India's finance ministry on Wednesday approved a $7.2-billion deal between Reliance Industries Ltd and Britain's BP, the Economic Times newspaper reported on its website.
Under a deal announced in February, BP plans to buy a 30 percent stake in 23 of Reliance's oil and gas blocks, including India's largest gas field KG-D6, for $7.2 billion, plus another $1.8 billion linked to exploration success.
The oil ministry has already given its support to the deal, one of the largest foreign investments in India.
A finance ministry official had no immediate comment on the newspaper report which quoted unnamed sources who said the deal would not require further cabinet approval.
Reliance is pinning hopes on Europe's second-largest oil company to help it find more oil and gas and boost output at the Indian company's showpiece KG-D6 field.
Reliance wants to tap BP's deepwater-drilling skills to improve gas production at its fields.
Oil Minister Jaipal Reddy said earlier he had recommended the cabinet's approval of the deal without any conditions. However, some government officials later raised concerns about contractual clauses that forbid export of crude oil from energy-hungry India.
For BP, the deal would give access to new hydrocarbon resources and markets.
Such access has become especially important for BP since a US government-imposed moratorium on drilling in the Gulf of Mexico in wake of last year's massive oil spill and political upheaval in the oil-rich Middle East and north Africa.
Late last month, India's government gave long-awaited clearance to the multi-billion-dollar sale of British oil explorer Cairn Energy's Indian oilfields to London-listed mining group Vedanta Resources.
The approval, nearly a year after the sale was initially announced, came with the key rider that Cairn India's new owner must share the oilfields' royalty burden, currently borne in whole by India's state-owned Oil and Natural Gas Corp.