Oil and gas explorer Cairn Energy today said it has suspended its $300 million (£180m) share buyback programme as it seeks to resolve a tax dispute with the Indian authorities.
The Edinburgh-based firm has been prevented from selling its 10 per cent stake in former subsidiary Cairn India Limited, which is valued at about $1 billion, while talks continue with the Indian income tax department.
So far, Cairn has returned almost $95m to investors by buying back shares, but today said it has decided to suspend the programme “until the position regarding the CIL shareholding is resolved”.
The announcement came as Cairn reported an operating loss of $879.1m for 2013, wider than the previous year’s loss of $247.3m, as it incurred higher write-downs and increased costs for unsuccessful exploration.
The group has put its exploration plans in Greenland on ice to focus on the North Sea and so-called Atlantic Margin.
Chief executive Simon Thomson said: “The strategy continues to focus on an attractive mix of frontier and mature basin exploration.
“By building a growing prospect and lead inventory, from which to select and high grade prospects for drilling, we aim to offer shareholders material potential growth opportunities over the long term.”