ONGC Fails to Assume Control of Cambay Block as Vedanta Mounts Challenge to Government Decision

ONGC Faces Delays in Taking Control of Cambay Basin Block as Vedanta Challenges Government Decision

The State-owned Oil and Natural Gas Corporation (ONGC) has yet to assume operational control of the Cambay basin block CB-OS-02 in Gujarat, despite being instructed to do so by the Ministry of Petroleum and Natural Gas. The delay is due to Vedanta's challenge to the government's decision not to extend the block's contract term.

In a September 19, 2025, directive, the Ministry of Petroleum and Natural Gas rejected an extension of the contract for the block, in which ONGC holds a 50 per cent participating interest, Vedanta holds 40 per cent, and Invenire Petrodyne Limited holds 10 per cent.

Following the government's decision, ONGC said it was instructed to immediately take over operations of the block and deployed an operational team to Suvali in Gujarat from September 20, 2025. However, the company stated that Vedanta has not yet handed over operations. Vedanta filed a writ petition before the Delhi High Court on September 22, 2025, challenging the rejection of the extension of the contract.

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The court has directed the parties to maintain the status quo in the matter and all hearings have been completed on May 18, 2026. The matter has been reserved for order by the court. Pending the outcome of the proceedings, Vedanta continues to act as the operator for the block.

The CB-OS/2 block holds Lakshmi and Gauri fields and produces about 3,400 barrels of oil per day and 3.4 lakh standard cubic metres of gas per day. The block was one of the three properties operated by Cairn India when billionaire Anil Agarwal's group acquired the firm in 2011 for USD 8.67 billion.

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The PSC for CB-OS/2 block was signed on August 30, 1998, and the contract expired on June 30, 2023. Prior to the denial of extension for CB-OS/2, the government had extended the contracts for Vedanta Cairn's two other blocks - a 10-year PSC extension was approved for the Rajasthan block RJ-ON-90/1 till May 14, 2030, and a similar period was given for the PKGM-1 block, more commonly known as the Ravva field, till October 27, 2029.

According to a DeGolyer and MacNaughton reserve report commissioned by Vedanta Cairn in 2019, CB-OS/2 block's two discoveries, Gauri and Lakshmi, held a total in-place reserves of 13.6 million barrels of oil and oil equivalent gas.