UK’s Cairn Energy offers to forego $500 million

The UK’s Cairn Energy Plc has offered to forego $500 million and invest the sum in any oil and gas or renewable energy project identified by the Indian government if New Delhi agrees to honour an international arbitration award and returns the value of loss it incurred because of being taxed retrospectively, sources said.

The Scottish firm invested in the oil and gas sector in India in 1994 and a decade later it made a huge oil discovery in Rajasthan. In 2006-07, it listed its Indian assets on the BSE.

Five years later, the government passed a retroactive tax law and billed Cairn Rs 10,247 crore plus interest and penalty for the reorganisation tied to the flotation.