India Seeks $30 Billion from Reliance, BP Over KG-D6 Gas Underproduction

The Indian government is seeking more than $30 billion in compensation from Reliance Industries and its partner BP, alleging underproduction and mismanagement at the KG-D6 deepwater gas fields in the Krishna Godavari basin, sources said. The arbitration case, which has been underway since 2016, centres on gas output from the D1 and D3 fields, with a three-member tribunal expected to deliver its verdict by mid-2026. The ruling can still be challenged in Indian courts.

The D1 and D3 fields were once projected to be a cornerstone of India’s energy security, but production fell far short of initial expectations due to technical challenges and disputes over costs. The government argues that Reliance had initially estimated recoverable reserves of about 10 trillion cubic feet, but ultimately produced only around 20% of that volume. It claims mismanagement, including aggressive production strategies and the use of fewer wells than planned, led to permanent loss of reserves.

Reliance and BP have rejected the government’s claims during the hearings, maintaining they owe no compensation. Reliance has said the arbitration proceedings are confidential, while BP declined to comment. The case, India’s largest-ever financial claim against a corporation, could have significant implications for the country’s energy sector, investor confidence, and future production-sharing contracts.

Pic courtesy: google/ images are subject to copyright