Cairn Energy plans $700 mn shareholder returns if India tax row resolved

The oil and gas company said it was considering entering into statutory undertakings with the Indian government.

Britain's Cairn Energy said on Tuesday it plans to return up to $700 million to shareholders via a special dividend and a share buyback this year, provided its lengthy dispute with India over certain tax claims is resolved in the near term.

The oil and gas producer, which has major operations in the South Asian country, said it was considering entering into statutory undertakings with the Indian government over changes to a retrospective tax law that is at the heart of the row between them.

The news comes a month after India proposed scrapping the controversial 2012 law and said it would refund disputed amounts to companies. Cairn was awarded damages of over $1.2 billion last year by a Dutch court, which was challenged by New Delhi.

"Progress in resolving our Indian tax issue and active portfolio management leave Cairn well-positioned to deliver growth from a sustainable business," Cairn Chief Executive Officer Simon Thomson said in a statement.

The company also posted a smaller loss in the first-half of $47.4 million and narrowed its 2021 outlook for production from its British assets to a range of 17,000 to 19,000 barrels per day.

London-listed Cairn, though in talks with India, has also been pursuing options to seize Indian assets overseas, including those of national carrier Air India, in the absence of a settlement.

Shares of the company are up more than 6% in early trading.