Reliance Industries (RIL) Receives ₹23,300 Crore Demand Notice from Government Over Gas Dispute

Mukesh Ambani-led Reliance Industries Ltd (RIL) informed the stock exchanges on March 04, 2025 that it has received a demand notice of ₹23,300 crore ($2.81 billion) from the Ministry of Petroleum and Natural Gas. The notice is related to a long-standing dispute over its KG-D6 gas field operations.

Background of the Gas Dispute

The government has raised this demand against RIL, BP Exploration (Alpha), and Niko (Neco), the contractors of the KG-D6 production sharing contract. The notice follows a recent ruling by the Division Bench of the Delhi High Court on February 14, 2025, which overturned a May 2023 decision by a single judge. The earlier ruling had dismissed the government’s appeal against an arbitration award favouring RIL.

RIL won this arbitration in July 2018, when the tribunal ruled against the government’s ₹12,800 crore ($1.55 billion) claim related to alleged gas migration from ONGC’s blocks. The company now plans to challenge the latest Delhi High Court judgment and has stated that it does not expect any financial liability.

Separate Issue: RIL’s Battery Subsidiary Faces Liquidated Damages

In a separate announcement, RIL also disclosed that its subsidiary, Reliance New Energy Battery Storage (RNEBSL), received a letter from the Ministry of Heavy Industries (MHI) regarding liquidated damages.

The MHI has imposed a penalty of 0.1% of the ₹50 crore performance security for each day of delay beyond January 1, 2025. The delay concerns the first milestone under the Production Linked Incentive (PLI) scheme for advanced chemistry cell manufacturing. As of March 3, the damages have reached ₹3.1 crore.

RNEBSL has requested an extension for meeting the milestone. RIL had received approval under this PLI scheme in 2022-23. The company aims to set up a battery gigafactory by 2026 and start producing sodium-ion batteries at a commercial scale by 2025.

RIL’s Stock Performance

Reliance Industries share price is trading at ₹1,174.85, up ₹12.95 (1.11%) today as of March 5, 10:49 AM IST. The stock opened at ₹1,161.00, reaching a high of ₹1,177.40 and a low of ₹1,157.00. Over the past 5 days, it has declined by 2.33% (-₹28.00). In the last 6 months, it has dropped by 21.35% (-₹318.68), and over the past year, it has fallen by 21.72% (-₹325.90).

Timeline of Events

• July 2018: RIL won an arbitration case against the government’s ₹12,800 crore claim related to gas migration.
• May 2023: A single-judge bench of the Delhi High Court dismissed the government’s appeal challenging the arbitration award.
• February 2025: A Division Bench of the Delhi High Court overturned the May 2023 ruling.
• March 2025: RIL and its partners received a ₹23,300 crore demand notice from the government.

Conclusion

While RIL faces legal hurdles in the KG-D6 dispute, the company remains firm in its stance. Meanwhile, its battery subsidiary is also addressing project delays under the PLI scheme.

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