Delhi HC dismisses Cairn India's plea for export of excess crude

Zee Media Bureau

New Delhi:  The Delhi High Court on Tuesday dismissed a plea filed by UK-based Vedanta group company, Cairn India Ltd, seeking permission to export excess crude from its Barmer oil field in Rajasthan.

Justice Manmohan, who had reserved the verdict on August 10, today pronounced the judgement in the matter in which the firm had argued that the export policy gave it the right to export.

During arguments, Additional Solicitor General Tushar Mehta, appearing for Ministry of Petroleum and Natural Gas, had opposed Cairn India's plea saying it cannot be permitted to export crude as "no unrefined petroleum product is allowed to be exported".

However, the counsel appearing for the firm had argued that no policy has been placed by the ministry before the court which says that crude cannot be exported.

The government had said that export of country's domestic crude oil cannot be allowed as it would be detrimental to national interest considering the fact that nearly 85 percent of required crude was imported.

Cairn India's counsel had said they were ready to sell crude within India provided they got the benchmark price. Cairn has a production-sharing contract with government under which the company gets 70 percent of crude produced from Barmer, with the rest going to the government.

Under the contract, government or its nominee can pick up the company's share of crude and what is not picked up, and sell it to private players or exported, Cairn has said. However, after the crude is sold, the government gets 70 percent of the profits, the company has contended. It had claimed that as a result of selling excess crude to private domestic companies like Reliance and Essar, at rates lower than international prices, the government was losing about Rs 4.5 crore per day.

Cairn had claimed it had made several representations to the Directorate General of Foreign Trade for permission to export the crude, but did not get any response. It had written to Indian Oil Corporation Ltd (IOCL) to "canalise" export of the crude, but got no response from it as well. IOCL is the canalising agent for the export of crude. Canalising agents are those through which a product can be imported or exported by companies which do not have permission to do so directly.

With PTI Inputs