Tax authorities in India have contacted Cairn Energy (CNE) to discuss the oil group's income tax assessments filed in 2007, and have told Cairn not to sell its $950m (£585m) residual stake in former subsidiary Cairn India while discussions are ongoing.
The Edinburgh-based oil group is the latest in a string of international companies to be probed by Indian tax officials, according to the Financial Times' Mumbai correspondent, James Crabtree. Some cases have resulted in protracted legal disputes, such as Vodafone's (VOD) $2.6bn quarrel over alleged unpaid capital gains tax relating to the acquisition of its Indian arm in 2007. The spate of tax rows follows controversial legal changes allowing Indian authorities to revisit concluded tax cases retrospectively.
Cairn still has enough cash to pay for exploration and project development for the next year or two - it had $1.25bn in net cash as of 31 December - but the company had planned to offload its remaining Cairn India stake soon to fund future work. Cairn plans to drill five high-impact exploration wells offshore Morocco, Senegal and Ireland in 2014, as well as four lower-impact, non-operated wells in the North Sea. Exploration in Greenland has slipped to 2015, while first oil from its Kraken project is not expected until around 2017.
