Norway's StatoilHydro is keen to treble its stake to 30 per cent in a significant gas block operated by state-owned Oil and Natural Gas Corporation in the Krishna-Godavari basin.

It also wants to be a joint operator in the gas-rich block which may increase by a third India's gas supply once it begins production in 2013.

An ONGC [Get Quote] official said this was unacceptable, as the joint venture agreement allows Statoil to double its stake to 20 per cent and not treble it. However, it was willing to offer up to 22 per cent to the Norwegian company.

At the moment, ONGC owns 65 per cent in the block, Petrobras of Brazil 15 per cent, while Statoil and Cairn India [Get Quote] hold 10 per cent each. Petrobras has the option to double its stake to 30 per cent.

ONGC, India's second most-profitable company, is worried that if both the companies raise their interest to 30 per cent each, each of the three partners will end up with the same stake. As a result, it will lose control of a block in which it has already discovered gas and sees potential for more.

"We want to avoid a situation where we are left with the same stake as the others and give away our sole operatorship," said the ONGC official. If Statoil agrees to take 22 per cent, ONGC will remain the largest stakeholder in the field with a 38 per cent interest.

Statoil said in an e-mail response: "Governmental approval for this share was given in July this year, and there is no new information given after this approval. We look forward to cooperate in this partnership."

ONGC had discovered gas in the block without any overseas technological support. Later, it decided to bring in Statoil and Petrobras as it lacked the technology to produce gas from the ultra-deep waters of the Krishna-Godavari basin in the country's east coast.

The block is estimated to hold around 6.37 trillion cubic feet of gas and can produce around 25 million standard cubic feet of the fuel every day.