Britains' Cairn Energy has offered to sell its stake in two oil and gas blocks in Krishna Godavari basin to Oil and Natural Gas Corporation for $100 million and 15 per cent equity in state-run firm's two blocks.

Cairn has offered to sell its 85 per cent stake in blocks KG-DWN-98/2 and KG-OS/6, which ONGC won under the New Exploration Licensing Policy rounds, ONGC sources said.

Rejecting ONGC's about $200 million non-binding bid for its two KG basin blocks and CB-OS/2 block in Cambay basin, the Scottish explorer gave ONGC time till July 15 to respond to its offer.

Cairn, however, has decided to withdraw CB-OS/2 block, where 5 oil and gas discoveries have been made to date, from its offer of sale.

The company has 100 per cent stake in KG-DWN-98/2 deep-sea block that lies adjacent to Reliance Industries' gigantic gas find, while it has 50 per cent stake in KG-OS/6. Videocon Petroleum Ltd has the remaining stake in the block.

Current reserve estimates for the acreage stand at between 100 million and 300 million barrels of crude and up to 1.5 trillion cubic feet of gas.

Sources said ONGC was considering the latest Cairn offer and would decide upon it in 7-10 days. "The state-run firm is interested in taking over the KG basin blocks as well as the Cambay basin property."

Stating that it has spent over $130 million on KG-DWN-98/2 block where 1.4 trillion cubic feet of gas reserves have been discovered, Cairn has offered to transfer its interest on "no past cost basis" and all future exploration and development costs would be borne in proportion to the participating interest held by the partners.

Sources said ONGC was also keen on acquiring Cairn's interest in CB-OS/2 block where Lakshmi gas, Gauri gas, Ambe gas, Parvati oil and Lakshmi oil fields have been found.

Lakshmi field is currently producing 3 million standard cubic metre of gas per day.

Earlier this year, Cairn Energy had set for itself 12 months to find a partner to help it appraise and hopefully exploit its discoveries in Krishna Godavari basin blocks off eastern India.

It is also the operator of 50,000 barrels per day Ravva field off the Andhra coast. ONGC, however, was not interested in the field.