The Centre on Thursday told the Delhi High Court that crude oil being a scarce resource, Cairn India, a subsidiary of UK-based Vedanta group, could not be allowed to export it from its Barmer oil and gas block in Rajasthan.
Additional solicitor general Tushar Mehta, appearing for the ministry of petroleum and natural gas, told Justice Manmohan that the government had a constitutional mandate of public trust and it being a custodian of natural resources could not be divested of its power to regulate exports.
He argued that Cairn India could not allege discrimination as no other company in India was being allowed to export crude oil and the Vedanta firm was free to sell excessive crude to any domestic refinery it wanted. “Crude oil export is not in the national interest. India’s energy cost would go up,” said Mehta.
However, Cairn India argued that domestic refineries were buying its crude at a rate 20% less than the international prices. The London-based Anil Agarwal-promoted Cairn India had moved the HC in January seeking directions to the government to permit the oil explorer to export crude oil drilled from the largest onshore area — Barmer. This, Cairn claimed, would help it to earn a better price and could also lead to substantial additional revenue for the state and central governments in terms of royalty, taxes and profit petroleum.
The petroleum ministry had earlier shot down a proposal from Cairn India to export crude oil from India’s largest onshore field, saying its production sharing contract (PSC) with the Centre did not provide for sales abroad. The extant PSC for the Barmer block would expire on May 14, 2020, and the explorer is seeking a 10-year extension for it.
The company had earlier told the court that it had incurred a loss of `1,400 crore after the petroleum ministry forced it to sell crude from its Rajasthan oil field to private players at prices 20% less than the global rates.