RIL’s oil-and-gas disputes include US$2.81bn KG-D6 demand

Reliance Industries Limited (RIL) faces a provisional US$1.81 billion demand in the KG-D6 gas-migration dispute after a Delhi High Court reversal. RIL also disclosed a US$1.15 billion share of the Government of India’s US$1.8 billion-plus-interest PMT execution demand, with both matters unresolved through court and arbitration processes.

Why does RIL face a US$1.81 billion KG-D6 demand?

RIL faces the US$1.81 billion KG-D6 demand because the Government of India challenged an arbitral award that had rejected its earlier US$1.55 billion gas-migration claim. The dispute concerns the KG-D6 Block and allegations that gas migrated from blocks operated by Oil and Natural Gas Corporation. An international arbitral tribunal issued its award on July 24, 2018 in favour of RIL and the other contractors under the Production Sharing Contract, or PSC, rejecting the Government of India’s US$1.55 billion claim.

The Ministry of Petroleum and Natural Gas raised the provisional US$1.81 billion demand after a Division Bench of the Delhi High Court reversed a May 9, 2023 judgment by a single judge. The single judge had dismissed the Government of India’s challenge to the July 2018 award. The disclosed US$1.81 billion amount is therefore a provisional demand following the Division Bench judgment, rather than a final payment determination stated in the prospectus.

The US$1.81 billion provisional demand is US$1.26 billion higher than the US$1.55 billion claim rejected in the 2018 award. That comparison shows that the amount now pursued by the Ministry of Petroleum and Natural Gas exceeds the gas-migration claim considered by the tribunal. The demand’s status depends on the Supreme Court challenge, the requested conciliation process or a later settlement, none of which had produced a disclosed final outcome.

What is the current status of RIL’s KG-D6 oil-and-gas dispute?

RIL has challenged the KG-D6 Division Bench judgment before the Supreme Court and has asked the Ministry of Petroleum and Natural Gas to enter conciliation. RIL filed a special leave petition, which is a request for the Supreme Court to hear an appeal, against the Division Bench judgment. A three-judge Supreme Court bench heard the matter from May 19, 2026 to May 25, 2026.

RIL submitted its conciliation request on May 20, 2026 on behalf of the PSC contractors under the Arbitration and Conciliation Act, 1996. Conciliation is a statutory settlement process in which parties seek to resolve a dispute without a court or tribunal determining the final result. On May 25, 2026, at RIL’s request and with the Government of India’s consent, the Supreme Court marked the matter “Part Heard” and adjourned it to July 21, 2026 for directions.

The procedural position means the July 2018 award, the Delhi High Court rulings and the provisional US$1.81 billion demand remain central to the same dispute. The prospectus does not disclose a stay of the provisional demand, a completed conciliation, or a Supreme Court decision on the merits. A final financial obligation would require a later court outcome, settlement or other disclosed resolution.

What does RIL’s US$1.15 billion PMT share represent?

RIL’s stated US$1.15 billion share arises from the Government of India’s effort to enforce a US$1.8 billion-plus-interest demand in the Panna-Mukta and Tapti, or PMT, arbitration. The Government of India filed an execution petition in the Delhi High Court against RIL and other parties to enforce a final partial award issued in 2016. The underlying PMT arbitration was initiated by BG Exploration and Production India Limited and RIL against the Government of India under PSCs because of differences over contract interpretation.

The prospectus describes US$1.8 billion plus interest as a universally computed demand, of which RIL’s stated share is US$1.15 billion. RIL’s stated share represents roughly 30% of the US$1.8 billion principal amount, before interest. The amount is an execution demand rather than a disclosed final quantification of all issues in the continuing PMT arbitration.

RIL says the 2016 final partial award was subsequently modified by further final partial awards after remission ordered by the English High Court. RIL also says the Government of India’s execution petition was filed despite the English High Court judgments, subsequent tribunal awards and the tribunal’s pending determination of outstanding issues. Those statements set out RIL’s disclosed position in the enforcement dispute and do not represent a final judicial determination.

Where do the PMT court and arbitration proceedings stand?

The PMT execution demand remains pending because the Delhi High Court Division Bench decided to hear the Government of India’s appeal on its merits. A single judge of the Delhi High Court held on June 2, 2023 that the Government of India’s execution petition was not maintainable. The Government of India appealed that ruling to the Division Bench.

The Division Bench rejected the claimants’ objections to the maintainability of the Government of India’s appeal and decided to hear the matter on merits. RIL and BG Exploration and Production India Limited have filed a special leave petition in the Supreme Court against the Division Bench order on maintainability. The prospectus does not disclose a final Division Bench decision on the US$1.8 billion-plus-interest execution demand.

The PMT arbitration itself remains under way, and the prospectus says a claim cannot be determined until the tribunal quantifies it in a final award. This creates two separate procedural tracks: the Delhi High Court proceedings concern enforcement of the 2016 final partial award, while the tribunal retains outstanding issues for final determination. The US$1.15 billion stated RIL share therefore remains contingent on processes that have not reached their disclosed endpoints.

What is the separate KG-DWN-98/3 cost-recovery dispute?

RIL also disclosed an arbitration concerning cost recovery under the PSC for Block KG-DWN-98/3, where the Government of India seeks US$165 million from RIL. The source states this as Rs 1,561 crore, representing RIL’s share of a total US$147 million demand, or Rs 2,342 crore, for additional Profit Petroleum. Profit Petroleum is the Government of India’s contractual share of petroleum profit under a PSC after the relevant contractual calculations.

The Government of India disallowed certain costs that RIL says the PSC permits the contractor to recover. RIL maintains that the contractor may recover all costs under the PSC and that the contract contains no provision allowing the Government of India to disallow contract-cost recovery. The arbitration had reached the final-hearing stage when disclosed.

The US$165 million RIL share is smaller than both the US$1.81 billion KG-D6 provisional demand and the US$1.15 billion PMT share. However, the three matters involve different PSC mechanisms: alleged gas migration in KG-D6, enforcement and interpretation issues in PMT, and cost recovery affecting additional Profit Petroleum in KG-DWN-98/3. Their outcomes therefore depend on separate court, arbitration and conciliation procedures.

Conclusion

RIL’s disclosed oil-and-gas disputes comprise three government-related monetary matters with distinct legal mechanisms: a US$1.81 billion provisional KG-D6 demand, a US$1.15 billion stated share of the US$1.8 billion-plus-interest PMT execution demand, and a US$165 million KG-DWN-98/3 additional Profit Petroleum demand. The amount and enforceability of each claim depend on unresolved judicial or arbitral steps.

The next disclosed KG-D6 milestone is July 21, 2026, when the Supreme Court was scheduled to issue directions after marking the matter Part Heard on May 25, 2026. The remaining points to watch are whether conciliation proceeds in KG-D6, whether the PMT Division Bench reaches a merits decision, and whether the PMT tribunal issues a final award quantifying outstanding claims.