Cairn focuses on Senegal as Indian tax dispute goes on

Oil and gas explorer Cairn ­Energy yesterday highlighted its multi-well appraisal and exploration programme off the coast of Senegal in west Africa as its main priority in 2015.

It came as Cairn also revealed that the Catcher and Kraken North Sea projects are on track for first oil from 2017.

Simon Thompson, group chief executive, said: “The large acreage position in Senegal ­offers material near-term growth potential with numerous follow-on prospects, and the joint venture is well positioned to benefit from the current reduction in industry costs.”

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Cairn has a 40 per cent interest in three blocks off the coast of Senegal with partners including ConocoPhillips, and it said yesterday that it would have a capital markets day on investment prospects there in the first half of 2015.

In a pre-close trading update ahead of its 2014 annual results announcement on 10 March, the company said it was fully funded to deliver its exploration and appraisal programme.

Group net cash at end-­December 2014 was $869 million (£573m), while a $575m lending bank facility had not been drawn down upon.

Cairn said it continued to seek a resolution over a continuing dispute with tax authorities in India, but that while talks were continuing it “remains unable to access the value in its near-10 per cent residual holding in Cairn India”.

That stake was valued at $702m at the end of last year. The Indian tax authorities are auditing the group’s finances for the year to March 2007, when Cairn India was a full subsidiary.

The Edinburgh-based company is barred from selling its holding in Cairn India until the matter is settled.

Cairn’s shares closed up 4.1p, or 2.6 per cent, at 164.7p.