CAIRN Energy’s share price plunged over 14 per cent yesterday, after the Scottish oil and gas explorer reported a higher-than-expected loss after tax of $556m (£335.2m) and suspended its share buyback programme due to an Indian tax dispute.
The Indian regulator had contacted the FTSE 250 firm at the start of the year to discuss income tax assessment, as part of the country’s tax crackdown to try to cut its budget deficit.
Cairn, which denies any wrongdoing, said it has decided to suspend its $300m (£181m) share buyback programme until its position in India is resolved.
The company fell into large losses due to rising costs for unsuccessful exploration activities in Morocco and the North Sea. Exploration costs rose 34 per cent to $213m in 2013.
On Monday Cairn said that it had plugged and abandoned a well located off Morocco.
Shares closed down 14.4 per cent.