Mumbai: ONGC Videsh Ltd (OVL), the overseas arm of state-owned oil and gas explorer ONGC, has made a successful 1.4 billion ($2.6 billion) bid for Imperial Energy of the UK, beating rivals China Petroleum and Chemical Corp (Sinopec) and Korean National Oil Company.

OVL has offered 12.50 pounds a share for the Russia-focused Imperial Energy through its wholly owned subsidiary Jarpeno.

Imperial Energy also confirmed it was in the process of finalising a 1.4 billion pounds bid offer from ONGC Videsh.

''Imperial Energy confirms that is in the course of finalising the terms of a possible recommended pre-conditional cash offer with OVL of 1,250 pence per Imperial share," the company said in a statement.

Imperial's shares closed at 12.40 pence on Friday, lower than the OVL offer and the 12.90 pounds bid approach made when oil was at its peak of $147 a barrel.

Imperial shares were down 21 pence (39 cents), or 1.7 per cent, at 12.19 pounds ($22.41) in early London trade after market got news that OVL was finalising an offer to buy the company at 12.50 pounds ($22.97) per share.

The drop in bid price has also been pressured by the fresh geopolitical risk in Russia and the Caucasus.

Sinopec had made a counter offer for Leeds-based Imperial, a relatively small oil and gas company, which has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.

Korea National Oil Corporation, however, said it had ''never been approached, nor had we considered buying Imperial Energy''.

Imperial Energy produced about 10,000 barrels of oil per day in December 2007 and is targeting to raise this amount to 80,000 barrels per day (4 million tons a year) by end-2011.

Imperial, with a string of oil exploration and production interests in Siberia, had Russian registered reserves of about 450 million barrels of hydrocarbons while independent assessment by DeGolyer and McNaughton in December 2007 suggested in-place reserves of 920 million barrels of oil equivalent. The company, however, is yet to make a profit.

Peter Levine, who founded Imperial Energy, received £90 million for his six per cent stake in the oil explorer. Levine, the chairman, sold £26m worth of shares in the business at the start of this year, but still held a 6 per cent stake that he has now cashed in.

ONGC seems to have received a green light from the Indian and Russian governments to buy Imperial.