State-owned Oil & Natural Gas Corp is now virtually certain to be in the race to pick up Videocon Industries' 10-per cent stake in a major gas field off the coast of East African country Mozambique.

Though there has been no official confirmation from the Indian petroleum ministry or ONGC, reports suggest that ONGC plans to ship the fuel as liquefied natural gas to a proposed LNG terminal at Mangalore.

"ONGC Videsh Ltd, the overseas arm of the state explorer, and Oil India Ltd (OIL) are together negotiating for the stake for which Videocon is reportedly seeking at least $3 billion," PTI reported.

Along with Videocon, state run oil retailer Bharat Petroleum Corp Ltd, also holds a 10-per cent stake in the block, which may hold as much as 70 trillion cubic feet of gas reserves.

Other international oil explorers are also in the fray for the Mozambique stake - Videocon knows that it is sitting on a 'black gold'mine, and is seeking a full market price for it.

"Global energy giants like Royal Dutch Shell, BP Plc, ExxonMobil, Spain's Repsol and China's Sinopec also have found Videocon's asking price too high," the PTI report said.

Energy firms are closely following the events in Mozambique as the country is now pegged to be 'floating on gas'. In fact, the block where BPCL and Videocon are present is said to be the biggest gas discovery made in decades.

Videocon has been in the market to offload either fully or partly its stake in the gas find, called Area-1, in Mozambique's offshore Rovuma Basin.

Reports say Oil India Ltd is looking to invest its cash reserves of Rs30,000 crore, as otherwise it is likely that the government may take away a big chunk of the cash in one form or another.