Vedanta says its contention upheld in arbitration award in Rajasthan block case

Govt had extended Vedanta's licence for Barmer oil block by 10 years till 2030

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26 Aug, 2025 12:21

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Billionaire Anil Agarwal-led Vedanta Ltd on August 24 said its contention has been upheld in the arbitration award issued in the Rajasthan oil block case, in which the company had challenged the government's demand for payout of additional profit.

"The company has received an arbitration award dated August 23, 2023 inter alia upholding the contention of the company," Vedanta informed the stock exchanges.

The additional profit, "on account of Director General of Hydrocarbon (DGH) audit exceptions in relation to allocation of common development costs across development areas and certain other matters, is not payable as per terms of the Production Sharing Contract (PCS) for Rajasthan block", it added.

Vedanta had initiated the arbitration proceedings after the government had sought additional share of profit from the company, while renewing its licence for the prolific oil block in Rajasthan's Barmer.

The initial licence to explore and produce oil and gas from the Barmer block expired on May 14, 2020. The government had agreed to a 10-year extension but it wanted a higher share of oil and gas from the block as well as settlement of Rs 5,651 crore dispute over cost recovery for the same.

In October last year, the government had agreed to sign the extension of the PSC pending the settlement of the dispute.

The government claimed that it should be transferred an additional profit by Vedanta after reallocating common costs between different fields in the block and disallowance of cost on a pipeline. It sought Rs 2,870 crore for fiscal 2016-17, which was revised to Rs 3,613 crore for the period till March 2018. On April 28, 2022, an additional amount of Rs 2,038 crore was included.

Vedanta had disputed this demand before the arbitration panel.

The company, while informing the exchanges that its contentions has been upheld in the arbitration award, noted that it "is in the process of reviewing the award in detail and evaluating its financial impact".

Vedanta's shares inched lower at the stock market on August 24, with the scrip settling at Rs 237.55 on the BSE, down 0.23 percent as against the previous day's close.

With PTI inputs