Supreme Court Advances KG Basin Gas Dispute Amid Mediation Efforts by Reliance
SC refuses to pause KG basin gas dispute as RIL seeks mediation route
Business Standard
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The Supreme Court of India has decided to continue hearings in the gas migration dispute involving Reliance Industries Limited (RIL) and the Centre, despite RIL's request for mediation. The case centers on allegations that RIL siphoned gas from state-run ONGC's reserves in the Krishna-Godavari basin, with the court urging both parties to reach a resolution.
- 01The Supreme Court is hearing appeals from Reliance Industries Limited and its partners against a Delhi High Court ruling regarding gas migration.
- 02The Centre has accused RIL of unjustly enriching itself by over $1.729 billion through siphoning gas from ONGC's block.
- 03The dispute originated from a 2000 Production Sharing Contract (PSC) between RIL and the Centre for gas exploration.
- 04A third-party study by DeGolyer & MacNaughton confirmed connectivity between the gas pools of RIL and ONGC, supporting the government's claims.
- 05The Supreme Court stated it would only pause hearings if both parties confirm a settlement has been reached.
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The Supreme Court of India has opted to continue hearings in the ongoing gas migration dispute involving Reliance Industries Limited (RIL) and the Indian government, despite RIL's intentions to seek mediation. The case stems from allegations that RIL siphoned gas from the adjacent block operated by Oil and Natural Gas Corporation (ONGC) in the Krishna-Godavari basin off the coast of Andhra Pradesh. The Centre claims that RIL and its partners, including BP Exploration and Niko Resources, have unjustly enriched themselves by approximately $1.729 billion by extracting gas from ONGC’s reserves. The dispute began following a 2000 Production Sharing Contract (PSC) and escalated when ONGC alleged in 2013 that the gas pools in its block were connected to RIL's block. A third-party analysis by DeGolyer & MacNaughton confirmed this connectivity, supporting the government's position. The Supreme Court, led by Chief Justice Surya Kant, indicated that hearings would proceed unless both parties jointly report a resolution. The Centre's Attorney General opposed any pause in proceedings, emphasizing the need to complete the hearings. The matter reflects ongoing tensions between private entities and state interests in India's energy sector.
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The outcome of this dispute could affect the operational dynamics of gas extraction in the KG basin, potentially impacting energy prices and investments in the sector.
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