Oil & Natural Gas Corporation Limited has disclosed receiving a significant tax demand order from the Commissioner CGST & Central Excise, Surat, under SEBI's disclosure regulations. The order, received on January 7, 2026, pertains to Special Additional Excise Duty obligations related to crude oil production in a joint venture block.

Tax Demand Details

The Commissioner has issued demands under the Central Excise Act 1944 and Section 147 of the Finance Act, 2002, specifically targeting the 10% participating interest held by M/s Invenire Petrodyne Ltd. The financial implications of the order are substantial:

Joint Venture Structure

The dispute centers around the Pre NELP Block CB-OS-02, operated as an Unincorporated Joint Venture with clearly defined participating interests. The partnership structure reveals the complexity of the tax obligation:

Company's Position

ONGC has maintained a clear stance regarding its liability in this matter. The company argues that as a non-operator partner, it does not qualify as a "manufacturer" within the meaning of Central Excise law, thereby exempting it from SAED obligations related to Invenire Petrodyne Ltd's 10% participating interest. This legal interpretation forms the foundation of ONGC's defense against the tax demand.

The company has already fulfilled its SAED obligations for its own 50% participating interest, demonstrating compliance with tax requirements for its direct stake in the joint venture.

Financial Impact Assessment

Despite the substantial amount involved, ONGC has assessed the potential impact on its operations. The company stated there would be "no significant impact in view of size and scale of operations," indicating its financial resilience to handle such regulatory challenges.

Next Steps

ONGC has outlined its immediate response strategy to contest the order. The company plans to review the order thoroughly and file an appeal before the appropriate appellate authority within the stipulated timeframe. This approach demonstrates the company's confidence in its legal position and commitment to protecting shareholder interests through proper legal channels.

Oil & Natural Gas Corporation has achieved significant progress in its blowout control operations at Well Mori-5 in Andhra Pradesh, with the Crisis Management Team reporting substantial improvements in the situation. The company continues focused blowout control efforts at the facility, which is operated by PEC contractor Deep Industries.

Incident Background and Timeline

The oil PSU had reported a gas leak during work-over operations at its Mori field facility in Andhra Pradesh. The incident was flagged by operator Deep Industries, with the company confirming there were no casualties or injuries reported. The affected well is located in a remote area with no human habitation within a radius of around 500-600 metres.

Operational Progress and Current Status

The blowout control operations have shown marked improvement across multiple parameters. Fire intensity, noise levels, and ambient heat in the vicinity of the well have reduced significantly, indicating effective progress in managing the situation according to the approved blowout control plan.

Infrastructure and Logistics Development

ONGC has completed construction of an approach road from the rear end of the wellsite to facilitate debris clearance operations. The required logistics have been mobilised for systematic debris removal, enabling continued progress toward wellhead capping operations.

A water blanket has been established at the wellsite to support ongoing debris removal in the vicinity of the wellhead. This infrastructure development is crucial for enabling subsequent operations for capping the wellhead, as outlined in the approved action plan.

Community Impact and Safety Measures

In recognition of the steady progress achieved and the remote likelihood of escalation, the district administration has advised residents in surrounding areas to resume their normal activities. This development reflects the significant improvement in the operational situation and reduced risk to the local community.

The company maintains that safety of the community and protection of the environment remain ONGC's highest priorities. All actions continue to be carried out in strict compliance with regulatory requirements and established industry best practices.

Market Performance

Shares of ONGC closed at ₹239.20, down ₹2.69, or 1.11%. The company had mobilised its crisis management team and regional crisis management team to oversee containment and response efforts at the Andhra Pradesh facility.