Director Shareholding

Cairn Energy PLC
20 May 2004


FOR IMMEDIATE RELEASE



20 May 2004


                  CAIRN ENERGY PLC ('Cairn' or 'the Company')

                         Directors' Interests in Shares

Cairn announces that it has been notified by the Trustee of the Company's
Employees' Share Trust ('the Trust') that a total of 600,923 shares were
transferred out of the Trust on 19 May 2004 to certain Executive Directors of
the Company, pursuant to the Company's Long Term Incentive Plan 2002 ('LTIP').

The shares comprise (i) 291,397 Ordinary Shares of 10 pence each in the Company
(being approximately one half of the total 582,790 Ordinary Shares) which vested
on 10 March 2004; and (ii) 309,526 Ordinary Shares of 10 pence each in the
Company which are to be released to certain Executive Directors following the
expiry of the one year withholding period in respect of an LTIP award which
vested on 17 March 2003. Details of the shares released from the Trust are as
follows:-

Director   Shares Released Pursuant to Shares Released Pursuant to   Total
           Vesting on 10 March 2004    Expiry of Withholding         Shares
                                       Period                        Released

Bill                  102,535               96,811                   199,346
Gammell

Mike                   62,954               70,905                   133,859
Watts

Kevin                  62,954               70,905                   133,859
Hart

Malcolm                62,954               70,905                   133,859
Thoms

In addition, the Executive Directors' yesterday exercised options over a total
of 390,000 Ordinary Shares pursuant to the Company's 1996 Second Share Option
Scheme. Details of the options exercised by the Executive Directors are set out
below.

Director             Date of Grant     Number of Options        Exercise Price

Bill Gammell           29.05.96                  150,000                 £2.34

Mike Watts             29.05.96                   80,000                 £2.34

Kevin Hart             15.04.98                  100,000                 £3.51

Malcolm Thoms          29.05.96                   60,000                 £2.34

Following the release of shares from the Trust and the exercise of options, the
Executive Directors yesterday sold a total of 614,640 shares at a price of £9.98
per share. Details of the share sales and the resulting effect on the Directors'
shareholdings are set out below.

Director   Shareholding   Shareholding   Shareholding   Shares    New
           before vesting after vesting  after exercise Sold*     Shareholding
           on 10.03.04    on 10.03.04    of options

Bill            880,000      1,085,069      1,235,069   200,069      1,035,000
Gammell

Mike            152,041        277,948        357,948   125,948        232,000
Watts

Kevin           221,811        347,718        447,718   157,718        290,000
Hart

Malcolm         260,000        385,907        445,907   130,905        315,002
Thoms

Philip            5,000          5,000          5,000         0          5,000
Tracy

*Includes shares sold to cover income tax and national insurance liabilities and
option exercise costs.

Following this announcement, the Executive Directors' beneficial interests in
the Ordinary Shares of the Company are as follows:-

Director   Number of Ordinary % Issued Share   Number of     Outstanding
           Shares             Capital          Options
                                                             Awards under LTIP
                                                             Tier      Tier
                                                             One       Two

Bill              1,035,000         0.684        55,000     233,000   430,000
Gammell

Mike                232,000         0.153             0     186,000   330,000
Watts

Kevin               290,000         0.192             0     169,000   330,000
Hart

Malcolm             315,002         0.208             0     159,000   330,000
Thoms

Philip                5,000         0.003             0     131,000    81,000
Tracy


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