ONGC has signed an agreement with Japanese exploration major Inpex Corporation to divest 26 per cent stake in one of its deep water blocks in the KG basin.

Initially, Inpex will invest $35 million (approx Rs 189 crore) as part of its share of the past cost the consortium has spent on the block so far. The deep water block KG DWN 2004/6 was awarded to a consortium of five companies with ONGC as the operator of the block with 60 per cent participating interest (PI) in 2006 under the New Exploration Licensing Policy round VI. The production sharing contract was signed in March 2007. Other players in the block were GSPC, HPCL, Gail and OIL with 10 per cent PI each.

ONGC has completed most of the Phase I exploration programme in the block except drilling of one well which is to be taken up. Drilling of the last well is expected to be taken up by December 2012 and the consortium plans to complete the minimum works programme by early 2013.