Vedanta recognises a ₹379 crore impairment charge after the Delhi High Court dismisses its challenge to the government’s contract-extension decision.
Highlights:
- ONGC took operational control of the block on July 22, 2026.
- The production-sharing contract expired in June 2023.
- Vedanta booked an impairment charge of approximately ₹379 crore.
- A division bench has reserved its judgment on Vedanta’s appeal.
- The companies say the final financial impact remains uncertain.
New Delhi, Nov 15: State-run Oil and Natural Gas Corporation has taken over operations and control of the disputed Cambay offshore block from Vedanta Oil & Gas following a Delhi High Court ruling, according to regulatory filings by the companies.
The takeover of block CB-OS-02 took effect on July 22, 2026, after a single-judge bench dismissed Vedanta’s challenge to the government’s decision against extending its production-sharing contract.
Vedanta operated the block with a 40 per cent participating interest. ONGC held 50 per cent, while Invenire Petrodyne held the remaining 10 per cent.
The production-sharing contract expired on June 29, 2023. Vedanta and its joint-venture partners had applied for an extension on June 28, 2021, under the government’s 2017 extension policy.
In a letter dated September 19, 2025, the government declined to extend the contract and directed the operator to hand over the block to ONGC. Vedanta challenged that decision before the Delhi High Court on September 22, 2025.
The dismissal of its petition on July 22, 2026, lifted an interim order that had required the existing position to be maintained. ONGC subsequently took custody of the block and applied for a petroleum lease on July 28.
The litigation is continuing. Vedanta appealed against the single-judge ruling before a division bench. Hearings concluded on October 1, and the judgment has been reserved, according to the filings.
Vedanta said it stopped recognising revenue and related expenses from the block from July 22. It also reassessed the recoverability of associated assets and receivables, citing the absence of a valid production-sharing contract and uncertainty arising from recent judicial developments.
Consequently, the company recognised an impairment charge of approximately ₹379 crore during the first quarter of FY27.
ONGC said it accounted for its interest in the block as an unincorporated joint venture until July 21, 2026. From the following day, it began operating the block under terms applicable to the nomination regime as the government’s nominee.
Decommissioning liabilities will be met from the block’s site restoration fund, ONGC said. Other future liabilities arising from petroleum operations after the takeover will be borne by ONGC while it continues operating the block.
Both companies said the litigation’s ultimate outcome and any consequential financial impact cannot presently be determined.
