The Natural Resources and Environment Ministry said Friday that Imperial Energy would be deemed nonstrategic, removing the first of two hurdles for Indian state-run energy major ONGC to buy the company.

In late August, ONGC agreed on a takeover of the midsized, London-listed oil producer for $2.6 billion, but for the deal to go ahead it must have no strategic assets and must then be approved by the Federal Anti-Monopoly Service.

"Imperial has no strategic fields or deposits, and we'll be sending this answer" to the anti-monopoly service, said a ministry official, who declined to be identified or say when.

Investors have been watching the outcome of the situation closely as the investment climate in Russia worsens.

Anti-monopoly service spokesman Sergei Noskovich said Friday that it was awaiting the ministry's answer and declined to give a time frame for when a decision could be made.

A well-connected investor in Imperial said approval would come "sooner rather than later," when asked whether the deal was expected to close before the end of this year.

President Dmitry Medvedev is expected to go to New Delhi, where ONGC is headquartered, on Dec. 3, in what industry insiders believe will finally clinch the deal, though a Kremlin spokesman could not confirm the trip.

Imperial would not comment on the timing of the deal, and a spokeswoman said the company was awaiting the anti-monopoly service's approval.

ONGC Videsh, the overseas arm of ONGC, would not comment on the deal but said it knew of no plans for ONGC to meet with Russian officials.

Imperial, which owns a number of licensees in the west Siberian region of Tomsk, hopes to produce 35,000 barrels per day by the end of 2009 and 80,000 bpd by 2011.