Govt demands $2.81 billion from Reliance, others for gas migration from ONGC’s blocks

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The Ministry initially sought $1.55 billion in compensation, but the dispute escalated through multiple legal proceedings, reaching the Delhi High Court.
Govt demands $2.81 billion from Reliance, others for gas migration from ONGC’s blocks
Reliance has said that the company and its partners deny the allegations and plan to challenge the latest ruling in court. Credits: Sanjay Rawat

The Ministry of Petroleum and Natural Gas has issued a $2.81 billion demand to Reliance Industries (RIL) and its consortium partners, BP Exploration (Alpha) and NIKO (NECO), over a long-standing 2018 dispute on gas migration from ONGC’s blocks to the KG-D6 block.

“…the Ministry of Petroleum and Natural Gas has raised a demand of US $2.81 billion on the PSC Contractors namely Reliance Industries Limited, BP Exploration (Alpha) Limited and NIKO (NECO) Limited,” the company said in a Tuesday exchange filing.

The claim dates back to 2018, when the Centre accused the KG-D6 (Krishna Godavari Dhirubhai 6, Reliance's first offshore gas field development and its first underwater discovery) Consortium, including RIL, of causing gas migration from ONGC’s adjacent blocks. The Ministry initially sought $1.55 billion in compensation, but the dispute escalated through multiple legal proceedings, reaching the Delhi High Court.

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In May 2023, a single-judge bench of the Delhi High Court dismissed the government's challenge to an arbitral award favouring RIL. However, on appeal, a division bench overturned the ruling on March 3, 2025.

“The Division Bench of the Hon’ble Delhi High Court has yesterday reversed the judgment of the single judge...,” RIL said in its filing.

Following the ruling, the petroleum and natural gas ministry has now increased its demand to $2.81 billion, citing updated legal developments and a reassessment of the gas migration issue.

Reliance has said that the company and its partners deny the allegations and plan to challenge the latest ruling in court.

"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.

On Monday, shares of Reliance Industries fell 3.6% to hit a 52-week low of ₹1,156 on both the BSE and NSE, extending its losing streak. The stock has declined 7% in a month, nearly 5% year-to-date, and is down 28% from its 52-week high of ₹1,608.80 on July 8, 2024.

RIL opened at ₹1,162.20 on the NSE today, touching a low of ₹1,159.55, down almost 1% from the previous session’s close of ₹1,171.25. The stock is currently trading at ₹1,168, down 0.28% from yesterday.

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