KG Basin Case: RIL Seeks Out-of-Court Settlement with Govt, Informs SC

Reliance Industries has informed the Supreme Court that it intends to explore an out-of-court settlement with the Union government in the long-running Krishna-Godavari (KG) Basin gas migration dispute.

During proceedings on Wednesday, counsel representing RIL and its foreign partners told the apex court that the companies plan to write to the Centre seeking conciliation or mediation to resolve the matter. 

The dispute relates to allegations that gas from blocks operated by state-run Oil and Natural Gas Corporation (ONGC) migrated into RIL’s KG-D6 block off the Andhra Pradesh coast. 

Supreme Court Continues Hearing Amid Settlement Talks

The matter came up before a Bench led by Chief Justice Surya Kant along with Justices Joymalya Bagchi and Vipul M Pancholi.

RIL’s counsel informed the court that the contract between the parties remains active and that both sides continue to maintain an ongoing business relationship, making conciliation a practical option.

However, Attorney General R. Venkataramani, appearing for the Union government, said the court proceedings should continue while discussions take place in parallel.

The Supreme Court observed that arguments could continue while mediation efforts remain open. The Bench added that if both parties arrive at a successful settlement, the matter could then be disposed of accordingly.

Background of the KG Basin Dispute

The legal battle stems from allegations that RIL and its consortium partners extracted gas that had allegedly migrated from adjacent ONGC-operated blocks into the KG-D6 block.

RIL, along with BP Exploration (Alpha) Limited and Niko Resources, has challenged a 2025 Delhi High Court order that went against an earlier arbitral award in their favour.

In 2018, an international arbitration tribunal had rejected the government’s $1.55 billion claim against the consortium.

Senior advocate Abhishek Manu Singhvi, appearing for RIL, argued that gas migration was a natural physical process caused by pressure differences and not an act of illegal extraction.

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Conclusion

The move toward possible conciliation marks an important development in the KG Basin dispute, which has significant implications for India’s energy sector and investor sentiment. While the Supreme Court proceedings continue, a negotiated settlement could potentially help both sides avoid a prolonged legal battle and bring greater clarity to one of the country’s biggest energy disputes.

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