Enhancing Energy Security for Indiag gy yNovember 2011

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Disclaimer

These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financial

condi t ion, future resul ts of operat ions, future business plans and strategies. Al l such forward- looking

statements are based on our management's assumptions and beliefs in the light of information available to

them at this time. These forward-looking statements are, by their nature, subject to significant risks and

uncertaint ies and actual results, performance and achievements may be material ly dif ferent from those

expressed in such statements. Factors that may cause actual results, performance or achievements to differ

from expectations include, but are not limited to, regulatory changes, future levels of industry product supply,

demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use

of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no

obligation to revise any such forward-looking statements to reflect any changes in Cairn India’s expectations

with regard thereto or any change in circumstances or events after the date hereof.

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India’s Dependence on Imports to meet Oil Demand to Grow

Imports

Source: • Domestic Production - BP Statistics (actual), Infraline (forecast)• Projected demand @ 2.8%CAGR - EIA Annual Energy Outlook 2011• OVL overseas equity oil production, forecast @ 2.8% CAGR

India world’s 5th largest importer of oil in 2010, importing ~75% of its oil needs

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Increasing Impact on Economic Growth from Oil Import Bill

Source: PPAC, Bloomberg, World Bank, FY12 GDP growth @7.5%

IEA forecasts average crude price of US$ 103/bbl from 2011-2015, compared to US$

79/bbl over 2006-2010

At US$ 103/bbl, India’s oil import bill would increase by US$ 20 bn in 2012

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Options for India to Secure Oil for Sustaining Growth

1. Domestic Exploration Efforts

2. Acquisition of Overseas Oil Equity

3. Demand Management

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Domestic Exploration Efforts need to be Stepped Up

Only 22% of India’s sedimentary basin area is well explored

Nine NELP rounds held so far, with one large discovery

Intensity of exploration activities must increase

Capital and technology required – role of private sector will therefore be critical

Supportive policy and fiscal environment key to attracting investment

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Imported & Domestic Quantity: MOPNG Data

Future: Assuming Indian production remains at current levels of 2009-10.

Domestic

21%

Imported

79%

Rajasthan

20%

Indian Crude Consumption: 2009-2010

Largest oil discovery in India since 1985

First Oil in August 2009, now producing at

125,000 bopd

Innovative technology applications

At current envisaged basin potential of 240,000

bopd, production from Rajasthan will:

Contribute ~35% of India’s domestic production

Offset India’s crude oil import dependency by

~7%

Cairn India Rajasthan – Enhancing India’s Energy Security

Other Domestic

~65%

Rajasthan

~35%

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80% of Value accrues to the Government

Rajasthan

In-place resource base of 4 bn bbls with

additional risked exploration potential of

2.5 bn bbls

~ 80% of value – potentially US$ 100 bn

accrues to the Government

Ravva

Recoverable resources tripled, expect to

achieve > 60% recovery

>US$ 5 bn paid as profit petroleum to

Government

Value Split: RJ-ON-90/1 PSC

Cairn – 20%

Government – 80%

(GoI, GoR, NOC)

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Overseas Oil Equity: Natural Hedge against Increasing Prices

Inorganic Growth

(Discovered Resources)

Advantages:

- Quicker to Production

- Low Risk

Disadvantages:

- Costlier than organic growth

- Competition for assets is high

Organic Growth

(Greenfield Exploration)

Advantages:

- Finding costs lower

- Competition is less intense

Disadvantages:

- Longer lead time

- Higher Risk

Options

Potential for public and private sector companies to collaborate and share risks

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Demand Management required to reduce Oil Intensity

India’s crude oil intensity is high relative to

developed and emerging economies

Policy efforts required to bring structural

shift away from oil in key sectors –

transport and industry

Japan’s 2006 National Energy Strategy

includes ambitious targets:

Reduction in ratio of oil to entire primary

energy supply to <40% by 2030

Reducing oil dependence in transport

sector to 80% by 2030

Improve coordination with other oil

consuming nations on use of Strategic

Petroleum Reserves

Source: Morgan Stanley

Oil Intensity (Oil Consumption per unit of 2009 GDP)

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Conclusions

Policy interventions required

National Energy Policy required to set:

Long term vision and short term goals

Roles and targets for Private and Public sector

Establish National Energy Council to:

Raise energy security on our national agenda

Catalyze & coordinate Public/ Private initiatives

Cost of oil will continue to rise

India’s oil demand will continue to grow with

its economy

Gap between domestic production and

demand expected to increase

To bridge the gap, we need to act now

Where are we today? What do we need to do?

Coordinated action between public and private sector key to meeting challenges