HARVEST NATURAL RESOURCES INC
AMENDING & RESTATING THE CREDIT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>6
<FILENAME>h00992exv10w7.txt
<DESCRIPTION>AMENDING & RESTATING THE CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.7

                                                                  EXECUTION COPY
                                                            OPERATION NUMBER 478





                                    AGREEMENT



                           DATED 23RD SEPTEMBER, 2002



                                     BETWEEN



                            LIMITED LIABILITY COMPANY
                                   "GEOILBENT"



                                       AND



                                  EUROPEAN BANK
                       FOR RECONSTRUCTION AND DEVELOPMENT



                             AMENDING AND RESTATING
                              THE CREDIT AGREEMENT
                            DATED 21ST NOVEMBER, 1996





<PAGE>

                                      INDEX


<Table>
<Caption>
SECTION                                                                                           PAGE
<S>                                                                                               <C>
1.     Interpretation................................................................................3
2.     Amendment and Re-Statement....................................................................4
3.     Conditions Precedent..........................................................................4
4.     Representations and Warranties................................................................8
5.     Fees, Costs and Expenses......................................................................9
6.     Governing Law.................................................................................9
7.     Rights of Third Parties......................................................................10

SCHEDULE

Amended and Amended and Restated Credit Agreement...................................................11
</Table>



<PAGE>

THIS AGREEMENT is dated 23rd September, 2002 between LIMITED LIABILITY COMPANY
"GEOILBENT", a limited liability company organised and existing under the laws
of the Russian Federation (the "BORROWER"), and EUROPEAN BANK FOR RECONSTRUCTION
AND DEVELOPMENT (the "BANK").

WHEREAS:-

(A)      By an agreement dated 21st November, 1996 between the Borrower and the
         Bank (as amended prior to the date hereof, the "ORIGINAL CREDIT
         AGREEMENT"), the Bank has agreed, subject to the terms and conditions
         of the Original Credit Agreement, to make a loan to the Borrower on a
         revolving basis in an amount not to exceed US$55,000,000 (the "ORIGINAL
         LOAN FACILITY").

(B)      The Parties have agreed to amend the Original Credit Agreement as
         provided in this Agreement. For convenience, the parties have agreed to
         hereby specify the provisions of the Original Credit Agreement, as so
         amended by this Agreement in restated form as set out in the Schedule
         hereto.

(C)      The amendments to the Original Credit Agreement to be made pursuant to
         this Agreement shall be effective from the Effective Date (as defined
         below) and the Original Credit Agreement remains in full force and
         effect except, from the Effective Date, as amended pursuant to this
         Agreement.

IT IS AGREED AS FOLLOWS:-

1.       INTERPRETATION

1.1      DEFINITIONS

         In this Agreement:-

         "EFFECTIVE DATE" means the date on which the Bank notifies the Borrower
         that the Bank has received (in form and substance satisfactory to the
         Bank), or has waived receipt (on such terms as the Bank may specify),
         each of the documents and other evidence specified in Clause 3.1
         (Conditions Precedent) other than the notice referred to in Section
         3.1(t) below.

         "PARTIES" means the Borrower and the Bank and "PARTY" means either one
         of the Parties.

         "AMENDED AND RESTATED CREDIT AGREEMENT" means the Original Credit
         Agreement, as amended and restated by this Agreement, in the form set
         out in the Schedule (Amended and Restated Credit Agreement).

1.2      INTERPRETATION

         Unless otherwise defined in this Agreement, capitalised terms used in
         this Agreement (but not the Schedule) shall have the meaning given to
         them in the Original Credit Agreement.



                                       3
<PAGE>

1.3      INCORPORATION

         The provisions of Section 1.02 (Interpretation), Section 8.03
         (Notices), Section 8.04 (English Language), Section 8.13 (Severability)
         and Section 8.14 (Counterparts) of the Original Credit Agreement shall
         apply to this Agreement (but not to the Schedule) as if the same had
         been set out in full herein.

2.       AMENDMENT AND RE-STATEMENT

2.1      EFFECTIVE DATE

         With effect on and from the Effective Date, the Original Credit
         Agreement shall be deemed to be amended such that the provisions of the
         Original Credit Agreement, as so amended, will be as set forth in the
         Schedule to this Agreement.

2.2      ACKNOWLEDGEMENT

         The Bank and the Borrower acknowledge that the principal outstanding
         amount of the Loan as at the date of and prior to the amendments to be
         made by this Agreement is $22,000,000.

2.3      CONFIRMATION

         Each Party confirms that, except as expressly provided by this
         Agreement or as provided for in the documents referred to in Clause 3.1
         (Conditions Precedent), each Financing Agreement and Project Agreement
         remains in full force and effect.

2.4      LONG-STOP

         If the Effective Date has not occurred on or prior to 31 December,
         2002, this Agreement shall be deemed to be terminated on such date and
         the Parties shall continue to be bound by the provisions of the
         Original Credit Agreement as if this Agreement had not been entered
         into.

3.       CONDITIONS PRECEDENT

3.1      CONDITIONS PRECEDENT

         The documents and other evidence referred to in the definition of
         Effective Date are as follows:-

         (a)      FINANCING AGREEMENTS. Duly executed originals of each of the
                  following documents:



                                       4
<PAGE>

                  (1)      an agreement amending the Shareholders Support
                           Agreement;

                  (2)      an agreement terminating the Security Sharing
                           Agreement; and

                  (3)      an agreement amending and restating the Russian Bank
                           Account Agreements.

         (b)      PROJECT AGREEMENTS. Certified copies of the following
                  agreements, as in force as at the date of this Agreement:

                  (1)      the License (including the License Agreement);

                  (2)      the Marketing Agreements;

                  (3)      the Services Agreement;

                  (4)      the Transportation Agreement;

                  (5)      the Supply Agreements;

                  (6)      the Independent Engineer Agreement; and

                  a copy of a duly executed agreement amending:

                  (7)      the Offshore Bank Account Agreement.

         (c)      SECURITY. Duly executed originals of agreements amending each
                  of the following Security Documents together with any
                  document, recording, filing, notification, registration,
                  notarisation or other evidence required, in the opinion of the
                  Bank, for the creation, validity, perfection or priority of
                  the Liens of the Bank in or under such Security Documents
                  (other than, in the case of the Immovable Property Mortgage
                  Agreement, notarisation and registration of such Security
                  Document):

                  (1)      the Contracts Assignment Agreement;

                  (2)      the Equipment Pledge Agreement;

                  (3)      the Expropriation Compensation Assignment Agreement;

                  (4)      the Immovable Property Mortgage Agreement;

                  (5)      the Insurance Assignment Agreement;

                  (6)      the Offshore Account Assignment Agreement;

                  (7)      the Russian Account Pledge Agreement;

                  (8)      the Russian Bank Account Agreements; and

                  (9)      the Share Pledges.



                                       5
<PAGE>

         (d)      CHARTERS. Certified copies of the Charters (and, if relevant,
                  certificates of registration and good standing) of the
                  Borrower, the Shareholders and, at the reasonable request of
                  the Bank, any other parties to the Financing Agreements and
                  Project Agreements, each as amended as at the date of this
                  Agreement.

         (e)      CORPORATE AUTHORISATIONS. Certified copies of all corporate
                  (including, if required, shareholder) authorisations and
                  approvals necessary for the due execution, delivery and
                  performance of this Agreement and each agreement as referred
                  to in paragraphs (a) - (c) above inclusive and any other
                  documents in implementation thereof, by the Borrower, the
                  Shareholders and, at the reasonable request of the Bank, any
                  other parties thereto and for the transactions contemplated
                  thereby, including the authorisations of the persons signing
                  such agreements to sign such documents and to bind the
                  respective parties thereby.

         (f)      SPECIMEN SIGNATURES.

                  (1)      A certificate of incumbency and authority of the
                           Borrower substantially in the form of Exhibit B to
                           the Amended and Restated Credit Agreement; and

                  (2)      a certificate of an appropriate officer of each
                           Shareholder and, at the reasonable request of the
                           Bank, any other party to the Financing Agreements and
                           Project Agreements certifying the specimen signature
                           of each person authorised to sign, on behalf of such
                           party, the Financing Agreements and Project
                           Agreements or the amendments thereto and/or
                           terminations thereof to be entered into and performed
                           by such party.

         (g)      GOVERNMENTAL AND OTHER APPROVALS. Certified copies of all
                  governmental, creditors' and other licenses, approvals,
                  consents, filings and registrations necessary for the
                  execution, delivery and performance of this Agreement, the
                  Financing Agreements and Project Agreements by the Borrower,
                  the Shareholders and, at the request of the Bank, any other
                  parties thereto and for the transactions contemplated thereby,
                  including, without limitation:

                  (1)      the borrowing by the Borrower under the Amended and
                           Restated Credit Agreement;

                  (2)      the creation, amendment and/or novation of the
                           Security;

                  (3)      the carrying out of the Project and the Financing
                           Plan;

                  (4)      the remittance to the Bank of all monies payable in
                           respect of the Amended and Restated Credit Agreement
                           and the Security; and



                                       6
<PAGE>

                  (5)      the carrying on of the business of the Borrower as it
                           is presently carried on and is contemplated to be
                           carried on under the Development Plan.

         (h)      INSURANCE. Original insurance certificates from the Borrower's
                  insurer or insurance broker showing that all insurance
                  policies and endorsements required pursuant to Section 5.04 of
                  the Original Credit Agreement are in full force and effect and
                  certified copies of such insurance policies and endorsements.

         (i)      AUDITORS LETTER. A copy of a letter to the Auditors from the
                  Borrower substantially in the form of Exhibit C to the Amended
                  and Restated Credit Agreement.

         (j)      EXISTING FINANCIAL DEBT. Evidence satisfactory to the Bank
                  that all Financial Debt of the Borrower (other than Financial
                  Debt set out in Section 6.04 of the text of the Amended and
                  Restated Credit Agreement), and all Liens on any property,
                  revenues or other assets of the Borrower (other than Permitted
                  Liens) have been discharged in full.

         (k)      BANK ACCOUNTS. Evidence satisfactory to the Bank that the
                  Offshore Bank Accounts and the Russian Bank Accounts are duly
                  established.

         (l)      INDEPENDENT ENGINEER. Evidence satisfactory to the Bank that
                  the Borrower has appointed the Independent Engineer in a
                  manner satisfactory to the Bank to perform its functions as
                  provided for in the Financing Agreements.

         (m)      SURFACE RIGHTS. Evidence satisfactory to the Bank that the
                  Borrower has all appurtenant surface land rights required for
                  the Project.

         (n)      DEVELOPMENT PLAN. A copy of the Development Plan, in form and
                  substance satisfactory to the Bank and the Independent
                  Engineer.

         (o)      REVISED BANKING CASE. A copy of a revised banking case
                  prepared by the Borrower in accordance with Section 8.05(c) of
                  the Original Credit Agreement to be delivered not more than 60
                  days prior to the Effective Date.

         (p)      AUDITED FINANCIAL STATEMENTS.

                  (1)      The Financial Statements of the Borrower for the
                           Financial Year ending on 30 September, 2001 and, to
                           the extent available, the unaudited quarterly
                           Financial Statements for the Financial Year
                           2001/2002; and

                  (2)      in the case of the Financial Statements for the
                           Financial Year ending on 30 September, 2001, the
                           balance sheet and the related income statement and
                           statement of changes in financial position of the
                           Borrower for the Financial Year ending on that date,
                           and



                                       7
<PAGE>

                           the notes thereon, certified by the Auditors, which
                           shall be satisfactory to the Bank in its sole
                           discretion.

         (q)      PROCESS AGENT APPOINTMENTS. Written confirmation from the
                  agents for service of process appointed by the Borrower and
                  the Shareholders pursuant to the Financing Agreements of their
                  acceptances of such appointments in connection with the entry
                  by the Borrower into the Amended and Restated Credit Agreement
                  and any documents related thereto.

         (r)      LEGAL OPINIONS.

                  (1)      the opinion of Fulbright & Jaworski;

                  (2)      the opinion of special counsel to Minley acceptable
                           to the Bank;

                  (3)      the opinion of Baker & McKenzie, special Russian
                           counsel to the Borrower;

                  (4)      the opinion of Allen & Overy Legal Services, special
                           Russian counsel to the Bank; and

                  (5)      the opinion of Allen & Overy Legal Services, special
                           English counsel to the Bank;

                  in each case regarding such matters incident to the
                  transactions contemplated by this Agreement, the Amended and
                  Restated Credit Agreement and any document related thereto
                  (including Financing Agreements and Project Agreements to be
                  amended as referred to in this Clause 3.1 (Conditions
                  Precedent) as the Bank shall reasonably request.

         (s)      Evidence satisfactory to the Bank that the Borrower has paid
                  to the Bank an appraisal fee in the amount of USD 225,000.

         (t)      Notice from the Bank to the Borrower that the Bank has
                  received (in form and substance satisfactory to the Bank) or
                  has waived receipt (on such terms as the Bank may specify),
                  all the documents and other evidence specified in this Clause
                  3.1 above.

4.       REPRESENTATIONS AND WARRANTIES

(a)      The Borrower shall be deemed to make the representations and warranties
         in the same terms as set out in Sections 2.01, 2.02 and 2.03 of the
         text of the Amended and Restated Credit Agreement appended in the
         Schedule hereto on the date of this Agreement and on the Effective
         Date.

(b)      The Borrower acknowledges that it has made the representations and
         warranties contained in paragraph (a) of this Section 4 above with the
         intention of inducing the Bank to enter into this Agreement and that
         the Bank has entered into this Agreement on the basis of, and in full
         reliance on, each of such representations



                                       8
<PAGE>

         and warranties. The Borrower has no knowledge of any additional facts
         or matters which would or might reasonably be expected to affect the
         judgement of a prospective lender regarding lending to the Borrower.
         The Borrower warrants to the Bank that each of such representations and
         warranties is true and correct and that none of them omits any matter
         the omission of which makes any of such representations and warranties
         misleading.

(c)      The Borrower represents that as of the date of this Agreement it has
         opened the following banks accounts: (a) the four Offshore Bank
         Accounts with Citibank N.A. (London Branch): the Disbursement Account
         No. 00008283400, the Export Sales Account No. 00008283419, the Debt
         Service Account No. 00008283427 and the Cash Collateral Account No.
         00008283435, and (b) six Russian Bank Accounts with the International
         Moscow Bank: the Rouble settlement account No. 40702810500010003818,
         the Rouble drawdown account No. 40702810800010003819, the USD current
         account No. 40702840400010003823, the USD Current drawdown account No.
         40702840400010048464, the USD transit account No. 40702840700010003824,
         the USD special transit account No. 40702840200010109891.

5.       FEES, COSTS AND EXPENSES

         The Borrower shall, whether or not the Effective Date occurs, forthwith
         on demand pay the Bank the amount of all costs and expenses (including,
         without limitation legal fees) incurred by it in connection with the
         negotiation, preparation, printing and execution of this Agreement, the
         Amended and Restated Credit Agreement and all other documents
         contemplated hereby and thereby, and the completion of the transactions
         contemplated herein and therein.

6.       GOVERNING LAW

         This Agreement is governed by English law. The provisions of Section
         8.09 (Arbitration and Jurisdiction), Section 8.10 (Privileges and
         Immunities of the Bank), Section 8.11 (Waiver of Sovereign Immunity) of
         the Original Credit Agreement shall apply to this Agreement (but not to
         the Schedule) as if the same had been set out in full herein.



                                       9
<PAGE>

7.       RIGHTS OF THIRD PARTIES

         Except as provided in the Amended and Restated Credit Agreement, none
         of the terms of this Agreement are intended to be enforceable by any
         third party and the Contracts (Rights of Third Parties) Act 1999 shall
         not apply to this Agreement.

IN WITNESS WHEREOF, the parties hereto, acting through their duly authorised
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.


                                                       LIMITED LIABILITY COMPANY
                                                                     "GEOILBENT"


                                              By:
                                                  ------------------------------
                                            Name:
                                                  ------------------------------
                                           Title:
                                                  ------------------------------


                                              By:
                                                  ------------------------------
                                            Name:
                                                  ------------------------------
                                           Title:
                                                  ------------------------------
                                                                          [Seal]


                                                                   EUROPEAN BANK
                                              FOR RECONSTRUCTION AND DEVELOPMENT


                                              By:
                                                  ------------------------------
                                            Name:
                                                  ------------------------------
                                           Title:
                                                  ------------------------------



                                       10
<PAGE>

                                    SCHEDULE

                      AMENDED AND RESTATED CREDIT AGREEMENT











                                CREDIT AGREEMENT

                            DATED 21ST NOVEMBER, 1996

                             AS AMENDED AND RESTATED
               PURSUANT TO AN AGREEMENT DATED 23RD SEPTEMBER, 2002


                                     between


                            LIMITED LIABILITY COMPANY
                                   "GEOILBENT"


                                       and


                                  EUROPEAN BANK
                       FOR RECONSTRUCTION AND DEVELOPMENT



                                       11
<PAGE>
TABLE OF CONTENTS


<Table>
<S>                                                                                                 <C>
ARTICLE I - DEFINITIONS..............................................................................15

    Section 1.01.         Definitions................................................................15
    Section 1.02.         Interpretation.............................................................30

ARTICLE II - REPRESENTATIONS AND WARRANTIES..........................................................30

    Section 2.01.         Representations Regarding the Project......................................30
    Section 2.02.         Representations Regarding the Borrower.....................................32
    Section 2.03.         Representations Regarding the Agreements...................................35
    Section 2.04.         Acknowledgement and Warranty...............................................36

ARTICLE III - LOAN...................................................................................36

    Section 3.01.         Amount and Currency........................................................36
    Section 3.02.         Disbursements..............................................................37
    Section 3.03.         Suspension and Cancellation................................................37
    Section 3.04.         Charges, Commissions and Fees..............................................38
    Section 3.05.         Interest...................................................................39
    Section 3.06.         Default Interest...........................................................39
    Section 3.07.         Repayment..................................................................40
    Section 3.08.         Voluntary and Mandatory Prepayment.........................................40
    Section 3.09.         Payments...................................................................41
    Section 3.10.         Insufficient Payments......................................................42
    Section 3.11.         Taxes......................................................................42
    Section 3.12.         Unwinding Costs............................................................43
    Section 3.13.         Increased Costs............................................................43
    Section 3.14.         Illegality.................................................................44
    Section 3.15.         Loan Account...............................................................44

ARTICLE IV - CONDITIONS PRECEDENT....................................................................44

    Section 4.01.         Conditions of First Disbursement...........................................44
    Section 4.02.         Conditions for Certain Disbursements.......................................48
    Section 4.03.         Conditions for Any Disbursement............................................49

ARTICLE V - AFFIRMATIVE COVENANTS....................................................................50

    Section 5.01.         Project Implementation.....................................................50
    Section 5.02.         Maintenance and Continuity of Business.....................................51
    Section 5.03.         Environment, Health and Safety.............................................51
    Section 5.04.         Insurance..................................................................51
    Section 5.05.         Accounting.................................................................51
    Section 5.06.         Continuing Governmental and Other Approvals................................52
    Section 5.07.         Security...................................................................52
</Table>



                                       12
<PAGE>

<Table>
<S>                                                                                                 <C>
    Section 5.08.         Compliance with Other Obligations..........................................52
    Section 5.09.         Taxes......................................................................53
    Section 5.10.         Project Agreements.........................................................53
    Section 5.11.         Offshore Bank Accounts.....................................................54
    Section 5.12.         Russian Bank Accounts......................................................56
    Section 5.13.         Cash Waterfall.............................................................57
    Section 5.14.         Further Documents..........................................................58
    Section 5.15.         Costs and Expenses.........................................................58
    Section 5.16.         Furnishing of Information..................................................59

ARTICLE VI - NEGATIVE COVENANTS......................................................................62

    Section 6.01.         Dividends..................................................................62
    Section 6.02.         Capital Expenditures.......................................................63
    Section 6.03.         Leases.....................................................................63
    Section 6.04.         Financial Debt.............................................................63
    Section 6.05.         Liens......................................................................64
    Section 6.06.         Derivative Transactions....................................................64
    Section 6.07.         Arm's Length Transactions..................................................64
    Section 6.08.         Profit-sharing and Management Arrangements.................................65
    Section 6.09.         Investments................................................................65
    Section 6.10.         Project Agreements.........................................................65
    Section 6.11.         Changes in Business, Capital and Charter...................................65
    Section 6.12.         Prepayment of Long-term Debt...............................................66
    Section 6.13.         Sale of Assets; Merger.....................................................66

ARTICLE VII - EVENTS OF DEFAULT......................................................................66

    Section 7.01.         Events of Default..........................................................66
    Section 7.02.         Consequences of Default....................................................69
    Section 7.03.         Automatic Acceleration.....................................................69

ARTICLE VIII - MISCELLANEOUS.........................................................................69

    Section 8.01.         Term of Agreement..........................................................69
    Section 8.02.         Entire Agreement; Amendment and Waiver.....................................69
    Section 8.03.         Notices....................................................................70
    Section 8.04.         English Language...........................................................71
    Section 8.05.         Financial Calculations and Development Plan................................71
    Section 8.06.         Rights, Remedies and Waivers...............................................72
    Section 8.07.         Indemnification............................................................73
    Section 8.08.         Governing Law..............................................................74
    Section 8.09.         Arbitration and Jurisdiction...............................................74
    Section 8.10.         Privileges and Immunities of the Bank......................................75
    Section 8.11.         Waiver of Sovereign Immunity...............................................75
    Section 8.12.         Successors and Assigns.....................................................75
    Section 8.13.         Severability...............................................................76
    Section 8.14.         Counterparts...............................................................76
</Table>



                                       13
<PAGE>

<Table>
<S>                                                                                                 <C>
Schedule 1 - Commitment..............................................................................77

Schedule 2 - Development Plan and Banking Case Procedures............................................78

Schedule 3 - Security Perfection Requirements........................................................80

Schedule 4 - Milestones..............................................................................83

Schedule 5 - Veksels.................................................................................84
</Table>


EXHIBITS

Exhibit A     -   Form of Disbursement Application

Exhibit B     -   Form of Certificate of Incumbency and Authority

Exhibit C     -   Form of Letter to Auditors



                                       14
<PAGE>

AGREEMENT, dated 21st November, 1996 as amended and restated by an agreement
dated 23rd September, 2002 between LIMITED LIABILITY COMPANY "GEOILBENT", a
limited liability company organised and existing under the laws of the Russian
Federation (the "Borrower"), and EUROPEAN BANK FOR RECONSTRUCTION AND
DEVELOPMENT (the "Bank").


ARTICLE I - DEFINITIONS


SECTION 1.01. DEFINITIONS

Wherever used in this Agreement, including the Schedules and Exhibits hereto,
unless the context otherwise requires, the following terms have the following
meanings:

"Affiliate"                         means, with respect to any person, any other
                                    person, directly or indirectly, controlling,
                                    controlled by, or under common control with,
                                    such person. For the purposes of this
                                    definition, "control" (including, with
                                    correlative meanings, the terms "controlled
                                    by" and "under common control with"), as
                                    used with respect to any person, means the
                                    possession, directly or indirectly, of the
                                    power to direct or cause the direction of
                                    the management and policies of such person,
                                    whether through the ownership of voting
                                    shares or by contract or otherwise.

"Amending Agreement"                means the agreement dated 23rd September,
                                    2002 pursuant to which the parties to this
                                    Agreement agreed to amend and restate this
                                    Agreement.

"Approved Budget"                   means the total expenditures budget for the
                                    period approved by the general meeting of
                                    the Shareholders of the Borrower authorising
                                    a certain amount of total expenditures for
                                    the period, comprising Operating Costs and
                                    Project Costs.

"Auditors"                          means such firm of independent accountants
                                    as the Borrower may from time to time
                                    appoint as its auditors in accordance with
                                    Section 5.05.

"Available Amount"                  means, as of any date, an amount determined
                                    by the Bank to be:

                                    (a) the lesser of:

                                             (1)      the Commitment as of such
                                                      date; and



                                       15
<PAGE>

                                             (2)      the Borrowing Base as
                                                      calculated in accordance
                                                      with the latest banking
                                                      case prepared pursuant to
                                                      Section 8.05(c);
                                    less:

                                    (b) the aggregate principal amount of the
                                    Loan outstanding on such date (but not
                                    including the amount of any Disbursement
                                    made on such date).

"Borrowing Base"                    means, as of any date, the lesser of:

                                    (a) one-half of the net present value,
                                    discounted at the Discount Rate, of all
                                    Future Net Cash Flow for the period from
                                    such date to the Reserve Tail Date; and

                                    (b) four-sevenths of the net present value,
                                    discounted at the Discount Rate, of all
                                    Future Net Cash Flow for the period from
                                    such date to 27 July 2006 or, if earlier,
                                    the Reserve Tail Date.

"Borrowing Base Reserves"           means, at any time, 100% of the proven
                                    developed reserves and 20% of the proven
                                    undeveloped reserves in the Fields, as set
                                    forth in the then current Development Plan.

"Business Day"                      means a day on which commercial banks and
                                    foreign exchange markets are open for the
                                    transaction of business in the Loan Currency
                                    interbank market in London, England and on
                                    which commercial banks and foreign exchange
                                    markets settle payments in the Loan Currency
                                    in New York, New York.

"Cash Collateral Account"           means the Offshore Bank Account designated
                                    as such in accordance with Section 5.11(e).

"Charter"                           means, in respect of any company,
                                    corporation, partnership, enterprise,
                                    governmental agency or other entity, its
                                    founding act, articles of incorporation and
                                    bylaws, memorandum and articles of
                                    association, statutes or similar instrument.

"Commitment"                        means, for each period set forth in Schedule
                                    1, the amount set forth in Schedule 1
                                    opposite such period to the extent that such
                                    amount has not been cancelled pursuant to
                                    Section 3.03, which amount is the maximum
                                    principal amount of the Loan during such
                                    period hereunder.



                                       16
<PAGE>

"Commitment Period"                 means the period commencing on 21 November
                                    1996 and terminating on the earliest of (a)
                                    27 July 2006, (b) the Reserve Tail Date, and
                                    (c) the date the obligation of the Bank to
                                    make Disbursements hereunder terminates in
                                    accordance with the terms of this Agreement.

"Contracts Assignment
Agreement"                          means the instrument pursuant to which the
                                    Borrower assigns to the Bank all of its
                                    rights, interests and benefits under the
                                    Marketing Agreements, the Transportation
                                    Agreement, the Services Agreement and the
                                    Supply Agreements, and all performance
                                    bonds, warranties, guarantees and
                                    undertakings issued thereunder, together
                                    with the notices and acknowledgements and
                                    consents in the forms attached thereto,
                                    dated 9 April/23 June 1997 as from time to
                                    time amended and/or supplemented in form and
                                    substance satisfactory to the Bank.

"Current Assets"                    means the aggregate (as of the date of
                                    calculation) of the Borrower's cash,
                                    marketable securities, trade and other
                                    receivables realisable within one year,
                                    inventories and prepaid expenses which are
                                    to be charged to income within one year, but
                                    excluding any receivables past due more than
                                    60 days or doubtful receivables and any
                                    funds temporarily on hand pending
                                    application to property, plant and equipment
                                    included in the Project.

"Current Liabilities"               means the aggregate (as of the date of
                                    calculation) of all liabilities of the
                                    Borrower falling due on demand or within one
                                    year, including the portion of Long-term
                                    Debt falling due within one year, but
                                    excluding liabilities for property, plant
                                    and equipment to the extent of the amount of
                                    funds therefore excluded from the
                                    calculation of Current Assets.

"Current Ratio"                     means the result obtained by dividing
                                    Current Assets by Current Liabilities. For
                                    the purpose of the calculation of the
                                    Current Ratio, the Subordinated Shareholder
                                    Loans shall not be included among the
                                    Current Liabilities, but only provided that
                                    the agreements under which such Subordinated
                                    Shareholder Loans are provided are in form
                                    and substance satisfactory to the Bank.

"Debt"                              means, with respect to any person, all
                                    obligations of such person for the payment
                                    or repayment of money including, without
                                    limitation:

                                    (a) any amounts payable by such person under
                                    leases or similar arrangements over their
                                    respective periods;



                                       17
<PAGE>

                                    (b) any credit to such person from a
                                    supplier of goods or under any instalment
                                    purchase or other similar arrangement; and

                                    (c) any liabilities and obligations of third
                                    parties to the extent that they are
                                    guaranteed by such person or such person has
                                    otherwise assumed or become liable for the
                                    payment of such liabilities or obligations
                                    or to the extent that they are secured by
                                    any Lien upon property owned by such person
                                    whether or not such person has assumed or
                                    become liable for the payment of such
                                    liabilities or obligations.

"Debt Service Account"              means the Offshore Bank Account designated
                                    as such in accordance with Section 5.11(d).

"Default Interest Period"           means, with respect to any amount overdue
                                    under this Agreement, a period commencing on
                                    the Business Day on which such payment
                                    becomes due or, as the case may be, on the
                                    last Business Day of the previous Default
                                    Interest Period, and ending on a Business
                                    Day selected by the Bank.

"Development Plan"                  means the development plan for the Project
                                    approved by the Bank in accordance with
                                    Section 8.05(b), as such development plan
                                    may be updated from time to time by the
                                    Borrower in accordance with the provisions
                                    of Section 8.05(c).

"Disbursement"                      means the disbursement of any portion of the
                                    Loan from time to time pursuant to Section
                                    3.02 or, as the context may require, the
                                    principal amount thereof from time to time
                                    outstanding.

"Disbursement Account"              means the Offshore Bank Account designated
                                    as such in accordance with Section 5.11(b).

"Discount Rate"                     means, for any period, the weighted average
                                    (expressed as a rate per annum) of all
                                    interest charges which are projected (on the
                                    basis of the Financial Model) to be
                                    applicable to all amounts of the Loan
                                    outstanding from time to time during such
                                    period (but without taking into account the
                                    Interest Premium).

"Dollars" or "$"                    means the lawful currency of the United
                                    States of America.

"Environmental Action Plan"         means the plan of nature protection measures
                                    for the Project approved by the Bank in
                                    accordance with Section



                                       18
<PAGE>

                                    5.03(b), as such plan may be amended from
                                    time to time with the prior written consent
                                    of the Bank.

"Equipment Pledge
Agreement"                          means the instrument pursuant to which the
                                    Borrower grants to the Bank a first ranking
                                    security interest in all of the Borrower's
                                    present and future equipment and other
                                    tangible movable assets, dated 9 April/23
                                    June 1997 as from time to time amended
                                    and/or supplemented in form and substance
                                    satisfactory to the Bank.

"Event of Default"                  means any one of the events specified in
                                    Section 7.01.

"Export Sales Account"              means the Offshore Bank Account designated
                                    as such in accordance with Section 5.11(c).

"Expropriation
Compensation Assignment
Agreement"                          means the instrument pursuant to which the
                                    Borrower and the Shareholders grant to the
                                    Bank a valid security interest of first
                                    priority in all of their rights to claim and
                                    receive compensation in the event of
                                    nationalisation, expropriation, requisition
                                    or confiscation of any of their property in
                                    the Russian Federation relating to the
                                    Borrower or its business or assets, dated 9
                                    April/23 June, 1997 as from time to time
                                    amended and/or supplemented in form and
                                    substance satisfactory to the Bank.

"Field Life Debt Service
Coverage Ratio"                     means, on any date, (a) the net present
                                    value, discounted at the Discount Rate, of
                                    all Future Net Cash Flow for the period from
                                    such date to the Reserve Tail Date, divided
                                    by (b) the aggregate principal amount of the
                                    Loan outstanding on such date.

"Fields"                            means the North Gubkinskoye, the
                                    Prisklonovoye and the South Tarassovskoye
                                    oil fields located 60 kilometres west of
                                    Tarko-Sale in the Purovsky District,
                                    Yamal-Nenets Autonomous Region, Tyumen
                                    Province of the Russian Federation, as
                                    specified in the License and the mining
                                    allotment attached thereto.

"Financial Debt"                    means, with respect to any person, all Debt
                                    of such person:

                                    (a) for or in consideration of borrowed
                                    money or arising out of any credit facility;

                                    (b) for the deferred purchase price of
                                    assets or services (other than trade
                                    payables arising in the ordinary course of
                                    business);



                                       19
<PAGE>

                                    (c) arising under any lease which would be
                                    capitalised on the balance sheet of the
                                    lessee in accordance with Generally Accepted
                                    Accounting Principles or which is otherwise
                                    in substance a financing lease; or

                                    (d) arising under any other transaction
                                    which, in accordance with Generally Accepted
                                    Accounting Principles, has the commercial
                                    effect of borrowing.

"Financial Model"                   means the financial model agreed by the Bank
                                    and used by the Borrower to prepare the
                                    financial projections for the Project, as
                                    amended from time to time pursuant to
                                    Schedule 2.

"Financial Statements"              means the consolidated financial statements
                                    (including a balance sheet, income statement
                                    and statement of changes in financial
                                    position, and notes thereon) of the Borrower
                                    and its Subsidiaries prepared in accordance
                                    with Generally Accepted Accounting
                                    Principles in the United States and,
                                    separately, in accordance with Generally
                                    Accepted Accounting Principles in the
                                    Russian Federation.

"Financial Year"                    means the period commencing each year on 1
                                    October and ending on the following 30
                                    September, or such other period as the
                                    Borrower may, with the Bank's consent, from
                                    time to time designate as the accounting
                                    year of the Borrower.

"Financing Agreements"              means this Agreement, the Shareholders
                                    Support Agreement, the agreement terminating
                                    the Security Sharing Agreement, the
                                    agreement amending and restating the Russian
                                    Bank Account Agreements, the Security
                                    Documents, the letter agreement related to
                                    the front-end commission referred to in
                                    Section 3.04(b), the Disbursement
                                    applications referred to in Section 3.02,
                                    the direct warranty of the Independent
                                    Engineer referred to in Section 4.01(a)(3)
                                    and any other agreements entered into
                                    between the Borrower or any other party and
                                    the Bank and notices, certificates and
                                    applications issued by the Borrower or any
                                    other party to the Bank in connection with
                                    this Agreement or the transactions
                                    contemplated by this Agreement in each case
                                    as amended, varied or supplemented from time
                                    to time, and, in the singular, means any one
                                    of such documents.

"Financing Plan"                    means the plan for financing the Project as
                                    set forth in Section 2.01(c).

"Future Net Cash Flow"              means, for any period, the gross revenues
                                    which are projected to be realised by the
                                    Borrower from the



                                       20
<PAGE>

                                    production and sale of oil and gas from the
                                    Fields during such period taking into
                                    account the Borrowing Base Reserves only,
                                    less the sum of Project Costs which are
                                    projected to be incurred during such period
                                    in the production of the Borrowing Base
                                    Reserves and the Operating Costs which are
                                    projected to be incurred during such period,
                                    all in accordance with the Financial Model.

"Generally Accepted
Accounting Principles"              means accounting principles generally
                                    accepted in the United States or the Russian
                                    Federation, as the case may be, and
                                    consistently applied.

"Harvest"                           means Harvest Natural Resources Inc., a
                                    corporation organised and existing under the
                                    laws of the State of Delaware in the United
                                    States of America.

"Immovable Property
Mortgage Agreement"                 means the instrument pursuant to which the
                                    Borrower grants to the Bank a first ranking
                                    mortgage over all of the Borrower's present
                                    and future immovable property, dated 9
                                    April/23 June 1997 as from time to time
                                    amended and/or supplemented in form and
                                    substance satisfactory to the Bank.

"Immovable Property
Mortgage Agreement No 1"            means the instrument pursuant to which the
                                    Borrower grants to the Bank a first ranking
                                    mortgage over certain of the Borrower's
                                    immovable property identified by the Bank in
                                    its sole discretion which instrument shall
                                    be in form and substance satisfactory to the
                                    Bank.

"Immovable Property
Mortgage Agreement No 2"            means the instrument pursuant to which the
                                    Borrower grants to the Bank a first ranking
                                    mortgage over all of the Borrower's present
                                    and future immovable property except for the
                                    property covered by the Immovable Property
                                    Mortgage Agreement No 1, which instrument
                                    shall be in form and substance satisfactory
                                    to the Bank.

"Independent Engineer"              means Ryder Scott Company or such other firm
                                    of engineers as may be selected from time to
                                    time by the Borrower with the prior written
                                    approval of the Bank.

"Independent Engineer
Agreement"                          means the consultancy agreement to be
                                    entered into between the Borrower and the
                                    Independent Engineer, which agreement shall
                                    be in form and substance satisfactory to the
                                    Bank.



                                       21
<PAGE>

"Insurance Assignment
Agreement"                          means the instrument pursuant to which the
                                    Borrower assigns to the Bank all of its
                                    rights, interests and benefits under all
                                    insurance now or hereafter maintained by the
                                    Borrower and all other insurance relating to
                                    the Project, together with the notices and
                                    acknowledgements and consents in the forms
                                    attached thereto, dated 11 July, 1997 as
                                    from time to time amended and/or
                                    supplemented in form and substance
                                    satisfactory to the Bank.

"Interbank Rate"                    means, for each Interest Period, the offered
                                    rate which appears on Telerate Page 3750 as
                                    of 11:00 a.m., London time, on the relevant
                                    Interest Determination Date for the period
                                    which is closest to the duration of such
                                    Interest Period (or, if two periods are
                                    equally close to the duration of such
                                    Interest Period, the average of the two
                                    relevant rates); provided that:

                                    (a) if, for any reason, the Interbank Rate
                                    cannot be determined at such time by
                                    reference to Telerate Page 3750, the
                                    Interbank Rate for such Interest Period
                                    shall be the rate which the Bank determines
                                    to be the arithmetic mean (rounded upward,
                                    if necessary, to nearest 1/16%) of the
                                    offered rates for deposits in the Loan
                                    Currency in an amount comparable to the
                                    portion of the Loan scheduled to be
                                    outstanding during such Interest Period for
                                    a period equal to such Interest Period which
                                    are advised to the Bank by three major banks
                                    active in the London interbank market
                                    selected by the Bank; and

                                    (b) if the Bank determines that deposits in
                                    the Loan Currency are not being offered in
                                    the London interbank market in such amounts
                                    or for such period, the Interbank Rate for
                                    such Interest Period shall be the cost to
                                    the Bank of funding the portion of the Loan
                                    scheduled to be outstanding during such
                                    Interest Period from whatever sources it
                                    selects.

"Interest
Determination Date"                 means, for any Interest Period, the date two
                                    Business Days prior to the first day of such
                                    Interest Period.

"Interest Payment Date"             means any day which is 27 January or 27 July
                                    in any year; provided, however, that, if any
                                    Interest Payment Date would otherwise fall
                                    on a day which is not a Business Day, such
                                    Interest Payment Date shall be changed to
                                    the next succeeding Business Day.

"Interest Period"                   means each period of six months commencing
                                    on an Interest Payment Date and ending on
                                    the next Interest



                                       22
<PAGE>

                                    Payment Date, except that, in the case of
                                    the first Interest Period applicable to each
                                    Disbursement:

                                    (a) if such Disbursement is made at least 15
                                    Business Days prior to the next Interest
                                    Payment Date, such Interest Period shall
                                    commence on the date of such Disbursement
                                    and end on the next Interest Payment Date;
                                    and

                                    (b) if such Disbursement is made less than
                                    15 Business Days prior to the next Interest
                                    Payment Date, such Interest Period shall
                                    commence on the date of such Disbursement
                                    and end on the Interest Payment Date
                                    following the next Interest Payment Date.

"Interest Premium"                  means an interest rate based on the amount
                                    of the Borrower's audited net profits
                                    calculated in accordance with Generally
                                    Accepted Accounting Principles accepted in
                                    the United States for a Financial Year to be
                                    applied to the Interest Period commencing on
                                    the next Interest Payment Date to occur
                                    after the end of such Financial Year and the
                                    next succeeding Interest Period and
                                    determined as follows:

<Table>
<Caption>
                                    Audited net profits                  Interest Premium
                                    ($)                                   (basis points)
<S>                                                                      <C>
                                    less than 8,000,000

                                    between 8,000,000 and 12,000,000            1%

                                    between 12,000,000 and 16,000,000           2%

                                    greater than 16,000,000                     3%
</Table>

"License"                           means the license to use natural resources
                                    issued to the Borrower and signed on 2 April
                                    1993 by the Committee of the Russian
                                    Federation for Geology and Use of
                                    Underground Resources and on 18 June 1993 by
                                    the Administration of the Yamal-Nenets
                                    Autonomous Region, as amended by an
                                    amendment dated 30 July 1996 and as further
                                    replaced by the License No. CLX 10867 HP
                                    registered by the Russian Federal Geological
                                    Fund on 17 March 2000 and License No. CLX
                                    11053 HP registered by the Russian Federal
                                    Geological Fund on 10 October 2001 as
                                    further amended or replaced from time to
                                    time in accordance with the provisions of
                                    this Agreement.

"License Agreement"                 means the agreement dated 11 February 2000
                                    among the Ministry of Natural Resources of
                                    the Russian Federation for Geology and Use
                                    of Underground Resources, the



                                       23
<PAGE>

                                    Administration of the Yamal-Nenets
                                    Autonomous Region and the Borrower on the
                                    right to use the underground resources of
                                    the North Gubkinskoye and Prisklonovoye
                                    Fields (as amended from time to time) and
                                    the agreement (undated) among the Ministry
                                    of Natural Resources of the Russian
                                    Federation, the Administration of the
                                    Yamal-Nenets Autonomous Region and the
                                    Borrower (as amended from time to time) on
                                    the right to use underground resources of
                                    the South Tarassovskoye Field, which are
                                    supplements to the License.

"Lien"                              means any mortgage, pledge, charge,
                                    privilege, priority, hypothecation,
                                    encumbrance, assignment, lien, attachment,
                                    set-off or other security interest of any
                                    kind upon or with respect to, or any
                                    segregation of or other preferential
                                    arrangement with respect to, any present or
                                    future assets, revenues or rights,
                                    including, without limitation, any
                                    designation of loss payees or beneficiaries
                                    or any similar arrangement under any
                                    insurance policy.

"Loan"                              means the loan provided for in Section 3.01
                                    or, as the context may require, the
                                    principal amount thereof from time to time
                                    outstanding.

"Loan Currency"                     means the currency in which the Commitment
                                    is denominated as set forth in Schedule 1.

"Loan Life Debt Service
Coverage Ratio"                     means, on any date, (a) the net present
                                    value, discounted at the Discount Rate, of
                                    all Future Net Cash Flow for the period from
                                    such date to 27 July 2006 or, if earlier,
                                    the Reserve Tail Date, divided by (b) the
                                    aggregate principal amount of the Loan
                                    outstanding on such date.

"Long-term Debt"                    means, with respect to any person, any Debt
                                    of such person which falls due or the final
                                    payment of which is due more than one year
                                    after the date of determination.

"Management Information
System"                             means an accounting and management
                                    information system which enables planning
                                    and monitoring of individual projects and
                                    detailed plans of running activities in the
                                    form of a budget proposal necessary for
                                    implementing strategies and achieving the
                                    Borrower's long-term goals, and enabling the
                                    Borrower to achieve an optimal
                                    organisational structure.

"Margin"                            means 4.75% per annum.

"Marketing Agreements"              means:



                                       24
<PAGE>

                                    (a) commission agreement no. KM-2002-07
                                    dated 25 December 2001 between Open Joint
                                    Stock Company " Severoimpeks" and the
                                    Borrower;

                                    (b) commission agreement no. 2001-04/04
                                    dated 5 December 2001 between Closed Joint
                                    Stock Company "Rosneftegazeksport" and the
                                    Borrower;

                                    (c) agreement on sale of oil on the domestic
                                    market no. 02-03-02 dated 21 February 2002
                                    between Joint Stock Company "Jutika Respekt"
                                    and the Borrower; and

                                    (d) contract no. 643/12495774/00017 dated 30
                                    August 2001 between the Borrower and Naftex
                                    Oil Trading Ltd;

                                    and all other agreements now or hereafter
                                    entered into by the Borrower in accordance
                                    with the terms of this Agreement for the
                                    marketing or sale of the Borrower's
                                    products, which agreements shall be in form
                                    and substance satisfactory to the Bank, and,
                                    in the singular, means any one of such
                                    agreements.

"Minley"                            means OJSC "Minley", an open joint stock
                                    company organised and existing under the
                                    laws of the Russian Federation.

"Offshore Account
Assignment Agreement"               means the instrument pursuant to which the
                                    Borrower assigns to the Bank the Borrower's
                                    right, title and interest in and to the
                                    Offshore Bank Accounts, together with the
                                    notices and acknowledgements and consents in
                                    the forms attached thereto, dated 30th
                                    September, 1997 as from time to time amended
                                    and/or supplemented in form and substance
                                    satisfactory to the Bank.

"Offshore Bank Accounts"            has the meaning given to it in Section
                                    5.11(a).

"Offshore Bank Account
Agreement"                          means the accounts agreement to be entered
                                    into among the Borrower, Citibank, N.A.,
                                    London Branch, and Moscow Narodny Bank
                                    Limited relating to the Offshore Bank
                                    Accounts, dated 30th September, 1997 as from
                                    time to time amended and/or supplemented in
                                    form and substance satisfactory to the Bank.

"Operating Costs"                   means all costs and expenses properly
                                    incurred by the Borrower in accordance with
                                    the Financing Agreements, the Project
                                    Agreements and the Development Plan in
                                    operating and maintaining the Project,
                                    including:



                                       25
<PAGE>

                                    (a) all costs and expenses incurred by the
                                    Borrower in operating, maintaining,
                                    repairing, protecting, treating and
                                    servicing the wells and associated
                                    production facilities in the Fields and in
                                    producing, transporting, storing, treating,
                                    disposing of, processing and marketing oil
                                    and gas, waste water and other substances
                                    produced from the Fields;

                                    (b) all license fees and royalties paid by
                                    the Borrower under the License;

                                    (c) insurance premiums paid by the Borrower
                                    in maintaining any of the insurance required
                                    by this Agreement;

                                    (d) administrative overhead expenses
                                    incurred by the Borrower from time to time,
                                    including engineering, data processing,
                                    accounting, legal and purchasing costs and
                                    charges, but excluding any such amount in
                                    respect of which the Borrower is entitled to
                                    be reimbursed by any person (until such
                                    amount is converted on the accounts of the
                                    Borrower to a loss following non-payment);

                                    (e) any fees payable by the Borrower to the
                                    banks at which the Offshore Bank Accounts
                                    and the Russian Bank Accounts are located
                                    and to any security trustee with respect to
                                    such accounts;

                                    (f) any fees, commissions, charges, costs
                                    and expenses due and payable pursuant to
                                    this Agreement and the other Financing
                                    Agreements to the Bank, including the fees
                                    and expenses of the Independent Engineer and
                                    the Bank's outside counsel and insurance,
                                    environmental and other consultants; and

                                    (g) all taxes, rates, charges, assessments,
                                    duties and tariffs which at any time are
                                    imposed or assessed on the Borrower or its
                                    income, profits or revenues, imports of
                                    goods or services for the Project or
                                    production, or the sale or export of
                                    production, from the Fields;

                                    but excluding, for the avoidance of doubt,
                                    depreciation, amortisation and other
                                    non-cash items, capital expenditures other
                                    than for maintenance, repairs and
                                    replacements essential to the operation of
                                    the Project, costs met from insurance
                                    proceeds not required to be reflected in the
                                    Borrower's financial accounts under
                                    Generally Accepted Accounting Principles in
                                    the United States and principal and interest
                                    due and payable under this Agreement.



                                       26
<PAGE>

"Participant"                       means a person from whom the Bank receives a
                                    formal commitment to acquire a participation
                                    in the Loan or, as the case may be, any
                                    successor or assignee of such person.

"Participation"                     means the investment of a Participant in the
                                    Loan or, as the context may require, in a
                                    Disbursement.

"Permitted Liens"                   means the Liens referred to in Sections
                                    6.05.

"Potential Event of Default"        means any event which, with the giving of
                                    notice, the passage of time or the making of
                                    any determination, or any combination
                                    thereof, would become an Event of Default.

"Project"                           means the commercial development of the
                                    Fields estimated to contain reserves of
                                    297,000,000 barrels of recoverable crude
                                    oil, including the drilling of at least 275
                                    additional wells and the expansion of
                                    production facilities and infrastructure, to
                                    provide for a maximum production of 75,000
                                    barrels of crude oil per day.

"Project Agreements"                means the Borrower's Charter, the License
                                    (including the Licence Agreement), the
                                    Marketing Agreements, the Services
                                    Agreement, the Transportation Agreement, the
                                    Offshore Bank Account Agreement and the
                                    Independent Engineer Agreement, and, in the
                                    singular, means any one of such agreements.

"Project Costs"                     means costs properly incurred by the
                                    Borrower in connection with the development
                                    of the Project, as such costs are estimated
                                    in Section 2.01(b) and described in the
                                    Development Plan, but excluding, for the
                                    avoidance of doubt, any costs incurred in
                                    exploring for oil and gas in the Fields or
                                    elsewhere and any Operating Costs.

"Reserve Tail Date"                 means the date on which 30% of the Borrowing
                                    Base Reserves are projected, in the
                                    Development Plan as updated from time to
                                    time in accordance with Section 8.05(c), to
                                    remain to be produced.

"Revenues"                          means, for any period, the Borrower's gross
                                    revenues from all sources during such
                                    period, including, without limitation, all
                                    revenues from the production and sale of oil
                                    and gas, the proceeds of any insurance or
                                    other claim (other than insurance proceeds
                                    used to meet costs not required to be
                                    reflected in the Borrower's financial
                                    accounts under Generally Accepted Accounting
                                    Principles in the United States), any
                                    refunds of taxes, any investment income and
                                    any payments received by the Borrower under
                                    the Marketing Agreements, the Transportation
                                    Agreement and the other Project Agreements.



                                       27
<PAGE>

"Roubles" or "Rb."                  means the lawful currency of the Russian
                                    Federation.

"Russian Account
Pledge Agreement"                   means the instrument pursuant to which the
                                    Borrower grants to the Bank a security
                                    interest in the Borrower's right, title and
                                    interest in and to the Russian Bank
                                    Accounts, together with the notices and
                                    acknowledgements and consents in the forms
                                    attached thereto, dated 11 July 1997 as from
                                    time to time amended and/or supplemented in
                                    form and substance satisfactory to the Bank.

"Russian Bank Accounts"             has the meaning given to it in Section 5.12.

"Russian Bank Account
Agreements"                         means the account agreements relating to the
                                    Russian Bank Accounts entered into between
                                    the Borrower, the Bank and the banks at
                                    which the Russian Bank Accounts are located,
                                    dated 11th June, 1997 as from time to time
                                    amended and/or supplemented in form and
                                    substance satisfactory to the Bank.

"Russian Disbursement
Accounts"                           means the Russian Bank Accounts designated
                                    as such in accordance with Section 5.12(b).

"Security"                          means the security created pursuant to the
                                    Security Documents to secure all amounts
                                    owing to the Bank under the Financing
                                    Agreements.

"Security Documents"                means the Contracts Assignment Agreement,
                                    the Equipment Pledge Agreement, the
                                    Expropriation Compensation Assignment
                                    Agreement, the Immovable Property Mortgage
                                    Agreement, the Insurance Assignment
                                    Agreement, the Offshore Account Assignment
                                    Agreement, the Russian Account Pledge
                                    Agreement and the Share Pledges, and, in the
                                    singular, means any one of such documents.

"Security Sharing
Agreement"                          means the security sharing agreement entered
                                    into between International Moscow Bank and
                                    the Bank providing for, inter alia, sharing
                                    of the Security and any other security
                                    interest created in favour of either
                                    International Moscow Bank and the Bank to
                                    secure any amounts owing by the Borrower,
                                    dated 28 May, 1997 as from time to time
                                    amended and/or supplemented in form and
                                    substance satisfactory to the Bank.



                                       28
<PAGE>

"Services Agreement"                means the services agreement dated 1 January
                                    1999 and the secondment agreement dated 1
                                    June 2002 between the Borrower and Harvest
                                    or any other services agreement to be
                                    entered into between Harvest (or an
                                    Affiliate thereof) and the Borrower with the
                                    same subject matter.

"Share Pledges"                     means the instruments pursuant to which
                                    Harvest and Minley pledge in favour of the
                                    Bank all of the participation interests in
                                    the Borrower owned by Harvest and Minley,
                                    respectively, respectively dated 9 April/23
                                    June 1997 as from time to time amended
                                    and/or supplemented.

"Shareholders"                      means Minley and Harvest.

"Shareholders Support
Agreement"                          means the performance, subordination and
                                    share retention agreement dated 9 April 1997
                                    entered into among the Borrower, the Bank
                                    and certain other parties as amended,
                                    novated, supplemented or varied from time to
                                    time.

"Short-term Debt"                   means, with respect to any person, any Debt
                                    of such person other than Long-term Debt.

"Subordinated
Shareholder Loans"                  means Debt of the Borrower owing to any
                                    Shareholder and which is subordinated,
                                    pursuant to the Shareholders Support
                                    Agreement, to the payment of all amounts
                                    payable to the Bank under the Financing
                                    Agreements.

"Subsidiary"                        means, with respect to any entity, any other
                                    entity over 50% of whose capital is owned,
                                    directly or indirectly, by such entity or
                                    which is otherwise effectively controlled by
                                    such entity.

"Supply Agreements"                 means, collectively, the major agreements
                                    now or hereafter entered into by the
                                    Borrower in accordance with the terms of
                                    this Agreement for the supply of services,
                                    equipment or materials for the Project as
                                    set forth in the Development Plan, which
                                    agreements shall be in form and substance
                                    satisfactory to the Bank, and, in the
                                    singular, means any one of such agreements.

"Telerate Page 3750"                means the display of London interbank
                                    offered rates of major banks for deposits in
                                    the Loan Currency designated as page 3750 on
                                    the Dow Jones Telerate Service (or such
                                    other page as may replace page 3750 on the
                                    Dow Jones Telerate Service for the purpose
                                    of displaying London interbank offered rates
                                    for deposits in the Loan Currency).



                                       29
<PAGE>

"Transportation Agreement"          means agreement no. 0002120 on
                                    transportation of crude oil dated 1 February
                                    2002 between Transneft Joint Stock Company
                                    and the Borrower or any other agreement
                                    hereafter entered into between the Borrower
                                    and the Transneft Joint Stock Company or any
                                    other pipeline operator in accordance with
                                    the terms of this Agreement for the
                                    transportation of the Borrower's products,
                                    which agreement shall be in form and
                                    substance satisfactory to the Bank.


SECTION 1.02. INTERPRETATION

(a) In this Agreement, unless the context otherwise requires, words denoting the
singular include the plural and vice versa, and words denoting persons include
corporations, partnerships and other legal persons.

(b) In this Agreement, references to a specified Article, Section, Schedule or
Exhibit shall be construed as a reference to that specified Article or Section
of, or Schedule or Exhibit to, this Agreement.

(c) The headings and the Table of Contents are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement.

(d) In this Agreement, references to any person includes its respective
permitted successors, transferees and assigns.


ARTICLE II - REPRESENTATIONS AND WARRANTIES


SECTION 2.01. REPRESENTATIONS REGARDING THE PROJECT

         The Borrower represents and warrants as follows:

(a) DEVELOPMENT PLAN. The Project conforms in all material respects with the
detailed description thereof contained in the Development Plan. As of the date
of the Amending Agreement, the information contained in the Development Plan is
true, complete and correct in all material respects, contains no untrue or
misleading statement and does not omit any material fact necessary to make the
statements therein not untrue or misleading. To the extent that any information
contained in the Development Plan relates to forecasts or projections of future
events, such forecasts and projections have been prepared in good faith
utilising due and careful consideration and based on assumptions that were
reasonable at the time that such forecasts and projections were prepared and
there has been nothing since the date of the Development Plan that would make
such forecasts and projections unreasonable.

(b) ESTIMATED PROJECT COSTS. As of the date of the Amending Agreement, the total
estimated cost of the Project is approximately $482,005,000 as follows:



                                       30
<PAGE>
<Table>
<Caption>
ITEM                                                                                    DOLLARS
<S>                                                                                   <C>
       INITIAL PROJECT COSTS
       Drilling and completion                                                        296,600,000
       Pads and connecting roads                                                       19,300,000
       Gathering systems                                                                6,200,000
       Power systems                                                                    9,800,000
       Oil processing equipment                                                        10,800,000
       Offices, housing and field camps                                                 2,600,000
       Miscellaneous valves and fittings                                                7,400,000
       Main roads                                                                      12,200,000
       Engineering and design                                                           3,300,000
       Environmental restoration                                                        4,400,000
       Water pumps and injection systems                                               31,200,000
       Pipeline                                                                         7,300,000
       Financing costs                                                                  1,105,000
       TOTAL INITIAL PROJECT COSTS                                                    412,205,000

       ADDITIONAL PROJECT COSTS FOR SOUTH TARASSOVSKOYE FIELD
       Drilling and completion                                                         45,300,000
       Pads and connecting roads                                                        3,300,000
       Gathering lines                                                                  3,700,000
       Power systems                                                                    1,400,000
       Water pumps and injection systems                                                2,700,000
       Other costs                                                                     13,400,000
       TOTAL ADDITIONAL PROJECT COSTS                                                  69,800,000


TOTAL PROJECT COST                                                                    482,005,000
</Table>



                                       31
<PAGE>

(c) FINANCING PLAN. The proposed sources of financing the Project are as
follows:

<Table>
<Caption>
                                      INITIAL FINANCING PLAN

INITIAL EQUITY                                                                          DOLLARS
<S>                                                                                   <C>
       Harvest                                                                         25,700,000
       Minley                                                                          50,000,000

       TOTAL INITIAL EQUITY                                                            75,700,000

INITIAL PROJECT-GENERATED CASH                                                        271,505,000

INITIAL LONG-TERM DEBT
       EBRD                                                                            55,000,000
       International Moscow Bank                                                       10,000,000

       TOTAL INITIAL LONG-TERM DEBT                                                    65,000,000
TOTAL INITIAL FINANCING
                                                                                      412,205,000


                     ADDITIONAL FINANCING PLAN FOR SOUTH TARASSOVSKOYE FIELD

SUBORDINATED DEBT
       Harvest                                                                          2,500,000

       Minley                                                                           5,000,000

       TOTAL SUBORDINATED DEBT                                                          7,500,000
PROJECT-GENERATED CASH
                                                                                       34,300,000
ADDITIONAL LONG-TERM DEBT

       EBRD                                                                            28,000,000

TOTAL ADDITIONAL LONG-TERM DEBT                                                        28,000,000
TOTAL ADDITIONAL FINANCING
                                                                                       69,800,000


TOTAL FINANCING                                                                       482,005,000
</Table>


SECTION 2.02. REPRESENTATIONS REGARDING THE BORROWER

         The Borrower represents and warrants as follows:



                                       32
<PAGE>

(a) INCORPORATION. The Borrower is a limited liability company, duly organised
and validly existing under the laws of the Russian Federation and registered
with all relevant registration bodies in the Russian Federation, and has full
power to own the properties which it owns and proposes to own for the purposes
of the Project and to carry out the business which it carries out and proposes
to carry out for the purposes of the Project.

(b) SUBSIDIARIES. The Borrower has no Subsidiaries.

(c) CHARTER CAPITAL. The Borrower has a charter capital of Rb. 62,957,763. The
following is a list of all participants in the Borrower, with their respective
percentage participation interests in the Borrower, as of the date of the
Amending Agreement:

<Table>
<Caption>
       PARTICIPANT                                           PERCENTAGE
<S>                                                          <C>
       Harvest                                                   34
       Minley                                                    66

       TOTAL                                                    100
</Table>

Of the charter capital referred to above, the equivalent in Roubles of
$75,700,000 has been fully paid and all in-kind capital contributions in respect
of such participation interests have been made for full commercial value. There
are no options, warrants or instruments convertible into participation interests
or other agreements relating to the existing capital of the Borrower or for the
issuance of additional participation interests of any class or description of
the Borrower. No person has any right (other than as a shareholder) to share in
the profits of the Borrower.

(d) DIRECTORS AND OFFICERS. As of the date of the Amending Agreement, the Acting
General Director of the Borrower is Mr. Ye. Grebenshikov, the Deputy General
Directors of the Borrower are Mr. I. Ryaskov and Mr. J. Krug, the Finance
Director of the Borrower is Mr. W. Crews and the Chief Accountant of the
Borrower is Mrs. G. Tsimbal. As of the date of the Amending Agreement, Mr. L.
Mikhelson is the representative of Minley in his capacity as President and Dr.
P. Hill is the representative of Harvest in his capacity as the President and
Chief Executive Officer.

(e) FINANCIAL STATEMENTS. The balance sheet of the Borrower as at 30 September
2001 and the related income statement and statement of changes in financial
position of the Borrower for the Financial Year ending on that date, and the
notes thereon, certified by the Auditors, will present a true and fair view of
the financial condition of the Borrower as of the date of such balance sheet and
for the period covered by such income statement and statement of changes in
financial position and will be prepared in accordance with Generally Accepted
Accounting Principles in the United States and, separately, in accordance with
Generally Accepted Accounting Principles in the Russian Federation. The Borrower
had, as of the date of such balance sheet, no material contingent obligations,
liabilities for taxes or unusual forward or long term commitments which will not
be disclosed by, or reserved against in, such balance sheet or the notes
thereto. Since the date of such balance sheet, the Borrower has not suffered any
material adverse change in its business prospects or financial condition,
incurred any substantial or unusual loss or liability or undertaken or agreed to
undertake



                                       33
<PAGE>

any substantial or unusual obligation except under the Financing Agreements and
Project Agreements.

(f) TITLE TO ASSETS. The Borrower owns and has good and marketable title to all
of the assets (other than the Fields), the ownership of which will be reflected
in its most recent balance sheet referred to in Section 2.02(e) or which are
referred to in the Security Documents. Pursuant to the License, the Borrower has
the exclusive right to use the Fields until 19 September 2018 or 19 March 2023,
depending on the Field, for the purpose of exploration and production of crude
oil, gas and condensate, has or will have good and marketable title to all of
the crude oil, gas and condensate produced from the Fields, free and clear of
all Liens other than the Security, and has the right to transport, market and
sell all of the crude oil, gas and condensate produced from the Fields. The
Borrower's assets, including without limitation its rights to the crude oil, gas
and condensate produced from the Fields and the proceeds from the sale thereof,
are not subject to any Lien, and the Borrower is not subject to any contract,
arrangement or law, whether conditional or unconditional, pursuant to which any
such Lien may be created, except for Permitted Liens. The Borrower's assets are
insured against such risks and in such amounts as are customary internationally
for businesses of a like nature.

(g) MATERIAL CONTRACTS. As of the date of the Amending Agreement, the Borrower
is not a party to, or committed to enter into, any agreement, other than the
Financing Agreements, the Project Agreements and the Supply Agreements:

         (1) that involves the payment of more than $500,000 (or the equivalent
         thereof in other currencies) per year or in the aggregate more than
         $1,500,000 (or the equivalent thereof in other currencies) over the
         term of such agreement;

         (2) that relates to the Project; or

         (3) that would or might affect the judgement of a prospective lender in
         considering whether to provide financing to the Borrower.

(h) COMPLIANCE WITH LAW. The Borrower is not in violation of any law presently
in effect. To the best of the Borrower's knowledge, no law has been proposed or
is expected which may have a material adverse effect on its business prospects
or financial condition or its ability to perform any of its obligations under
the Financing Agreements or Project Agreements. All tax returns and reports of
the Borrower required by law to be filed have been duly filed and all tax
assessments, fees and other governmental charges upon the Borrower, its
properties and its income, which are due and payable, have been paid, other than
those currently payable without penalty or interest. Neither the Borrower nor
any of its officers, directors or authorised employees, agents or
representatives has paid, promised to pay or offered to pay, or authorised the
payment of, any commission, bribe, pay-off or kickback related to the Project
that violates any applicable law or entered into any agreement pursuant to which
any such commission, bribe, pay-off or kickback may or will at any time be paid.

(i) NO DEFAULT. The Borrower is not in default under any agreement, obligation
or duty to which it is a party or by which it or any of its properties or assets
is bound and there exists no Event of Default and no Potential Event of Default.



                                       34
<PAGE>

(j) ENVIRONMENTAL COMPLIANCE. The Borrower and its businesses, operations,
assets, equipment, property, leaseholds and other facilities are in compliance
with the provisions of all applicable environmental, health and safety laws. The
Borrower has been issued all required permits, licenses, certificates and
approvals relating to, and has received no complaint, order, directive, claim,
citation or notice from any governmental authority or other person with respect
to, air emissions, discharges to surface water or ground water, noise emissions,
solid or liquid waste disposal, the use, generation, storage, transportation or
disposal of toxic or hazardous substances or wastes or other environmental,
health or safety matters.

(k) LITIGATION. The Borrower is not engaged in, or, to the best of its
knowledge, threatened by, any litigation, arbitration or administrative
proceeding, the outcome of which might have a material adverse effect on its
business prospects or financial condition.


SECTION 2.03. REPRESENTATIONS REGARDING THE AGREEMENTS

         The Borrower represents and warrants as follows:

(a) CORPORATE POWER. The Borrower has the corporate power to enter into and
perform the Financing Agreements and Project Agreements to which it is a party.

(b) DUE AUTHORISATION; ENFORCEABILITY; NO CONFLICT. The Financing Agreements and
Project Agreements to which the Borrower is a party have been duly authorised by
the Borrower. This Agreement has been duly executed by the Borrower and this
Agreement constitutes, and the other Financing Agreements and Project Agreements
to which the Borrower is a party, when executed and delivered, will constitute,
valid and legally binding obligations of the Borrower, enforceable in accordance
with their respective terms. The making of the Financing Agreements and Project
Agreements and the compliance with the terms thereof:

         (1) will not result in violation of the Borrower's Charter or any
         provision contained in any law applicable to the Borrower;

         (2) will not conflict with or result in the breach of any provision of,
         or require any consent under, or result in the imposition of any Lien
         under, any agreement or instrument to which the Borrower is a party or
         by which the Borrower or any of its assets is bound; and

         (3) will not constitute a default or an event which, with the giving of
         notice, the passage of time or the making of any determination, or any
         combination thereof, would constitute a default under any such
         agreement or instrument.

(c) GOVERNMENTAL APPROVALS. No governmental licenses, approvals, consents,
filings or registrations are required for the due execution, delivery or
performance by the Borrower of any Financing Agreement or Project Agreement, or
the validity or enforceability thereof, except for (1) the authorisation of the
Central Bank of Russia for the incurrence and repayment of the indebtedness
incurred under this Agreement and the establishment and operation of the
Offshore Bank Accounts as contemplated herein, (2)



                                       35
<PAGE>

those required for the validity, perfection and priority of the Security as
listed in Schedule 3, and (3) the construction, environmental and operating
permits and approvals listed in the Development Plan.

(d) RANKING. This Agreement constitutes a direct, unconditional and secured
general obligation of the Borrower and the indebtedness incurred by the Borrower
hereunder ranks and will rank in priority of payment at least equal with all
other present and future indebtedness of the Borrower.

(e) SECURITY. Each Security Document will, when executed and delivered and when
the documents, recordings, filings, notifications and registrations listed in
Schedule 3 have been executed or made, constitute a valid and perfected security
interest in, and a Lien of first priority on, the collateral covered by such
Security Document, securing payment of all principal, interest and other amounts
payable to the Bank under the Financing Agreements and ranking senior to all
other Liens on such collateral. The Borrower is not a party to any other
security agreement or instrument creating or purporting to create a Lien on such
collateral.

(f) PROJECT AGREEMENTS. Each of the License, the Services Agreement, the
Marketing Agreements and the Transportation Agreement is in full force and
effect without modification from the form referred to in Section 1.01. There has
occurred no breach, and no event which with the giving of notice, the passage of
time or the making of any determination, or any combination thereof, would
constitute a breach, of any such Project Agreement.


SECTION 2.04. ACKNOWLEDGEMENT AND WARRANTY

         The Borrower acknowledges that it has made the representations and
warranties contained in Sections 2.01, 2.02 and 2.03 with the intention of
inducing the Bank to enter into this Agreement and that the Bank has entered
into this Agreement on the basis of, and in full reliance on, each of such
representations and warranties. The Borrower has no knowledge of any additional
facts or matters which would or might reasonably be expected to affect the
judgement of a prospective lender regarding lending to the Borrower. The
Borrower warrants to the Bank that each of such representations and warranties
is true and correct and that none of them omits any matter the omission of which
makes any of such representations and warranties misleading.


ARTICLE III - LOAN


SECTION 3.01. AMOUNT AND CURRENCY

         Subject to the terms and conditions of this Agreement, the Bank agrees
to lend to the Borrower, on a revolving basis during the Commitment Period, a
maximum aggregate principal amount not to exceed the Commitment.



                                       36
<PAGE>

SECTION 3.02. DISBURSEMENTS

(a) The Borrower may borrow and reborrow the Commitment on any Business Day
during the Commitment Period in one or more Disbursements as requested by the
Borrower. The Borrower may request a Disbursement by submitting to the Bank an
original application for such Disbursement, in the form of Exhibit A and in
substance satisfactory to the Bank, at least 10 Business Days prior to the
proposed date of such Disbursement. Such application shall, unless the Bank
otherwise agrees, be irrevocable and binding on the Borrower.

(b) Each Disbursement shall be:

         (1) in an amount not to exceed the Available Amount as of the date of
         such Disbursement;

         (2) in an amount not less than $2,000,000 or, if less, such Available
         Amount; and

         (3) in integral multiples of $1,000,000 or such Available Amount.


SECTION 3.03. SUSPENSION AND CANCELLATION

(a) From time to time while the Loan is being disbursed, the Bank may, by notice
to the Borrower, suspend or cancel the right of the Borrower to further
Disbursements:

         (1) if the first Disbursement after the date of the Amending Agreement
         has not been made by the date six months after the date thereof or such
         other date as may be agreed by the parties hereto;

         (2) if an Event of Default or Potential Event of Default has occurred
         and is continuing; or

         (3) if the Board of Governors of the Bank has decided in accordance
         with Article 8, paragraph 3, of the Agreement Establishing the Bank
         that access by the Russian Federation to Bank resources should be
         suspended or otherwise modified.

Upon the giving of such notice, the right of the Borrower to further
Disbursements shall be suspended or cancelled as indicated in the notice. The
exercise by the Bank of the right of suspension shall not preclude the Bank from
exercising its right of cancellation as provided in this Section 3.03, either
for the same or another reason, and shall not limit any other provision of this
Agreement.

(b) The Borrower shall have the right at any time, on not less than 30 days'
prior notice to the Bank, to cancel in whole or in part the then unutilised
portion of the Commitment, provided that:

         (1) in the case of a partial cancellation of the Commitment:

                  (A) such cancellation shall be in an amount of not less than
                  $1,000,000 and in integral multiples of $1,000,000;



                                       37
<PAGE>

                  (B) the Commitment for the then current period set forth in
                  Schedule 1 shall be reduced by the amount of such
                  cancellation; and

                  (C) if the Commitment for such then current period is thereby
                  reduced to an amount which is less than the Commitment for any
                  subsequent period set forth in Schedule 1, the Commitment for
                  each such subsequent period shall be reduced to the Commitment
                  for such then current period as so reduced;

         (2) the Borrower shall pay to the Bank on the date of cancellation:

                  (A) all accrued commitment charge on the cancelled portion of
                  the Commitment and all other amounts due hereunder; and

                  (B) a cancellation fee equal to the following percentage of
                  the amount of the Commitment to be cancelled:

<Table>
<Caption>
              DATE OF CANCELLATION                                                 PERCENTAGE
<S>                                                                                <C>
              On or prior to 18 months from the date of the Amending                  2.50
              Agreement

              After 18 months and on or prior to 30 months from the                   1.50
              date of the Amending Agreement

              After 30 months and on or prior to 42 months from the                   0.75
              date of the Amending Agreement

              After 42 months from the date of the Amending Agreement                    0
</Table>

Any such notice of cancellation by the Borrower shall be irrevocable and binding
on the Borrower. No portion of the Commitment which is cancelled by the Borrower
may be reinstated.

SECTION 3.04. CHARGES, COMMISSIONS AND FEES

(a) The Borrower shall pay to the Bank during the Commitment Period a commitment
charge at the rate of 0.5% per annum on so much of the Commitment as is not,
from time to time, disbursed and outstanding or cancelled. The commitment charge
shall accrue from day to day from the date which is 30 days after 21 November
1996 and shall be calculated on the basis of the actual number of days elapsed
in the relevant period and a 360-day year. The commitment charge shall be due
and payable in arrears on each Interest Payment Date (even though no interest
may be payable on such date). The Bank acknowledges receipt of the commitment
charge accrued until 27 July, 2002.

(b) The Borrower shall pay to the Bank a front-end commission in an amount and
on the dates as separately agreed between the Borrower and the Bank pursuant to
a letter agreement dated 21 November 1996. The Bank acknowledges receipt of this
front-end commission.



                                       38
<PAGE>

(c) The Borrower shall pay to the Bank during the term of this Agreement an
annual loan administration fee in the amount of $5,000 per annum. Such loan
administration fee shall be due and payable in advance, for the initial year,
within 30 days after 21 November 1996 and, for each subsequent year, on each
anniversary thereof. In the event that a Participant hereafter acquires a
Participation, the Borrower shall pay to the Bank during the term of this
Agreement an additional annual loan administration fee in the amount of $5,000
per annum for each such Participant. Such additional loan administration fee
shall be due and payable in advance, for the initial year, within 30 days after
receipt by the Borrower of notice from the Bank that such Participant has
acquired such Participation and, for each subsequent year, on each anniversary
of the date on which such Participant acquired such Participation.


SECTION 3.05. INTEREST

(a) Except as provided in Section 3.06, the Borrower shall pay interest on the
principal amount of the Loan from time to time outstanding (or, in the case of
the first Interest Period for each Disbursement, the principal amount of such
Disbursement from time to time outstanding):

         (1) until the first repayment installment date set forth in Section
         3.07 or, if earlier, the first date on which the outstanding principal
         amount of the Loan equals $55,000,000, at a rate equal to the sum of
         the Margin and the Interbank Rate for such Interest Period; and

         (2) thereafter, the sum of the Margin, the Interest Premium, and the
         Interbank Rate for such Interest Period.

(b) Interest shall:

         (1) accrue from and including the first day of an Interest Period to
         but excluding the last day of such Interest Period;

         (2) be calculated on the basis of the actual number of days elapsed and
         a 360-day year; and

         (3) interest shall be due and payable on the Interest Payment Date
         which is the last day of the relevant Interest Period.

(c) On each Interest Determination Date, the Bank shall determine the interest
rate applicable during the relevant Interest Period and promptly give notice
thereof to the Borrower. Each determination by the Bank of the interest rate
applicable to any portion of the Loan shall be final, conclusive and binding
upon the Borrower unless shown by the Borrower to the satisfaction of the Bank
that any such determination has involved clerical error.


SECTION 3.06. DEFAULT INTEREST

(a) If the Borrower fails to pay when due any amount payable by it under this
Agreement, the overdue amount shall bear interest at a rate equal to the sum of:



                                       39
<PAGE>

         (1) 2.0% per annum;

         (2) the Margin; and

         (3) the rate of interest offered in the London interbank market for a
         deposit in the Loan Currency of an amount comparable to the overdue
         amount for a period equal to the relevant Default Interest Period or,
         if the Bank determines that deposits in the Loan Currency are not being
         offered in the London interbank market in such amounts or for such
         period, the cost of funds to the Bank from whatever sources it selects.

(b) Default interest shall:

         (1) accrue from day to day from the due date to the date of actual
         payment, after as well as before judgement, if any;

         (2) be calculated on the basis of the actual number of days elapsed and
         a 360-day year;

         (3) be compounded at the end of each Default Interest Period; and

         (4) be due and payable forthwith upon demand.

(c) Each determination by the Bank of the interest rates applicable to amounts
in default and of Default Interest Periods shall be final, conclusive and
binding upon the Borrower unless shown by the Borrower to the satisfaction of
the Bank that any such determination has involved clerical error.


SECTION 3.07. REPAYMENT

(a) The Borrower shall repay the Loan in instalments on each of 27 January 2000,
27 July 2000, 27 January 2001, 27 July 2001, 27 January 2002, 27 July 2002, 27
January 2004, 27 July 2004, 27 January 2005, 27 July 2005, 27 January 2006 and
27 July 2006. On each such date, the Borrower shall repay such amount of the
Loan as is necessary to ensure that, after such repayment, the outstanding
principal amount of the Loan does not exceed the Commitment for the period
commencing on such date.

(b) The dates for payment of principal of the Loan are intended to coincide with
Interest Payment Dates. If any Interest Payment Date is affected by the proviso
to the definition of "Interest Payment Date", then the corresponding date for
payment of principal shall be changed to coincide with such Interest Payment
Date.


SECTION 3.08. VOLUNTARY AND MANDATORY PREPAYMENT

(a) The Borrower shall have the right at any time, on not less than 30 days'
prior notice to the Bank, to prepay on any Interest Payment Date all or a part
of the principal amount of the Loan then outstanding; provided that:



                                       40
<PAGE>

         (1) the Borrower furnishes the Bank with evidence satisfactory to the
         Bank that there will be sufficient funds in the Debt Service Account
         and the Russian Bank Accounts (other than the Russian Disbursement
         Accounts) to enable such prepayment to be made in accordance with
         Section 5.13(a);

         (2) the Borrower shall pay to the Bank at the same time all accrued
         interest and other amounts payable on the principal amount of the Loan
         to be prepaid and all other amounts due hereunder; and

         (3) in the case of partial prepayment, such prepayment shall be in an
         amount of not less than $1,000,000 and in integral multiples of
         $1,000,000.

Any such notice of prepayment by the Borrower shall be irrevocable and binding
on the Borrower and, upon delivery of such notice, the Borrower shall be
obligated to prepay the Loan in accordance with the terms thereof.

(b) In the event that, at any time, the outstanding principal amount of the Loan
exceeds the Borrowing Base as calculated in accordance with the most recent
banking case prepared pursuant to Section 8.05(c), the Borrower shall, on the
next Interest Payment Date, prepay such amount of the Loan as is necessary to
ensure that, after such prepayment, the outstanding principal amount of the Loan
equals the Borrowing Base.

(c) Amounts of the Loan prepaid by the Borrower under Section 3.08(a) or 3.08(b)
may be reborrowed by the Borrower in accordance with the provisions of Section
3.02.


SECTION 3.09. PAYMENTS

(a) Payments of principal, interest, charges, commissions, fees, expenses and
any other amounts due to the Bank under this Agreement shall be made in the Loan
Currency, for value on the due date, to such bank or banks, and in such place or
places, as the Bank may from time to time designate by notice to the Borrower.

(b) The sums to be disbursed by the Bank to the Borrower hereunder shall be
payable in the Loan Currency in New York, New York for value, unless otherwise
agreed by the Borrower and the Bank, on the value date requested by the Borrower
in its Disbursement application, to the account of the Bank for the benefit of
the Borrower. The Borrower hereby irrevocably authorises and instructs the Bank,
at the Borrower's expenses, to transfer such sums to the Disbursement Account.

(c) If any date for any payment under this Agreement would otherwise fall on a
day which is not a Business Day, then such payment shall be made on the next
succeeding Business Day.

(d) The Bank shall have the right, to the fullest extent permitted by law, to
apply any amount on deposit or account with the Bank to or for the credit of the
Borrower in any currency and whether or not matured, in reduction of amounts due
and payable hereunder, whether or not the Bank has demanded payment hereunder.
The Bank may, to the fullest extent permitted by law, deduct from the proceeds
of any Disbursement any charges, commissions, fees, expenses and other amounts
then due and payable by



                                       41
<PAGE>

the Borrower to the Bank under any Financing Agreement and the credit advice of
the Bank shall reflect such deduction. The Bank will give notice to the Borrower
of any such application and/or deduction promptly after having made same.


SECTION 3.10. INSUFFICIENT PAYMENTS

(a) Notwithstanding any other provision of this Agreement, if the Bank at any
time receives less than the full amount then due and payable to it under this
Agreement, the Bank shall have the right to allocate and apply such payment in
any way or manner and for such purpose or purposes under this Agreement as the
Bank in its sole discretion determines, notwithstanding any instruction that the
Borrower may give to the contrary.

(b) The obligation of the Borrower to make payments in accordance with Section
3.09(a) shall not be deemed to have been novated, discharged or satisfied by any
tender of, or recovery under a judgement expressed in, any currency other than
the Loan Currency or by any tender or recovery in any place other than the place
specified in Section 3.09(a), except to the extent to which such tender or
recovery results in the effective payment, in the Loan Currency and at the place
specified in Section 3.09(a), of the full amount due to the Bank hereunder. The
amount, if any, by which such tender or recovery falls short of such amount
shall be and remain due to the Bank as a separate obligation, unaffected by
judgement having been obtained (if such is the case) for any other amounts due
under or in respect of this Agreement.


SECTION 3.11. TAXES

(a) The Borrower shall pay or cause to be paid all present and future taxes,
duties, fees and other charges of whatsoever nature, together with any interest
thereon and penalties with respect thereto, now or at any time hereafter levied
or imposed by the Russian Federation or the Government of the Russian
Federation, or by any department, agency, political subdivision or taxing or
other authority thereof or therein, or by any organisation of which the Russian
Federation is a member, or by any jurisdiction out of which or through which
payments hereunder are made, on or in connection with the payment of any amounts
due to the Bank under this Agreement.

(b) All payments of principal, interest and other amounts due to the Bank under
this Agreement shall be made without set-off or counterclaim and free and clear
of, and without deduction or withholding for or on account of, any such taxes,
duties, fees or charges; provided, however, that, in the event that the Borrower
is prevented by operation of law or otherwise from paying or causing to be paid
such taxes, duties, fees or other charges, the principal, interest or other
amount (as the case may be) due under this Agreement shall be increased to such
amount as may be necessary to yield and remit to the Bank the full amount it
would have received had such payment been made without deduction of such taxes,
duties, fees or other charges.

(c) The provisions of Sections 3.11(a) and 3.11(b) shall not apply to taxes,
duties, fees or other charges to the extent that such taxes, duties, fees or
other charges arise as a direct consequence of a Participation having been
acquired by a Participant whose



                                       42
<PAGE>

principal office is located in the Russian Federation or by the permanent office
or establishment in the Russian Federation of a Participant.


SECTION 3.12. UNWINDING COSTS

(a) If, for any reason (including, without limitation, an acceleration pursuant
to Section 7.02 or 7.03), any portion of the Loan becomes due and payable on a
date other than the last day of an Interest Period, the Borrower shall pay to
the Bank on demand the amount, if any, by which:

         (1) the interest which would have accrued on such portion of the Loan
         from the date on which such portion of the Loan has become due and
         payable to the last day of the then current Interest Period at a rate
         equal to the Interbank Rate for such Interest Period;

exceeds:

         (2) the interest which the Bank would be able to obtain if it were to
         place an amount equal to such portion of the Loan on deposit with a
         leading bank in the London interbank market for the period commencing
         on the date on which such portion of the Loan has become due and
         payable and ending on the last day of the then current Interest Period.

(b) If any overdue amount is paid on a date other than the last day of a Default
Interest Period, the Borrower shall pay to the Bank on demand the amount, if
any, by which:

         (1) the interest which would have accrued on such overdue amount from
         the date of receipt of such overdue amount to the last day of the then
         current Default Interest Period at a rate equal to the rate specified
         in Section 3.06(a)(3) for such Default Interest Period;

exceeds:

         (2) the interest which the Bank would be able to obtain if it were to
         place an amount equal to such overdue amount on deposit with a leading
         bank in the London interbank market for the period commencing on the
         date of receipt of such overdue amount and ending on the last day of
         the then current Default Interest Period.

(c) A certificate of the Bank as to any amount payable under this Section 3.12
shall be final, conclusive and binding on the Borrower unless shown by the
Borrower to the satisfaction of the Bank to contain manifest error.


SECTION 3.13. INCREASED COSTS

         The Borrower shall, from time to time on demand of the Bank, reimburse
the Bank for any net incremental costs to the Bank of making or maintaining the
Loan or to any Participant of acquiring or maintaining its Participation which
result from any



                                       43
<PAGE>

change in applicable law or in the interpretation thereof by any governmental or
regulatory authority charged with the administration thereof subsequent to 21
November 1996. A certificate of the Bank or such Participant as to the amount of
such net incremental costs shall be final, conclusive and binding on the
Borrower unless shown by the Borrower to the satisfaction of the Bank to contain
clerical error.


SECTION 3.14. ILLEGALITY

         Notwithstanding anything in this Agreement, if, subsequent to 21
November 1996, any change made in any applicable law or the interpretation or
application thereof by any governmental authority charged with the
administration thereof makes it unlawful for the Bank or any Participant to
continue to maintain or to fund the Loan or its Participation, as the case may
be, then:

         (1) upon request by the Bank, the Borrower shall, on the next Interest
         Payment Date or such earlier date as the Bank may specify, prepay that
         portion of the principal amount of the Loan which the Bank notifies to
         the Borrower as being affected by such change, together with all
         accrued interest and other amounts payable thereon; and

         (2) upon notice from the Bank, the right of the Borrower to
         disbursement of any portion of the Loan which the Bank notifies to the
         Borrower as being affected by such change and which has not theretofore
         been disbursed shall terminate immediately.


SECTION 3.15. LOAN ACCOUNT

         The Bank shall open and maintain on its books an account in the
Borrower's name showing the Disbursements and repayments thereof and the
computation and payment of interest, charges, commissions, fees and other
amounts due and sums paid hereunder. Such account shall be final, conclusive and
binding on the Borrower as to the amount at any time due from the Borrower
hereunder unless shown by the Borrower to the satisfaction of the Bank to
contain clerical error.


ARTICLE IV - CONDITIONS PRECEDENT


SECTION 4.01. CONDITIONS OF FIRST DISBURSEMENT

         The Bank and the Borrower hereby acknowledge that the obligation of the
Bank to make the first Disbursement was subject to the prior fulfilment, in form
and substance satisfactory to the Bank, of the following conditions precedent
and that such conditions precedent were fulfilled or waived prior to the first
Disbursement under this Agreement:

(a) FINANCING AGREEMENTS. The Bank shall have received duly executed originals
of the following agreements, each in form and substance satisfactory to the
Bank:

         (1) the Shareholders Support Agreement;



                                       44
<PAGE>

         (2) the Russian Bank Account Agreements; and

         (3) a direct warranty by the Independent Engineer in favour of the
         Bank.

(b) PROJECT AGREEMENTS. The Bank shall have received certified copies of the
following agreements, each in form and substance satisfactory to the Bank:

         (1) the License (including the License Agreement);

         (2) the Marketing Agreements;

         (3) the Services Agreement;

         (4) the Transportation Agreement;

         (5) the Supply Agreements;

         (6) the Offshore Bank Account Agreement; and

         (7) the Independent Engineer Agreement.

(c) SECURITY. The Security (other than the Immovable Property Mortgage
Agreement) shall have been validly created and perfected in a manner
satisfactory to the Bank and the Bank shall have received duly executed
originals of the following Security Documents, each in form and substance
satisfactory to the Bank, together with any document, recording, filing,
notification, registration, notarisation or other evidence required, in the
opinion of the Bank, for the creation, validity, perfection or priority of the
Liens of the Bank in or under such Security Documents (other than, in the case
of the Immovable Property Mortgage Agreement, notarisation and registration of
such Security Document):

         (1) the Contracts Assignment Agreement;

         (2) the Equipment Pledge Agreement;

         (3) the Expropriation Compensation Assignment Agreement;

         (4) an Immovable Property Mortgage Agreement covering all of the
         Borrower's present immovable property;

         (5) the Insurance Assignment Agreement;

         (6) the Offshore Account Assignment Agreement;

         (7) the Russian Account Pledge Agreement; and

         (8) the Share Pledges.

(d) CHARTERS. The Bank shall have received certified copies of the Charters
(and, if relevant, certificates of registration and good standing) of the
Borrower, the



                                       45
<PAGE>

Shareholders and, at the reasonable request of the Bank, any other parties to
the Financing Agreements and Project Agreements, each as amended to date.

(e) CORPORATE AUTHORISATIONS. The Bank shall have received certified copies of
all corporate (including, if required, shareholder) authorisations and approvals
necessary for the due execution, delivery and performance of the Financing
Agreements and Project Agreements, and any other documents in implementation
thereof, by the Borrower, the Shareholders and for the transactions contemplated
thereby, including the authorisations of the persons signing the Financing
Agreements and Project Agreements on behalf of the Borrower and the Shareholders
to sign such documents and to bind the respective parties thereby.

(f) SPECIMEN SIGNATURES. The Bank shall have received:

         (1) a certificate of incumbency and authority of the Borrower
         substantially in the form of Exhibit B; and

         (2) a certificate of an appropriate officer of each Shareholder
         certifying the specimen signature of each person authorised to sign, on
         behalf of such party, the Financing Agreements and Project Agreements
         to be entered into and performed by such party.

(g) GOVERNMENTAL AND OTHER APPROVALS. The Bank shall have received certified
copies of all governmental, creditors' and other licenses, approvals, consents,
filings and registrations necessary for the execution, delivery and performance
of the Financing Agreements and Project Agreements by the Borrower, the
Shareholders and, at the request of the Bank, any other parties thereto and for
the transactions contemplated thereby, including, without limitation:

         (1) the borrowing by the Borrower under this Agreement;

         (2) the creation of the Security;

         (3) the carrying out of the Project and the Financing Plan;

         (4) the remittance to the Bank of all monies payable in respect of this
         Agreement and the Security; and

         (5) the carrying on of the business of the Borrower as it is presently
         carried on and is contemplated to be carried on.

(h) INSURANCE. The Bank shall have received an original insurance certificate
from the Borrower's insurer or insurance broker showing that all insurance
policies and endorsements required pursuant to Section 5.04 are in full force
and effect and certified copies of such insurance policies and endorsements.

(i) AUDITORS LETTER. The Bank shall have received a copy of a letter to the
Auditors from the Borrower substantially in the form of Exhibit C.

(j) EQUITY. The Bank shall have received evidence satisfactory to the Bank that
the Shareholders have contributed, in a manner satisfactory to the Bank, at
least



                                       46
<PAGE>

$75,700,000 (or the equivalent thereof in other currencies at then current rates
of exchange) in paid-in capital to the Borrower and the Borrower has expended
such paid-in capital on the Project.

(k) EXISTING FINANCIAL DEBT. The Bank shall have received evidence satisfactory
to the Bank that all Financial Debt of the Borrower (other than Financial Debt
permitted under Section 6.04) and all Liens on any property, revenues or other
assets of the Borrower (other than Permitted Liens) have been discharged in
full.

(l) BANK ACCOUNTS. The Bank shall have received evidence satisfactory to the
Bank that the Offshore Bank Accounts and the Russian Bank Accounts have been
duly established.

(m) INDEPENDENT ENGINEER. The Borrower shall have appointed the Independent
Engineer in a manner satisfactory to the Bank to perform its functions as
provided for in the Financing Agreements.

(n) SURFACE RIGHTS. The Bank shall have received evidence satisfactory to the
Bank that the Borrower has all appurtenant surface land rights required for the
Project.

(o) DEVELOPMENT PLAN. The Bank shall have received the Development Plan, in form
and substance satisfactory to the Bank and the Independent Engineer.

(p) INITIAL BANKING CASE. The Bank shall have received the initial banking case
prepared by the Borrower in accordance with Section 8.05(c) not more than 45
days prior to such Disbursement and such banking case (including the assumptions
and estimates contained therein) shall be in form and substance satisfactory to
the Bank.

(q) AUDITED FINANCIAL STATEMENTS. The Bank shall have received the balance sheet
of the Borrower as at 31 December 1995 and the related income statement and
statement of changes in financial position of the Borrower for the Financial
Year ending on that date, and the notes thereon, certified by the Auditors, and
such balance sheet, income statement and statement of changes in financial
position and notes thereon shall be satisfactory to the Bank in its sole
discretion.

(r) ENVIRONMENTAL ACTION PLAN. The Bank shall have received the Environmental
Action Plan, in form and substance satisfactory to the Bank.

(s) PROCESS AGENT APPOINTMENTS. The Bank shall have received written
confirmation from the agents for service of process appointed by the Borrower
and the Shareholders pursuant to the Financing Agreements of their acceptances
of such appointments.

(t) LEGAL OPINIONS. The Bank shall have received:

         (1) the opinion of Emens, Kegler, Brown, Hill & Ritter, special counsel
         to Benton Oil and Gas Company;

         (2) the opinion of Baker & McKenzie, special Russian counsel to the
         Borrower;



                                       47
<PAGE>

         (3) the opinion of Allen & Overy, special Russian counsel to the Bank;

         (4) the opinion of Baker & McKenzie, special English counsel to the
         Borrower; and

         (5) the opinion of Allen & Overy, special English counsel to the Bank;

in each case regarding such matters incident to the transactions contemplated by
the Financing Agreements and Project Agreements as the Bank shall reasonably
request, which opinions shall be in form and substance satisfactory to the Bank.


SECTION 4.02. CONDITIONS FOR CERTAIN DISBURSEMENTS

(a) If, immediately after any Disbursement requested by the Borrower under this
Agreement, the outstanding principal amount of the Loan would exceed
$30,000,000, then the obligation of the Bank to make such Disbursement shall be
subject to the Bank having received (in addition to any other condition
precedent to making of a Disbursement), together with the application for such
Disbursement:

         (A) evidence satisfactory to the Bank that the Shareholders have
         jointly provided (by way of equity or subordinated shareholder loans)
         $7,500,000 in additional funds to the Borrower and that these funds
         have been applied exclusively towards a reduction of the accounts
         payable and other Current Liabilities of the Borrower; and

         (B) evidence satisfactory to the Bank that no less than $8,000,000 from
         Disbursements which shall have been effected after the date of the
         Amending Agreement and prior to the requested Disbursement date have
         been applied exclusively towards a reduction of the accounts payable
         and other Current Liabilities of the Borrower.

(b) If, immediately after any Disbursement requested by the Borrower under this
Agreement, the outstanding principal amount of the Loan would exceed
$40,000,000, the obligation of the Bank to make such Disbursement shall be
subject to the fulfilment, in form and substance satisfactory to the Bank of the
following condition precedent on or prior to the date of the application for
such Disbursement:

         (A) the Bank shall have approved of the identity of and the terms of
         engagement for the hiring of a consultant to develop the Management
         Information System to be installed by the Borrower and shall have been
         provided with evidence to its satisfaction as to the engagement of that
         consultant on such terms prior to any such disbursement.

(c) If, immediately after any Disbursement requested by the Borrower under this
Agreement, the outstanding principal amount of the Loan would exceed
$45,000,000, the obligation of the Bank to make such Disbursement shall be
subject to the Bank having received (in addition to any other condition
precedent to making of a Disbursement) together with the application for such
Disbursement:



                                       48
<PAGE>

         (A) a certification of technical and operational completion signed by
         the Independent Engineer of the Management Information System to be
         installed by the Borrower, the scope of which shall have been agreed
         with the Bank in advance, confirming, among other things, that the
         Borrower has (1) prepared a FIT-GAP analysis report defining the
         Borrower's requirements for an effective and efficient Management
         Information System; (2) acquired suitable tools (as identified in the
         FIT-GAP analysis report) for creating the Management Information
         System; and (3) performed an initial training (as identified in the
         FIT-GAP analysis report) of the relevant employees in use of the
         Management Information System;

         (B) duly executed original of an agreement terminating the Immovable
         Property Mortgage Agreement;

         (C) duly executed original of the Immovable Property Mortgage Agreement
         No 1 together with (1) evidence satisfactory to the Bank as to the due
         notarisation and registration of the Immovable Property Mortgage
         Agreement No 1 and (2) an opinion of Allen & Overy, special Russian
         counsel to the Bank in form and substance to its satisfaction in
         respect of same;

         (D) duly executed original of the Immovable Property Mortgage Agreement
         No 2.


SECTION 4.03. CONDITIONS FOR ANY DISBURSEMENT

         The obligation of the Bank to make any Disbursement shall also be
subject to the fulfilment, in form and substance satisfactory to the Bank, of
the conditions that, on the date of the Borrower's application for such
Disbursement and on the date of such Disbursement:

(a) CONTINUING VALIDITY OF DOCUMENTS. All agreements, documents and instruments
delivered to the Bank (A) pursuant to Section 4.01 and 4.02, if applicable, and
(B) as conditions precedent to the effectiveness of the Amending Agreement,
shall be in full force and effect and unconditional.

(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties made or
confirmed by the Borrower and the Shareholders in the Financing Agreements and
Project Agreements shall be true on and as of such dates with the same effect as
though such representations and warranties had been made on and as of such
dates.

(c) NO DEFAULT. No Event of Default or Potential Event of Default shall have
occurred and be continuing or shall, in the reasonable opinion of the Bank, be
imminent and the Borrower shall not, as a result of such Disbursement, be in
violation of its Charter, any provision contained in any agreement or instrument
to which the Borrower is a party (including this Agreement) or by which the
Borrower is bound or any law applicable to the Borrower.

(d) NO MATERIAL ADVERSE CHANGE. Nothing shall have occurred which, in the
reasonable opinion of the Bank, might have a material adverse effect on the
carrying out



                                       49
<PAGE>

of the Project, the Borrower's business prospects or financial condition or the
ability of the Borrower to perform any of its obligations under any Financing
Agreement or Project Agreement.

(e) USE OF PROCEEDS. The proceeds of such Disbursement shall be needed by the
Borrower for the purposes of the Project and the Bank shall have received such
evidence as to the proposed utilisation of the proceeds of such Disbursement and
the utilisation of the proceeds of any prior Disbursement as the Bank reasonably
requests.

(f) DISBURSEMENT APPLICATION. The Bank shall have received an original of the
Borrower's timely application for such Disbursement substantially in the form of
Exhibit A.

(g) MILESTONES. If such Disbursement is made prior to the date 54 months from
the date of the first Disbursement, the Bank shall have received written
confirmation from the Independent Engineer that the Borrower has produced from
the Fields, on average during the six-month period ending on the last six-month
anniversary of the first Disbursement occurring prior to the date of such
Disbursement, not less than the minimum level of daily production of crude oil
set forth in Schedule 4 for such period.

(h) CASH COLLATERAL ACCOUNT. The balance of the Cash Collateral Account shall be
not less than the minimum amount which is required pursuant to Section 5.11(e)
after taking into account such Disbursement and such balance shall have been
generated by Project revenues.

(i) OTHER. The Bank shall have received such other documents and legal opinions
as the Bank may reasonably request.


ARTICLE V - AFFIRMATIVE COVENANTS

         Unless the Bank otherwise agrees in writing:


SECTION 5.01. PROJECT IMPLEMENTATION

(a) The Borrower shall carry out the Project in accordance with the Development
Plan and cause the financing specified in the Financing Plan to be applied
exclusively to the Project. The proceeds of the Disbursements to be effected
after the date of the Amending Agreement in the aggregate amount of $8,000,000
shall be applied exclusively towards a reduction of the accounts payable and
other Current Liabilities of the Borrower.

(b) The Borrower shall, at its own expense, retain the Independent Engineer
pursuant to the Independent Engineer Agreement to perform the functions
specified in the Financing Agreements. The Independent Engineer shall, at the
Bank's direction and at the Borrower's expense, visit the Fields once in each
calendar year for the purpose of confirming proven producing and proven
non-producing reserves.



                                       50
<PAGE>

SECTION 5.02. MAINTENANCE AND CONTINUITY OF BUSINESS

         The Borrower shall maintain its corporate existence in compliance with
all applicable laws. The Borrower shall conduct its business and carry out the
Project in accordance with internationally accepted practices in the oil and gas
industry and in compliance with all applicable laws.


SECTION 5.03. ENVIRONMENT, HEALTH AND SAFETY

(a) The Borrower shall conduct its business with due regard to the environment,
health and safety. The Borrower shall carry out the Project in accordance with
environmental standards in effect from time to time in the jurisdiction in which
the Project is located and with environmental standards existing in the European
Union on the date of the Amended and Restated Agreement (or, in the event that
such standards do not exist in the European Union, as set forth in the World
Bank Group's Pollution Prevention and Abatement Handbook). Without limiting the
foregoing, the Borrower shall diligently implement and adhere to the
Environmental Action Plan.

(b) Not later than 30 days prior to the date of the first Disbursement, the
Borrower shall submit to the Bank for approval the proposed plan of
environmental protection measures for the Project, including, without
limitation, detailed environmental performance criteria, standards, practices
and procedures. Upon approval of such plan by the Bank, such plan shall
constitute the Environmental Action Plan for purposes of this Agreement.

(c) The Borrower shall observe all applicable laws relating to the minimum age
of employment of children, minimum wages, hours of work and occupational health
and safety, not take any action to prevent employees from lawfully exercising
their rights of association and to organise and bargain collectively and not
utilise forced labour.

(d) The Borrower shall consult with the Bank's Environmental Department
regarding environmental measures to be adopted in respect to the expansion of
its operations, including but without limitation, an expansion to other portions
of the area covered by the Borrower's License and that were not notified to the
Bank by the Borrower as being under development at 21 November 1996.


SECTION 5.04. INSURANCE

         The Borrower shall maintain insurance against loss, damage and
liability in a manner and with insurers satisfactory to the Bank. The Bank shall
be named as a loss payee (except with respect to liability insurance) and
additional insured under the relevant insurance policies and the interests of
the Bank shall be noted thereon.


SECTION 5.05. ACCOUNTING

(a) The Borrower shall promptly and diligently install, and thereafter maintain,
an accounting and cost control system satisfactory to the Bank. The Bank shall
have received the certification referred to in Section 4.02(c)(A) by not later
than 1 May 2003



                                       51
<PAGE>

and from the date of such certification the Borrower shall maintain the
Management Information System in a manner satisfactory to the Bank, including
without limitation, organisation of semi-annual training sessions for its
employees in use of the Management Information System.

(b) The Borrower shall maintain books of account and other records adequate to
present a true and fair view of the consolidated financial condition of the
Borrower and its Subsidiaries and the results of its operations (including the
progress of the Project) in conformity with Generally Accepted Accounting
Principles.

(c) The Borrower shall maintain as auditors of the Borrower a firm of
independent accountants acceptable to the Bank. The Borrower shall authorise, by
a letter substantially in the form of Exhibit C, the Auditors to communicate
directly with the Bank at any time regarding the Borrower's accounts and
operations.


SECTION 5.06. CONTINUING GOVERNMENTAL AND OTHER APPROVALS

         The Borrower shall obtain and maintain in force (or, where appropriate,
renew) all governmental, corporate, creditors', shareholders' and other
necessary licenses, approvals, consents, filings and registrations required for
the purposes described in Sections 4.01(e) and 4.01(g) hereof and Sections
3.1(e) and (g) of the Amending Agreement. The Borrower shall perform and observe
all the conditions and restrictions contained in, or imposed on the Borrower by,
such licenses, approvals, consents, filings and registrations.


SECTION 5.07. SECURITY

(a) The Borrower shall, at its own cost, create, perfect, maintain and, where
appropriate, renew the Security in a manner satisfactory to the Bank and take
all actions requested by the Bank which are necessary to ensure that the Liens
created by the Security Documents (including, for the avoidance of doubt, the
Immovable Property Mortgage Agreement) constitute valid and perfected Liens of
first priority over the collateral purported to be covered thereby, securing
payment of all obligations of the Borrower under the Financing Agreements and
ranking senior to the claims of all third parties other than claims secured by
Permitted Liens.

(b) The Bank shall have received the documents referred to in Section
4.02(c)(B), 4.02(c)(C) and 4.02(c)(D) by not later than 31 December 2002.


SECTION 5.08. COMPLIANCE WITH OTHER OBLIGATIONS

         The Borrower shall comply with all agreements to which it is a party or
by which it or any of its properties or assets is bound.



                                       52
<PAGE>

SECTION 5.09. TAXES

(a) The Borrower shall pay when due all of its taxes, rates, charges and
assessments, including without limitation any taxes, rates, charges and
assessments against any of its properties, other than taxes, rates, charges or
assessments which are being contested in good faith and by proper proceedings
and as to which adequate reserves have been set aside for the payment thereof.
The Borrower shall make timely filings of all tax returns and governmental
reports required to be filed or submitted under any applicable law or
regulation.

(b) The Borrower shall pay all taxes (including stamp taxes), duties, fees or
other charges payable on, or in connection with, the execution, issue, delivery,
registration or notarisation of any Financing Agreement, any Project Agreement
or any other document related to this Agreement. Upon notice from the Bank, the
Borrower shall pay to the Bank, or reimburse the Bank for, an amount equal to
any such taxes, duties, fees or other charges levied on or paid by the Bank.


SECTION 5.10. PROJECT AGREEMENTS

(a) The Borrower shall, except as contemplated by Section 5.10(b) and 5.10(c),
maintain all Project Agreements to which the Borrower is a party in full force
and effect without modification and perform its obligations under, and not
commit any breach of or default under, any such Project Agreement.

(b) If the Transportation Agreement or the Services Agreement expires in
accordance with its terms, the Borrower shall, not later than the date of such
expiration, enter into a new Transportation Agreement or Services Agreement with
the same party and on terms which are substantially the same as those of the
expiring agreement or with such other party and on such other terms as may be
approved by the Bank in writing.

(c) The Borrower shall at all times maintain at least one Marketing Agreement in
effect. If a Marketing Agreement expires in accordance with its terms, the
Borrower may (but shall not be required to) enter into a new Marketing Agreement
with the same party and on terms which are substantially the same as those of
the expiring agreement. All other Marketing Agreements entered into by the
Borrower shall be with such parties and on such terms as may be approved by the
Bank in writing. The Borrower shall use reasonable efforts to ensure that all
Marketing Agreements provide for payments in respect of the sale of the
Borrower's oil and gas production to be made by the purchaser directly to the
Export Sales Account or one of the Russian Bank Accounts (other than the Russian
Disbursement Accounts).

(d) The Borrower shall promptly deliver to the Bank a certified copy of:

         (1) each Marketing Agreement and Transportation Agreement entered into
         by the Borrower after the date hereof in accordance with Section
         5.10(b) or 5.10(c);

         (2) each Supply Agreement entered into by the Borrower after the date
         hereof; and



                                       53
<PAGE>

         (3) each agreement entered into by the Borrower after the date hereof
         that involves the payment of more than $500,000 (or the equivalent
         thereof in other currencies) per year or in the aggregate more than
         $1,500,000 (or the equivalent thereof in other currencies) over the
         term of such agreement.

Promptly upon entering into any such agreement, the Borrower shall take all
actions necessary to ensure that a valid first ranking security interest is
granted in favour of the Bank in all of its rights, interests and benefits under
such agreement pursuant to the Contracts Assignment Agreement.

(e) In the event that the Borrower sells any or all of its production on the
domestic market, it shall sell such production on terms that provide for payment
to be received by the Borrower in one of the Russian Bank Accounts (other than
the Russian Disbursement Accounts) prior to delivery.


SECTION 5.11. OFFSHORE BANK ACCOUNTS

(a) The Borrower shall establish and maintain four bank accounts denominated in
Dollars at the principal London branch of Citibank, N.A. (such four accounts the
"OFFSHORE BANK ACCOUNTS"), which accounts shall be pledged to the Bank, as
security for all amounts payable by the Borrower under the Financing Agreements.

(b) The Borrower shall designate one of the Offshore Bank Accounts as the
Disbursement Account. All Disbursements under this Agreement shall be deposited
into the Disbursement Account. The Borrower may withdraw amounts from the
Disbursement Account only for the purpose of paying Project Costs in accordance
with the Development Plan or transferring such amounts to one of the Russian
Disbursement Accounts. The Borrower shall not withdraw amounts from the
Disbursement Account for any other purpose without the prior written consent of
the Bank.

(c) The Borrower shall designate one of the Offshore Bank Accounts as the Export
Sales Account. The Borrower shall ensure that all amounts paid to the Borrower
in respect of the sale of oil and gas outside of the Russian Federation and all
other export revenues of the Borrower are, except as provided in Section 5.12,
deposited into the Export Sales Account. If any such amounts are received by the
Borrower in any other account or place, it shall immediately transfer such
amounts to the Export Sales Account. As long as no Event of Default or Potential
Event of Default has occurred and is continuing, the Borrower may withdraw
amounts from the Export Sales Account only for the purposes of:

         (1) transferring such amounts to one of the Russian Bank Accounts
         (other than the Russian Disbursement Accounts) to the extent (and only
         to the extent) that such amounts are subject, in accordance with then
         applicable law, to mandatory conversion into Roubles and transferring
         to the Russian Federation;

         (2) transferring such amounts to the Debt Service Account at least to
         the extent required by Section 5.11(d) below;

         (3) paying Operating Costs in accordance with the Development Plan; and



                                       54
<PAGE>

         (4) if and only if the balance of the Disbursement Account and each
         Russian Disbursement Account is zero and the Available Amount is zero,
         paying Project Costs then due and payable in accordance with the
         Development Plan.

         The Borrower shall not withdraw amounts from the Export Sales Account
         for any other purpose without the prior written consent of the Bank. If
         an Event of Default or Potential Event of Default has occurred and is
         continuing, the Borrower shall not withdraw any amounts from the Export
         Sales Account for any purpose without the prior written consent of the
         Bank.

(d) The Borrower shall designate one of the Offshore Bank Accounts as the Debt
Service Account. At least 30% of all Revenues received, whether in the Export
Sales Account, the Russian Bank Accounts or otherwise shall be transferred to
(in the case of the Export Sales Account and in the case of the Russian Bank
Accounts from such accounts) or in any other case shall be deposited into the
Debt Service Account. As long as no Event of Default or Potential Event of
Default has occurred and is continuing, the Borrower may withdraw amounts from
the Debt Service Account pursuant to payment instructions issued in accordance
with the Offshore Account Assignment Agreement only for the purposes of making
payments in accordance with the provisions of Section 5.13.

The Bank may from time to time and in its sole discretion agree with the
Borrower on a different minimum percentage to be transferred to/deposited in the
Debt Service Account.

The Borrower shall not make any other withdrawals amounts from the Debt Service
Account without the prior written consent of the Bank. If an Event of Default or
Potential Event of Default has occurred and is continuing, the Borrower shall
not withdraw any amounts from the Debt Service Account without the prior written
consent of the Bank.

(e) The Borrower shall designate one of the Offshore Bank Accounts as the Cash
Collateral Account. At all times, the Borrower shall maintain a balance in the
Cash Collateral Account equal to not less than:

         (1) until 27 July 2003, 30% of the aggregate amount of interest which
         is due and payable on the Loan on the next Interest Payment Date; and

         (2) thereafter, an amount equal to 30% of the aggregate of the amount
         of principal and interest which is due and payable on the Loan on the
         next Interest Payment Date.

The Borrower may withdraw amounts from the Cash Collateral Account only for the
purpose of paying principal and interest under this Agreement in the event that
the aggregate balances of the Export Sales Account, the Debt Service Account and
the Russian Bank Accounts (other than the Russian Disbursement Accounts) are
insufficient to pay all amounts specified in Sections 5.13(a)(1) through
5.13(a)(4) or for the purpose of transferring any amount to the extent (and only
to the extent) required by the authorisation issued by the Central Bank of
Russia for the establishment and operation



                                       55
<PAGE>

of the Offshore Bank Accounts. The Borrower shall not withdraw amounts from the
Cash Collateral Account for any other purpose without the prior written consent
of the Bank.


SECTION 5.12. RUSSIAN BANK ACCOUNTS

(a) The Borrower shall establish and maintain one or more bank accounts at such
banks located in the Russian Federation as may be proposed by the Borrower and
approved by the Bank (the "RUSSIAN BANK ACCOUNTS"), which accounts shall be
pledged to the Bank as security for all amounts payable by the Borrower under
the Financing Agreements.

(b) The Borrower shall designate two of the Russian Bank Accounts (one
denominated in Roubles and one denominated in Dollars) as the Russian
Disbursement Accounts. The Borrower may withdraw amounts from the Russian
Disbursement Accounts only for the purpose of paying Project Costs in accordance
with the Development Plan. The Borrower shall not withdraw amounts from the
Russian Disbursement Accounts for any other purpose without the prior written
consent of the Bank.

(c) The Borrower shall ensure that all Revenues and any other payments made to
the Borrower which, in either case, are received in Roubles or which the
Borrower is required by applicable law to convert into Roubles or remit to or
retain in the Russian Federation, including without limitation any payments made
to the Borrower in Roubles under the Marketing Agreements, the Transportation
Agreement and the other Project Agreements, are deposited into one of the
Russian Bank Accounts (other than one of the Russian Disbursement Accounts). As
long as no Event of Default or Potential Event of Default has occurred and is
continuing, the Borrower may withdraw amounts from the Russian Bank Accounts
(other than the Russian Disbursement Accounts) only for the purposes of:

         (1) converting such amounts into Dollars and transferring such amounts
         to the Debt Service Account at least to the extent required by Section
         5.11(d) above;

         (2) paying Operating Costs in accordance with the Development Plan; and

         (3) if and only if the balance of the Disbursement Account and each
         Russian Disbursement Account is zero and the Available Amount is zero,
         paying Project Costs then due and payable in accordance with the
         Development Plan.

The Borrower shall not withdraw amounts from the Russian Bank Accounts (other
than the Russian Disbursement Accounts) for any other purpose without the prior
written consent of the Bank. If an Event of Default or Potential Event of
Default has occurred and is continuing, the Borrower shall not withdraw any
amounts from the Russian Bank Accounts for any purpose without the prior written
consent of the Bank.



                                       56
<PAGE>

SECTION 5.13. CASH WATERFALL

(a) As long as no Event of Default or Potential Event of Default has occurred
and is continuing, the Borrower may withdraw amounts from the Debt Service
Account only on each Interest Payment Date and on each such date shall do so for
the purpose of making the following payments in the following order:

         (1) this sub-section has been left intentionally blank;

         (2) mandatory prepayment of principal of the Loan as required by
         Section 3.08(b);

         (3) interest due and payable on the Loan on such Interest Payment Date
         to the extent accrued at the rate specified in Section 3.05(a)(1) or
         3.05(a)(2), as applicable;

         (4) scheduled repayment instalments of principal of the Loan due and
         payable on such Interest Payment Date under Section 3.07(a);

         (5) transfers to the Cash Collateral Account until the balance of the
         Cash Collateral Account equals the minimum balance specified in Section
         5.11(e);

         (6) if and only if the balance of the Disbursement Account and each
         Russian Disbursement Account is zero and the Available Amount is zero,
         Project Costs then due and payable in accordance with the Development
         Plan; and

         (7) this sub-section has been left intentionally blank;

         (8) voluntary prepayment of principal of the Loan in accordance with
         Section 3.08(a) and payments and other distributions to Shareholders or
         Affiliates of Shareholders to the extent permitted by Section 6.01;
         provided that payments may be made under this category only to the
         extent that the Bank is satisfied that, after all payments are made on
         such Interest Payment Date under this Section 5.13, sufficient funds
         will be available in the Offshore Bank Accounts and the Russian Bank
         Accounts for the purpose of paying when incurred all Project Costs and
         Operating Costs projected under the Development Plan.

In addition (and notwithstanding Section 5.11 and 5.12) the Borrower may make
the payments referred to in Sections 5.13(a)(2), (3) and (4) above from any of
the Export Sales Account and the Russian Bank Accounts (other than the Russian
Disbursement Account) in the event that the balance of the Debt Service Account
is insufficient to pay in full all such amounts.

(b) The amounts of the payments to be made by the Borrower out of the Debt
Service Account on each Interest Payment Date shall be calculated by the
Borrower and notified to the Bank on the date two Business Days prior to such
Interest Payment Date and payments shall be made by the Borrower out of the Debt
Service Account on such Interest Payment Date only in accordance with the
amounts as so calculated. The Borrower shall pay each category listed in Section
5.13(a) in the order in which it is



                                       57
<PAGE>

listed there (starting with (2) and ending with (8)) in full before making any
payment to the next category in the list.

(c) Notwithstanding Section 5.13(a), as long as no Event of Default or Potential
Event of Default has occurred and is continuing the Borrower may at any time
withdraw amounts from the Debt Service Account for the purposes of making the
following payments in the following order:

         (1) Operating Costs then due and payable in accordance with the
         Development Plan;

         (2) transfers to the Cash Collateral Account until the balance of the
         Cash Collateral Account equals the minimum balance specified in Section
         5.11(e); and

         (3) if and only if the balance of the Disbursement Account and each
         Russian Disbursement Account is zero and the Available Amount is zero,
         Project Costs then due and payable in accordance with the Development
         Plan.

provided that the Borrower shall only be permitted to make such payments if it
first furnishes the Bank with evidence satisfactory to the Bank that, following
any such payment, the amount standing to the credit of the Debt Service Account
shall at no times decrease below the sum of the amounts described under Sections
5.13(a)(2), 5.13(a)(3) and 5.13(a)(4) payable on the next Interest Payment Date.


SECTION 5.14. FURTHER DOCUMENTS

         The Borrower shall execute all such other documents and instruments and
do all such other acts and things as the Bank may reasonably determine are
necessary or desirable to give effect to the provisions of the Financing
Agreements and to cause the Financing Agreements to be duly registered,
notarised and stamped in any applicable jurisdiction. The Borrower hereby
irrevocably appoints and constitutes the Bank as the Borrower's true and lawful
attorney with right of substitution (in the name of the Borrower or otherwise)
to execute such documents and instruments and to do such acts and things in the
name of and on behalf of the Borrower in order to carry out the provisions
hereof.


SECTION 5.15. COSTS AND EXPENSES

(a) The Borrower shall, whether or not any Disbursement is made, pay to the Bank
or as the Bank may direct, within 30 days of the Bank furnishing to the Borrower
the invoice therefor (but, in any event, on or prior to the first Disbursement
after the date of this Agreement in the case of costs and expenses incurred
prior to the date of such Disbursement), all reasonable out-of-pocket costs and
expenses (including, without limitation, travel expenses and the fees and
expenses of outside counsel to the Bank and all other financial, accounting,
engineering, environmental, insurance and other consulting fees and expenses)
incurred by the Bank in connection with:

         (1) the assessment, preparation and arrangement of the Loan by the
         Bank;



                                       58
<PAGE>

         (2) the preparation, execution and, where appropriate, registration and
         notarisation of any Financing Agreement, any Project Agreement, the
         Security and any other documents related to this Agreement;

         (3) the giving of any legal opinions hereunder; and

         (4) the administration of the Financing Agreements.

(b) The Borrower shall pay to the Bank or as the Bank may direct, on demand, all
fees, costs and expenses (including, without limitation, legal fees and
expenses) incurred by the Bank:

         (1) in the determination of whether there has occurred an Event of
         Default or Potential Event of Default;

         (2) in respect of the preservation or enforcement of any of its rights
         under any Financing Agreement and the collection of any amount owing to
         the Bank; and

         (3) in connection with the assessment, preparation, review, execution
         and, where appropriate, registration and notarisation of any amendment
         of or waiver to any Financing Agreement, any Project Agreement or any
         other document related to this Agreement.


SECTION 5.16. FURNISHING OF INFORMATION

(a) As soon as available but, in any event, within 45 days after the end of each
quarter of each Financial Year, the Borrower shall furnish to the Bank:

         (1) two copies of the Borrower's complete Financial Statements for such
         quarter in form satisfactory to the Bank and, if requested by the Bank,
         certified by an officer of the Borrower, including the breakdown by
         maturity and counterparty of accounts payable, taxes payable, and
         accounts receivable, in a form satisfactory to the Bank;

         (2) (i) a management discussion and analysis of results for such
         quarter, including a report on any factors materially affecting or
         which might materially affect the Borrower's business and operations or
         its financial condition or a statement that there are no such factors;
         and (ii) a report detailing any variance, positive or negative, between
         the quarterly Approved Budget versus the actual total Project Costs and
         Operating Costs for the quarter in excess of 5% of the quarterly
         Approved Budget, which report to be provided after the end of the last
         quarter of each Financial Year shall also contain an analysis on any
         variance between the Approved Budget for the Financial Year versus the
         actual total Project Costs and Operating Costs for the same Financial
         Year;

         (3) a report, in a form satisfactory to the Bank, on the implementation
         and progress of the Project, including a report on any factors
         materially affecting or



                                       59
<PAGE>

         which might materially affect, the carrying out of the Project or the
         implementation of the Financing Plan or a statement that there are no
         such factors;

         (4) a statement of all transactions and transfers between the Borrower
         and each of its Affiliates and Shareholders during such quarter with a
         value in excess of $25,000 or the equivalent thereof in other
         currencies at then current rates of exchange or a statement that there
         were no such transactions; and

         (5) a report by the Borrower's reservoir engineer, which report shall
         be approved by the Independent Engineer, to address both well and
         reservoir performance (the "RESERVOIR REPORT"). The Reservoir Report
         shall address available reservoir pressure data, injection volumes by
         well and by reservoir, production response to injection and/or
         premature water break through. Well performance shall, in particular,
         address large changes in production rates (or wells going off
         production), reason for change (reservoir or mechanical), plans to
         address any problem in the existing reservoir or plans to re-complete
         to a different reservoir and in subsequent reports, results of
         implementation of any such plan.

(b) As soon as available but, in any event, within 120 days after the end of
each Financial Year, the Borrower shall furnish to the Bank:

         (1) two copies of its complete Financial Statements for such Financial
         Year, together with a report of the Auditors thereon, all in form
         satisfactory to the Bank;

         (2) a management letter from the Auditors commenting on, among other
         matters, the adequacy of the Borrower's financial control procedures
         and accounting systems, together with a copy of any other communication
         sent by the Auditors to the Borrower or to its management in relation
         to the Borrower's financial, accounting and other systems, management
         and accounts;

         (3) a report by the Auditors certifying that the Borrower was in
         compliance with the financial covenants contained in Sections 6.01,
         6.04, 6.05, 6.06 and 6.13 as of the end of such Financial Year or, as
         the case may be, detailing any non-compliance; and

         (4) a report on compliance by the Borrower with applicable
         environmental, health and safety standards, implementation of the
         Environmental Action Plan and worker health and safety initiatives
         (including training programmes) undertaken by the Borrower during such
         Financial Year and any other environmental, health and safety issues
         arising in relation to the Borrower or the Project during such
         Financial Year, including any violations of applicable environmental,
         health and safety standards and fines and remedial action relating
         thereto, public complaints and environmental emergencies.

(c) Prior to the first Disbursement and, thereafter, within 30 days after the
effective or renewal date of any insurance policy, the Borrower shall furnish to
the Bank an original certificate from the Borrower's insurer or insurance
broker, indicating the properties insured, amounts and risks covered, names of
the loss payees, beneficiaries and assignees, name of the insurer and any
special features of the new or renewed insurance policy.



                                       60
<PAGE>

(d) The Borrower shall, not later than 15 days after the end of each calendar
quarter furnish to the Bank quarterly statements or, in the event that the most
recent banking case prepared in accordance with Section 8.05(c) shows a Field
Life Debt Service Coverage Ratio of less than 2.0 or a Loan Life Debt Service
Coverage Ratio of less than 1.75, not later than 15 days after the end of each
calendar month, furnish to the Bank monthly statements of all transactions in
relation to the Offshore Bank Accounts and the Russian Bank Accounts during each
calendar month.

(e) The Borrower shall promptly inform the Bank of any proposed change in the
nature or scope of the Project or the Development Plan or the business or
operations of the Borrower and of any event or condition (including, without
limitation, any pending or threatened litigation or arbitration) which might
have a material adverse effect on the carrying out of the Project, the carrying
on of the Borrower's business or operations or the ability of the Borrower to
perform any of its obligations under any Financing Agreement or Project
Agreement.

(f) Immediately upon the occurrence of any Event of Default or Potential Event
of Default, the Borrower shall give the Bank notice thereof by facsimile
transmission or telex specifying the nature of such Event of Default or
Potential Event of Default and any steps the Borrower is taking to remedy the
same.

(g) At least once every three years during the term hereof, the Borrower shall
engage a reputable environmental consulting firm of international standing
acceptable to the Bank to conduct an environmental audit of the Project in a
manner satisfactory to the Bank. Promptly after completion of each such audit,
the Borrower shall furnish the results thereof to the Bank.

(h) Forthwith upon the occurrence of any incident or accident relating to the
Borrower or the Project, including but not limited to any such incident or
accident likely to have a material adverse effect on the environment or worker
health or safety, the Borrower shall give the Bank notice thereof by facsimile
transmission or telex specifying the nature of such incident or accident and any
steps the Borrower is taking to remedy the same. Without limiting the generality
of the foregoing, an incident or accident is likely to have a material adverse
effect on the environment or worker health or safety if any applicable law
requires notification of such incident or accident to the authorities, such
incident or accident involves worker fatality or multiple serious injuries
requiring hospitalisation or such incident or accident has become public
knowledge whether through media coverage or otherwise.

(i) The Borrower shall furnish promptly to the Bank two copies of all notices,
reports and other communications of the Borrower to its shareholders with
respect to any matter which may materially impact on the Project and/or on the
ability of the Borrower to perform its obligations under any of the Financing
Agreements and/or the Project Agreements and the minutes of all shareholders'
meetings. Without limiting the foregoing, the Borrower shall, on or before the
date that it gives official notice to its shareholders of any shareholders'
meeting, furnish the Bank, by facsimile transmission or telex, with notice of
such meeting and the agenda thereof. The Borrower shall permit a representative
of the Bank to attend as an observer, at the Borrower's expense, the annual and
extraordinary Shareholders' meetings of the Borrower and any meetings of



                                       61
<PAGE>

the representatives of the Shareholders of the Borrower (as such representatives
are described in Section 2.02(d) or any replacements thereof), provided that the
observer shall not be present while any confidential matter to which a lender
should not be privy under applicable principles of good corporate governance
and/or as required by applicable law is to be discussed.

(j) The Borrower shall furnish promptly to the Bank and any consultants engaged
by the Bank, and shall instruct the Independent Engineer to furnish promptly to
the Bank and any consultants engaged by the Bank, such other information as the
Bank or such consultants may from time to time reasonably request. The Borrower
shall permit representatives of the Bank (including, without limitation, any
consultants engaged by the Bank) to visit the Project or any of the other
premises where the business of the Borrower is conducted or where the Project is
being carried out and to have access to the books of account and records of the
Borrower.

(k) The Borrower shall furnish to the Bank within 20 Business Days of the
completion referred to below and in any event on or before 28 February 2003 a
report signed by the independent engineer acceptable to the Bank certifying the
completion of the front-end engineering and design phase of the Borrower's
proposed gas processing plant.


ARTICLE VI - NEGATIVE COVENANTS

         Unless the Bank otherwise agrees in writing:


SECTION 6.01. DIVIDENDS

(a) Except as otherwise expressly provided in Section 6.01(b), the Borrower
shall not declare or pay any dividend, make any distribution on its charter
capital, purchase, redeem or otherwise acquire any shares of charter capital of
the Borrower or any option over the same, make any payment of principal or
interest on any Subordinated Shareholder Loan or make any other payment or
distribution to any Shareholder or any Affiliate of any Shareholder (including,
without limitation, to Harvest under the Services Agreement, but excluding (1)
reimbursement to Harvest at cost for goods and services (including without
limitation services of consultants) procured by Harvest on behalf of the
Borrower from unaffiliated entities on an arm's length basis, (2) an amount, as
set forth in detail in the Development Plan, not to exceed $2,000,000 (or the
equivalent thereof in other currencies at then current rates of exchange) per
year to Minley for services provided on an arm's length basis by Minley to the
Borrower, (3) an amount not to exceed $1,000,000 (or the equivalent thereof in
other currencies at then current rates of exchange) per year for the salaries
and expenses of employees seconded to the Borrower by Harvest, and (4)
reimbursement to Harvest of amounts paid by Harvest on behalf of the Borrower of
front-end commission and fees and expenses of the Bank's outside counsel due
under this Agreement and fees and expenses of the Borrower's outside counsel).

(b) Notwithstanding the foregoing, the Borrower may take any such action on or
after the first repayment installment date set forth in Section 3.07(a) or, if
earlier, the



                                       62
<PAGE>

first date on which the outstanding principal amount of the Loan equals
$55,000,000, but only if:

         (1) no Event of Default or Potential Event of Default has occurred and
         is continuing;

         (2) the Borrower gives the Bank not less than 30 days' prior written
         notice of such payment;

         (3) such payment is made only on an Interest Payment Date pursuant to
         Section 5.13(a)(9); and

         (4) the most recent banking case prepared in accordance with Section
         8.05(c) shows a Field Life Debt Service Coverage Ratio of not less than
         2.0 and a Loan Life Debt Service Coverage Ratio of not less than 1.75.


SECTION 6.02. CAPITAL EXPENDITURES

         The Borrower shall not incur expenditures or commitments for
expenditures for fixed and other non-current assets, other than expenditures
required for carrying out the Project in accordance with the Development Plan or
for maintenance, repairs or replacements essential to the operation of the
Project in accordance with the Development Plan, in an aggregate amount in
excess of $1,000,000 (or the equivalent thereof in other currencies at then
current rates of exchange) in any Financial Year.


SECTION 6.03. LEASES

         The Borrower shall not enter into any agreement or arrangement to
acquire by lease the use of any property or equipment of any kind, except in the
ordinary course of business in connection with the Project as set forth in the
Development Plan and to the extent that the aggregate payments by the Borrower
in respect of such leases will not exceed $200,000 (or the equivalent thereof in
other currencies at then current rates of exchange) in any Financial Year.


SECTION 6.04. FINANCIAL DEBT

(a) The Borrower shall not incur, assume or permit to exist any Financial Debt
except:

         (1) the Loan;

         (2) Subordinated Shareholder Loans; and

         (3) veksels in the total amount of RUR48,500,000 as specified in
         Schedule 5, which will be repaid on maturity dates set forth in column
         5 of Schedule 5 (Maturity Date) and which shall not be renewed or
         reissued.



                                       63
<PAGE>

(b) The Borrower shall not enter into any agreement or arrangement to guarantee
or, in any way or under any condition, to become obligated for all or any part
of any financial or other obligation of another person, other than guarantees,
as specified in the Development Plan, of trade payables arising in the ordinary
course of business which are related to the Project and have maturities not to
exceed 90 days. For the avoidance of doubt, the Borrower shall not enter into
any forward sales agreement for sales of crude with a time difference in excess
of one month between the receipt of payment and delivery of crude.


SECTION 6.05. LIENS

         The Borrower shall not create or permit to exist any Lien on any
property, revenues or other assets, present or future, of the Borrower, except:

         (1) any Lien constituted or evidenced by the Security Documents; and/or

         (2) any tax or other non-consensual Lien arising by operation of law or
         other statutory Lien arising in the ordinary course of business,
         provided that such Lien (other than a Lien for a sum which is not yet
         delinquent) is discharged within 60 days after the date it is created
         or, if the validity or amount of such Lien or the sum secured by such
         Lien is being contested in good faith and by proper proceedings and
         adequate reserves have been set aside for the payment of such sum,
         within 60 days after final adjudication; and/or

         (3) any Lien subsisting at the date of the Amending Agreement and
         agreed to in writing by the Bank; and/or

         (4) any Lien arising out of title retention provisions in a supplier's
         standard conditions of supply in respect of goods acquired in the
         ordinary course of the Borrower's operations; and/or

         (5) any other Lien created or outstanding with the prior written
         consent of the Bank.


6.06. DERIVATIVE TRANSACTIONS

         The Borrower shall not enter into any interest rate or currency swap,
interest rate cap or collar, forward rate agreement or other interest rate,
currency or commodity hedge or similar derivative transaction; provided that the
Borrower may enter into commodity hedges for up to 20% of its annual oil
production and for a term not to exceed two years. For the avoidance of doubt,
the Borrower shall not enter into any forward sales agreement for sales of crude
with a time difference in excess of one month between the receipt of payment and
delivery of crude.


SECTION 6.07. ARM'S LENGTH TRANSACTIONS

         The Borrower shall not enter into any transaction with any person
except in the ordinary course of business, on ordinary commercial terms and on
the basis of arm's-



                                       64
<PAGE>

length arrangements, or enter into any transaction whereby the Borrower would
pay more than the ordinary commercial price for any purchase or would receive
less than the full ex-works commercial price (subject to normal trade discounts)
for its products or services.


SECTION 6.08. PROFIT-SHARING AND MANAGEMENT ARRANGEMENTS

(a) The Borrower shall not enter into any partnership, profit-sharing or royalty
agreement or other similar arrangement whereby the Borrower's income or profits
are, or might be, shared with any other person.

(b) The Borrower shall not enter into any management contract or similar
arrangement whereby its business or operations are managed by any other person.


SECTION 6.09. INVESTMENTS

         The Borrower shall not form or have any Subsidiary, or make or permit
to exist loans or advances to, or deposits (other than deposits in the Offshore
Bank Accounts or the Russian Bank Accounts) with, other persons or investments
in any person or enterprise; provided, however, that funds deposited in the
Offshore Bank Accounts and the Russian Bank Accounts may be invested by the
banks at which they are located in short-term investment grade marketable
securities. Without limiting the foregoing, the Borrower shall not open or
maintain any bank accounts other than the Offshore Bank Accounts and the Russian
Bank Accounts.


SECTION 6.10. PROJECT AGREEMENTS

         The Borrower shall not terminate, amend or grant any waiver in respect
of any provision of any of the Project Agreements to which it is a party or
consent to any assignment of any Project Agreement by any other party thereto.


SECTION 6.11. CHANGES IN BUSINESS, CAPITAL AND CHARTER

(a) The Borrower shall not make changes, or permit changes to be made, to the
nature of its contemplated business or operations. The Borrower shall not make
any material changes to the nature or scope of the Project or (except in
accordance with Section 8.05(c)) the Development Plan, including without
limitation any such change that would involve an increase in Project Costs of
more than 5%. Except as provided in the Development Plan, the Borrower shall not
carry out any business or activity other than businesses or activities
substantially related to the Project.

(b) The Borrower shall not make changes, or permit changes to be made, to its
capital except in accordance with the Financing Plan and the Shareholders
Support Agreement. Except to the extent permitted by the Shareholders Support
Agreement, the Borrower shall not permit any change in the equity interest of,
or any transfer of any shares held in its registered charter capital by, any
Shareholder.



                                       65
<PAGE>

(c) The Borrower shall not make changes, or permit changes to be made, to its
Charter in any manner which would be inconsistent with the provisions of any
Financing Agreement.


SECTION 6.12. PREPAYMENT OF LONG-TERM DEBT

         The Borrower shall not (whether voluntarily or involuntarily) make any
prepayment, repurchase or early redemption of any Long-term Debt or make any
repayment of any Long-term Debt pursuant to any provision of any agreement or
note which provides directly or indirectly for acceleration of repayment in time
or amount, unless in any such case it shall, if the Bank so requires,
contemporaneously make a proportionate prepayment of the principal amount then
outstanding of the Loan in accordance with the provisions of Section 3.08(a).


SECTION 6.13. SALE OF ASSETS; MERGER

(a) Except as contemplated by the Development Plan, the Borrower shall not sell,
transfer, lease or otherwise dispose of (whether in a single transaction or in a
series of transactions, related or otherwise) any of its capital assets with an
aggregate book value in excess of $350,000 (or the equivalent thereof in other
currencies at then current rates of exchange) in any Financial Year.

(b) The Borrower shall not undertake or permit any merger, consolidation or
reorganisation.


ARTICLE VII - EVENTS OF DEFAULT


SECTION 7.01. EVENTS OF DEFAULT

         Each of the following events and occurrences shall constitute an Event
of Default under this Agreement:

(a) PAYMENTS. The Borrower fails to pay when due any principal of, or interest
on, the Loan as required by this Agreement.

(b) COVENANTS. The Borrower or any other party (other than the Bank) fails to
perform in a timely manner any of its obligations under any Financing Agreement
or any other agreement between the Borrower and the Bank, the failure to perform
such obligation is not referred to elsewhere in this Section 7.01 and, if
capable of remedy, such failure to perform has continued for a period of 30 days
after notice thereof has been given to the Borrower by the Bank.

(c) PROJECT AGREEMENTS. Any party (other than the Bank) fails to perform in a
timely manner any of its obligations under any Project Agreement, the failure to
perform such obligation is not referred to elsewhere in this Section 7.01 and,
if capable of remedy, such failure to perform has continued for a period of 30
days after notice thereof has been given to the Borrower by the Bank.



                                       66
<PAGE>

(d) REPRESENTATIONS. Any representation or warranty made or confirmed by the
Borrower or any Shareholder in any Financing Agreement or Project Agreement was
false or misleading when made or confirmed.

(e) NATIONALISATION. (i) any government or governmental authority condemns,
nationalises, seizes or otherwise expropriates all or any substantial part of
the property or other assets of the Borrower, or assumes custody or control of
such property or other assets or of the business or operations of the Borrower,
or takes any action for the dissolution or disestablishment of the Borrower or
any action that would prevent the Borrower or its officers from carrying on its
business or operations or a substantial part thereof and/or (ii) any government
or governmental authority condemns, nationalises, seizes or otherwise
expropriates, or assumes custody or control of all or any substantial part of
the charter capital of the Borrower and the Bank shall be satisfied that any
such action with respect to the charter capital of the Borrower would have a
material adverse effect on the Project or on the ability of the Borrower to
perform its obligations under the Financing Agreements and the Project
Agreements.

(f) BANKRUPTCY. There has been entered against the Borrower or any Shareholder a
decree or order by a court adjudging the Borrower or such Shareholder bankrupt
or insolvent, or approving as properly filed a petition seeking reorganisation,
administration, arrangement, adjustment, composition or liquidation of or in
respect of the Borrower or such Shareholder under any applicable law, or
appointing a receiver, administrator, liquidator, assignee, trustee,
sequestrator or other similar official of the Borrower or such Shareholder or of
any substantial part of its property or assets, or ordering the winding up or
liquidation of its affairs; or the Borrower or any Shareholder institutes
proceedings to be adjudicated bankrupt or insolvent, or consents to the
institution of bankruptcy or insolvency proceedings against it, or files a
petition or answer or consent seeking reorganisation, administration, relief or
liquidation under any applicable law, or consents to the filing of any such
petition or to the appointment of a receiver, administrator, liquidator,
assignee, trustee, sequestrator or other similar official of the Borrower or
such Shareholder or of any substantial part of its property, or makes an
assignment for the benefit of creditors, or admits in writing its inability to
pay its debts generally as they become due; or any other event occurs which
under any applicable law would have an effect analogous to any of the events
listed in this section.

(g) FINANCIAL DEBT. A default of any nature occurs with respect to any Financial
Debt of the Borrower (other than the Loan) or of any Shareholder under any
agreement pursuant to which there is outstanding any such Financial Debt, and
such default continues beyond any applicable period of grace.

(h) ABANDONMENT. The Borrower ceases to carry on its business; or the Project or
any material part of the Project is abandoned by the Borrower; or the operation
of the Project is interrupted for a period in excess of 60 consecutive days or
any periods in the aggregate in excess of 90 days during any period of 12
consecutive months.

(i) PHYSICAL LOSS. Any portion of the Project facilities or the Russian oil
pipeline system is damaged or destroyed and, in the opinion of the Bank, such
event is likely to prevent the Borrower from transporting or selling all or any
material portion of its



                                       67
<PAGE>

production of crude oil or gas; or the assets comprising the Project or any
material part of the Project become an actual, constructive, compromised or
arranged total loss.

(j) TERMINATION OF AGREEMENT. Except as contemplated by Section 5.10(b) or
5.10(c), any Financing Agreement or Project Agreement is terminated, rescinded
or cancelled for any reason or is or becomes void or unenforceable, or is
claimed to be so by any party thereto (other than the Bank).

(k) LITIGATION. A final judgment, order or arbitral award for the payment of
money is rendered against the Borrower or any of its properties and such
judgment, order or arbitral award continues to be unsatisfied for a period of 30
consecutive days; or any legal, arbitral or administrative proceeding is
instituted which, if adversely determined, might, in the reasonable opinion of
the Bank, have a material adverse effect on the Project, the Borrower or the
ability of the Borrower to perform any of its obligations under any Financing
Agreement or Project Agreement.

(l) SECURITY. Any Security Document for any reason (other than an act or
omission of the Bank) ceases to constitute a valid and perfected first priority
security interest in and Lien on any of the collateral purported to be covered
thereby.

(m) APPROVALS. Any license, approval, consent, filing or registration now or
hereafter required for the execution, delivery or performance by any party of
any Financing Agreement or Project Agreement or to construct, own, operate or
maintain the Project is modified, revoked, withdrawn or withheld or ceases to
remain in full force and effect, and, in the case of a Project Agreement, such
occurrence might, in the reasonable opinion of the Bank, have a material adverse
effect on the Project, the Borrower or the ability of the Borrower to perform
any of its obligations under any Financing Agreement or Project Agreement.

(n) SHAREHOLDING. Any change occurs in the Borrower's shareholders or the
percentages of their respective shareholdings in the Borrower, except as
permitted by the Shareholders Support Agreement.

(o) FINANCIAL RATIOS. Two consecutive quarterly Financial Statements furnished
pursuant to Section 5.16(a), except for the quarterly Financial Statements for
the 2nd and 3rd calendar quarters of the year 2002, show a Current Ratio on the
dates of such Financial Statements of less than 1.1; or the most recent banking
case prepared in accordance with Section 8.05(c) shows a Field Life Debt Service
Coverage Ratio of less than 1.5 and the Field Life Debt Service Coverage Ratio
is not restored to 1.5 or above within three months; or the most recent banking
case prepared in accordance with Section 8.05(c) shows a Loan Life Debt Service
Coverage Ratio of less than 1.25 and the Loan Life Debt Service Coverage Ratio
is not restored to 1.25 or above within three months.

(p) ADVERSE CHANGE. Any circumstance or event occurs which, in the reasonable
opinion of the Bank, might have a material adverse effect on the Project, the
Borrower or the ability of the Borrower to perform any of its obligations under
any Financing Agreement or Project Agreement.



                                       68
<PAGE>

SECTION 7.02. CONSEQUENCES OF DEFAULT

         If an Event of Default occurs and is continuing, then the Bank may at
its option, by notice to the Borrower, declare all or any portion of the
principal of, and accrued interest on, the Loan (together with any other amounts
accrued or payable under this Agreement) to be, and the same shall thereupon
become (anything in this Agreement to the contrary notwithstanding), either:

         (1) due and payable on demand; or

         (2) immediately due and payable without any further notice and without
         any presentment, demand or protest of any kind, all of which are hereby
         expressly waived by the Borrower.


SECTION 7.03. AUTOMATIC ACCELERATION

         If the Borrower becomes voluntarily or involuntarily dissolved or
bankrupt (however such bankruptcy may be evidenced), the principal of, and all
accrued interest on, the Loan (together with any other amounts accrued or
payable under this Agreement) shall thereupon become immediately due and payable
(anything in this Agreement to the contrary notwithstanding) without any
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower.


ARTICLE VIII - MISCELLANEOUS


SECTION 8.01. TERM OF AGREEMENT

         This Agreement shall continue in force until the date that the
obligation of the Bank to make Disbursements hereunder has terminated in
accordance with the terms hereof or, if later, until all moneys payable
hereunder have been fully paid in accordance with the provisions hereof;
provided that the indemnities and warranties of the Borrower shall survive
repayment of the Loan and termination of this Agreement.


SECTION 8.02. ENTIRE AGREEMENT; AMENDMENT AND WAIVER

         This Agreement and the documents referred to herein constitute the
entire obligation of the parties hereto with respect to the subject matter
hereof and shall supersede any prior expressions of intent or understandings
with respect to this transaction. Any amendment to, waiver by the Bank of any of
the terms or conditions of, or consent given by the Bank under, this Agreement
(including, without limitation, this Section 8.02) shall be in writing, signed
by the Bank and, in the case of an amendment, the Borrower. In the event that
the Bank waives a condition to any Disbursement, the Borrower shall, by
accepting such Disbursement, be deemed to have agreed to all of the terms and
conditions of such waiver.



                                       69
<PAGE>
SECTION 8.03. NOTICES

         Any notice, application, approval, agreement or other communication to
be given or made under this Agreement by or to the Bank or by or to the Borrower
shall be in writing. Except as otherwise provided herein, such notice,
application or other communication shall be deemed to have been duly given or
made when it is delivered by hand, airmail, telex or facsimile transmission to
the party to which it is required or permitted to be given or made at such
party's address specified below or at such other address as such party
designates by notice to the party giving or making such notice, application or
other communication.

For the Borrower:

         Limited Liability Company "Geoilbent"
         626729 Gubkinsky Settlement
         P.O. Box 46
         Purovsky Region
         Tyumen Province
         Russian Federation

         Attention:        General Director

         Fax:              (7) (34536) 31357

         with a courtesy copy to:

         Harvest Natural Resources Inc.
         15835 Park Ten Place Drive, Suite 115
         Houston, Texas 77019
         U.S.A.

         Attention:        Chief Financial Officer

         Fax:              (1) (281) 5796702

         and

         Open Joint Stock Company "Minley"
         Tarko Sale Settlement
         22-A Pobedy Street
         629850 Yamalo-Nenetsky Autonomous District
         Purovsky District
         Russian Federation
         Moscow Representative Office:
         B.Polyanka 7/10, building 3

         Attention:        General Director

         Fax:              (7) (095) 7212229



                                       70
<PAGE>

         provided that no failure by the Bank to deliver, or Harvest or Minley
         to receive, a copy of any such notice, application or other
         communication shall in any manner affect the effectiveness thereof as
         against the Borrower or give rise to any claim or right against the
         Bank.

For the Bank:

         European Bank for Reconstruction and Development
         One Exchange Square
         London EC2A 2JN
         United Kingdom

         Attention:        Operation Administration Unit

         Telex:            8812161
         Answerback:       EBRD L G
         Fax:              (44) (207) 338-6100


SECTION 8.04. ENGLISH LANGUAGE

         All documents to be furnished or communications to be given or made
under this Agreement shall be in the English language or, if in another
language, shall be accompanied by a translation into English certified by the
Borrower, which translation shall be the governing version between the Borrower
and the Bank.


SECTION 8.05. FINANCIAL CALCULATIONS AND DEVELOPMENT PLAN

(a) All financial calculations to be made under, or for the purposes of, this
Agreement shall be made in accordance with Generally Accepted Accounting
Principles in the United States and, except as otherwise required to conform to
the definitions contained in Article I or any other provisions of this
Agreement, shall be made using the then most recently issued quarterly Financial
Statements which the Borrower is required to furnish to the Bank from time to
time under Section 5.16(a) and, if applicable, on the basis of the then current
Development Plan and most recent banking case prepared in accordance with
Section 8.05(c); provided, however, that:

         (1) if the relevant quarterly Financial Statements should be in respect
         of the last quarter of a Financial Year then, at the Bank's option,
         such calculations may instead be made from the audited Financial
         Statements for the relevant Financial Year; and

         (2) if there should occur any material adverse change in the financial
         condition of the Borrower after the end of the period covered by the
         relevant Financial Statements, then such material adverse change shall
         also be taken into account in calculating the relevant figures.

(b) Not later than 30 days prior to the date of the first Disbursement, the
Borrower shall submit to the Bank for approval the proposed development plan for
the Project



                                       71
<PAGE>

containing detailed technical plans and specifications, a financing plan,
estimated drilling, production and construction schedules and budgets, operating
plans and procedures, transportation and marketing arrangements, assumptions
regarding future taxes, operating expenses, capital expenditures, inflation and
proven, probable and possible reserve levels, working capital requirements, a
list of the Supply Agreements (including details of Supply Agreements entered
into with Shareholders) and a list of required construction, environmental and
operating permits and approvals. Upon approval of such plan by the Bank, such
plan shall constitute the Development Plan for purposes of this Agreement.

(c) The Borrower shall, in consultation with the Bank and in accordance with the
procedures set forth in Schedule 2, update the Development Plan and prepare
banking cases on the basis of the Financial Model. The Borrower shall update the
Development Plan and prepare a banking case prior to each Interest Payment Date
and, if the Bank believes that the minimum Current Ratio, Field Life Debt
Service Coverage Ratio or Loan Life Debt Service Coverage Ratio specified in
Section 7.01(o) might not be satisfied or that any assumptions used in updating
the Development Plan and preparing the most recent banking case have
subsequently become incorrect or inappropriate, at any other time upon the
request of the Bank. The Borrower may update the Development Plan and prepare a
banking case at any other time if the Borrower believes that any assumptions
used in preparing the then current Development Plan and most recent banking case
have subsequently become incorrect or inappropriate.


SECTION 8.06. RIGHTS, REMEDIES AND WAIVERS

(a) The rights and remedies of the Bank in relation to any misrepresentations or
breach of warranty on the part of the Borrower shall not be prejudiced by any
investigation by or on behalf of the Bank into the affairs of the Borrower, by
the execution or the performance of this Agreement or by any other act or thing
which may be done by or on behalf of the Bank in connection with this Agreement
and which might, apart from this Section, prejudice such rights or remedies.

(b) No course of dealing or waiver by the Bank in connection with any condition
of Disbursement under this Agreement shall impair any right, power or remedy of
the Bank with respect to any other condition of Disbursement or be construed to
be a waiver thereof.

(c) No action of the Bank in respect of any Disbursement shall affect or impair
any right, power or remedy of the Bank in respect of any other Disbursement.
Without limiting the foregoing, the right of the Bank to require compliance with
any condition under this Agreement which may be waived by the Bank in respect of
any Disbursement is, unless otherwise notified to the Borrower by the Bank,
expressly preserved for the purposes of any subsequent Disbursement.

(d) No course of dealing and no delay in exercising, or omission to exercise,
any right, power or remedy accruing to the Bank upon any default under this
Agreement or any other agreement shall impair any such right, power or remedy or
be construed to be a waiver thereof or an acquiescence therein. No action of the
Bank in respect of any



                                       72
<PAGE>

such default, or acquiescence by it therein, shall affect or impair any right,
power or remedy of the Bank in respect of any other default.

(e) The rights and remedies provided in this Agreement and the other Financing
Agreements are cumulative and not exclusive of any rights or remedies provided
by applicable law.


SECTION 8.07. INDEMNIFICATION

(a) The Borrower assumes full liability for, and agrees to and shall indemnify
and hold harmless the Bank and its officers, directors, employees, agents and
servants against and from any and all liabilities, obligations, losses, damages
(compensatory, punitive or otherwise), penalties, claims, actions, taxes,
duties, suits, costs and expenses (including, without limitation, reasonable
legal counsel's fees and expenses and costs of investigation) of whatsoever kind
and nature, including, without prejudice to the generality of the foregoing,
those arising in contract or tort (including, without limitation, negligence) or
by strict liability or otherwise, which are imposed on, incurred by or asserted
against the Bank or any of its officers, directors, employees, agents or
servants (whether or not also indemnified by any other person under any other
document) and which in any way relate to or arise out of, whether directly or
indirectly:

         (1) any of the transactions contemplated by any Financing Agreement or
         Project Agreement or the execution, delivery or performance thereof;

         (2) the operation or maintenance of the Borrower's facilities or the
         ownership, control or possession thereof by the Borrower; or

         (3) the exercise by the Bank of any of its rights and remedies under
         any of the Security Documents or any of the other Financing Agreements;

provided that the Bank shall not have any right to be indemnified hereunder for
its own recklessness or willful misconduct.

(b) Without limiting the generality of the foregoing, the Borrower agrees to and
shall indemnify and hold harmless the Bank and its officers, directors,
employees, agents and servants against and from any such liabilities,
obligations, losses, damages, penalties, claims, actions, taxes, duties, suits,
costs or expenses arising under any environmental law or other applicable law as
a result of the past, present or future operations of the Borrower (or any
predecessor or successor in interest to the Borrower), or the past, present or
future condition of any site or facility owned, operated or leased by the
Borrower (or any such predecessor or successor in interest), or any release or
use or threatened release of any pollutants or hazardous materials at any such
site or facility, including any such release or use or threatened release which
occurs during any period when the Bank is in possession of any such site or
facility following the exercise by the Bank of any of its rights and remedies
under any Financing Agreement.

(c) Any third party referred to in paragraphs (a) and (b) above may enjoy the
benefit and enforce the terms of such paragraphs in accordance with the
provisions of the Contracts (Rights of Third Parties) Act 1999.



                                       73
<PAGE>

(d) The Borrower acknowledges that the Bank is entering into this Agreement, and
has acted, solely as a lender, and not as an advisor, to the Borrower. The
Borrower represents and warrants that, in entering into the Financing
Agreements, it has engaged, and relied upon advice given to it by, its own
legal, financial and other professional advisors and it has not relied on and
will not hereafter rely on any advice given to it by the Bank.


SECTION 8.08. GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of England.


SECTION 8.09. ARBITRATION AND JURISDICTION

(a) Any dispute, controversy or claim arising out of or relating to this
Agreement or any other Financing Agreement, or the breach, termination or
invalidity hereof or thereof, shall be settled by arbitration in accordance with
the UNCITRAL Arbitration Rules as at present in force. There shall be one
arbitrator and the appointing authority shall be the London Court of
International Arbitration. Where the UNCITRAL Arbitration Rules do not provide
for a particular situation, the arbitral tribunal shall, in its absolute
discretion, determine what course of action should be followed and the arbitral
tribunal's decision shall be final. The seat and place of arbitration shall be
London, England and the English language shall be used throughout the arbitral
proceedings. Except as provided in Section 8.09(b), the parties waive their
right to any form of appeal from, or recourse in respect of, such arbitral
proceedings to a court of law or other judicial authority. The arbitral tribunal
shall not be authorised to take or provide, and the Borrower shall not be
authorised to seek from any judicial authority, any interim measures of
protection or pre-award relief against the Bank, any provisions of UNCITRAL
Arbitration Rules notwithstanding. The arbitral tribunal shall have authority to
consider and include in any proceeding, decision or award any dispute properly
brought before it by the Bank (but no other party) insofar as such dispute
arises out of any Financing Agreement, but, subject to the foregoing, no other
parties or other disputes shall be included in, or consolidated with, the
arbitral proceedings. In any arbitral proceeding, the certificate of the Bank as
to any amount due to the Bank under any Financing Agreement shall be prima facie
evidence of such amount.

(b) Notwithstanding Section 8.09(a), this Agreement and the other Financing
Agreements, and any rights of the Bank arising out of or relating to this
Agreement or any other Financing Agreement, may, at the option of the Bank, be
enforced by the Bank in the courts of the Russian Federation or England or in
any other courts having jurisdiction. The Borrower hereby irrevocably submits to
the jurisdiction of the courts of England with respect to any dispute,
controversy or claim arising out of or relating to this Agreement or any other
Financing Agreement, or the breach, termination or invalidity hereof or thereof.
The Borrower hereby irrevocably designates, appoints and empowers The Law
Debenture Corporate Service Limited at its registered office (being 5th floor,
100 Wood Street, EC2V 7EX, London, England) to act as its authorised agent to
receive service of process and any other legal summons in England for purposes
of any such action or proceeding. The Borrower hereby irrevocably consents to
the service



                                       74
<PAGE>

of process or any other legal summons out of such courts by mailing copies
thereof by registered airmail postage prepaid to its address specified herein.
The Borrower covenants and agrees that, so long as it has any obligations under
this Agreement, it shall maintain a duly appointed agent to receive service of
process and any other legal summons in any legal action or proceeding brought by
the Bank in England in respect of any Financing Agreement and shall keep the
Bank advised of the identity and location of such agent. Nothing herein shall
affect the right of the Bank to serve process upon the Borrower in any manner
authorised by the laws of any relevant jurisdiction.


SECTION 8.10. PRIVILEGES AND IMMUNITIES OF THE BANK

         Nothing in this Agreement shall be construed as a waiver, renunciation
or other modification of any privileges, immunities or exemptions of the Bank
accorded under the Agreement Establishing the European Bank for Reconstruction
and Development, international convention or any applicable law.


SECTION 8.11. WAIVER OF SOVEREIGN IMMUNITY

         The Borrower represents and warrants that this Agreement and the
incurring by the Borrower of the Loan are commercial rather than public or
governmental acts and that the Borrower is not entitled to claim immunity from
legal proceedings with respect to itself or any of its assets on the grounds of
sovereignty or otherwise under any law or in any jurisdiction where an action
may be brought for the enforcement of any of the obligations arising under or
relating to this Agreement. To the extent that the Borrower or any of its assets
has or hereafter may acquire any right to immunity from set-off, legal
proceedings, attachment prior to judgement, other attachment or execution of
judgement on the grounds of sovereignty or otherwise, the Borrower hereby
irrevocably waives such rights to immunity in respect of its obligations arising
under or relating to this Agreement.


SECTION 8.12. SUCCESSORS AND ASSIGNS

(a) This Agreement shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto, except that the Borrower may not
assign or otherwise transfer all or any part of its rights or obligations under
this Agreement without the prior written consent of the Bank.

(b) After an Event of Default has occurred and is continuing the Bank may sell,
transfer, assign or otherwise dispose of all or part of its rights or
obligations under this Agreement and the other Financing Agreements (including,
without limitation, by granting of Participations) without the consent of the
Borrower. Prior to the occurrence of an Event of Default the Bank shall not
sell, transfer, assign or otherwise dispose of all or part of its rights or
obligations under this Agreement and the other Financing Agreements (including,
without limitation, by granting of Participations) without the Borrower's
consent.



                                       75
<PAGE>

(c) Except as provided in Section 8.07(c) of this Agreement, none of the terms
of this Agreement are intended to be enforceable by any third party and the
Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement.

(d) Notwithstanding any provision of this Agreement, the parties hereto do not
require the consent of any third party to rescind or vary this Agreement at any
time.


SECTION 8.13. SEVERABILITY

         If any provision of this Agreement is prohibited or unenforceable in
any jurisdiction, such prohibition or unenforceability shall not invalidate the
remaining provisions hereof or affect the validity or enforceability of such
provision in any other jurisdiction.


SECTION 8.14. COUNTERPARTS

         This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.


IN WITNESS WHEREOF, the parties hereto, acting through their duly authorised
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.


                                                       LIMITED LIABILITY COMPANY
                                                                     "GEOILBENT"


                                             By:
                                                  ------------------------------
                                           Name:
                                                  ------------------------------
                                          Title:
                                                  ------------------------------


                                                                   EUROPEAN BANK
                                              FOR RECONSTRUCTION AND DEVELOPMENT


                                             By:
                                                  ------------------------------
                                           Name:
                                                  ------------------------------
                                          Title:
                                                  ------------------------------



                                       76
<PAGE>

SCHEDULE 1 - COMMITMENT


<Table>
<Caption>
PERIOD                                                                                           COMMITMENT
<S>                                                                                             <C>
From 21 November 1996 to 27 January 2000                                                        $55,000,000

From 27 January 2000 to 27 July 2000                                                            $49,500,000

From 27 July 2000 to 27 January 2001                                                            $44,000,000

From 27 January 2001 to 27 July 2001                                                            $38,500,000

From 27 July 2001 to 27 January 2002                                                            $33,000,000

From 27 January 2002 to 27 July 2002                                                            $27,500,000

From 27 July 2002 to the date of the Amending Agreement                                         $22,000,000

From the date of the Amending Agreement and until 27 January 2004                               $50,000,000

From 27 January 2004 to 27 July 2004                                                            $41,666,667

From 27 July 2004 to 27 January 2005                                                            $33,333,333

From 27 January 2005 to 27 July 2005                                                            $25,000,000

From 27 July 2005 to 27 January 2006                                                            $16,666,667

From 27 January 2006 to 27 July 2006                                                            $ 8,333,333

From 27 July 2006 on                                                                                    Nil
</Table>



                                       77
<PAGE>

SCHEDULE 2 - DEVELOPMENT PLAN AND BANKING CASE PROCEDURES


1. ASSUMPTIONS USED IN DEVELOPMENT PLAN AND FINANCIAL MODEL

         In updating the Development Plan and preparing each banking case, the
Borrower shall incorporate the following assumptions into the Development Plan
and the Financial Model:

(a) Model assumptions regarding fiscal and accounting practices of the Borrower.

(b) Technical assumptions consisting of forecasts of Project Costs (including
contingencies), Operating Costs (including general and administrative expenses,
taxes and royalties), proven producing, proven non-producing, probable and
possible reserves and rates of production from such reserves.

(c) Macroeconomic assumptions consisting of long-term forecasts of international
inflation and inflation in the Russian Federation for the elements comprising
Project Costs and Operating Costs, interest rates for loans in the Loan
Currency, rates of exchange of the Loan Currency into Roubles and oil and gas
prices.


2. BASIS FOR DETERMINING ASSUMPTIONS

         The assumptions referred to in paragraph 1 above shall be determined on
the basis of the following:

(a) The model assumptions referred to in paragraph 1(a) above shall be
determined on the basis of the then existing fiscal and accounting practices of
the Borrower and the written advice of the Auditors regarding such assumptions
and any changes to such assumptions.

(b) The technical assumptions referred to in paragraph 1(b) above shall, subject
to paragraph 3(c) below, be determined on the basis of the Borrower's
projections as confirmed by the Independent Engineer.

(c) The macroeconomic assumptions referred to in paragraph 1(c) above shall be
determined on the basis of the Bank's projections from the latest available
relevant publications and forecasts from official and other
internationally-recognised sources and forecasts prepared by the Bank. Forecasts
of floating interest rates for the Loan Currency will take into account, if
available, the rates for floating/fixed interest rate swaps for the Loan
Currency of comparable maturities and amortisations.


3. UPDATING OF DEVELOPMENT PLAN AND PREPARATION OF BANKING CASE

(a) Not less than 45 days prior to the date on which the updated Development
Plan is to take effect and the banking case is to be prepared, the Borrower
shall incorporate the assumptions referred to in paragraph 1 above into the
Development Plan and the Financial Model, prepare a banking case based on such
assumptions and forward to the Bank and the Independent Engineer, in a form
satisfactory to the Bank, the updated



                                       78
<PAGE>

Development Plan and results of such banking case (including a calculation of
the Field Life Debt Service Coverage Ratio, the Loan Life Debt Service Coverage
Ratio and the Borrowing Base), together with the assumptions used by the
Borrower in preparing such updated Development Plan and such banking case.

(b) Within 30 days after receipt of such updated Development Plan and such
banking case, the Bank shall either:

         (1) confirm to the Borrower its agreement to such updated Development
         Plan and such banking case, including the assumptions used in preparing
         such updated Development Plan and such banking case; or

         (2) notify the Borrower that it disagrees with such updated Development
         Plan and such banking case and of the reasons for such disagreement,
         including any assumptions with which it disagrees.

In case of any such disagreement, the Bank, the Borrower and the Independent
Engineer shall consult during the next 15 days regarding such disagreement.

(c) In the event that agreement on such updated Development Plan and such
banking case is not reached between the Bank and the Borrower during such
consultation period, the determination by the Bank of the updated Development
Plan and the banking case, including the assumptions used in preparing the
updated Development Plan and the banking case, shall be final and binding on the
Borrower.

(d) Except for updating the assumptions in accordance with this Schedule, the
Borrower shall not make any material change to the Financial Model except with
the prior written consent of the Bank.



                                       79
<PAGE>

SCHEDULE 3 - SECURITY PERFECTION REQUIREMENTS


CONTRACTS ASSIGNMENT AGREEMENT

1. Delivery of notices of the Contracts Assignment Agreement to Transneft Joint
Stock Company, the contracting parties to the Marketing Agreements and Supply
Agreements, Harvest and all other contracting parties.

2. Receipt of acknowledgements and, if relevant, consents to the Contracts
Assignment Agreement from Transneft Joint Stock Company, the contracting parties
to the Marketing Agreements and Supply Agreements, Harvest and all other
contracting parties.

3. Recording of the Contracts Assignment Agreement in the Borrower's security
records.


EQUIPMENT PLEDGE AGREEMENT

1. Recording of the Equipment Pledge Agreement in the Borrower's security
records.

2. Placing of metal plates containing a Notice of Pledge on all of the pledged
property in accordance with the Equipment Pledge Agreement.

3. If the equipment is of a type which is subject to state registration,
registration of the Equipment Mortgage with the relevant registry.


EXPROPRIATION COMPENSATION ASSIGNMENT AGREEMENT

1. Recording of the Expropriation Compensation Assignment Agreement in the
Borrower's security records.

2. Notice to the Russian Government through the State Registration Chamber
attached to the Ministry of the Economy of the Russian Federation.


IMMOVABLE PROPERTY MORTGAGE AGREEMENT

1. Recording of the Immovable Property Mortgage Agreement in the Borrower's
security records.

2. Notarisation of the Immovable Property Mortgage Agreement by a Russian
notary.

3. Registration of the Immovable Property Mortgage Agreement with the local land
registry and the municipal department that registers buildings.

4. Amendments to the Borrower's Charter providing for the hypothecation of the
Borrower's immovable property.



                                       80
<PAGE>

5. Registration of the amendments to the Borrower's Charter with the Local
Registration Chamber and the State Registration Chamber attached to the Ministry
of the Economy of the Russian Federation.


INSURANCE ASSIGNMENT AGREEMENT

1. Delivery of notice of the Insurance Assignment Agreement to each insurer.

2. Receipt of consent to the Insurance Assignment Agreement from each insurer.

3. Receipt by the Bank of originals of each insurance policy.

4. Recording of the Insurance Assignment Agreement in the Borrower's security
records.


OFFSHORE ACCOUNT ASSIGNMENT AGREEMENT

1. Delivery of notice of the Offshore Account Assignment Agreement to Citibank,
N.A., London Branch.

2. Receipt of an acknowledgement of the Offshore Account Assignment Agreement
from Citibank, N.A., London Branch.

3. Recording of the Offshore Account Assignment Agreement in the Borrower's
security records.

4. Registration of the charge created by the Offshore Account Assignment
Agreement with the Registrar of Companies in England.


RUSSIAN ACCOUNT PLEDGE AGREEMENT

1. Delivery of notice of the Russian Account Pledge Agreement to each bank at
which a Russian Bank Account is held.

2. Receipt of consent to the Russian Account Pledge Agreement from each bank at
which a Russian Bank Account is held.

3. Recording of the Russian Account Pledge Agreement in the Borrower's security
records.


SHARE PLEDGES

1. Receipt by the Bank of instruments of transfer in respect of all outstanding
participation interests in the Borrower owned by Harvest and Minley, duly
executed in blank by each of Harvest and Minley.

2. Delivery of notice of the Share Pledges to the Borrower and acknowledgement
of receipt of such notice by the Borrower.



                                       81
<PAGE>

3. Recording of the Share Pledges in the Borrower's register of participation
interests and receipt by the Bank of the Borrower's register of participation
interests.

4. Recording of the Share Pledges in the security records of Minley.

5. Receipt by the Bank of undated resignations of the officers and directors of
the Borrower.



                                       82
<PAGE>
SCHEDULE 4 - MILESTONES


<Table>
<Caption>
                                                                                          PRODUCTION
SIX-MONTH PERIOD ENDING ON:                                           DATE             (BARRELS PER DAY)
<S>                                                               <C>                  <C>
the date of the first Disbursement                                 (15.10.97)                7,000

the date six months after the first Disbursement                   (15.04.98)                7,200

the date 12 months after the first Disbursement                    (15.10.98)                9,300

the date 18 months after the first Disbursement                    (15.04.99)                10,200

the date 24 months after the first Disbursement                    (15.10.99)                12,100

the date 30 months after the first Disbursement                   (15.04.2000)               14,400

the date 36 months after the first Disbursement                   (15.10.2000)               17,400

the date 42 months after the first Disbursement                   (15.04.2001)               21,000

the date 48 months after the first Disbursement                   (15.10.2001)               24,200
</Table>



                                       83
<PAGE>

SCHEDULE 5 - VEKSELS


<Table>
<Caption>
                                                                                                                    VEKSELS PAID
      VEKSEL       DATE OF          FACE-VALUE,                                                          NO. OF         AS OF
NO.   NUMBER      DRAWING UP          IN RUB.            MATURITY DATE         RECIPIENT OF VEKSEL      AGREEMENT     20.09.02
---   ------      ----------        -----------          -------------         -------------------      ---------   ------------
<S>    <C>       <C>               <C>                <C>                      <C>                      <C>         <C>
                                                       Upon presentation,
                                                         but not earlier
 1    1859497   April 12, 2002      1,000,000.00      than October 18, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                         but not earlier
 2    1859498   April 12, 2002      1,000,000.00      than October 18, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                         but not earlier
 3    1859499   April 12, 2002      1,000,000.00      than October 18, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                         but not earlier
 4    1859500   April 12, 2002      1,000,000.00      than October 18, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                         but not earlier
 5    1859501   April 12, 2002      1,000,000.00      than October 18, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 6    1859502   April 12, 2002      1,000,000.00     than November 19, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 7    1859503   April 12, 2002      1,000,000.00     than November 19, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 8    1859504   April 12, 2002      1,000,000.00     than November 19, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 9    1859505   April 12, 2002      1,000,000.00     than November 19, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 10   1859506   April 12, 2002      1,000,000.00     than November 19, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 11   1859507   April 12, 2002      1,000,000.00     than December 17, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                        but not earlier
 12   1859508   April 12, 2002      1,000,000.00     than December 17, 2002    JSC "Purnefteotdacha"         1

                                                       Upon presentation,
                                                         but not earlier
 13   1859513   April 12, 2002      2,000,000.00      than October 21, 2002    LLC "Noyabrskdorstroy"        2

                                                       Upon presentation,
                                                         but not earlier
 14   1859514   April 12, 2002      2,000,000.00      than October 10, 2002    LLC "Noyabrskdorstroy"        2

                                                       Upon presentation,
                                                        but not earlier
 15   1859525   April 23, 2002        500,000.00     than November 27, 2002    LLC "Spetstransservice"       3

                                                       Upon presentation,
                                                        but not earlier
 16   1859526   April 23, 2002        500,000.00     than November 27, 2002    LLC "Spetstransservice"       3

                                                       Upon presentation,
                                                        but not earlier
 17   1859523   April 23, 2002      1,000,000.00     than December 26, 2002    ZAO "Stroytransservice"       4
</Table>



                                       84
<PAGE>
<Table>
<S>    <C>       <C>               <C>                <C>                      <C>                      <C>         <C>
                                                       Upon presentation,
                                                        but not earlier
 18   3159465   April 25, 2002      1,000,000.00     than November 27, 2002           FGUP SUSS               6

                                                       Upon presentation,
                                                         but not earlier
 19   3159471   April 26, 2002      2,000,000.00      than October 29, 2002            NO ASPO                7

                                                       Upon presentation,
                                                        but not earlier
 20   3159474   April 26, 2002      2,000,000.00     than November 27, 2002            NO ASPO                7

                                                       Upon presentation,
                                                         but not earlier
 21   3159468   April 26, 2002      1,000,000.00      than January 29, 2003            OOO KMK                8

                                                       Upon presentation,
                                                        but not earlier
 22   3159469   April 26, 2002      1,000,000.00     than November 27, 2002            III EIE                8

                                                       Upon presentation,
                                                        but not earlier
 23   3159480   April 27, 2002      3,000,000.00      than March 27, 2003      LLC "SibMontazhComplex"        9

                                                       Upon presentation,
                                                        but not earlier
 24   3159481   April 27, 2002      2,000,000.00     than December 26, 2002    LLC "SibMontazhComplex"        9

                                                       Upon presentation,
                                                         but not earlier
 25   3159482   April 27, 2002      1,000,000.00      than October 29, 2002    LLC "SibMontazhComplex"        9

                                                       Upon presentation,
                                                        but not earlier
 26   3159475   April 27, 2002      2,000,000.00     than February 26, 2003      LLC "Spetsmontazh"          10

                                                       Upon presentation,
                                                        but not earlier
 27   3159476   April 27, 2002      1,000,000.00     than December 26, 2002      LLC "Spetsmontazh"          10

                                                       Upon presentation,
                                                        but not earlier
 28   3159477   April 27, 2002      1,000,000.00     than November 27, 2002      LLC "Spetsmontazh"          10

                                                       Upon presentation,
                                                         but not earlier
 29   3159478   April 27, 2002      2,000,000.00      than October 29, 2002      LLC "Spetsmontazh"          10

                                                       Upon presentation,
                                                         but not earlier
 30   3159512     May 15, 2002        500,000.00      than October 29, 2002    ZAO "Company Territory"       13

                                                       Upon presentation,
                                                        but not earlier
 31   3159555    June 13, 2002      2,000,000.00     than December 25, 2002     LLC "Purnefteotdacha"        39

                                                       Upon presentation,
                                                        but not earlier
 32   3159558    June 19, 2002      4,000,000.00     than November 19, 2002           AVS-stroy              40

                                                       Upon presentation,
                                                        but not earlier
 33   3159559    June 19, 2002      5,000,000.00     than December 17, 2002           AVS-stroy              40

             TOTAL:                48,500,000.00                                                                         --

</Table>



                                       85
<PAGE>
EXHIBIT A - FORM OF DISBURSEMENT APPLICATION


                   [To Be Typed on Letterhead of the Borrower]

                                                                          [Date]

European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2EH
United Kingdom

Attention:        Operation Administration Unit

Subject:          Operation No. 478
                  Disbursement Application No. _____(1)

Sir/Madam:

1. Please refer to the credit agreement dated __________ 1996 (as amended and
restated as at [ ], 2002, the "Credit Agreement") between Limited Liability
Company "Geoilbent" (the "Borrower") and European Bank for Reconstruction and
Development (the "Bank").

2. Expressions defined in the Credit Agreement shall bear the same meanings
herein.

3. We hereby request the following Disbursement in accordance with the
provisions of the Credit Agreement:

         Currency required: Dollars
         Amount (in figures and words):
                                        ----------------------------------------

                                        ----------------------------------------
         Value Date:
                     ------------------------------

4. For the purposes of Section 4.03 of the Credit Agreement, we hereby represent
and warrant that:

(a) all agreements, documents and instruments delivered to the Bank (A) pursuant
to Section 4.01 [and 4.02] of the Credit Agreement and (B) as conditions
precedent to the effectiveness of the Amending Agreement are in full force and
effect and unconditional;

(b) the representations and warranties made by the Borrower in the Financing
Agreements and Project Agreements are true on and as of the date hereof with the
same effect as though such representations and warranties had been made on and
as of the date hereof;



----------

(1)      Each application must be numbered in series.



                                      A-1
<PAGE>

(c) no Event of Default or Potential Event of Default has occurred and is
continuing or is imminent;

(d) the Borrower will not, as a result of such Disbursement, be in violation of
its Charter, any provision contained in any agreement or instrument to which the
Borrower is a party (including the Credit Agreement) or by which the Borrower is
bound or any law applicable to the Borrower;

(e) nothing has occurred which might materially and adversely affect the
carrying out of the Project or the Borrower's business prospects or financial
condition or which makes it unlikely that the Borrower will be able to perform
any obligation under the Credit Agreement or any other Financing Agreement;

(f) the proceeds of such Disbursement are needed by the Borrower for the
purposes of the Project;

(g) the Borrowing Base as of the date of such Disbursement will be $__________
and the amount of such Disbursement will not exceed the Available Amount as of
the date of such Disbursement; and

(h) if relevant, the conditions specified in Section 4.02 and 4.03 have been
satisfied.

5. The representations and warranties made in paragraph 4 above will continue to
be true on and as of the date of such Disbursement with the same effect as
though such representations and warranties had been made on and as of the date
of such Disbursement. If any such representation or warranty is no longer true
on or prior to or as of the date of such Disbursement, we shall immediately
notify the Bank and shall, upon demand by the Bank, repay any amount which has
been or is disbursed by the Bank in respect of such Disbursement.

Yours faithfully,

LIMITED LIABILITY COMPANY
"GEOILBENT"


By:
    ------------------------------
    Authorised Representative(2)



----------

(2)      As named in the Certificate of Incumbency and Authority.



                                      A-2
<PAGE>

EXHIBIT B - FORM OF CERTIFICATE OF INCUMBENCY AND AUTHORITY


                   [To Be Typed on Letterhead of the Borrower]

                                                                          [Date]

European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2EH
United Kingdom

Attention:        Operation Administration Unit

Subject:          Operation No. 478
                  Certificate of Incumbency and Authority(3)

Sir/Madam:

With reference to the credit agreement dated __________ 1996 (as amended and
restated as at [ ], 2002, the "Credit Agreement") between Limited Liability
Company "Geoilbent" (the "Borrower") and European Bank for Reconstruction and
Development (the "Bank"), I, the undersigned [General Director] of the Borrower,
duly authorised by its the Shareholders, hereby certify that the following are
the names, offices and true specimen signatures of the persons, any one of whom
is and will continue to be (until the Bank has received actual written notice
from the Borrower that they or any of them no longer continue to be) authorised,
on behalf of the Borrower, individually:

(1)      to sign the Amending Agreement, any Disbursement applications,
         certifications, letters or other documents to be provided under the
         Credit Agreement and any other agreements to which the Bank and the
         Borrower may be party in connection therewith; and

(2)      to take any other action required or permitted to be taken by the
         Borrower under the Credit Agreement or any other agreement to which the
         Bank and the Borrower may be party in connection therewith:



----------

(3)      Designation may be changed by the Borrower at any time by providing a
         new Certificate of Incumbency and Authority to the Bank.



                                      B-1
<PAGE>

<Table>
<Caption>
NAME                       OFFICE           SPECIMEN SIGNATURE
<S>                        <C>              <C>
         ---------------   ---------------  -------------------------

         ---------------   ---------------  -------------------------

         ---------------   ---------------  -------------------------

         ---------------   ---------------  -------------------------
</Table>

IN WITNESS WHEREOF, I have signed my name on the date first above written.

Yours faithfully,

LIMITED LIABILITY COMPANY
"GEOILBENT"


By:
   -------------------------------
   Name:
   Title: General Director



                                      B-2
<PAGE>

EXHIBIT C - FORM OF LETTER TO AUDITORS


                   [To Be Typed on Letterhead of the Borrower]

                                                                          [Date]
[Name of Auditors]
[Address]

Sir/Madam:

We hereby authorise and request you to give to European Bank for Reconstruction
and Development (the "Bank") all such information as it may reasonably request
with regard to our Financial Statements, both audited and unaudited, which we
have agreed to supply under the terms of the credit agreement dated [ ], 1996
(as amended and restated as at [ ], 2002, the "Credit Agreement") between
ourselves and the Bank. For your information, we enclose a copy of the Credit
Agreement.

We authorise you to send our audited accounts to the Bank to enable us to
satisfy the reporting requirements set forth in Section 5.16 of the Credit
Agreement. When submitting the same to the Bank, you are also requested to send,
at the same time, a copy of your full report on such accounts in a form
acceptable to the Bank.

For our records, please ensure that you send to us a copy of every letter which
you receive from the Bank immediately upon receipt and a copy of each reply made
by you immediately upon the issue thereof.

Yours faithfully,

LIMITED LIABILITY COMPANY
"GEOILBENT"


By:
   -------------------------------
   Authorised Representative

Enclosure: Amended and Restated Credit Agreement

cc:      European Bank for Reconstruction and Development
         One Exchange Square
         London EC2A 2EH
         United Kingdom
         Attention:        Operation Administration Unit
         Subject:          Operation No. 478



                                      C-1

</TEXT>
</DOCUMENT>
