Reliance and BP's $30 Billion Face-Off Over KG-D6 Gas Output

The government claims Reliance Industries Ltd and BP owe over USD 30 billion for not meeting gas output targets and overbuilding facilities at KG-D6 fields. The dispute, which involves cost disallowances and reserves misestimations, is currently under arbitration. Reliance denies the claims and questions the government's actions.

The Indian government has raised a substantial compensation claim of over USD 30 billion against Reliance Industries Ltd and its partner BP, alleging that they constructed larger-than-required facilities at the Krishna Godavari basin KG-D6 fields and failed to meet natural gas output targets, according to sources.

The claim was presented to a three-member arbitration tribunal, which recently concluded hearings in the long-standing 14-year dispute. An outcome is expected next year, but any party dissatisfied with the ruling will likely challenge it in the Supreme Court, informed sources state.

Reliance refutes the claim of USD 30 billion, asserting that the allegations of underproduction are unfounded. The company states that the situation is being handled under the country's judicial system, expressing full confidence in legal proceedings. The complex situation originated from projections not aligning with actual gas output due to unforeseen factors.