The newspaper said the Central Bureau of Investigation (CBI) was also investigating the upstream regulator for approving escalated costs for Reliance Industries' D6 block in the Krishna-Godavari basin from $2.4 billion in 2004 to $8.5 billion in 2006.
"We are at an advanced stage of investigation in our preliminary inquiry," the newspaper quoted an unnamed senior CBI official as saying.
"Whether (a complaint) will also name other officials of the petroleum ministry will be taken at the time of registering an FIR (formal police case)."
The Comptroller and Auditor General's (CAG) report said energy major Reliance had inflated development costs on its D6 block in the Krishna-Godavari basin and cited a joint venture of Reliance with BG and ONGC for hiking development costs in the Panna-Mukta and Tapti gas fields.
The CAG report also said Cairn India Ltd had been allowed to explore additional areas not stipulated in its contract for the RJ-ON-90/1 block.
The CAG report is a draft which has been sent to the oil ministry for comments. The ministry has said it has two weeks to reply.
