Reliance says oil ministry raised $2.81 bn demand in ONGC gas dispute case

Reliance Industries says the petroleum ministry has raised a $2.81 billion demand over a gas migration dispute linked to KG-D6, following a Delhi High Court ruling in the government's favour

The Ministry of Petroleum and Natural Gas has issued a demand of $2.81 billion to Reliance Industries Limited (RIL) and its consortium partners — BP Exploration (Alpha) Limited and NIKO (NECO) Limited — over a long-standing dispute concerning gas migration from ONGC’s blocks to the KG-D6 block, RIL said in an exchange filing on Tuesday.

 

"...The Ministry of Petroleum and Natural Gas has raised a demand of $2.81 billion on the PSC Contractors namely Reliance Industries Limited, BP Exploration (Alpha) Limited and NIKO (NECO) Limited," the filing stated.

 

The claim is linked to a case dating back to 2018, when the government of India (GOI) accused the KG-D6 Consortium, which includes RIL, of being responsible for gas migration from ONGC’s adjacent blocks.  

 

 

Initially, the ministry sought approximately $1.55 billion in compensation for the alleged migration. The matter became more complex due to multiple legal proceedings, eventually reaching the Delhi High Court.  

 

In May 2023, a single-judge bench of the Delhi High Court dismissed the Centre's challenge against an arbitral award that had ruled in favour of Reliance Industries. However, after the government appealed to a division bench, the court overturned the previous decision in a judgment issued on March 3, 2025.  

 

Following this ruling, the Ministry of Petroleum and Natural Gas has now increased its demand to $2.81 billion, citing the latest legal developments and a reassessment of the gas migration issue.

 

"The company is legally advised that the Division Bench judgment and this provisional demand are unsustainable. The company is taking steps to challenge the judgment of the Division Bench of Hon’ble Delhi High Court. The company does not expect any liability on this account," RIL said in the exchange filing.