Govt refuses to extend Vedanta’s contract for Cambay basin block

In a setback to Anil Agarwal-led Vedanta Group, the government has rejected an application from its subsidiary for extending the production sharing contract (PSC) of a key Cambay basin oil and gas block, CB-OS/2.

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Vedanta Cairn Oil and Gas, aunit of Vedanta Ltd, operated the Gujarat offshore block with a 40 per cent stake, while state-owned Oil and Natural Gas Corporation (ONGC) held 50 per cent and Invenire Energy 10 per cent.

‘ONGC, in a regulatory filing, said the Ministry of Petroleum and Natural Gas, through a September 19 letter, informed partners that the extension request was not accepted. ONGC has been asked to manage operations temporarily, though no reason was cited for the denial.

‘The PSC, signed on August 30, 1998, expired on June 30, 2023. Vedanta-led partners had continued operations while awaiting a decision on renewal. The CB-OS/2 block houses Lakshmi and Gauri fields, producing 3,400 barrels of oil and 3.4 lakh standard cubic metres of gas daily.

‘According to a 2019 reserve report by DeGolyer and Mac-Naughton, the block held an estimated 13.6 million barrels of oil and oil-equivalent gas.