Japan's oil giant Inpex Corp has acquired 26 per cent stake in India's state-run explorer Oil & Natural Gas Corp's (ONGC's) Krishna Godavari basin deep-sea block.

Announcing the stake sale, ONGC said, "ONGC and Inpex have entered into a strategic partnership for exploration of hydrocarbons in one of the acreages in KG basin."

To begin with, deep water exploration expert Inpex will invest $35 million as part of its share of the past cost the group has spent on the block thus far.

S V Rao, director (exploration) ONGC, said that Inpex would bring with it know-how in deep water drilling which would help the company bolster its capability to accelerate the process.

The KG deep-sea block was awarded to a group of five players with ONGC gaining 60 per cent participating interest in 2006. Each of GSPC, HPCL, Gail and Oil India had held 10 per cent stake in the block, which was awarded under the New Exploration Licensing Policy round VI. The aforementioned production sharing agreement was penned down in March 2007.

The KG basin is one of the most plentiful oil & gas offshore basins in India, situated in the Bay of Bengal.

Following the announcement of the deal, shares in ONGC gained 0.66 per cent to Rs 268.30 apiece. The stock touched an intraday low of Rs 267 and an intraday high of Rs 269.40.