LONDON: India’s largest oil producer ONGC has agreed a 1 4 billion pounds ($2.6 billion) takeover of Russia-focused oil explorer Imperial Energy Corp Plc as it works to secure energy to fuel India’s boomingeconomy.

Imperial said on Tuesday that ONGC’s overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares in a deal that could double state-owned ONGC’s proved and probable reserves.

This is less than the 1,290 pence approach Imperial said last month it was discussing with an unnamed bidder, which sources close to the matter identified as ONGC. Nonetheless, some analysts welcomed the approach.

“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.

But Andrey Gromadin at JP Morgan said a possible rival bid from China could push the price higher.

“We believe 1,250-1,500 pence is highly attractive and represents a best-case scenario for shareholders,” he said in a research note.

Imperial shares traded down 0.4 per cent at 1,235 pence at 1018 GMT, outperforming a 1.7 percent fall in the DJ Stoxx European oil and gas sector index.

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 Sinopec and said the Chinese state-controlled company had gained access to Imperial’s books but failed to table a bid.