London-based Vedanta Resources' proposed acquisition of a majority stake in Cairn India may be scuppered by India's petroleum ministry, which wants state-owned Oil and Natural Gas Corp a chance to buy the holding, the Mint newspaper reported on Monday.
On August 16, Vedanta had said it would spend up to $9.6 billion to buy a majority stake in Cairn Energy's Indian unit, which operates an oil block in western Rajasthan state.
"The deal may not go through. They will have to give a choice to ONGC," the paper said, quoting an unidentified petroleum ministry official.
"We are trying to find out the real worth of the assets. It will take some time. Cairn is applying to us for approval," the official told the paper.
ONGC is the licensee and also a partner in the field with 30 percent stake, the paper said.
Last week ONGC's chairman had said the company was evaluating the implications of the Vedanta-Cairn deal.
A spokesman for Vedanta declined comment, while Cairn India officials were not immediately available.