Significant Gas Discovery in India

Cairn Energy PLC
16 May 2000


                               Cairn Energy PLC

              Cairn Announces Significant Gas Discovery in India              


Cairn Energy PLC announces that its wholly-owned subsidiary, Cairn Energy
India Pty Limited, has made a significant gas discovery  with  its first 
exploration  well CB-A-1 in Block CB-OS/2, offshore Gujarat in Western India.
The well tested a structure located between the existing Hazira and North
Tapti Fields. Due to time constraints as a consequence of the onset of the
monsoon season, the well was TD'd at 1,350 metres and a limited test programme
was carried out.

The well encountered multiple pay zones between 760 metres and 1,270 metres. 
Gas samples were recovered by RFT from 4 zones and oil samples recovered from
2 zones. On test a total of 30 metres gross interval was perforated between
805 and 860 metres.  The well flowed at a stabilised rate of 28.1 million
cubic feet of gas per day on a 56/64' choke at a flowing well head pressure of
734 psi. The gas is dry methane with no CO2 or H2S.

Cairn intends to evaluate the untested oil and gas zones at the earliest
opportunity. 

Whilst further appraisal is required, the current estimated mean reserve for
this structure is 400 Bcf. 

Cairn is currently evaluating all options to start the appraisal programme at
the earliest opportunity with the objective of bringing significant volumes of
gas into the Gujarat market before the end of 2001.  Initial marketing studies
by Cairn within the state of Gujarat have already been carried out and
discussions with numerous potential purchasers are underway.

In addition to appraising the existing discovery, Cairn intends to drill
exploration wells on a number of further prospects which have been identified
on the Block. Including the existing discovery, these prospects have a
combined unrisked mean reserve expectation of 2 Tcf.  

Following the acquisition of an additional 30% equity interest during 1999,
Cairn  holds a 75% equity interest in the Block and is Operator for the Joint
Venture, which includes TATA Petrodyne Limited (15%) and the Indian national
oil company ONGC (10%). ONGC has a right to increase its stake by 30% in the
event of a commercial discovery on the Block.  If ONGC exercise this right,
Cairn's equity interest in the Block would reduce from 75% to 50%.

Bill Gammell, Cairn's Chief Executive commented:- 

'The excellent results from this well confirm our belief in the value of
Cairn's Indian exploration portfolio.  We look forward to a quick appraisal
and development programme especially given that the discovery is located so
close to one of the world's fastest growing quality gas markets. We are also
delighted with the co-operation we have received from the Gujarat authorities
and ONGC, which has enabled us to drill this well in such a short timeframe,
having only completed the seismic acquisition in February this year.'


For further information, contact:-

Cairn Energy PLC

Bill Gammell, Chief Executive                   0131 475 3000
Mike Watts, Exploration Director                0131 475 3000
Kevin Hart, Finance Director                    07771 934974


Notes to Editors:-


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

2. The Hazira Field is on production and is contained within a separate   
ring-fenced area within the boundary of  Block CB-OS/2.  The Joint Venture
comprises the Gujarat State Petroleum Company (66.6%) and the Operator Niko
Resources Ltd. (33.3%).

3. The North Tapti Field is 100% owned and operated by ONGC.  The field is
under appraisal and is contained within a separate ring-fenced area within the
boundary of Block CB-OS/2.