Vedanta Oil & Gas shares fall over 3% after firm discloses two legal matters involving ONGC, GoI

Shares of Vedanta Oil & Gas fell as much as 3.4% to their day’s low of Rs 33.66 on the BSE on Wednesday after the company disclosed two separate legal matters involving the Oil and Natural Gas Corporation Limited (ONGC) and the Directorate General of Hydrocarbons (DGH), Government of India.

In the first matter, the company said it had received demand letters from the DGH regarding four blocks awarded under the Open Acreage Licensing Policy (OALP) bidding rounds. According to the company, DGH has not granted further extensions for the four blocks and has sought payment of liquidated damages along with applicable interest.

Vedanta said it believes it has valid grounds in the matter and is pursuing appropriate legal remedies available. The company has also requested DGH to refer the matter to the Committee for External Eminent Experts (CEEE) for resolution through conciliation or mediation.


Also read: Vedanta Aluminium vs Power vs Oil & Gas vs Iron & Steel: Which stock should you buy?

The company said the financial impact, if any, arising from the DGH matter will be assessed and accounted for, as required, based on the outcome of the proceedings and in accordance with applicable accounting standards. The aggregate amount claimed by DGH is approximately $35 million plus interest.

Vedanta Oil & Gas and ONGC

In a separate disclosure, the company said it had received a copy of an enforcement petition filed by ONGC before the Delhi High Court seeking enforcement of an arbitral award dated July 31, 2023, arising from arbitration proceedings between ONGC and Vedanta Limited.

At a hearing on July 20, the Delhi High Court issued a notice to the company to file its reply. No interim adverse order has been passed against the company, and the next hearing is scheduled for September 11, 2026.

The arbitral award relates to an amount of approximately $37 million applicable to Vedanta Limited and its subsidiaries. The company said the amount has already been provided for in its books of account. Vedanta is evaluating the matter and said it will pursue appropriate legal remedies.

Crisil upgrades Vedanta Oil & Gas

Earlier this week, Vedanta Oil and Gas Ltd's long-term rating was upgraded to CRISIL AA+/Stable from CRISIL A+/Watch Developing, while its short-term rating was withdrawn.

CRISIL said the upgrade factors in the company's stronger business and financial risk profile following the transfer of Vedanta's oil and gas undertaking into the company as part of the demerger. Vedanta Oil and Gas is one of India's largest private-sector oil and gas producers, operating 44 blocks covering more than 47,000 square kilometres and producing approximately 87 kilo barrels of oil equivalent per day (kboepd) in fiscal 2026.

Read more: Vedanta shares drop 26% in two months, erase all post-demerger gains. Time to buy or better to avoid?

The rating agency said the company benefits from a healthy reserve base, established producing assets and a competitive operating cost structure. More than 80% of production comes from its Rajasthan assets, while operating efficiency remains strong, supported by first-quartile operating costs and the production-sharing contract framework.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)