Oil and Natural Gas Corporporation is mulling takeover of US-listed oil firm Transmeridian that has 211-million-barrel reserves in Kazakhstan.

Transmeridian has been on the radar of ONGC [Get Quote] Videsh Ltd (the overseas investment arm of ONGC) for sometime now. The company has done preliminary due diligence and it is expected to take a decision anytime now, industry sources said.

Houston-based Transmeridian has a 100 per cent interest in CaspiNeft, which holds the licence to the South Alibek field in Kazakhstan.

The field has 211 million barrels of reserves. The field is expected to produce one million barrels of oil per day.

Transmeridian is listed on the AMEX Stock Exchange and independent valuers put its value at over $1.5 billion.

The sources said as per the US law OVL had two options to takeover Transmeridian -- make offer directly to company shareholders for purchase of shares or make a merger proposal under which 100 per cent of the company is acquired with board and shareholder approving the OVL's offer. Transmeridian Chairman Lorrie T Olivier is the largest shareholder with an 18.4 per cent interest.

The South Alibek field constitutes a 14,111 sq km field in the northeast of the Caspian Sea in northwestern Kazakhstan, 380-km away from Tengiz.

OVL currently has 26 projects in 15 countries with oil projects in Sudan, Russia, Columbia and Syria and one in Vietnam for natural gas.

During 2007-08, OVL's share of production is 1.76 million tons of oil and 0.519 billion cubic meters of gas and the company is aiming to raise it to nearly 7.988 million tons of oil equivalent.