Oil and Natural Gas Corporation will take a 30 per cent share in British firm Cairn Energy's giant oil field in Rajasthan even as Petroleum Minister Ram Naik hoped that the discovery will fuel foreign companies to invest in oil and gas exploration in India.

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"We have a right to 30 per cent of any development area resulting from a commercial discovery on the (Cairn) block. We will exercise this right," ONGC chairman and managing director Subir Raha told PTI in New Delhi.

Cairn on Monday announced the discovery of 450 to 1,100 million barrels of good quality light crude oil in the exploration well N-B-1 in Block RJ-ON-90/1 in northern Rajasthan.

"It is a good find and we are encouraged by it. In our estimation, the discovery is of medium size but we will wait for final testing and further drilling to target depth before making any assessment," Raha said.

ONGC had previously farmed-in 30 per cent stake in Lakshmi and Gauri gas discoveries in Cairn's offshore Cambay block CB/OS/2.

Naik described the discovery as "landmark" which will make Rajasthan India's third largest oil producing state after Gujarat and Assam.

"It is particularly heartening to note that the oil find comes within days of an Indo-Korean consortium discovered gas in offshore Myanmar. Indian companies (ONGC and GAIL) finding gas in foreign lands and foreign company (Cairn) finding oil in India will encourage global giants to come and explore for oil and gas in Indian basins," he told PTI.

Naik hoped that the oil find will change the perception about the Indian basins and lead to more foreign giants bidding for oil and gas blocks in the fifth offering under the new exploration licensing policy in April-May.

"I am very happy that the Indian deserts (like those in Middle East nations) too hold oil. For a country which is 70 per cent dependent on imports to meet its crude oil requirement, this augurs very well," he said.

The preliminary reserve estimates are in the 50 to 200 million barrel range.

The discovery is located 60-km north of the previous discovery named Saraswati in the Block RJ-ON-90/1 in Barmer district.

Cairn, which has earlier made three significant oil finds in the same block, holds 100 per cent interest in the 5,000 sq km onshore block. ONGC has a right to 30 per cent of any development area resulting from a commercial discovery on the block.

The British firm had previously struck oil at three places in the blocks. The discoveries, which together are estimated to hold 30 million tonnes of oil, had been named Guda, Raghaveshri and Saraswati.