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Imperial Energy says ONGC makes $2.6 bln approach

LONDON - India's ONGC Videsh is finalising a 1.4 billion pounds ($2.6 billion) bid for Russia-focused oil explorer Imperial Energy Corp Plc as ONGC works to secure energy to fuel India's booming economy.

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Imperial said in a statement on Tuesday it was in talks on a 1,250 pence per share cash offer -- less than the 1,290 approach which it had said last month it was discussing with an unnamed bidder, which sources close to the matter identified as ONGC, the overseas arm of state-owned ONGC.

Nonetheless, analysts welcomed the statement.

"This is a good price, given consideration for the current softening in oil prices, the turbulence on global stock markets and the geopolitical stage," analysts at brokerage Daniel Steward said in a research note.

Imperial shares traded down 1.7 percent at 1,219 pence by 0744 GMT, underperforming a 1.3 percent fall in the DJ Stoxx European oil and gas sector index.

The British company said a further announcement on the matter was expected later on Tuesday.

Imperial shares have risen sharply in recent weeks as investors hoped a bid battle would develop after the company said earlier this month it had received a second approach from an unnamed party.

Sources close to the matter identified this party as Chinese state-controlled Sinopec, while news reports and market rumours also said bids could come from Korean and Kazakh companies.

However, investors also feared that a deal might not come at all, as Indian oil companies have in the past failed to table firm bids for companies and assets they have appraised.

Also, Russia has become an increasingly difficult place in which to do oil deals as the Kremlin has increased its control over the oil industry.

However sources close to the parties said on Tuesday ONGC had received a green light from the Indian and Russian governments to buy Imperial.

The sources said the drop in the price which ONGC was prepared to bid reflected the fall in the oil price to around $114/barrel from a July 11 peak above $147/barrel.