The Delhi High Court on Wednesday dismissed a plea by Vedanta for permission to export its share of surplus crude oil from Barmer oilfields in Rajasthan.
The Delhi High Court on Wednesday dismissed a plea by Vedanta for permission to export its share of surplus crude oil from Barmer oilfields in Rajasthan. A Division Bench comprising justices S Ravindra Bhat and Sanjeev Sachdeva upheld the single judge’s order that had disallowed crude oil exports in October 2016. Justice Manmohan in his 2016 judgment had accepted the government’s policy that India is not self-sufficient in oil production, and till such self sufficiency is achieved, no permission can be granted to export crude from India.
The judge had agreed with the decision of the empowered committee of secretaries that denied permission to erstwhile Cairn India, a Vedanta group company, to export its share of crude oil, saying the reasons given by the panel “are legal, germane and valid grounds.” The government had told the HC that India had a total refining capacity of 223 million tonne, but as of now, only 38 million tonne of crude oil was available, thus it would not be in the interest of the country to export crude. It also said Cairn India had been permitted by the empowered committee to sell crude to private companies within the country.
The UK-based Vedanta group company can only claim compensation from the government for not picking up its share of crude from the oilfield, the Centre had told the HC. However, Cairn India told the court that it was selling the crude at a lower price and the government was “discriminatory” towards it as the policy has permitted Indian Oil to export.
It further said that a loss of Rs 1,400 crore has been caused to the government as it was forced to sell its share of crude from its Rajasthan oil field to private players at prices 20% less than global rates.
Under the PSC between Cairn India and state explorer ONGC, it could sell surplus crude oil only to the government and its nominees. Cairn had a PSC with the government under which the company got 70% of crude produced from Barmer and the remaining went to the government. Earlier this year, the government had extended Vedanta’s production contract for the Rajasthan block by 10 years to 2030 after the original contract ends in 2020.