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Update expected

Cairn shares rise on hopes of India tax settlement

Simon Thomson

Simon Thomson was understood to have met Indian officials

Investors in Cairn Energy appear hopeful that the Indian government will comply with an order to hand over $1.2 billion in a tax claim.

Shares in the company rose firmly at the end of last week amid hopes that the Edinburgh-based oil and gas explorer will provide a positive update on talks with the Indian government when it announces full year figures this week.

Cairn announced in December that an international tribunal had awarded it significant damages after ruling that India had breached its obligations to the company in the case dating back to 2007.

However, India has not yet paid up and Cairn has filed a lawsuit in the US to recover the money owed. Cairn chief executive Simon Thomson was understood to have met India’s finance minister in Delhi last month.

Cairn paid out a special dividend of 32p per share in January following the return of $250m to shareholders as a result of selling its Senegalese assets.

Shares fell back after the payout but rose strongly on Friday, up by about 5% in intra-day trade to 209p before closing 2.3% up at 204p. They are up 22.37% over the last three months.

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