Both the company and the government agreed to increase the latter’s share of profit by 10 per cent, until the ongoing legal battle got over.
“Since the legal process is going on and the case is likely to go to the Supreme Court, we have requested the government to give us extension with a 10 per cent increase in royalty as they wanted.
“Let the legal process take its own course. Whatever the verdict of the court, we will accept that,” Anil Agarwal, chairman of Vedanta Resources, said earlier this month.
The Telegraph
Vedanta has got a 10-year extension of its contract for the exploration and production of oil and gas from the prolific Rajasthan oil block, under the condition it pays a higher share of profit to the government.
The 25-year contract for Barmer block RJ-ON-90/1 of Vedanta, formerly Cairn India, is due for renewal on May 14, 2020.
“The Government of India, acting through the Directorate General of Hydrocarbons, Ministry of Petroleum and Natural Gas has granted its approval for a ten-year extension of the Production Sharing Contract (PSC) for the Rajasthan Block, RJ-ON-90/1,” the company said in a regulatory filing on Monday.
The tenure of contract has been extended for an additional period of 10 years with effect from May 15, 2020.
“Such extension has been granted by the Government of India, pursuant to its policy dated April 7, 2017, for extension of pre-New Exploration Licensing Policy (pre-NELP) exploration blocks PSCs subject to certain conditions,” the company said. Even though it disagrees with the government stand that the Barmer licence can be renewed only under the new policy, Vedanta had applied for contract extension to bring certainty to its own investment plan.