The Israeli director and writer had delivered a script for This Is Gonna Suck, which Cobain's widow Courtney is an executive producer on, only to be told by producers that it was too "unconventional".
"They told me, 'We cannot support [your] wildly independent and unconventional approach to this movie'," he admitted to The Playlist.
"They told me, 'Tell them Working Title does not support this version of the film and will not be moving forward with it'. Courtney was very upset when I told her I wasn't going to do it. I felt bad, I wanted to make this film, but it just couldn't happen."
Oren - whose next film is Rampart with Woody Harrelson - said the proposed film and screenplay was all about "attitude" and showed the late musician's varying moods and was framed around his relationships with ex-girlfriends Tracy Marander, Tobi Vail and Courtney.
"This is a guy who thought he sucked, but occasionally thought he was brilliant too. The film would have been fragmented, but also examined what made him tick," he explained.
The 45-year-old had planned to get Ben Foster into the lead role.
"Ben was definitely on my mind for the part. He's the actor of his generation. And he's barely scraped the tip of his abilities," he continued.
"People haven't yet fully noticed him, but he's an extraordinary talent."