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RIL Fights Govt Over $247M Oil Block Dispute
27 Dec, 2025
Summary
- Dispute over $247 million profit share from KG-D6 oil block.
- Government retroactively disallowed costs incurred by Reliance.
- Final arbitration decision expected by early 2026.
A long-standing financial dispute between the Indian government and Reliance Industries Limited (RIL) over the KG-D6 oil block is poised for resolution in early 2026. The crux of the disagreement lies in a $247 million claim by the government for a higher profit share from the gas field, a matter currently undergoing international arbitration.
The conflict escalated when the government blocked Reliance from recovering infrastructure development costs for the KG-D6 block. Under the New Exploration Licensing Policy (NELP), operators are permitted to recoup all investment costs before profit sharing. Reliance asserts that it operated with government committee approval and that the government retroactively disallowed expenses despite the absence of any financial risk for the state.
Reliance contends that the production sharing contract lacks provisions for such unilateral cost disallowances after they've been incurred. The company highlights that similar blocks managed by other operators, which performed worse, have not faced comparable proceedings. A final decision on the $247 million claim is anticipated by early 2026.
