ONGC Temporarily Assumes Control Over Vedanta-Operated Oilfields As Contract Renewal Dispute Goes To Court

ONGC Temporarily Assumes Control Over Vedanta-Operated Oilfields As Contract Renewal Dispute Goes To Court

Last Updated Sep - 23 - 2025, 10:36 AM | Source : Fela News

Government orders interim operational control to ONGC for CB-OS/2 fields; Vedanta challenges decision in Delhi High Court.

In a significant move, the Government has directed ONGC (Oil and Natural Gas Corporation) to take over interim operational control of the Vedanta-operated CB-OS/2 oil and gas block, off India’s west coast. Vedanta, which has been running the block under older licensing systems, had applied to renew its contract but that renewal was rejected. Vedanta has now approached the Delhi High Court to contest this decision. 

The CB-OS/2 block includes the Lakshmi and Gauri fields. In that consortium, Vedanta held 40 per cent, ONGC 50 per cent, and Tata Petrodyne around 10 per cent. Though Vedanta says the block contributes less than 0.3% to its overall earnings, the fields currently produce about 3,400 barrels of oil per day and 340,000 standard cubic metres of gas.

The Government has described the takeover as an interim measure to maintain continuity and preserve petroleum reserves until the block is awarded to another operator. It is being seen as an urgent public interest step.

Notably, this marks the first time India has declined to renew a contract for an oilfield operator under such older policy frameworks. This is a signal: the energy sector is increasingly asserting stricter oversight and expectations of accountability in licensing renewals. 

On the legal front, the case has moved into the Delhi High Court. Justice Sachin Datta has recused himself, and a fresh bench is expected to review whether the government’s refusal and the interim takeover hold under law. Meanwhile, investors and companies involved in extraction watch closely this development could reshape how contracts, renewals, and operational control are handled in India’s oil-and-gas sector.

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