ONGC to buy Cairn's 10 per cent stake in KG gas block

State-owned Oil and Natural Gas Corp (ONGC) will acquire the 10 per cent stake of Cairn India in a gas-discovery block close to Reliance Industries-operated KG-D6 gas field in the Bay of Bengal.

Cairn India, which had made four discoveries in the Krishna Godavari basin block KG-DWN-98/2, offered to sell 100 per cent stake in the area to ONGC in 2005.

However, ONGC bought a 90-per cent stake in the gas field and opted to keep Cairn as partner as it wanted to utilise Cairn India's expertise in oil and gas exploration.

''That has been agreed in our last board meeting,'' ONGC chairman and managing director Sudhir Vasudeva said.

The two partners, however, failed to agree on how to optimally exploit the pre-2005 discoveries as also subsequent finds.

Cairn also disagreed with ONGC's estimates of in-place volume of 25.61 million tonnes of oil and 197 billion cubic metres of natural gas and felt its implementation programmes were not justified and chose to exit the joint venture.