NEW DELHI: The Indian government has issued a demand of USD 2.81 billion to Reliance Industries Limited (RIL) and its partners, BP Exploration and NIKO, over the alleged migration of natural gas from Oil and Natural Gas Corporation (ONGC) blocks to RIL's KG-D6 block in the Krishna Godavari basin. The Ministry of Petroleum and Natural Gas claims that RIL extracted gas that rightfully belonged to ONGC.
This demand follows a recent ruling by the Division Bench of the Delhi High Court, which overturned a previous arbitration award that had been in RIL’s favour. In an exchange filing, RIL confirmed that the ministry had issued the demand notice and stated its intention to challenge it.
“The Ministry of Petroleum and Natural Gas has raised a demand of USD 2.81 billion on the PSC Contractors, namely Reliance Industries Limited, BP Exploration (Alpha) Limited, and NIKO (NECO) Limited. The letter of demand was received by the company at 11:30 AM on 3 March 2025,” said RIL.
The dispute dates back to 2016, when the government first issued a notice to RIL and its partners, demanding approximately USD 1.55 billion for alleged gas migration from ONGC blocks. RIL contested the claim and initiated international arbitration in 2018. The arbitration panel ruled in RIL’s favour, awarding the company approximately USD 1.55 billion.
However, the petroleum ministry appealed the decision, but a single judge of the Delhi High Court dismissed the appeal in May 2023. The government then filed another appeal before the Division Bench of the Delhi High Court, which in February 2025 overturned the earlier ruling, invalidating RIL’s arbitration victory. This led to the ministry issuing the fresh demand of USD 2.81 billion.
RIL has asserted that it will contest the demand and does not expect to be liable for the amount.
“The company is taking steps to challenge the judgment of the Division Bench of the Hon’ble Delhi High Court,” RIL said. “The company does not expect any liability on this account.”