RoydadNaft –  India is pursuing more than $30 billion in compensation from Reliance Industries and partner BP in a long-running arbitration dispute, alleging the companies failed to produce vast amounts of natural gas from deepwater fields due to mismanagement, sources familiar with the matter told Reuters exclusively.

The claim, the largest ever by the Indian government against a corporation, centers on the D1 and D3 fields in the flagship KG-D6 block in the Krishna Godavari basin, where Reliance had initially estimated recoverable reserves at around 10 trillion cubic feet but produced only about 20% of that volume, according to government arguments in the proceedings.

A three-member arbitration tribunal in India has been hearing the case since 2016, with final arguments concluding on November 7. A verdict is expected in mid-2026 and could be challenged in Indian courts, sources said.

The government contends that “unduly aggressive” production techniques — including drilling fewer wells than planned (18 instead of 31) without adequate infrastructure — damaged the reservoir, leading to the loss of most of the reserves and depriving the state of its share of the gas.

Reliance and BP have disputed the allegations and denied owing any compensation to the government, the sources added.

A Reliance spokesperson described the arbitration as confidential and declined to comment further. BP declined to comment. Indian government ministries did not respond to requests for comment.

The KG-D6 project, India’s first major deepwater gas development awarded to Reliance in 2000, was once hailed as a cornerstone of the country’s energy independence but was plagued by technical challenges and cost disputes. Production from the D1 and D3 fields ceased in 2020.