The Cabinet on Thursday approved ONGC's proposal to acquire Cairn Energy's stake in two gas blocks for $135 million.

The Oil and Natural Gas Corporation will acquire a 90 per cent stake in Krishna-Godavari basin block KG-DWN-98/2 and 15 per cent stake in exploration area of Canbay basin block CD-OS/2, sources said.

ONGC would also acquire 10 per cent in developed fields CB-OS/2d namely Lakshmi and Gauri.

In return Cairn Energy of the Untied Kingdom will get 30 per cent stake in two onland blocks of ONGC GV-ONN/2001/1 in Ganga valley and CB-ONN/97/1 in Cambay basin.