Delhi HC overturns tribunal ruling in ONGC gas dispute, Reliance faces billions in demand

New Delhi: The Delhi High Court has ruled in favour of the Government of India (GOI) in the long-running dispute over gas migration from ONGC's blocks to Reliance Industries’ KG-D6 block, prompting the Ministry of Petroleum and Natural Gas to issue a $2.81 USD billion (about Rs 24,500 crore) demand against Reliance Industries Limited (RIL) and its consortium partners, BP Exploration (Alpha) Limited and NIKO (NECO) Limited.

The case dates back to 2018, when the GOI accused the KG-D6 Consortium of benefiting from natural gas that allegedly migrated from ONGC’s adjacent blocks. Initially, the oil ministry sought $1.55 billion in compensation, but the dispute escalated through multiple legal proceedings.

In May 2023, a single-judge bench of the Delhi High Court ruled in favour of Reliance Industries, dismissing the Centre's challenge against an arbitral award that had sided with the company. However, after the government appealed to a division bench, the court overturned the earlier ruling on March 3, 2025.

Following this latest judgment, the oil ministry reassessed the gas migration issue and raised its demand to $2.81 billion, nearly doubling the initial claim. The demand is based on the Delhi HC’s latest interpretation of the case, which sided with the government’s assessment of the financial implications of the alleged gas migration.