Mumbai, Aug. 23: Cairn India, in which London-based Vedanta Resources is looking to pick up a majority stake, has discovered oil and gas in an onshore block in the Krishna Godavari basin, the company said on Monday.
The company has informed Directorate General of Hydrocarbons (DGH) about the discovery, Cairn India said in a statement.
The discovery was made at the Nagayalanka-1z well in the KG-ONN-2003/1 block, which is operated by Cairn with an a 49 per cent participating interest. State-run explorer ONGC holds the remaining 51 per cent. A flow of 75 barrels per day of oil and 0.27 million cubic feet per day of gas was achieved at the well, Cairn said.
The well is being evaluated to assess the commercial potential of the discovery, the company said.
On August 16, Vedanta Resources said that it would spend up to $9.6 billion to buy a majority stake in Cairn India, the Indian unit of the UK-based Cairn Energy.
In August 2009, Cairn India began pumping crude from its block in the Mangala oil field in the western Indian state of Rajasthan, the first major crude oil discovery in the energy-hungry nation in two decades.
The firm holds a 70 per cent stake in the Rajasthan oil block, called RJ-ON-90/1, while ONGC holds the balance.
The deal with Vedanta needs the government approval because Cairn India has production-sharing contracts (PSCs) with the government for oil and gas exploration blocks.
Approval from partner ONGC is also crucial for any change of ownership.
The petroleum ministry reportedly wanted ONGC to be given a chance to buy the holding even as state-owned ONGC, OIL India Ltd and GAIL have began talks for a joint bid to counter Vedanta.