India’s Oil and Natural Gas Corporation (ONGC) has officially taken over the operations of the CB-OS/2 Cambay basin oil and gas block. This significant development comes after the government rejected Vedanta’s application to extend its production sharing contract (PSC) for the lucrative block, where it previously served as the operator.
The Union Ministry of Petroleum and Natural Gas issued a directive on September 19, informing the original contractor parties – Vedanta, ONGC, and Tata Petrodyne – that their request for a PSC extension for CB-OS/2 had been declined. In a separate, direct communication, ONGC was instructed to assume control of all associated data, assets, and operational responsibilities as the government’s designated entity. In response, ONGC has confirmed it is now in charge of the block, as announced to the stock exchanges on Monday.
This handover to ONGC is explicitly an ‘interim measure’ by the Indian government. Its primary purpose is to ensure the seamless continuation of petroleum operations, safeguarding vital oil and gas reserves, until a new long-term agreement or allocation for the block is established with another suitable party.
Located off India’s west coast, the CB-OS/2 block encompasses the active Lakshmi and Gauri fields, which currently yield approximately 3,400 barrels of oil and 340,000 standard cubic meters of gas daily. The block was initially awarded to Cairn Energy India under a pre-New Exploration Licensing Policy (NELP) Production Sharing Contract back in 1998. Following the commercial discovery of oil and gas, a Petroleum Mining Lease (PML) was granted in 2002. Later, in 2011, the Vedanta Group acquired a majority stake in Cairn Energy, subsequently integrating it into its corporate structure.
Prior to the government’s intervention, Vedanta, through its subsidiary Cairn Energy, held a 40% stake in the block. ONGC maintained a 50% interest, while the remaining 10% was held by Tata Petrodyne, which has since been acquired by Invenire Energy.