Cairn suspends share buybacks amid India tax row

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”.

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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.”