Vedanta Oil and Gas reported a 19% year-on-year decline in average daily gross production to 72.2 kboepd for Q2 FY27. The drop was driven by natural field decline in Rajasthan and the exit from the Cambay block following a legal dispute. Management is now prioritizing enhanced oil recovery and optimization projects to stabilize output as it continues its legal battle over the Cambay asset.
Vedanta Oil and Gas Q2 FY27 Production Report
Average daily gross production fell to 72.2 kboepd in Q2 FY27, down 19% from 89.1 kboepd in Q2 FY26.
Working interest production dropped to 47.8 kboepd, an 18% decline compared to 58.2 kboepd in the same period last year.
Reader Takeaway: Optimization efforts aim to offset natural declines, but the loss of Cambay operations creates significant output headwinds.
What just happened
Vedanta Oil and Gas has released its operational performance for the second quarter ended September 30, 2026. The company saw a broad reduction in output across its major assets. The Rajasthan fields, which form the core of the company's production base, saw gross operated production fall by 15% to 59.9 kboepd. Meanwhile, the Cambay block production ceased for the company on July 21, 2026, following the transition of operations to ONGC.
Why this matters
The consistent decline in production volumes across the portfolio suggests increasing pressure on the company's core assets. With the loss of the Cambay block following the dismissal of the legal challenge in the Delhi High Court, the company has lost a contributor to its top-line volume. Shareholders must now look toward the efficacy of Enhanced Oil Recovery (EOR) projects in Rajasthan to determine if the company can arrest the current downward trend in production.
The Cambay Block transition
The status of the Cambay block remains a critical point of uncertainty. Following the MoPNG's rejection of the Production Sharing Contract extension, the Delhi High Court dismissed the company's challenge in July 2026. While the company has appealed this decision, ONGC has taken over full operational control. Current production figures only reflect partial output from this block until the July 24 transition date.
Risks to watch
Key risks include the potential for further production slippage if EOR initiatives do not yield expected results, and the outcome of the ongoing appeal in the Delhi High Court concerning the Cambay block. Continued reliance on mature assets in Rajasthan necessitates high capital discipline to maintain volume stability.
What to track next
Investors should monitor official updates regarding the Division Bench proceedings for the Cambay legal challenge and examine quarterly progress reports for signs of successful volume stabilization in the Rajasthan basin through the company's planned optimization initiatives.