28th Oct 2019 08:25
(Alliance News) - Cairn Energy PLC said Monday that the Arbitral Tribunal expects to announce, in the summer of 2020, the outcome related to the oil & gas firm's proceedings against India under the UK-India Bilateral Investment Treaty.
Separately, Cairn said it has completed the first well in its Mexican offshore drilling programme, known as Alom-1 in Block-9, which had the objective of proving hydrocarbons in stacked Pleistocene targets.
The well was drilled to a vertical depth of 2.06 kilometres below the sea surface. However the objectives were discovered to be dry. As a result, the well is to be plugged and abandoned.
Following the Alom-1 well drilling, the semi-submersible rig used will be moved to drill Cairn's second well on Block-9, Bitol-1, and is expected to start operations there in November.
The dispute between Cairn Energy and the Indian government stretches back to early 2014, when the Indian government froze Cairn Energy's 10% stake in Cairn India following the introduction of a retrospective tax legislation.
To date, the Indian Income Tax Department has seized dividends due to Cairn from its shareholding in Vedanta Ltd of around USD155 million, the company said.
It also has offset a tax rebate of USD234 million due to Cairn as a result of overpayment of capital gains tax, Cairn said.
The Tribunal said it expects to be in a position to issue an award in the summer of 2020, but it does not intend to firmly commit to a specific date.
Cairn said it continues to have a "high level of confidence" in its claims made in the arbitration, and is looking for full restitution for losses of more than USD1.4 billion.
Shares in Cairn Energy were down 6.9% at 179.80 pence on Monday morning in London.
By Dayo Laniyan; [email protected]
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