Reliance, BP, ONGC Jointly Win Offshore Oil Block Amid $2.81 bn Gas Migration Dispute

In a rare collaboration, Reliance Industries, British energy company BP, and India’s state-run Oil and Natural Gas Corporation (ONGC) have jointly secured an offshore oil block in Gujarat as part of the latest bidding round under the Open Acreage Licensing Policy (OALP-IX). This marks the first time the three entities have partnered on such a venture.

The trio won block GS-OSHP-2022/2, located in the Saurashtra Basin. The block was one of 28 offered by the Indian government, covering a combined area of 1.36 lakh square kilometers, aimed at boosting domestic oil and gas exploration.

ONGC emerged as the most successful bidder, securing 15 blocks — 11 independently and four in partnership with others, including Oil India Ltd and Indian Oil Corporation.

According to a PTI report, contracts for the awarded blocks were signed in the presence of Union Petroleum Minister Hardeep Singh Puri.

Of the 28 blocks offered under OALP-IX, nine were onshore, eight in shallow waters, and 11 in ultra-deepwater areas. The blocks span eight sedimentary basins.

Director General of Hydrocarbons, Pallavi Jain, told PTI that the OALP rounds to date have attracted investment commitments totaling around $3.77 billion.

The government introduced OALP in 2017 to incentivise oil and gas exploration by offering revenue-sharing contracts, marketing and pricing freedom, and reduced royalties. The latest round (OALP-X), announced in February, is the largest so far, offering 25 blocks across various terrains—including onshore, shallow water, deep water, and ultra-deepwater zones. Bidding for this round closes on July 31.

Vedanta Wins Seven Blocks

Vedanta Ltd, which reportedly submitted bids for all 28 blocks, won seven. Oil India secured six blocks independently and an additional three in collaboration with ONGC.

According to PTI, while the first OALP round saw strong participation from private players—Vedanta, for instance, won 41 out of 55 blocks—subsequent rounds have largely been dominated by public sector companies.

Reliance and BP, longtime partners in India’s upstream energy sector, have participated selectively in bidding rounds. Since 2017, they’ve bid in only two rounds—and won blocks in both.

The government hopes continued expansion of exploration acreage will reduce India’s heavy reliance on imported oil, which currently costs over $220 billion annually.

Reliance-BP and ONGC: New Collaboration After Legal Setback

Reliance and BP are already joint partners in the KG-D6 basin, producing around 28 million standard cubic meters of gas per day.

A BP spokesperson told PTI that the new joint venture with ONGC holds strategic significance. The spokesperson described the partnership as a synergy of national and international expertise aimed at strengthening India’s energy security.

Under this collaboration, ONGC holds a 40% stake, while Reliance and BP each hold 30%.

Interestingly, the tie-up comes just a month after Reliance and BP lost a long-standing gas migration dispute with ONGC. In March, the Ministry of Petroleum and Natural Gas demanded $2.81 billion from Reliance Industries Ltd and its consortium partners — BP Exploration (Alpha) Limited and NIKO (NECO) Limited.

Previously, the Delhi High Court had ruled that the Reliance-led consortium had benefited from gas migrating from ONGC’s block into its own KG-D6 wells.