- India is seeking over $30 billion from Reliance Industries and BP in an arbitration over gas it says was not produced from offshore fields, people familiar with the matter said.
- Reliance rejected reports of a $30 billion claim and said the government’s demand tied to the KG-D6 block is about $247 million.
- The dispute has been heard by a tribunal since 2016, with a ruling expected in 2026.
India is seeking more than $30 billion in compensation from Reliance Industries and its partner BP in a long-running dispute over offshore gas production, people familiar with the matter said. Reliance said there was no $30 billion claim against it and BP. ( Reuters)
The stakes are high for one of India’s biggest listed companies and a major foreign investor in its upstream sector. The case is also being closely watched because it tests how India enforces production-sharing contracts used to develop offshore resources.
A three-member tribunal has been hearing the dispute since 2016, people familiar with the proceedings said. Final arguments were heard on Nov. 7, and a decision is expected in mid-2026, with any ruling open to challenge in Indian courts.
Reliance said the government’s claim related to the KG-D6 block was about $247 million, which it said has been disclosed in its annual audited financial statements. The company said the matter is sub judice — meaning it is before the courts — and would be decided through India’s legal process. ( Economictimes)
The government’s case centres on gas produced from two deepwater fields, D1 and D3, in the D6 block of the Krishna Godavari basin. People familiar with the matter said the government is seeking the value of the production shortfall.
Two people familiar with the hearings said officials argued that the state owns any gas discovered under the contract and that mismanagement led to most of the reserves being lost. They said the government also alleged Reliance used 18 wells instead of 31 planned, without adequate infrastructure, damaging the reservoir.
BP, a London-based partner in the fields, declined to comment. Spokespeople for India’s federal oil, law and information ministries, and the prime minister’s office, did not respond to requests for comment.
The KG-D6 block sits in the Bay of Bengal off the southern state of Andhra Pradesh and was awarded to Reliance in 2000 under a production-sharing contract. Such contracts allow companies to recover costs from oil and gas sales before sharing profit with the state.
In 2011, Reliance sold a 30% stake in 21 production-sharing contracts it operates in India, including KG-D6, to BP for $7.2 billion. The KG-D6 venture later drew scrutiny as production fell short of early expectations.
India’s oil ministry told parliament in 2012 that Reliance had estimated recoverable reserves from D1 and D3 at 10.3 trillion cubic feet before revising them down to 3.1 trillion cubic feet. A trillion cubic feet is a common measure of natural gas volume.
The project, once seen as a key pillar of India’s energy security push, struggled with water ingress and reservoir pressure issues, according to past public statements cited in the dispute. Reliance said in February 2020 that it had ceased production at the D1 and D3 fields.
Reliance has said it and BP complied with contractual and legal obligations and objected to what it described as a mischaracterisation of the facts, Indian media reported. ( Telegraphindia)
The outcome could influence how future offshore projects are judged in disputes over reserves estimates, spending plans and output targets. For Reliance and BP, the arbitration adds a fresh layer of legal and regulatory risk around one of India’s most closely watched gas assets.
