"The due diligence is moving rapidly," Great Offshore Managing Director Vijay Sheth said, but refused to confirm the name of the firm. "We hope to close the deal in one or two months."

SeaDragon Offshore Chairman Stephen Baird said: "We both are okay with the deal but are waiting for our bankers' nod to seal the deal."

Baird was in India on Friday to participate in the silver jubilee celebrations of Great Offshore. In January, it informed the BSE that it would be buyins a firm for $1.4 billion.

Great Offshore faced tough competition from other firms such as Mercator and Essar to buy SeaDragon. The market turmoil has delayed the deal further, he added. SeaDragon would give Great Offshore access to rigs that could be deployed for ultra deep water discoveries.

SeaDragon makes two such rigs and it would take two years to complete them. Globally, there is a greater demand for rigs because of an increase in exploration activities.

"Shortage of rigs is a major challenge. For the next two years, there in no rig that could be deployed for ultra deep water discovery," ONGC Chairman RS Sharma said. ONGC plans to foray into ultra deep water discovery.