CAIRN Energy has changed hugely since it became embroiled in a tax dispute in India in 2014 but news that the case may not be resolved until August next year remains unwelcome.
The Indian Government has prevented Cairn selling a stake in its former subsidiary in the country worth around $860m while the dispute drags on.
The company is seeking $1.1bn compensation from the government meaning it has much riding on the outcome of the saga.
True Cairn does not need the cash it could get for the Indian stake as much as it did in 2014.
Following the start of production from the giant Kraken oil field off Shetland in June, Cairn is generating plenty of cash in the North Sea, with more to come from the Catcher development off Aberdeen.
The company has made a big find off Senegal it thinks it could bring onstream without straining its balance sheet.
But a $1bn plus cash injection could still provide a welcome boost to Cairn’s firepower while giving it the option to make big payouts to investors.
Analysts have said the uncertainty in India makes it hard to put a value on Cairn.
For other oil and gas firms Cairn’s problems in India highlight the potential downsides involved in operating in countries where the political environment may be riskier than in the UK.
They come after Cairn cut short a pioneering exploration drive in Nepal after facing security complications in that country.
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