RIL–Government KG-D6 Dispute Nears Resolution
A long-running dispute between Reliance Industries Ltd and the Government of India over the KG-D6 offshore gas block is expected to reach a settlement in 2026, nearly 13 years after it began. The case involves a claim of about $247 million raised by the government, linked to cost recovery and profit-sharing under the production-sharing contract for the deepwater block.
Background of the Dispute
The KG-D6 block, located in the Krishna-Godavari basin off India’s east coast, was developed by a consortium led by Reliance along with its partners. Under the then-prevailing exploration policy, contractors were allowed to recover approved development costs before sharing profits with the government. The dispute arose when the government disallowed part of the costs claimed by the consortium, arguing that projected production targets were not met. Reliance has consistently maintained that all expenditures were approved through the contractually mandated process and that there was no breach of agreement.
What Lies Ahead
The matter has been under international arbitration, and officials familiar with the process say the case is now in its final stages, with a ruling or settlement likely in early 2026. The outcome is being closely watched by the energy sector, as it could set an important precedent for contract stability and investor confidence in India’s upstream oil and gas industry. A decision will determine whether Reliance must pay the disputed amount or whether its cost recovery claims will be upheld.
