"We are talking to BG for picking up their stake in CB-OS/1. Talks have progressed well and we hope to conclude the deal soon," Rakesh Jain, the newly appointed managing director of HOEC, told PTI.

He, however, did not elaborate on the negotiations.

HOEC holds 17.36 per cent stake in the block were BG had encountered marginal presence of hydrocarbons in three wells it has drilled so far.

Tata Petrodyne and state-owned Oil and Natural Gas Corporation have 10 per cent a piece in the block.

BG Group was exiting CB-OS/1 as "the potential in the block was not in conformity with the oil and gas portfolio held by the Group." Incidentally, Tata Petrodyne too was exiting the block.

Jain said HOEC would be looking at organic and inorganic growth in the form of acquisitions and bidding for new oil and gas blocks on offer in the fourth round of New Exploration Licensing Policy.

In HOEC, Unocal of US holds 34.51 per cent stake, HDFC 10.7 per cent and IL&FS 4.3 per cent.

Presently, HOEC, together with Hardy Oil of UK, is producing 4,900 barrels of oil per day from PY-3 fields in Cauvery basin, which is estimated to hold recoverable reserves of 17.5 million barrels.