NEW DELHI: Oil and Natural Gas Corp ( ONGC ) will pay $1.2 billion for Gujarat State Petroleum Corp’s ( GSPC ) entire 80% stake in the Deen Dayal West field and six other finds in the KG Basin in a deal that would help the Gujarat firm deleverage.ONGC will acquire the participating interest of GSPC, a company of the Gujarat government, along with the operatorship in the Deen Dayal West field for $995.26 million, the company said in a statement late on Friday. Jubilant and Geo Global Resources have 10% each in the field.ONGC would also pay GSPC $200 million towards future consideration for six discoveries other than Deen Dayal West Field, which will be adjusted against the valuation of these discoveries after the approval of their field development plans, the company said.“The acquisition of participating interest and operatorship rights in the block fits well with the strategy of ONGC to enhance natural gas production from domestic fields on a faster pace ... with a goal to reduce import dependency of hydrocarbons by 10% by year 2021-22. The trial gas production from Deen Dayal West Field has already begun,” the company said.It said the acquisition would act as a pivot to develop other fields in the region using the infrastructure already built by GSPC.GSPC had announced the gas discovery in the Deen Dayal West field with much fanfare when Narendra Modi was Gujarat’s chief minister. Subsequently, the company faced unexpected technical hurdles resulting in a rise in development expenditure, debt and delay in execution. GSPC has spent $3 billion to develop the field but hasn’t been able to start commercial production.GSPC’s stake in the KG block and future income from the block is hypothecated to lenders, sources said. The Comptroller and Auditor General (CAG) had criticised GSPC this year for the way it handled the block.The investments in the block drove up GSPC’s debt 180% in four years to Rs 19,700 crore by March 2015, the auditor said.ONGC said it would “endeavour” to begin commercial production and use the infrastructure developed by GSPC for the Deen Dayal field to fast-track the development of its neighbouring fields in the KG basin.“The Deen Dayal field will act as a pivot in developing nearby high pressure –high temperature discoveries in Yanam and Godavari PML areas of ONGC, simultaneously,” said the company. ONGC and GSPC had signed a preliminary pact on October 4 to acquire a stake in the KG basin field. The two companies then had differences over several issues including the quantity of reserves in the KG field, the amount of capital and operating expenditure needed, the prices gas and condensate from the field can obtain, and the discount rate that should be used to calculate the net asset value.