Home Business Oil and Gas India Seeks $30 Billion from R...

India Seeks $30 Billion from Reliance and BP Over Gas Dispute

Oil and Gas

India Seeks $30B from Reliance, BP Over Gas Dispute

Business Honor
29 December, 2025

Indian government seeks over $30 billion from Reliance and BP amidst ongoing arbitration over offshore gas production failures.

The Indian government is seeking more than $30 Billion in legal damages from Reliance Industries Limited and BP due to their failure to perform under contract regarding the gas production volumes from two offshore gas fields located off the east coast of India in the Krishna Basin. The Indian government is seeking this amount of damages as part of the ongoing arbitration case first initiated in 2016. The tribunal hearing the case is anticipated to give a final ruling by mid-2026. The focus of dispute relates to India's First Offshore Gas Project, D1, in relation to Reservoirs D1/3 Trialed and Developed by BP and Reliance Industries. Due to numerous technical and economic difficulties experienced by the companies during the development of the respective gas reserves and associated facilities, the production generated was much less than expected.

Reliance Industries indicated that approximately 30% (30 million cubic meters) of the total amount of natural gas produced in India comes from 'D6 block' (D1 and D3 fields). The company and British Petroleum will begin production of three more deepwater fields soon. According to a recent report in Fortune India, Reliance and partners have invested about $10 Billion in exploratory and production activities in the Krishna Godavari Basin since it was first discovered in the early 2000's.

Despite rapid increases in production, a pricing agreement with the Government has resulted in an overall slower recovery than anticipated for the costs. In addition, rapidly increasing demand for natural gas across India, projected to rise by 60% by 2030 as per the International Energy Agency, will create a backdrop to this anticipated increase in the supply of LNG. The outcome of this arbitration will greatly affect how the Indian Energy Sector will develop, especially regarding the Offshore Gas Production Sector.