Cairn Energy ready to reinvest in India

Oil rig pumpjacks extract crude oil (Reuters Photo)

Britain’s Cairn Energy PLC, which gave India its biggest onshore oil discovery and gas find that opened the KG basin, is keen to reinvest in the country if a retrospective tax issue it is facing is resolved, its chief executive said.

Cairn, which in early 1990s grew the Ravva oil and gas field in the Krishna Godavari basin in the Bay of Bengal and then went on to find the country’s biggest inland oil discovery in the Thar desert, was in 2014 slapped with a tax demand of Rs 10,247 crore over an internal business reorganisation it did of its India business years back.

The tax department confiscated its dividend income, stopped tax refund and sold its shares to recover the tax demand which was raised using the 2012 retrospective tax legislation.

“We are keen to reinvest in India provided this retrospective tax issue is resolved. India is one place where we would like to look at exploration licensing rounds,” its CEO Simon Thomson said.

Since the retrospective tax demand was raised against Cairn Energy, India has conducted five auctions - three for pure play exploration blocks and two for discovered oil and gas fields, but none of them attracted any significant new international name.

The rounds have been dominated by oil PSUs such as ONGC and domestic private player Vedanta.

Prime Minister Narendra Modi wants India’s oil import dependence to be reduced by 10% by 2022 and to raise domestic output through the involvement of foreign and private players who have better technology and understanding of sedimentary basins.

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