Vedanta has challenged in the Supreme Court an order passed by the Delhi High Court permitting the government to seek a higher share in the profit form the company's prolific Rajasthan field upon renewal of the production sharing contract, according to a report in The Economic Times.
In March, the Delhi High Court said the Centre can demand 10 per cent higher share in the profit derived from oil produced by Vedanta from the Barmer oil field in Rajasthan to extend the production sharing contract (PSC) with the company for another 10 years, PTI report said.
In April, the oil ministry said it will seek tens of millions of dollars from Vedanta's Cairn Oil & Gas after the Delhi High Court held that the firm was liable to pay higher profit share to the government in lieu of its Rajasthan oil and gas block license being extended beyond initial term, a top official said. In the interim, the firm's Barmer basin block licence, whose initial 25-year term ended on May 15, 2020, has been given an eighth interim extension, the official, who wished not to be identified, said to PTI.
"Now that the Delhi High Court has upheld the government policy, we will issue recovery notices seeking higher profit petroleum since May 15, 2020," he had said. "The exact amount is being calculated but it will be in tens of millions of dollars."
The Union Cabinet headed by Prime Minister Narendrea Modi had in March 2017 approved a policy for extension of production sharing contracts (PSCs) for oil and gas blocks beyond their initial term. This policy provided that the government's share of profit petroleum (earning from sale of oil and gas after deducting all expenses) would be 10 per cent more during the extended period.
(With PTI inputs)
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