Reliance's Legal Battle Intensifies Over Gas Block Dispute

A USD 2.81 billion demand has been placed on Reliance Industries Ltd and its partners for gains from gas that may have migrated from ONGC's block, following a Delhi High Court decision. This situation stems from longstanding contentions dating back to 2013 over reservoir connectivity and gas migration matters.

The Ministry of Petroleum and Natural Gas has demanded USD 2.81 billion from Reliance Industries Ltd, BP Plc, and other partners. The sum relates to profits amassed from gas extraction, alleged to have migrated from a neighboring ONGC block. The decision follows a Delhi High Court ruling reversing a prior arbitration award absolving the companies.

The court ruling is part of a longstanding legal battle that began when ONGC raised concerns over potential reservoir connectivity with Reliance. This prompted several investigations and legal challenges over the years. Originally, an arbitration tribunal had cleared Reliance, which the government subsequently challenged in court.

Legal representatives of Reliance maintain that the demand notice and the subsequent court ruling are not sustainable under law, and the company plans to contest the judgment further. The complex case highlights issues of energy resource management and inter-corporate legal disputes in India's oil and gas sector.

(With inputs from agencies.)