SC Allows Reliance, Centre To Pursue Conciliation In 13-Year-Old KG-D6 Row

(MENAFN- Live Mint) Mumbai: The Supreme Court on Monday paved the way for a possible settlement in the 13-year-old KG-D6 gas migration dispute by allowing a Reliance Industries Ltd -led consortium and the Union government to pursue conciliation, days after initially declining a similar request.

After five days of hearings, a three-judge bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice Vipul M. Pancholi accepted Reliance's plea for conciliation, counsel for the Reliance-led consortium told Mint.

Attorney general R. Venkataramani, appearing for the Centre, said the government was willing to consider a fresh request for conciliation, PTI reported.

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The nearly $3-billion dispute centres on allegations by the Centre that the consortium of Reliance, the UK's BP and Canada's Niko (which exited in December 2019) had extracted gas that had migrated from blocks operated by state-run Oil and Natural Gas Corp. (ONGC) in the Krishna-Godavari basin.

The Reliance consortium had made a similar plea for conciliation last week on 20 May, but it was declined by the attorney general and the apex court. CJI Kant insisted on hearing the arguments before taking a decision.

The top court has adjourned the matter till 21 July.

Queries emailed to Reliance and the ministry of petroleum and natural gas were unanswered till press time.

Senior lawyers Abhishek Manu Singhvi, Harish Salve and Kapil Sibal were leading the arguments for the RIL-led consortium, while the government's arguments were presented by Venkataramani and senior lawyer K.K. Venugopal.

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Singhvi said in court that it was not a domestic matter but an international commercial arbitration as BP Exploration and Niko Resources are internationally registered companies. He said gas is a“fugitive mineral” and, unlike coal, migrates from high-pressure to low-pressure areas.

Venkataramani, after listening to the arguments by RIL on the first day of hearing, claimed in the court that the consortium“committed a theft” of ONGC's gas and was accountable for it.

Shiv Sapra, partner at Kochhar & Co., said the government's willingness to consider conciliation did not necessarily indicate any weakness.

“It does reflect a recognition that high-stakes arbitrations involving sovereign resources carry inherent uncertainty, regardless of prior successes before arbitral tribunals,” Sapra said.“At this level, the dispute ceases to be purely contractual and intersects with questions of public revenue, national assets, and judicial scrutiny.”

Gautam Mohanty, advocate at Delhi High Court, said the case highlights a contradiction in India's arbitration system. On one hand, India wants to appear investor-friendly and encourage companies to resolve disputes through arbitration. But on the other hand, courts and the government can still closely review or challenge such awards, especially in cases involving national resources or public interest.

The dispute involves the KG‐D6 block, which is the common name for the KG‐DWN‐98/3 exploration block in the Krishna‐Godavari (KG) basin off India's east coast in Andhra Pradesh. It was awarded to a consortium led by Reliance Industries in 2000 through a production-sharing contract under India's New Exploration Licensing Policy.

Reliance controls 66.67% of the project while the UK's BP owns 33.33% after consortium partner Niko exited its 10% stake.

The case dates back to 2013, when ONGC first suspected the KG-D6 block may be connected to its adjacent KG-D5 and G-4 blocks. It accused Reliance-BP of extracting gas belonging to its blocks.

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The two sides appointed US-based consulting agency DeGolyer and MacNaughton in 2014 to investigate the matter. The consultant concluded that there was indeed significant migration of gas from ONGC's blocks, which was pumped out by the Reliance-led consortium from 2009 to 2015.

The ministry of petroleum and natural gas raised a demand of $2.81 billion from Reliance, BP and Niko in March 2025 pertaining to the gas-migration issue.

The Reliance consortium moved the Supreme Court after a division bench of the Delhi High Court set aside an award in their favour by a three-member tribunal led by Singapore-based arbitrator Lawrence Boo.

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