Reliance Industries received a demand notice from the Ministry of Petroleum and Natural Gas on Tuesday, seeking $2.81 billion (approximately Rs 24,500 crore) from the company and its partners, including British energy giant BP Plc. The demand arises from allegations that the companies benefited from natural gas that may have migrated from the neighboring block of state-run Oil and Natural Gas Corporation (ONGC).
According to a regulatory filing from Reliance, the Ministry’s demand was based on a judgment from the Division Bench of the Delhi High Court. The letter of demand, dated March 3, 2025, was received by the company at 11:30 a.m. Reliance, however, has stated that it is “legally advised that the Division Bench judgment and this provisional demand are unsustainable” and is taking steps to challenge the ruling.
The company further stated, “The company does not expect any liability on this account,” in response to the demand.
Reliance’s shares saw a decline of up to 1.0 percent, dropping to Rs 1,159.3 during intraday trading on the Bombay Stock Exchange (BSE). By 3 p.m., the stock had slightly recovered, trading 0.4 percent lower for the day at Rs 1,166.2.
This latest development follows the Delhi High Court’s February 14 decision to overturn an earlier international arbitration tribunal ruling, which had exonerated Reliance and its partners from paying any compensation for gas allegedly migrating from ONGC’s adjoining fields.
The dispute centers around the Krishna Godavari (KG) Basin deep-sea block KG-D6, in which Reliance originally held a 60 percent interest, BP owned 30 percent, and Canadian company Niko held the remaining 1 percent. Over time, Reliance and BP acquired Niko’s interest, with the two now holding 66.66 percent and 33.33 percent stakes, respectively.
2016: The Indian government demanded $1.55 billion from Reliance and its partners for gas allegedly migrated to KG-D6 from ONGC’s neighboring fields.
2018: An arbitral tribunal ruled in favor of Reliance, determining that the company was not liable to pay compensation.
2023: The government filed an appeal, which was initially dismissed by a single-judge bench of the Delhi High Court, upholding the arbitration ruling.
February 2025: The Division Bench of the Delhi High Court overturned the previous decision, ruling against Reliance and its partners, which led to the demand from the Ministry of Petroleum.
As the legal battle continues, Reliance Industries and its partners are preparing to challenge the Division Bench’s ruling, aiming to nullify the demand for compensation.
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