Sudhir Vasudeva, CMD of ONGC noted, ''It is important that henceforth we collaborate with more management engagement on important global assignments beyond the current projects so that the interests of both the companies are mutually served.''

"We think it is better to cooperate than compete," said Dinesh Sarraf, managing director of OVL.

Constantly being outbid by China with the backing of its sovereign funds for overseas energy acquisitions, India - despite holding foreign exchange reserves of $287 billion, has been recently been unable to bid for foreign oil blocks.

Its last major international purchase was the $1.9 billion acquisition of Imperial Energy way back in 2008. (See: ONGC completes acquisition of Imperial Energy)

India currently produces 680,000 barrels of oil per day and spends close to $124 billion (Rs600,000 crore) to import 80 per cent of its crude oil requirement.

According to the Paris-based International Energy Agency, India's energy consumption is likely to more than double by 2030 to 833 million tons of oil equivalent.