Approval of Extension

Cairn Energy PLC
13 July 2004



EMBARGOED FOR RELEASE AT 0700


                                CAIRN ENERGY PLC
                                                                    13 July 2004

                             APPROVAL OF EXTENSION
                       BLOCK RJ-ON-90/1, RAJASTHAN, INDIA

Cairn announces that, following the potentially significant N-C oil discovery
announced in April 2004, approval has been received from the Indian Government
to extend the current northern boundary of Block RJ-ON-90/1 to cover the extent
of the N-C reservoir as presently mapped.

The extension is effective for the remaining exploration period of the block and
covers an area of approximately 850 square kilometres.

Bill Gammell, Chief Executive, commented:

'Cairn plans an extensive seismic and drilling campaign to appraise the
extension area north of the existing N-C discovery and looks forward to working
with the Rajasthan State Authorities in progressing a fast-track programme.'

Enquiries to:

Cairn Energy PLC

Mike Watts, Exploration Director                       Tel: [phone]
Malcolm Thoms, Group General Manager                   Tel: [phone]

Brunswick Group Limited:

Patrick Handley, Catherine Bertwistle, Mark Antelme    Tel: [phone]


Notes to Editors:

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

2.                  Cairn is currently involved in an extensive exploration and
appraisal programme across its 5,000 square kilometre onshore exploration block
(RJ-ON-90/1) in the Rajasthan Basin.

3.                  Cairn holds a 100% interest in Block RJ-ON-90/1. Oil &
Natural Gas Corporation Ltd ('ONGC') has a right to 30% of any development area
resulting from a commercial discovery on the block.

4.                  The main exploration play objectives encountered in the
Rajasthan Basin, commencing with the stratigraphically youngest formation, are:
Thumbli, Dharvi Dungar, Barmer Hill and Fatehgarh.




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