Petroleum assets leased out by a company undergoing insolvency proceedings will be exempt from moratorium under the Insolvency and Bankruptcy Code (IBC), the Ministry of Corporate Affairs (MCA) has notified.
The new provision is aimed at ensuring that national assets in the petroleum sector don't lie idle, a senior official said.
This would effectively mean that the petroleum ministry would be able to take back the possession of assets, such as oil wells, and give them to another party.
Supporting the move, a petroleum and natural gas ministry official said the government was working to further expand India's oil production at a time when global supplies continued to be increasingly stressed by geopolitics. "At such a juncture, it's not prudent to have oil wells fall inactive if any company goes into insolvency." Videocon Oil Ventures Limited, the oil and gas exploration company of Videocon, is one such company that went into insolvency in 2019. The corporate insolvency proceedings kicked off the moratorium on its oil basins.
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