Government claims $2.81 billion from Reliance and BP over alleged KG basin gas siphoning

The government has claimed $2.81 billion from Reliance Industries Limited and BP for allegedly drawing gas from ONGC’s KG basin fields. The matter is now before the Supreme Court after the Delhi High Court set aside an earlier arbitration award favouring RIL

New Delhi: The government has made a claim of $2.81 billion from Reliance Industries Limited and UK oil giant BP for allegedly siphoning out gas from ONGC’s fields in India’s eastern offshore KG basin, the Parliament was informed on Monday.

“The Government has made a claim of $2.81 billion from Reliance Industries Limited and BP. The matter is presently sub judice before the Supreme Court of India,” Minister of State for Petroleum and Natural Gas Suresh Gopi said in a written answer to a question in the Rajya Sabha.

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The minister’s reply came in answer to a question raised by Rajya Sabha member Deepak Prakash, who asked: “Whether it is a fact that the Government has claimed more than $2.00 billion from private companies for alleged gas pilferage/theft from ONGC’s blocks off the eastern coast”.

The MP also asked for “complete details thereof with the names of private companies involved and the latest status of payment received from these private companies so far”.

As of March, the Indian government has demanded approximately $2.81 billion (around Rs 25,983 crore) from Reliance Industries Limited (RIL) and its partner BP following a February 2025 Delhi High Court ruling, which set aside a 2018 arbitration award that initially cleared RIL of liability for alleged migration of gas from ONGC fields in the KG basin.

The Ministry of Petroleum and Natural Gas has alleged that between 2004 and 2013-14, RIL’s KG-D6 block drew gas from adjacent ONGC blocks, amounting to an “unjust enrichment” of over $1.55 billion (plus interest).

A division bench of the Delhi High Court on February 14, 2025, ruled in favour of the government, overturning a previous single-judge ruling that favoured RIL, calling the demand “unsustainable”.

Reliance maintains that the gas was “migratory” (naturally moved across boundaries) and that they are not liable for extracting it. The company has challenged the Delhi HC judgment in the Supreme Court.