Govt moves court to secure $500 mn due from Vedanta
The government has gone to court to secure dues of about $500 million from Vedanta, whose refusal to pay so far has delayed the renewal of the contract for its prolific Rajasthan block. “We have filed a petition in Delhi HC seeking to recover and secure our dues,” Petroleum Secretary Tarun Kappor told ET. “We want to support private sector companies working in the sector and are aware that they have to make large investments in exploration and production of crude oil and gas. The extension case is under consideration of the Government as per the Government policy.” Vedanta has been seeking a ten years extension for its block in Barmer, Rajasthan after its initial 25-year production sharing contract ended on May 14 this year. For extension, Vedanta needs to clear all government dues, as per the policy. The government demand for about $500 million was triggered after the audit flagged discrepancy in cost recovery claims by Vedanta. The company has disputed the government demand and approached an arbitration tribunal for resolution. Since the arbitration process can take long to resolve the dispute, the government has approached the court to secure its dues. Some of the disputes in the Indian oil and gas sector have remained unresolved for almost a decade with the matter being tossed between arbitrational tribunal and the courts year after year. The arbitration rules provide for securing of disputed amounts, which can either be placed with the court or in an escrow account. If the court helps secure the government dues, it would pave the way for a ten-year extension for Vedanta’s contract. After the initial contract expired mid-May, the government has been extending Vedanta’s contract by months. The latest extension of three months will last until January-end. Meanwhile, the production at Barmer block has been declining. The Barmer block, which was discovered by Cairn Energy of the UK and later acquired by mining baron Anil Agarwal’s Vedanta, has seen its output drop by a fifth in two years.
Energy guzzler India seeks foreign investment in strategic petroleum reserves
India has invited global firms to invest in its strategic petroleum reserves (SPRs) as the nation’s energy consumption growth would be fastest among large economies in coming decades, oil minister Dharmendra Pradhan told a conference on Monday. India’s share in global energy consumption is set to rise from 7% to 12% in 2050, Pradhan told the ADIPEC conference. The nation, the world’s third-biggest oil consumer and importer, earlier this year filled its three SPRs in southern India with 5.33 million tonnes of oil when prices were low. To attract private investment in its SPRs, India recently allowed Abu Dhabi National Oil Co (ADNOC) to re-export some of its oil stored in Mangalore SPR, mirroring a model adopted by South Korea and Japan. The country is building two more commercial-cum-strategic petroleum storage with capacity of 6.5 million tonnes. “I invite global energy players to come and invest in this project,” he said, adding India’s fuel demand has almost recovered to the pre-Covid levels. Last month, local sales of key fuels – gasoline, gasoil and cooking gas – in India rose compared to last year. “We anticipate that this recovery path in energy demand growth in India will sustain in the coming months,” he said. India wants to cut its carbon emissions and raise the share of gas in its energy mix to 15% by 2030 from the current 6.2%. Companies are investing $60 billion in creating oil and gas infrastructure over five years through 2024, which includes building gas import terminals and expanding gas pipeline networks to provide last mile connectivity to households and industries. The South Asian nation is spending $20 billion to produce 15 million tonnes of compressed biogas by 2023, and has recently started supplying hydrogen compressed natural gas for 50 buses as a trial.