Mumbai: Oil and Natural Gas Corporation of India Ltd (ONGC) is in talks with UK's Imperial Energy Corp Plc, a £1billion-plus (around $2 billion) oil and gas company registered in Leeds, for a possible takeover.

London-listed Imperial Energy, in response to press speculation on a takeover approach having been made said on its website, "the board of Imperial confirms that it has received an approach which may or may not lead to an offer being made for the Company."

With just 10,000 barrels per day of current production, imperial has a growing portfolio of oil and gas interests in West Siberia and has recoverable reserves of around 900,000 barrels.

Imperial, which last month announced its biggest find and potentially added to its reserve base and increased the potential value of the firm, is unlikely to accept a bid below 12 pounds per share, sources close to the development said.

Imperial Energy has oil assets in the Tomsk region of western Siberia in Russia and north-central Kazakhstan.

Imperial Energy has a market capitalisation of £789.31 million.

Imperial founder-chairman Peter Levine and the company's largest non-institutional shareholder, holds a little over 6 per cent in the company. Institutional investors include Schroder (10 per cent), Deutsche Bank (over 5 per cent), Baille Gifford, Fidelity, Blackrock, S R Global Fund and J P Morgan Chase.

An acquisition would strengthen ONGC's oil assets, which through its overseas arm ONGC Videsh Ltd (OVL) is currently present in 38 oil and gas projects in 18 countries.
 
Its crude oil production touched 6.811 million tonnes In 2007-08 - its highest from overseas assets. ONGC currently has oil and gas production from six projects spread in Sudan, Russia, Vietnam, Syria and Colombia.

ONGC chairman and managing director and OVL chairman R S Sharma recently said that the parent has surplus liquid funds to fund its growth and expansion.

He said OVL is a zero debt company and can leverage its net worth to raise funds.

Gazprombank, the banking arm of Russian gas export monopoly Gazprom, had proposed to acquire the oil producer in November 2007 but the talks ended without a deal.