acting as trustee of the country's natural resources, was entitled to consider not only a company's technical eligibility but also its conduct while deciding whether to grant an extension.

The court observed that private companies cannot hold the government to ransom in matters concerning the exploitation of the country's natural resources.

It also upheld the government's reliance on Vedanta's unilateral deduction of about ₹88 crore from the government's share of profit petroleum towards its special additional excise duty (SAED) liability as a valid ground for rejecting the extension request.

Request rejected

Vedanta has operated the block since 1998 under a PSC with the Centre and consortium partners including ONGC. The PSC expired in June 2023.

Although Vedanta applied for a 10-year extension before the contract expired, the government rejected the request in September 2025, citing outstanding dues and non-compliance with policy. It directed the company to cease operations and hand over the block to ONGC.

Vedanta challenged the decision, arguing that it had applied for the extension well in time, that the government had continued to grant interim extensions while deciding the application, and that the dues were disputed and later paid under protest. The Centre maintained that an extension under the 2017 policy was discretionary and not a matter of right.

In January, the Delhi high court had directed both sides to maintain status quo, preventing the transfer of the block to ONGC during the pendency of the case. That interim protection ended with Wednesday's judgment, after which the Centre said ONGC had taken possession of the block.