The long-continuing dispute around KG-D6 block may see some resolution in 2026. According to Reuters report, a three-member tribunal is expected to deliver its verdict in mid-2026 which can be challenged in Indian courts. Final arguments in the case were held on November 7. Financialexpress.com could not verify the news independently. We have written to Reliance Industries (RIL) on the same, seeking clarification. Keep watching this space for any potential update.
The tribunal has been hearing the dispute since 2016 over gas output from the D1 and D3 deepwater fields in the KG-D6 block of the Krishna Godavari basin, located in the Bay of Bengal off the coast of Andhra Pradesh. Mukesh Ambani-led Reliance Industries is contesting the government of India’s $247 million claim for additional profit petroleum from KG-D6 in an international arbitration. Reliance Industries with British Petroleum (BP) and Niko is operating the KG-D6 oil block of the Krishna Godavari basin, located in the Bay of Bengal off the coast of Andhra Pradesh since 2002.
What is the D1–D3 gas project?
The D1 and D3 fields were India’s first major deepwater gas project and were expected to strengthen the country’s energy independence. However, the project faced several problems, including water ingress, pressure issues in the reservoir and disputes with the government over cost recovery.
As a result, production fell far short of initial expectations, according to earlier public statements by Reliance and the government.
In 2012, the oil ministry told Parliament that before work began on the KG-D6 fields, Reliance had estimated recoverable gas reserves from D1 and D3 at 10.3 trillion cubic feet. This estimate was later revised down sharply to 3.1 trillion cubic feet.
Reliance Industries has said that total production from the wider KG-D6 block reached about 3 trillion cubic feet of gas equivalent before output from D1 and D3 was stopped in 2020. It is not clear how much of that came specifically from these two fields.
Government claims gas loss due to mismanagement
The gas block was awarded to Reliance Industries in 2000 under a production sharing contract. BP bought a 30% stake in several of Reliance’s oil and gas assets, including KG-D6, in 2011 for $7.2 billion.
According to Reuters, the government argues that mismanagement by Reliance and BP led to the loss of most of the gas reserves in D1 and D3. It claims the companies produced only about 20% of the roughly 10 trillion cubic feet of gas they had originally estimated.
The government has told the tribunal that since it owns the gas under the contract, Reliance Industries and BP should pay the value of the shortfall.
Government flags “unduly aggressive” production methods
According to Reuters report, during the hearings, the government alleged that Reliance Industries followed “unduly aggressive” production methods. It said the company drilled only 18 wells instead of the 31 originally planned and did so without adequate infrastructure.
This approach, the government claims, damaged the reservoir and made much of the gas permanently unrecoverable.
Reliance Industries and BP have disputed the government’s claims in the arbitration and have argued that they do not owe any compensation, as per the report.