The Indian Oil Corporation and Oil and Natural Gas Corporation's overseas arm ONGC Videsh Ltd will mount a joint bid for acquiring the South Ghawar gas field, one of the largest onshore fields in Saudi Arabia.

"They (Saudi Arabia) have invited us in London on July 21 for negotiations to develop the South Ghawar gas field," M S Ramachandran, chairman, IOC told PTI in New Delhi on Wednesday.

Saudi Arabia had last month terminated the contract with the ExxonMobile-led consortium for developing the South Ghawar gas reserves. The ExxonMobil consortium, which also included Shell, BP and ConocoPhilips, was to invest $15 billion in bringing gas to production.

The companies wanted access to more gas than the Saudis were offering and the two sides also disagreed over the rate of return for investments in the petrochemical, power and desalination plants.

Ramachandran said he had a round of discussion on getting a stake in the South Ghawar field with the Saudi Aramco CEO Abdullah S Jumah last month, when he had gone to Riyadh for renewing the annual contract for the import of crude oil.

ONGC Videsh would have a majority stake in the consortium, bidding for the South Ghawar field that is estimated to hold 35 trillion cubic feet of gas reserves, he said.

"We have indicated to them our interest in taking up the Ghawar gas project as also the associated petrochemicals and power projects," he said.

Ramachandran and OVL managing director Atul Chandra will hold negotiations with the Saudi Arabian national oil firm in London to get a foothold in the Arab country, which holds the world's largest oil reserves.

The state-run refiner, which also happens to be the sole Indian firm in the Fortune 500 list of global firms, is exploring opportunities in Iran, Kuwait, Sudan, Bangladesh, Qatar, Papua New Guinea and Indonesia.

"We are adopting the consortium approach to acquire oil properties abroad. Besides OVL, we are also exploring projects with Petronas of Malaysia and Premier Oil of the United Kingdom," he said.

"We have the expertise in downstream refining and marketing but for exploration and production we need a partner," he said.

Saudi Arabia had picked eight oil companies in June last year to carry out the multibillion-dollar gas projects. Split into three consortiums - two led by ExxonMobil and one by Royal/Dutch Shell - they were tasked with bringing a gas field on stream and to build facilities that will use their production as feedstock for electricity, water desalination and petrochemical plants.

ExxonMobil was tasked with developing the South Ghawar field requiring a $15 billion investment, and the Red Sea field, needing $5 billion. Shell was picked to develop Shaybah, requiring an investment of $5 billion.

The South Ghawar project, located north of the Empty Quarter, includes the construction of two electricity and desalination plants as well as two petrochemicals plants in the eastern and western provinces.

Besides the Ghawar field, Saudi Arabia has also cancelled the contract for the Red Sea field.