Indian Oil Corporation will buy 40 per cent of ONGC Videsh Ltd's stake in the Greater Nile Oil Project in Sudan.

OVL, the overseas arm of Oil and Natural Gas Corporation, had earlier this month acquired Canadian Talisman Energy's 25 per cent stake in GNOP for $720 million.

"It is a government decision. Talisman Energy's 25  per cent stake in GNOP would be shared between OVL and IOC in 60:40 ratio," well-placed sources in IOC said in New Delhi.

They claimed that Talisman Energy had first approached IOC for selling its stake in GNOP, which produces over 12 million tonne of crude oil annually, but OVL was asked to do the negotiations as the government had designated it as the nodal agency for acquisitions abroad.

"At that time it was decided that if OVL is successful, 10 per cent stake in GNOP will go to IOC while OVL would hold 15 per cent," sources said adding formal negotiations on price at which IOC would farm-in equity in the Sudan field were yet to begin with ONGC.

However, ONGC appears reluctant to farm-in IOC in the Sudan field.

"It (farming out stake) depends on what IOC offers us," a senior ONGC official said indicating that it would share the Sudan pie only at a premium.

OVL's 25 per cent stake in GNOP will give it close to 3 million tonne of crude oil annually.