Shirish Nadkarni
OGJ Correspondent

MUMBAI, June 17 -- Indian state-run Oil & Natural Gas Corp. is said to be cool towards OAO Gazprom's offer of a 50% stake in its shallow-water exploration property NEC-OSN-97/1 in the country's North-Eastern coast, off the Orissa coastline.

A consortium of Gazprom and GAIL (India) Ltd. acquired the block during the first round of bidding under the new exploration licensing policy (NELP-I) in 1997. However, GAIL surrendered its 50% stake in the block after the consortium hit two dry holes last year.

Following GAIL's exit, Gazprom approached ONGC with a farm-in offer in December 2007. Both companies had previously entered agreements to jointly explore oil and gas fields in India, Russia, and third countries.

While ONGC sources maintain Gazprom's proposal is still under consideration, industry sources close to the development said the Indian E&P major had been having a frustrating time and little success while exploring oil and gas in a Bengal offshore block (WB-OSN-2000/1) bordering the Gazprom asset.