Delhi High Court Orders Status Quo On ONGC Takeover Of Vedanta's Gujarat Offshore Oil Block

The Delhi High Court on Tuesday ordered a status quo on the government's move to take over an offshore oil block in Gujarat operated by Vedanta Ltd., effectively pausing the Centre's direction asking the company to stop operations and hand over the block to ONGC.

A single-judge bench of Justice Amit Sharma declined the Union government's request to have Vedanta's challenge thrown out at the threshold, saying the issues raised could not be decided without a proper response from the authorities.

Rejecting the preliminary objection on maintainability, the court said, “In view of the aforesaid, submissions on behalf of respondent Nos. 2 and 4 raising preliminary objection with respect to maintainability of the present petition and its dismissal in limine cannot be accepted.”

The dispute relates to the CB-OS/2 offshore oil block off the Gujarat coast. Vedanta has operated the block since 1998 under a production-sharing contract that expired in June 2023.

While Vedanta's request for a fresh 10-year term was under consideration, the government allowed operations at the block to continue through a series of interim extensions. In September 2025, the Petroleum Ministry declined the extension and asked the company to stop operations and hand over the block and related assets to ONGC.

Vedanta moved the High Court saying the decision came after a long period during which operations were allowed to continue, and that the reasons cited in the rejection had not been flagged earlier as decisive. The company also said it was not given a proper opportunity to address those issues before the handover directions were issued.

The Union government opposed the petition, maintaining that Vedanta had no vested right to an extension. It said the rejection was an administrative decision taken in public interest and that interim permissions did not confer any continuing entitlement.

The court, however, said Vedanta's challenge raised issues that required closer examination. “the petitioner has raised certain issues, as noted hereinabove leading upto the impugned rejection letter/order, which require consideration and the same cannot be properly adjudicated without an appropriate response/counter affidavit on behalf of concerned respondents,” the court observed.

Pending further hearing, the court directed that the existing situation on the ground should not be disturbed. “In the meantime, the parties shall maintain status quo.” the court said.

The Centre and other parties have been granted four weeks to file their replies. The matter is listed next on February 27, 2026.