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Informist, Tuesday, May 26, 2026

 

NEW DELHI – The Supreme Court has accepted a request by Reliance Industries Ltd. and its consortium partners, UK-based BP Exploration (Alpha) Ltd. and Canada-based Niko (NECO) Ltd., to resolve the dispute in the Krishna Godavari-Dhirubhai 6 gas block case through conciliation. This follows Attorney General R. Venkataramani saying a fresh request was made by Reliance Industries and others to resolve the case, which the government was willing to consider. The apex court will hear the gas migration case next on Jul. 21.

 

The consortium had received a demand notice of $2.81 billion from the Ministry of Petroleum and Natural Gas last year, after the Delhi High Court set aside a 2018 arbitral award allowing the Mukesh Ambani-led conglomerate to produce all hydrocarbons from the KG-D6 basin. At the hearing, Reliance Industries argued that the Delhi High Court had wrongly treated the gas migration arbitration dispute as a domestic dispute, overlooking the participation of its foreign partners. The company said it had not pursued arbitration alone but acted only as the operator under the production-sharing contract on behalf of the consortium. All investments under the contract were made by all three parties, not just by Reliance Industries, it said, adding that the profits were to be divided among the three. 

 

In 2000, the Ministry of Petroleum and Natural Gas and Reliance Industries had signed a production-sharing contract for exploration of natural gas in the Krishna-Godavari basin, where Oil and Natural Gas Corp. Ltd. and RIL had adjacent gas fields. Subsequently, Reliance Industries transferred a portion of its participating interest to BP Exploration (Alpha).

 

A dispute arose in 2013 when ONGC informed the Directorate General of Hydrocarbons that gas pools in its block were connected to those of RIL's block KG-DWN-98/2, generally known as KG-D6. RIL contended that some gas from ONGC's block had "migrated" to its block.

 

In 2014, ONGC moved the Delhi High Court, alleging that the private sector oil and gas company might be getting gas from its pool. In 2015, the court directed the government to consider a report prepared by DeGolyer & MacNaughton. The agency undertook an independent third-party study to verify the claimed continuity and migration of gas from ONGC block to RIL's. It released its final report in 2015, saying "integrated analyses indicated connectivity and continuity of the reservoirs across the blocks operated by ONGC and RIL".

 

The same year, the government appointed a committee headed by Justice A.P. Shah to consider the agency's report. RIL withdrew halfway through the committee's proceedings. The committee's report was based on written and oral submissions made by the parties and no experts appeared before it or rendered it any assistance.

 

Based on the Shah committee's report, the Ministry of Petroleum and Natural Gas, in a letter dated Nov. 3, 2016, raised a demand on RIL for $1.55 billion along with interest up to Mar. 31, 2016, and $175 million towards revised additional cumulative profit petroleum claimed to be receivable up to Mar. 31, 2016, towards disgorgement of "unjust enrichment" claimed to have been made by RIL.

 

After the government raised the demand, the RIL-led consortium invoked arbitration. The arbitral tribunal rejected the government's demand and ruled in favour of the Mukesh Ambani-led company. Consequently, the government moved a single-judge bench of the high court, challenging the arbitration award. In May 2023, the single judge also ruled in favour of the company, after which the government moved a division bench of the high court, which ruled in favour of the government in 2025.  

  

At 1125 IST, shares of Reliance Industries Ltd. were down 0.5% at INR 1,360.50 on the National Stock Exchange.  End

 

US$1 = INR 95.43

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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