Reliance-ONGC Dispute: Mukesh Ambani-led Reliance Industries Ltd. (RIL) has been served a demand for a huge $2.81 billion (approximately Rs 24500 crore) by Ministry of Petroleum and Natural Gas. The demand was served after a recent ruling by the Division Bench of the Delhi High Court in a long legal battle over alleged natural gas migration from state-owned oil major Oil and Natural Gas Corporation’s (ONGC’s) blocks. RIL’s consortium partners BP Exploration and NIKO (NECO) Limited also have been sent the notice. Mukesh Ambani-led Reliance Industries in an exchange filing said that it received the letter of demand from the government on March 3. ONGC in 2013 claimed that the consortium had illegally benefited from its adjacent gas block in the KG basin and consequently the government demanded $1.529 billion and interest from the consortium as compensation. Meanwhile RIL and its partners have rejected the demand as legally unsustainable and said that they may challenge the decision in higher courts. 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 the Hon’ble Delhi High Court. The Company does not expect any liability on this account Reliance said in the exchange filing on Tuesday 04 March 2025. As soon as the news about the disclosure broke out shares of Reliance went down and were trading flat at Rs 1172 a share at 11:00 AM. Reliance-ONGC Dispute The Ministry of Petroleum and Natural Gas (MoPNG) in an order sought disgorgement from Reliance and its partners demanding USD 1.47 billion from the partners for producing in seven years ending March 31 2016 about 338.332 million British thermal units of gas that had seeped or migrated from ONGC’s blocks into their adjoining KG-D6 in the Bay of Bengal. After deducting USD 71.71 million royalty paid on the gas produced and adding an interest at the rate of LIBOR plus 2 per cent totalling USD 149.86 million a total demand of USD 1.55 billion was made on Reliance BP and Niko. The government also pressed Reliance to pay USD 174.9 million of additional profit petroleum after certain costs were disallowed because of KG-D6 output being lower than the target. Reliance and its partners on November 11 2016 slapped an arbitration notice. In July 2018 the international arbitration tribunal rejected the government’s claim and the three-member panel awarded USD 8.3 million compensation to the three partners by a majority of 2-1. The government challenged the arbitration award before a single bench of Delhi High Court seeking it be set aside as it “strikes at the heart of the public policy and has given a premium to a contractor (Reliance) that has amassed vast wealth by committing an insidious fraud as well as criminal offence.” In May 2023 the Delhi High Court upheld the arbitration award saying “the view taken by the arbitral tribunal is most certainly a “possible view” which calls for no interference.” Subsequently the government approached the division bench of the Delhi High Court against the order. The division bench on February 15 set aside a May 2023 ruling that had upheld the 2018 arbitration award rejecting the government’s claim. (With PTI inputs)