New Delhi, Dec. 9 : The Union Government has given the signal to the state-run oil company, Oil and Natural Gas Corporation(Videsh) Limited (ONGC) to make a formal offer for acquiring 100 per cent equity in the UK-listed Imperial Energy.

A special meeting of the Cabinet Committee on Economic Affairs (CCEA) was convened to consider the Imperial bid here today.

ONGC Videsh Ltd''s 1,250 pence a share bid gave the company a 10 per cent internal rate of return (IRR) taking crude at USD 121 a barrel, but with rupee depreciating by
20 per cent against the dollar and crude falling to around USD 40 a barrel the IRR has come down to 3-4 per cent.

Imperial explores oil in Siberia region of Russia and had the equivalent of 920 million barrels of proven and probable oil reserves as of December 2007, according to an audit by DeGolyer & McNaughton.

Earlier, UK''s takeover panel had rejected parent company- ONGC''s plea for more time to make a formal offer for acquisition of Imperial Energy Corporation.

Union Petroleum Minister Murli Deora, however, declined to comment, saying "We will let you know in due course."

However, sources said the CCEA has approved ONGC Videsh Limited (OVL) to go-ahead with the bid for 1.4 billion pounds despite returns falling on lines with crude prices.

The meeting was chaired by the Prime Minister, Dr. Manmohan Singh.(ANI)