The Delhi High Court on Wednesday upheld the Centre’s decision to deny an extension of the Production Sharing Contract (PSC) for Vedanta Ltd’s offshore Suvali oil block in Gujarat and allow Oil and Natural Gas Corporation Ltd (ONGC) to take over operations.
Justice Purushaindra Kumar Kaurav dismissed Vedanta’s petition challenging the Ministry of Petroleum and Natural Gas’s September 19, 2025 order, which rejected the company’s 2021 application seeking a 10-year extension of the PSC signed on June 20, 1998.
Vedanta had requested an extension of the contract until June 29, 2033. The company had previously received five interim extensions, with the final extension expiring on September 29, 2024. Following the expiry, the government directed ONGC to take immediate control of the assets and operations within the PSC contract area.
In its judgement, the court observed that Vedanta’s action of “unilaterally deducting” the government’s share, either to offset excise duty liabilities or retain economic benefits, provided sufficient grounds for denying relief under the extension policy.
The court’s decision clears the way for ONGC to assume responsibility for the oil block operations and reinforces the government’s authority in managing production-sharing agreements. The ruling marks a setback for Vedanta’s efforts to continue operating the offshore block and comes as India’s energy sector focuses on strengthening public sector participation and efficient management of domestic oil and gas assets.