Cairn India, India's fourth largest oil and gas manufacturer, stated on Monday that it had struck oil at a well in the Krishna Godavari basin, a place off the Andhra Pradesh coast.

According to the company's statement to the BSE, it has achieved a good flow of 75 barrels of oil a day along with 0.27 million cubic feet of gas per day at the time of the drill stem tests.

The evaluation of the well and test results will help assess the commercial potential of the oil discovery and decide how much the program will flourish or not in the future.

The operator of Cairn India has a 49 per cent stake, while the State-run Oil and Natural Gas Corp. (ONGC) has the remaining 51 per cent stake in the block.

In an announcement last week Cairn India had said it will sell a 51-60 per cent stake to Vedanta Group which is led by the London-based industrialist Anil Agarwal on Monday for $8.5-$9.6 billion.

However there might be trouble with the deal as the government's opinion is that the State-owned ONGC should have the first right of refusal over the shares of the company.