Rolls-Royce is under increasing pressure after its suspect A380 engine was formally blamed for the emergency landing of a Qantas jet last month.
The engine failed soon after flight QF32 took off from Singapore, bound for Sydney on November 4 with 469 people aboard.
A preliminary factual report from the Australian Transport Safety Bureau (ATSB), released on Friday, said the Rolls-Royce Trent 900 engine exploded at about 7000ft above sea level.
Bureau chief Martin Dolan described the emergency as "an uncontrolled engine failure".
"The initial assessment was that the most likely cause of the engine failure was problems with the release of oil into a particular part of the engine, leading to an oil fire and consequences finally in the liberation of the disc elements," Mr Dolan said.
The flying kangaroo has hinted at legal action against the British engine maker if a settlement cannot be reached.
Rolls-Royce chairman John Rose has already taken a share of responsibility, saying he offered "regret" for the incident.
Not all A380s use the Trent engine, with Qantas, British Airways and Singapore Airlines the major users.
Qantas said the report showed its pilots had done everything they could in the circumstances.
"The ATSB is satisfied that the action taken by Qantas adequately addresses the immediate safety of flight concerns in respect of the operation of its A380 aircraft equipped with Trent 900 series engines," the report said.
Mr Dolan added his personal praise.
"The aircraft would not have arrived safely in Singapore without the focused and effective action of the flight crew," he said.
A Qantas statement said the airline remained engaged with safety and investigation bodies along with Rolls-Royce and Airbus.
The Civil Aviation Safety Authority (CASA) still has its own concerns with the engines.
On Thursday it ordered Qantas to conduct a further inspection of the engines.
As with most issues related to jet engines, the inspections are highly technical and will involve the use of tiny cameras to study the oil tube and condition of the tube walls.
The specific engine involved in the incident remains in Singapore where Airbus will repair it.
"Sixteen Qantas engines require either modification to the latest standard or full replacement," the airline said.
"Five of these have been replaced to date and all airworthiness directives and CASA requirements are being met."
Despite the chaos the engine failure has created for Qantas, the carrier is still promising to get all passengers to their destinations during the Christmas rush.
"Qantas will continue to operate a full international and domestic schedule and expects to make further announcements about the return to service of more A380s, before Christmas, in the near future," it said.
"In addition to the two aircraft that are back in service, two new A380s will be delivered and enter service in coming weeks, and another two are due for delivery in early 2011."
At midday (AEDT) Qantas was up three cents or 1.1 per cent on the ASX at $2.67.
The ATSB has promised the investigation will continue.
"It is very early in what is a very complex investigation, and it is possible that the scope of the continuing investigation as outlined below may change as the investigation progresses," the preliminary report said.
A final report is due some time before November 2011.