Drilling Report

Cairn Energy PLC
16 February 2001


CAIRN ENERGY PLC

'Parvati' Oil Discovery (formerly prospect 'G') on Block CB-OS/2

Fourth hydrocarbon discovery offshore Western India

Parvati Oil Discovery

Cairn announces a fourth hydrocarbon discovery on Block CB-OS/2 offshore
Gujarat in Western India with its exploration well CB-G-1Z, located
approximately 10 kilometres north of the Lakshmi gas discovery. The well
encountered only small gas columns at the main target level but several oil
pay zones at the secondary target level below 1,100 metres.

A multi-zone test on a 40/64 inch choke, flowed oil and water at rates up to
2,000 barrels of oil per day with a water cut varying between 5-25%.  For
technical reasons a stabilised flow rate was not achieved.  It is too early to
determine whether this discovery could be commercial as initial gross reserve
estimates range between 3 million and 20 million barrels of oil.

A 3D seismic survey is currently being conducted over the Lakshmi, Ambe and
Gauri discoveries.  As a result of oil being found in Parvati, Gauri and Ambe,
the logs of the previously drilled CB-E-1 well have been re-examined and
indicate a potentially oil bearing section which was not tested in the well
prior to abandonment. In order to give time to analyse the new data and
properly evaluate the potential of the oil play on the block, further
exploration/appraisal drilling will be delayed until the results from the 3D
seismic survey are available.

Bill Gammell, Cairn's Chief Executive commented:-

'Whilst this well failed to discover additional gas reserves it has
highlighted the requirement for further evaluation of the oil potential on
Block CB-OS/2.'

Enquiries:-

Cairn Energy PLC:
Bill Gammell, Chief Executive                     Tel:  [phone]
Dr Mike Watts, Exploration Director               Tel:  [phone]
Kevin Hart, Finance Director                      Tel:  [phone]

Brunswick Group Limited:
Victoria Sabin                                    Tel:  [phone]
Melissa Miller                                    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 holds a 75% equity interest in Block CB-OS/2 and
   is Operator for the Joint Venture which includes TATA
   Petrodyne Limited (15%) and the Indian state oil and gas
   company Oil & Natural Gas Company Ltd. ('ONGC') (10%).
   ONGC has a right to increase its stake by 30% in respect
   of each commercial discovery made on the Block. If ONGC
   exercise this right, Cairn's equity interest in respect
   of any such discovery would reduce from 75% to 50%.
   
3. The original CB-G-1 hole reached a total depth of 1385
   metres and was side tracked with a 60m offset, as CB-G-1Z
   for geological reasons.
   
4. The oil and water flow was obtained with 6 perforated
   intervals open to the well.  Contribution of individual
   intervals has not been quantified conclusively.
   
5. The crude oil tested in CB-G-1 has an API gravity of
   around 26 degrees