India demands $30B from Reliance, BP for KG-D6 gas underproduction
29 Dec 2025

Indian government is demanding over $30 billion in damages from Reliance Industries and British Petroleum (BP) in an arbitration case.

The claim relates to natural gas that the companies allegedly failed to produce from offshore fields.

The dispute has been ongoing since 2016 and centers around two deepwater fields, D1 and D3, in the Krishna Godavari basin's D6 block.

Tribunal to deliver verdict by mid-2026
Hearing timeline

A three-member tribunal has been hearing the case since 2016. The final arguments were heard on November 7, and a verdict is expected by mid-2026. This ruling can be challenged in Indian courts.

The D1 and D3 fields were India's first major deepwater gas project, seen as crucial for the country's energy independence when they were developed.

Production difficulties and cost-recovery disputes
Project challenges

The D1 and D3 project has faced production difficulties due to water ingress, reservoir pressure issues, and cost-recovery disputes with the government.

Reliance had initially estimated recoverable reserves from these fields at 10.3 trillion cubic feet (tcf) but later revised it down to 3.1 tcf in a written statement to Parliament in 2012.

$30B claim is India's largest against a corporation
Claim details

The $30 billion claim is the largest ever made by the Indian government against a company.

It alleges that mismanagement by Reliance and BP resulted in the loss of most reserves in D1 and D3.

Under their production-sharing contract with the Indian government, disputes are to be settled by an arbitration tribunal agreed upon by both parties.

Government's argument and companies' response
Dispute resolution

The government argued in the arbitration that Reliance had estimated recoverable gas reserves from D1 and D3 fields at about 10 tcf but produced only about 20% of that.

It contended that Reliance and BP should pay the government for this shortfall.

However, both companies contested this claim during their arguments to the tribunal.

Reliance's production cessation and government's profit share
Production details

In February 2020, Reliance announced it had stopped production at the D1 and D3 fields.

The company said overall production from the block that includes these fields had reached 3 tcf of gas equivalent. However, it wasn't clear how much of this gas came from the D1 and D3 fields.

Under their contract, Reliance and its partners were allowed to recover costs from oil and gas sales before sharing profits with the government.