OVL is at an advanced stage of takeover talks with London-listed Imperial Energy and may make a price offer soon, bankers associated with the deal said.
A relatively small British oil and gas company based in Leeds in UK, Imperial has said that it has received an "approach", which could result in an offer for the business.
ONGC chairman and managing director and OVL chairman R S Sharma declined to comment on the transaction, while OVL Managing Director R S Butola could not be immediately reached.
Imperial Energy is an upstream oil and gas exploration and production company focused on the Commonwealth of Independent States, and has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.
The company had on July 15 stated that "it is in discussions in relation to a possible cash offer for the company at a price of 12.90 pound sterling per share (about $2 billion)."
It produced about 10,000 barrels of oil per day in December 2007 and is targeting to raise this to 80,000 barrels per day (4 million tons a year) by year-end 2011.
The Russian Ministry of Natural Resources says Imperials Russian Registered Reserves amount to about 450 million barrels of hydrocarbons. Independent assessment of the reserves by DeGolyer and McNaughton in December 2007 suggested in place reserves of 920 million barrels of oil equivalent.
