Cairn Energy Plc Deputy Chief Executive Officer Mike Watts and its chief financial officer will step down amid a tax dispute with India.
Watts, who joined Cairn in 1995, and his colleague Jann Brown won’t seek re-election at the annual shareholder meeting on May 15, the Edinburgh-based explorer said today in a statement. James Smith, who recently joined from Rothschild Group, will become a finance director.
Watts and Brown “have agreed, during their notice periods, to continue in senior roles and dedicate their time to seeking to resolve the tax position in India,” Cairn said. It denied any underpayment and reiterated most recently on April 3 that the company “has been compliant” with the tax requirements.
The explorer has been investigated by the Indian authorities over tax returns for the fiscal year ended March 31, 2007, which covers a $2 billion share sale in Cairn India Ltd. in December 2006. Watts was part of the team that first made a Rajasthan oil discovery in 1999 that became the company’s largest oil-producing project in India.
As an exploration director, Watts oversaw Cairn’s drilling off Greenland, which wasn’t successful. The company refocused on the North Sea and Northern Africa after spending $1 billion on a two-year exploration campaign in the Arctic.
The latest exploration well off Morocco was “plugged and abandoned without testing,” Cairn said March 17.
Cairn has lost about 87 percent of its value since a peak of 1,252 pence on Aug. 16, 2010. The shares declined 1.4 percent to 167.5 pence by the close in London, valuing the company at 965.2 million pounds ($1.6 billion).