Delhi High Court Upholds Arbitration Panel’s Decision in Favor of RIL and Foreign Partners in Gas Migration Dispute
In a major legal development, the Delhi High Court has upheld the ruling of an arbitration panel in favor of Reliance Industries (RIL) and its foreign partners, including BP Plc and Niko Resources of Canada, regarding a dispute over gas migration from fields operated by the state-owned Oil and Natural Gas Corp Ltd (ONGC).
The dispute arose when the Indian government accused the consortium of committing an “insidious fraud” by syphoning gas from deposits beyond their right to exploit. According to the government, the consortium produced around 338.332 million British thermal units of gas that migrated from adjoining ONGC blocks into RIL’s KG-D6 block.
However, the arbitration panel ruled in 2018, in a 2:1 majority decision, that Reliance is entitled to produce all hydrocarbons resulting from petroleum operations conducted on the contract area, which may include hydrocarbons migrating from adjacent blocks.
The blocks operated by RIL and ONGC are adjacent to each other in the Bay of Bengal, making the dispute a complex legal matter. The Delhi High Court’s decision to uphold the arbitration panel’s ruling is a significant setback for the Indian government.
This ruling has major implications for the oil and gas industry in India, particularly for companies involved in operations in adjacent blocks. It remains to be seen how this ruling will impact future legal disputes in the industry.
About Reliance:
Headquartered in Mumbai, Reliance Industries Limited is a multinational conglomerate with diverse business interests, ranging from energy, petrochemicals, and natural gas to retail, telecommunications, mass media, and textiles.
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