Statement re Rajasthan Block

Cairn Energy PLC
10 May 2007



Embargoed for Release 07:00                                          10 May 2007


The following release was issued today by Cairn India to the Bombay Stock
Exchange and the National Stock Exchange of India:

                    'Rajasthan Block Northern Appraisal Area
               Extension, Discoveries and Further Drilling Plans

The Government of India (GoI) has awarded Cairn India a six month extension to
the Exploration Phase of the Northern Appraisal Area (NAA) of the Rajasthan
licence RJ-ON-90/1 in North West India from May 2007.

The granting of the extension will allow Cairn India to carry out an appraisal
programme to delineate and explore the full potential of the Northern Appraisal
Area (NAA), which covers an area of 879 square kilometres (km2). These
discoveries have opened up a new play in the lower Dharvi Dungar sands on the
western margin of the Rajasthan basin.


-      The Kameshwari West-2 discovery is located 12 km north west of the 2003
Kameshwari discovery and 56 km south of the Mangala field.  The well encountered
18.2 metres (m) of net pay in the lower Dharvi Dungar formation from a gross
interval of 40 m. From formation pressure data a gas gradient and an oil
gradient have been defined in the well. A Gas Oil Contact (GOC) at 1227.5 m
MDBRT (1127 m TVDSS) and an Oil Water Contact (OWC) at 1247.7 m MDBRT (1147 m
TVDSS) have been confirmed.

-      Open Hole Drill Stem Testing (OHDST) has been carried out and the well
was flowed for approximately 7 hours at an average liquid rate of 450 barrels of
liquid per day and 0.06 mmscfd on a 32/64' choke with a water cut of 50%.   The
oil API is 33 degrees.

-      The Kameshwari West-3 discovery is located 10.6 km to the north of
Kameshwari West-2 and encountered up to 16 m of gas pay in tight lower Dharvi
Dungar reservoir rock in a potential column of over 100 m.  The well TD is 1499
m MD. Two DSTs were conducted and test results in the upper interval confirmed
the presence of a gas pool which flowed at approximately 75,000 scfd. The deeper
test of the potential oil accumulation remains inconclusive due to the tight
nature of the reservoir rock.

The area is covered by 350 km2 of 3D seismic data acquired in 2006. Further
operations will re-commence in the NAA with exploration well Kameshwari West
'M'.

In June 2005, Cairn was granted an 18 month extension (until 14 November 2006)
to complete its activities in the northern appraisal area to the north and west
of the Development Area. However, the work programme in this area was
interrupted by the severe flooding in Rajasthan in 2006. Cairn India ceased
operations in this area and entered discussions with the GoI for a further
extension of part of this acreage to complete its planned work programme.


Rahul Dhir, Chief Executive Officer of Cairn India said

'Cairn India is delighted to have secured this extension in order to further
evaluate the potential of this area. The two discoveries confirm our belief that
the Rajasthan basin is world class and will continue to add incremental value.''


Enquiries to:

Analysts/Investors
Sir Bill Gammell, Chief Executive                     Tel: [phone]

Media
Brunswick Group LLP                                   Tel: [phone]
Patrick Handley, Mark Antelme, Phoebe Buckland

Cairn India Media Enquiries
David Nisbet                                          Tel: [phone]


About Cairn India Limited

-      'Cairn India' where referred to in the release means Cairn India Limited
        and/or its subsidiaries, as appropriate

-      'Cairn' where referred to in this release means Cairn Energy PLC and/or
        its subsidiaries (including Cairn India), as appropriate.

-      Cairn India is headquartered in Gurgaon on the outskirts of Delhi, with
       operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan.

-      On 9 January 2007, Cairn successfully concluded the flotation of its
       Indian business with the commencement of trading of Cairn India Limited 
       on the Bombay Stock Exchange and the National Stock Exchange of India. 
       Cairn Energy PLC currently holds a majority shareholding in Cairn India 
       Limited.

-      Cairn India is currently focused on exploration and production in India
       where it has a working interest in 15 blocks, two of which are producing
       hydrocarbons.  The company holds material exploration and production 
       positions in west India, east India along with new exploration rights 
       elsewhere in India.

-      This focus on India has already resulted in a significant number of oil
       and gas discoveries.  In particular, Cairn India made a major oil 
       discovery (Mangala) in Rajasthan in the north west of India at the 
       beginning of 2004.
       Cairn India has now made 22 discoveries in Rajasthan block RJ-ON-90/1.

-      In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a Production
       Sharing Contract (PSC) signed on 15 May 1995. The main Development Area 
       (1,858 km2), which includes Mangala, Aishwariya, Saraswati and 
       Raageshwari; is shared between Cairn India and ONGC, with Cairn India 
       holding 70% and ONGC having exercised their back in right for 30%. A 
       further Development Area (430 km2), including the Bhagyam and Shakti 
       fields, is also shared between Cairn India and ONGC in the same 
       proportion. Cairn India has a 100% interest in the Northern Appraisal 
       Area.

-      India currently imports approximately 2,000,000 barrels of oil per day
       (bopd).  It produces approximately 700,000 bopd itself of which 
       approximately 50,000 bopd comes from the Cairn India operated Ravva field  
       on the east coast of India

-      For further information on Cairn India Limited see www.cairnindia.com


Technical

2P          proven plus probable

3P          proven plus probable and possible

2D/3D       two dimensional/three dimensional

boe         barrel(s) of oil equivalent

boepd       barrels of oil equivalent per day

bopd        barrels of oil per day

bscf        billion standard cubic feet of gas

EOR         enhanced oil recovery

FDP         field development plan

MDBRT       measured depth below rig table

mmboe       million barrels of oil equivalent

mmscfd      million standard cubic feet of gas per day

PSC         production sharing contract

TVDSS       Total vertical depth sub sea

The Fatehgarh is the name given to the primary reservoir rock of the Northern
Rajasthan fields of Mangala, Aishwariya  and Bhagyam.

The Barmer Hill is a lower permeability tight rock which overlies the Fatehgarh.

The Dharvi Dungar forms the secondary reservoirs in the Guda field and is the
reservoir rock encountered in the recent  Kameshwari West discoveries.

The Thumbli forms the youngest reservoirs encountered in the basin.  The Thumbli
is the primary reservoir for the Raageshwari field.




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