**India Seeks $30 Billion from Reliance and BP in Gas Arbitration Case**
India is pursuing over $30 billion in compensation from Reliance Industries and BP in an ongoing arbitration case concerning gas production from offshore fields. This dispute, which has been under review since 2016, centers on the D1 and D3 deepwater fields located in the D6 block of the Krishna Godavari basin. The final arguments in the case were presented on November 7, and a three-member tribunal is expected to issue its ruling by mid-2026.
The D1 and D3 fields, recognized as India’s first significant deepwater gas project, were initially anticipated to enhance the country’s energy independence. However, the project has faced numerous challenges, including issues with water ingress, reservoir pressure, and disputes over cost recovery with the government. These complications have hindered production, falling short of earlier expectations set by both Reliance and the government.
In a 2012 statement to parliament, the oil ministry revealed that Reliance had initially estimated recoverable reserves from the D1 and D3 fields at 10.3 trillion cubic feet (tcf), later revising this figure down to 3.1 tcf. The arbitration case is confidential, and representatives from both Reliance and BP have refrained from commenting on the matter.
The gas block, situated in the Bay of Bengal off Andhra Pradesh, was awarded to Reliance in 2000 under a production-sharing contract. The $30 billion claim represents the largest amount ever sought by the Indian government from a corporation, alleging that mismanagement by Reliance and BP led to the depletion of most reserves in the D1 and D3 fields.
In 2011, Reliance sold a 30% stake in 21 oil-and-gas production sharing contracts, including the KG-D6 block, to BP for $7.2 billion. According to the government’s arguments in the arbitration, Reliance had projected recoverable gas reserves of approximately 10 trillion cubic feet but has only produced about 20% of that amount. The government contends that Reliance and BP should compensate for the shortfall in production.
As the arbitration process continues, the outcome could have significant implications for both companies and India’s energy landscape.
**FAQ**
**What is the basis of India’s $30 billion claim against Reliance and BP?**
India’s claim is based on allegations that Reliance and BP mismanaged gas production from the D1 and D3 fields, resulting in a significant shortfall in expected reserves.
