AGM Statement

Cairn Energy PLC
20 April 2006

                                                                 20th April 2006

                                CAIRN ENERGY PLC

                             Annual General Meeting


The following statement was made by Cairn's chairman, Norman Murray at the
Company's Annual General Meeting (AGM) held in Edinburgh today:-


'The Board is delighted that Cairn experienced another year of exceptional
growth and further evolution in 2005. In particular, the exploration and
development of the world class Rajasthan asset in north west India continued
apace.


As part of the natural transition of the business towards increased autonomy in
India, the Company continues to examine and progress a partial initial public
offering (IPO) of the Indian exploration and production (E&P) business on the
Bombay Stock Exchange.


Before giving a brief review of the Group's activities in both 2005 and 2006 to
date, I wish to highlight specific events which have occurred since the
Preliminary Results were reported in March, namely:


  • The appointment of a Chief Executive Officer to take forward the Indian
    business and its IPO.

  • First oil from the Mangala field in Rajasthan is scheduled to commence
    in approximately 30 months following Field Development Plan (FDP) approval
    and project sanction by the Cairn Board.

  • A new oil discovery in Rajasthan.

  • The commencement of a hydraulic fracture stimulation programme in
    Rajasthan which although at the very early stages, is already highlighting
    possible new reserves.


IPO


With the continuing success in the northern fields in Rajasthan and the growing
resource base, we believe the time is right ahead of first oil from Mangala to
progress the creation of two world class businesses, one based in the United
Kingdom and one in India.


To this end, I am pleased to report that we have appointed Rahul Dhir to be
Chief Executive Officer of the new Indian business, which subject to market
conditions Cairn is aiming to list through an IPO on the Bombay Stock Exchange
in the last quarter of 2006 or early 2007. Rahul Dhir will join Cairn in May
from Merrill Lynch where he is currently a Managing Director and co-head of
Energy and Power Investment Banking. A separate announcement on this appointment
has been released today.



Operations


Development Rajasthan, India

During 2005, Cairn continued with its evaluation and pre-development of the
Mangala field, the largest oil discovery in India for more than two decades,
against a backdrop of India emerging as an area of world focus for future
industry activity and investment. Our estimate of the Rajasthan 2P reserve and
contingent resource base for the three main northern fields; Mangala, Bhagyam
and Aishwariya, has grown significantly and is now around 800 million barrels
(mmbbls) of oil. At current oil prices, the Rajasthan fields are capable of
generating many billions of dollars of revenue over the life of the project for
stakeholders, including the Government of India (GoI).


The FDPs for the Mangala, Aishwariya, Saraswati and Raageshwari fields have been
agreed by the joint venture Operating Committee (OC) and are awaiting final GoI
approval. These approvals are a precursor to formal sanctioning of the
development project by the Cairn Board. The Bhagyam FDP is currently being
prepared for submission to the joint venture and to the GoI.


The present focus is to bring Mangala on stream at the earliest opportunity
followed by Bhagyam and Aishwariya. First oil from the Mangala field in
Rajasthan is scheduled to commence in approximately 30 months following Field
Development Plan (FDP) approval and project sanction by the Cairn Board. First
oil from Bhagyam and Aishwariya is targeted to commence a year after Mangala.


The initial development investment for Mangala and Raageshwari gas by the joint
venture to first production is estimated to be in the region of $800 million and
we are on track to have financing in place to fund our share of the project.
Credit approval from all the relevant banks has been requested during May and
formal signing of the facility is planned in June 2006.

Appraisal Rajasthan, India

In a little over two years since discovering the world class Mangala field, we
have conducted an extensive exploration programme across the basin which has
primarily targeted prospects with structural traps. We now believe that there is
in excess of 3.5 billion barrels of oil in place within our acreage and the
resource base continues to grow.


Today we can announce a further discovery in Rajasthan which is the 18th on the
block. The N-P exploratory well drilled on the flank of the Barmer airfield high
structure has encountered 16 metres of log evaluated oil bearing Fatehgarh
sands. The surface location for this first vertical well was two kilometres (km)
within the extended Development Area and 6.4 km south east of the N-E-1
discovery. At this stage, the updip potential and associated oil in place
volumes are uncertain. An appraisal drilling programme, commencing with a
sidetrack well which will be cored, is required before determining the
significance of this discovery.


An exploratory well on the NX structure was dry.


An extensive 3D seismic programme is to commence in May 2006 in the Appraisal
area to the south of the Barmer airbase. The survey will be acquired in phases
to allow processing, interpretation and follow on drilling prior to the present
November 2006 deadline for completion of activities in this area. An application
to extend the appraisal time period in this area for a further six months has
been made.


An extensive programme of hydraulic fracture stimulation (fraccing) has recently
commenced on the acreage. Early results on the Raaageshwari deep gas
accumulation from a single tested zone in Raageshwari-5 indicate a two fold
increase in productivity.


The first frac test on the Barmer Hill formation at Mangala was conducted on the
Mangala-6 well and resulted in up to 150 bopd flowing to surface. Test
production using a pump is planned. This is a very encouraging early result as
it indicates the potential for reserves addition from the Barmer Hill formation
where the in place volumes are considered to be large. The Mangala Barmer Hill
formation will be further evaluated during the main phase of development
drilling for the highly productive Fatehgarh reservoir. The next Barmer Hill
formation well stimulation by fraccing will take place at Aishwariya.


Appraisal drilling activity in the next few months is to be focused on the N-P
oil and GSV gas discoveries and nearby prospects.


Operations Elsewhere in India, Bangladesh and Nepal


The deep drilling rig Cairn has been using in its Rajasthan programme is being
mobilised to drill two exploration prospects on the onshore part of the Ravva
contract area. Operations are expected to commence in June 2006. In the light of
recent and nearby discoveries by other operators, the exploration potential of
the Cretaceous formations at Ravva is being reviewed.


A development infill programme at Ravva of four to five wells is planned
commencing August 2006 using a Cairn contracted drilling rig. This activity is
designed to extend the Ravva plateau production period.


In the KG Basin, deep water block KG-DWN-98/2 (Cairn 10%), the fourth
exploration well in the current six well programme, discovered modest quantities
of gas and current operations continue on the fifth well. The large ultra deep
water prospect in the south of the block has been reviewed with ONGC with the
possibility that this will be drilled as a seventh exploration well prior to
September 2006.


The Tisua exploration well (Cairn 30%) on block GV-ONN-97/1 in the Himalayan
Foreland Basin is expected to spud at the end of April. Two other non-operated
exploration wells are also planned during the summer of this year on block
CB-ONN-2001/1 in the Cambay Basin (Cairn 30%).



In Bangladesh, we are planning an infill drilling campaign for Sangu along with
an appraisal well in South Sangu and at least one exploration well during the
winter of 2006/2007. The Government of Bangladesh has recently granted formal
approval for Cairn's participation (45%) in Block 7 which is operated by Chevron
(formerly Unocal). A 2D seismic survey is presently being acquired over this
block.


Despite invoking contractual Force Majeure on the Nepalese blocks in August
2005, in view of the present security troubles, Cairn held a joint review
meeting in Kathmandu with Government officials during March 2006 to discuss the
results of ongoing technical studies.


Indian Exploration Bid Round (NELP-VI)


For more than ten years India has been a focus for Cairn. The NELP-VI (New
Exploration Licensing Policy) bid round is currently underway with GoI road show
presentations taking place around the world. Cairn has been involved in a number
of these presentations.


The company expects to be an active participant in the bidding for some of the
55 blocks that are on offer. The closing date for bids is set for 15th September
2006 with the announcement of awards by the GoI expected in December 2006.


Staff


Preparing the business for an IPO will represent a challenging time for staff
across the Group and I would like to place on record my thanks and appreciation
for the commitment and dedication all employees have shown since the company
made the IPO announcement in March.


I am also pleased to announce that Group General Manager and Board Director,
Malcolm Thoms, has been appointed Chief Operating Officer.


Concluding remarks


The new financing and the strength of our balance sheet will enable us to move
forward on the key projects in Rajasthan while maintaining an active exploration
and drilling programme providing potential for further growth across South Asia.


The future offers us challenges and opportunities and we always work in a spirit
of partnership and co-operation with Governments and our joint venture partners.
Cairn has a clear and consistent strategy and, with the growing industry and
investment interest in South Asia, has an optimal opportunity to capitalise on
its competitive edge through a proposed partial IPO of its Indian business.'


Enquiries to:


Cairn Energy PLC:

Analysts/Investors

Bill Gammell Chief Executive                   Tel: [phone]

Kevin Hart Finance Director

Mike Watts Exploration Director

Media

David Nisbet, Head of Group Communications


Brunswick Group LLP:

Patrick Handley, Mark Antelme                 Tel: [phone]



A presentation by the Executive Directors at today's AGM is available on the
Company's website at www.cairn-energy.plc.uk .


Notes to Editors:


   •Cairn focuses its activities on the geographic region of South Asia.  The
    Group holds material exploration and production positions in west India,
    east India and Bangladesh along with new exploration rights in India and
    Nepal.


   •This focus on South Asia has already resulted in a significant number of
    oil and gas discoveries.  In particular, the Company made a major oil
    discovery (Mangala) in Rajasthan in the north west of India at the beginning
    of 2004.


   •India currently imports two million barrels of oil a day.  It produces
    650,000 bopd a day itself of which 50,000 bopd comes from the Cairn operated
    Ravva field on the east coast of India.


   •Cairn has recently opened a new Indian headquarters at Gurgaon on the
    outskirts of Delhi to provide improved support for the Rajasthan project
    team and to manage the Company's business interests in India.


   • 'Cairn' where referred to in this release means Cairn Energy PLC and/or
    its subsidiaries, as appropriate.


   • 'ONGC' is the Oil and Natural Gas Corporation Ltd


   •Unless otherwise stated any reference to reserves refers to gross life of
    field 2P reserves. Any reference to resource base refers to gross 2P
    reserves plus contingent resources.


           For further information on Cairn see www.cairn-energy.plc.uk


Note: There are matters discussed in this Statement that are forward looking.
All such forward-looking statements are based on our management's assumptions
and beliefs in light of information available to them at this time.  These
forward-looking statements are, by their nature, subject to significant risks
and uncertainties and actual results, performance or achievements may be
materially different from those expressed in such statements.


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            The company news service from the London Stock Exchange