Government to appeal against HC verdict on Cairn’s Rajasthan PSC, says Pradhan

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New Delhi | Published: June 7, 2018 2:28:31 AM

As reported by FE on Wednesday, since the order was passed by a single-judge bench, the government may file the appeal before a larger bench of the same court or go to the apex court.

Cairn's Barmer PSC, cairn, delhi hc, government, vedanta cairn, dharmendra pradhanPetroleum minister Dharmendra Pradhan on Wednesday said the government will appeal against the Delhi High Court order in favour of Cairn. (PTI)

Petroleum minister Dharmendra Pradhan on Wednesday said the government will appeal against the Delhi High Court order in favour of Cairn, an arm of Vedanta, that mandated that the initial terms must continue for the company’s extended production sharing contract (PSC) with the government for its Barmer block (RJ-ON-90/1) in Rajasthan.

“The government has the right to decide policies. The new policy regarding extension of PSCs is in the public domain and we will stick to it,” said Pradhan. The HC order implied that the company won’t have to shell out an extra 10 percentage points as government’s share of “profit petroleum” during the extended term of the PSC between 2020 and 2030.

However, the ministry of petroleum and natural gas in the modified policy dated April 7, 2017, said, “The government share of profit petroleum during the extended period of contract shall be 10% higher for these blocks, than the share as calculated using the normal PSC provisions in any year during the extended period and hence will vary from year to year based on investment multiple (IM)/post tax rate of return (PTRR).”

As reported by FE on Wednesday, since the order was passed by a single-judge bench, the government may file the appeal before a larger bench of the same court or go to the apex court. A 10-year extension of Cairn’s PSC for the Rajasthan block — which was due to expire on May 14, 2020 — was granted by the government in March 2017 under a modified policy, which did away with the practice of automatic extension of such contracts.

However, the government had added the rider of extra profit share to itself, against which the firm moved the court. On fuel prices, Pradhan said the government is not considering rolling back price deregulation. “The government is sensitive towards the issue and it will not let hurt the poor. We are working on the issue continuously keeping all factors in mind.”

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