Shares of Edinburgh-based oil and gas company Cairn Energy fell 9% on Monday after it said a long-awaited tribunal decision on its proceedings against India won’t be delivered this year and that its Alom-1 exploration well offshore Mexico was dry and would be permanently plugged and abandoned.
Earlier this month, Cairn said it failed to find hydrocarbons at the Chimera well east of Shetland it had hoped would yield 154 million barrels of oil equivalent.
Cairn announced an update on Monday on its proceedings against India under the UK-India Bilateral Investment Treaty.
“The Arbitral Tribunal has indicated that, whilst it is not yet able to commit to a specific award release date, it expects to be in a position to issue the Award in the summer of 2020,” said Cairn.
“Cairn continues to have a high level of confidence in the merits of its claims in the arbitration and is seeking full restitution for losses of more than $1.4 billion.”
Cairn added the Arbitral Tribunal has indicated that it expects to be in a position to issue the award in the summer of 2020, but has clarified that to avoid any misunderstanding “the Tribunal did not intend firmly to commit to a specific Award-release date, nor is it yet in a position to do so.”
Cairn commenced proceedings against India in 2015 following retrospective taxation actions undertaken by the Indian Income Tax Department (IITD) in 2014.
Final merits hearings for the arbitration concluded during 2018.
Cairn also said it has completed the first well in its drilling programme offshore Mexico.
“The exploration target of the Alom-1 well on Block 9 was to prove hydrocarbons in stacked Pleistocene targets,” said Cairn.
“The objectives were found to be dry and the well will now be permanently plugged and abandoned.”