India's state-run, Oil & Natural Gas Corp has said that it will buyout British energy major BG Group's stake in three oil and gas exploration blocks.

Company Chairman and Managing Director Sudhir Vasudeva said that ONGC will acquire the stake in three of BG's eastern offshore oil and gas exploration blocks. ONGC will also receive $ 50 million from the UK firm for settlement of past costs that were incurred by ONGC for carrying out work on behalf of BG.

The Indian company will buyout 45 per cent in Krishna-Godavari Basin block KG-OSN-2004/1, 25 per cent interest in the Mahanadi Basin exploration block MN-DWN-2002/02 and 30 per cent stake in deep water block KG-DWN-98/4.

Vasudeva said that the board of ONGC has given its approval to the acquisition of stake from BG. Even as ONGC acquires the stakes, it will not be required to transfer any cash to the British firm. BG is indebted to ONGC for past services on the projects performed by the Indian company on its behalf.

Vasudeva also said that BG is quitting the blocks due to its new global portfolio alignment strategy. The British firm has also put its 65.12 per cent stake in Gujarat Gas Co for auction.