ONGC announced last month it had bought a 25% stake in a Sudanese oil project from Canada's Talisman Energy for $US750 million.

The project produces about 12 million tonnes of crude a year and is owned by the state companies of Sudan, China, and Malaysia.

"There are proven reserves and there are prospective reserves in that project," said chairman and managing director of ONGC, Subir Raha. "It's a good business deal at the given price."

As for the concerns about the risk of investing in a country racked by more than four decades of civil war, "We have more sabotage here in India than in Sudan," Mr Raha said.

To underline this point, last month ONGC had six of its employees killed by rebels in India's eastern province of Assam.

Indian Oil Minister Ram Naik told a press conference this week that ONGC would soon open an office in Baghdad, home of Iraqi strongman Saddam Hussein and a potential target for a US-led invasion force.

The move comes after he met with his Iraqi counterpart, Amir Muhammed Rasheed, to work on getting ONGC an oil concession in southern Iraq.

Iraq, India and Algeria are reportedly in the final stages of a deal to start exploring and drilling the Tuba oil field between Zubair and Rumaila in the south of the country.

ONGC is currently awaiting approval from its board to invest approximately $US63 million in Iraq.