India's state-run oil company ONGC says separatists have demanded it pay them $113m or stop operations in the north-eastern state of Assam.
ONGC said the United Liberation Front of Assam (Ulfa) was asking for 5bn rupees ($113m) "without much delay".
ONGC has several oilfields and gas exploitation centres in Assam, India's third largest oil-producing state.
Prime Minister Manmohan Singh said the rebels must end extortion if they wanted peace efforts to succeed.
"If they want the peace process in Assam to continue, they must understand there's no scope for extortion, killing or any kind of violence," he told a news conference in the Assam capital, Guwahati.
'Shocked'
ONGC officials say the rebel demand came last week.
"We have received this demand and we are shocked," said company chairman Subir Raha.
Ulfa has yet to say whether it made the demand.
Last week a bomb blast damaged an oil pipeline in Assam's western district of Bongaigaon, badly damaging a pipeline carrying crude to an oil refinery.
The blast happened barely a few hours before Prime Minister Singh laid the foundation stone for a thermal power station in Bongaigaon.
Ulfa is one of the most powerful of nearly a dozen separatist groups fighting Indian security forces in the north-east.
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