The $2.81 Bn Government Demand will be Challenged by RIL Following the Court's Reversal

In response to a recent decision by the Delhi High Court's Division Bench, Reliance Industries Limited (RIL) has declared its plan to contest a $2.81 billion demand from the Ministry of Petroleum and Natural Gas. A long-running dispute about purported gas migration from Oil and Natural Gas Corporation (ONGC) blocks to the KG-D6 Consortium blocks, in which Reliance is a significant partner, is the source of the demand. The dispute stems from a 2018 international arbitration ruling in which the Government of India's (GOI) claims were rejected by the KG-D6 Consortium, which included RIL, BP Exploration (Alpha) Limited, and NIKO (NECO) Limited. The consortium was given an amount of almost $1.55 billion. In May 2023, a Delhi High Court judge maintained this award. The GOI later appealed the ruling, nevertheless.

What Exactly Happened?

RIL announced in a regulatory filing that on July 24, 2018, an eminent international arbitration panel awarded the company an arbitral award of about US $1.55 billion against the Government of India's (GOI) claim on the KG-D6 Consortium for alleged gas migration from ONGC's blocks. On May 09, 2023, the GOI's appeal contesting the arbitral award was denied by a single judge of the Hon'ble Delhi High Court. The Hon'ble Delhi High Court's Division Bench received an appeal from the Government of India.

On March 3, 2025, the Delhi High Court's Division Bench reversed the decision of the single judge. As a result, the Ministry of Petroleum and Natural Gas demanded $2.81 billion from the PSC Contractors, RIL, NECO, and ALPHA. In a formal announcement to the stock exchanges, Reliance Industries said that the Division Bench ruling and the ensuing demand were "unsustainable." The business has declared that it is contesting the ruling right now. Additionally, RIL has stated that it is confident it would not be held liable for this demand. According to the company's declaration, RIL has received legal advice that the Division Bench ruling and this temporary requirement are unworkable.

RIL’s Financial Dynamics

The biggest company in India's private sector is RIL. Hydrocarbon production and exploration, petroleum refining and marketing, petrochemicals, advanced materials and composites, renewables (hydrogen and solar), retail, and digital services are all included in its operations. In the quarter that concluded on December 31, 2024, RIL recorded a 12% year-over-year growth in consolidated net profit, reaching a record high of INR 21,930 crore. EBITDA increased 7.8% to INR 48,003 crore, while RIL's Q3 sales increased 7.7% to INR 267,186 crore.