Deepwater Block KG-DWN-98/2 Awarded in India

Cairn Energy PLC
7 January 2000

Deepwater Block KG-DWN-98/2 Awarded in India

Cairn announces today that it has been awarded by the Indian Government, Block
KG-DWN-98/2 ('the Block') offshore eastern India in the Krishna-Godavari
Basin. Cairn has a 100% interest in the Block which covers an area of
approximately 9,800 sq. kms and which lies within 10km of the Cairn operated
250 million barrel Ravva oilfield. It is anticipated that negotiations for a
production sharing contract ('PSC') for the Block will follow shortly.

The Block, in which water depths range from 300m to 3000m is sparsely
explored, containing only four wells, all drilled previously in the north by
ONGC. Oil and gas has been encountered and flowed from two wells within the
northern boundary of the Block. 

Cairn plans a 3D seismic programme in the northern third of the Block
immediately following execution of the PSC to define drilling targets for the
phase 1 exploration programme. In addition, a 2D seismic programme will be
shot in the deeper water areas to delineate possible medium to long term
exploration targets.

The award of the Block, pursuant to India's New Exploration Licensing round,
augments Cairn's existing exploration and production interests in the
Krishna-Godavari Basin. The Block lies to the south of the Cairn-operated
Ravva field and is adjacent to Block KG-OS/6 (Cairn 50% and operator).

Dr. Michael Watts, Cairn's Exploration and New Business Director commented:

'We are delighted with the award of this exploration Block, one of the most
sought-after in the licensing round due to the presence of a proven
hydrocarbon system. The Block has a clear strategic fit with our existing
interests offshore eastern India.'



Enquiries:

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