ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp, has acquired a majority stake in an oil block in Australia.

"We have acquired 55 per cent interest in Block WA 306 P, located in the North West Shelf in offshore Australia, from Canadian firm Antrim Energy Inc," OVL managing director R S Butola told PTI in New Delhi.

While OVL is not paying any money for the acquisition, it will carry the entire cost of drilling of the first exploratory well on the block, likely to start in September.

"In the event of a discovery in the block, OVL will get to recover the cost of the exploration. The produce thereafter will be shared among the partners in proportion to their shareholding," Butola said.

Antrim, which currently holds 87.5 per cent stake in the block, estimates up to $500 million barrels of recoverable oil. The first well in the Browse Basin of the North West shelf could yield 150 million barrels of recoverable oil.

"The block holds good potential," Butola said.

Magellan Petroleum Ltd holds the remaining 12.5 per cent interest.

OVL, already has oil and gas assets in Myanmar, Vietnam, Iran, Iraq, Syria, Libya, Sudan and Angola.

OVL signed the farm-in agreement on August 27. The acquisition will become final, once the Government of Australia approves it.