People of Manjavadi village detected the leak after they found their farmlands flooded with oil 3-4 days back.
The oil was being transported through pipeline from the Oil and Natural Gas Commission owned oil well at Adiyakkamangalam to Narimanam for refining, they said.
Officials said it was not clear whether the pipe had broken due to recent heavy rains or the soil becoming loose.
ONGC officials said the pipes might have got corroded due to the saline condition in the area.