India's government has approved a bid by a state-owned oil company to buy into Sudan's controversial oil industry.

Petroleum Minister Ram Naik has told Reuters the state-owned Oil and Natural Gas Corporation's (ONGC) could buy a 25% stake in Greater Nile Petroleum from Canada's Talisman Energy.

The Chinese are there, the Malaysians are there, and we have good relations with Sudan

Petroleum Minister Ram Naik

"The cabinet has cleared it. All legal formalities will be completed by 31 July," Mr Naik told reporters after the cabinet meeting.

ONGC has been looking to invest in foreign fields to make up for a domestic energy shortfall.

"It's very clear why a country like India is interested in an asset such as this. It's an extremely good asset, it's got long, long life," Talisman chief executive Jim Buckee said.

"India and China are moving into massive energy-deficient positions, and if you read what the minister's said, he's well aware of that and they need to have assets like the Sudan asset. That's why they want it," Mr Buckee said.

Human rights claims

Human rights groups have claimed Sudan's Islamic government has been using revenues from the project to fund a two-decade-old civil war against rebels in the mainly animists and Christian south.

Mr Naik told reporters that the civil war in Sudan and protests from human rights groups did not worry him.

"The Chinese are there, the Malaysians are there, and we have good relations with Sudan," he said

Members of the US government have proposed sanctions against Sudan which had threatened Talisman's investment.

Talisman, which bought into the Greater Nile Petroleum Operating Company in 1999, claims its operations in Sudan have not fuelled the war.

Good prospecting

Mr Naik said ONGC would recover the entire investment of $750m in the project in five to six years assuming crude price of about $19 a barrel.

The project near Bentiu, 750km south of the capital Khartoum, pumps about 230,000 barrels a day of oil, which is shipped by pipeline to the Red Sea.

The other partners are China National Petroleum, Malaysia state oil company Petronas and Sudan's Sudapet.