Hardy Oil and Gas said yesterday it expected a legal wrangle in India, where its activities are focused, to continue into 2017.
Announcing half-year results yesterday, the Aberdeen-based company said a second appeal by India’s government in a protracted arbitration ruling dispute had been dismissed.
The government has since escalated its appeal to the Supreme Court of India, while legal proceedings in the US to confirm the ruling are currently under consideration in Washington DC.
At the heart of the case is the legal status of a licence – CYOS/2, covering about 332 square miles – in which Hardy secured a 75% stake, alongside partners including India’s Oil and Natural Gas Corporation.
Hardy, led by former KCA Deutag director Ian MacKenzie as chief executive, has previously threatened to re-evaluate its current India focus because of the dispute and other red tape.
Yesterday, Mr Mackenzie said: “Our objectives remain the securing of key stakeholders’ approvals and the initiation of activity that will take us closer to realising production from our portfolio of assets for the benefit of our shareholders.
“The enforcement of the CYOS/2 award would deliver new cash resources to expand our portfolio within or outside of India.”
Hardy is due about £46million in compensation under the disputed arbitration ruling.
The firm said a successful conclusion to the wrangle could give it “significant” funds, while putting it in a better position to add new upstream assets.
It added: “The appeal and enforcement process in India is likely to continue into 2017.
“The company believes that it has a strong position as the unanimous international award, passed by three former chief justices of India, is well-reasoned.”
The debt-free firm, whose chairman is Alasdair Locke, the former executive chairman of Abbot Group, now KCA Deutag, posted pre-tax losses of £1million for the six months to September 30, a slight improvement on a year ago.
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