New Delhi: The government may give Cairn Energy one of the surrendered oil fields such as Ratna R-Series in lieu of the USD 1.4 billion it has to pay to the British firm, helping prevent seizure of foreign assets in case of default as well as get an experienced operator in struggling E&P sector, sources said.
Cairn Energy gave India its biggest onland oil discovery but exited the country after it was slapped with a ₹10,247-crore tax demand using a legislation that gave the government the powers to tax companies retrospectively. The firm has now won an international arbitration against the tax demand and the government has been ordered to return the value of shares of Cairn it had sold, dividends it had seized and tax refund it had withheld to recover the tax demand.
For a government struggling to find revenue to boost a COVID-19 battered economy, options of appeal against the arbitration award are limited and it may not have the financial bandwidth for such a payout, two sources with knowledge of the development said.
