TRANSMERIDIAN EXPLORATION INC
EX-10.8
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>3
<FILENAME>a04-6295_1ex10d8.htm
<DESCRIPTION>EX-10.8
<TEXT>
<html>

<head>



</head>

<body link="blue" vlink="purple">

<div style="font-family:'Times New Roman';">

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 10.8</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SHAREHOLDERS&#146;
JOINT OPERATING AGREEMENT</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(REPUBLIC OF
KAZAKHSTAN)</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">-AMONG-</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">TRANSMERIDIAN EXPLORATION INC.</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(hereinafter TME)</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">-and-</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">KAZSTROIPROEKT TOO (KSP)</font></b></h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="center" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">(hereinafter KSP)</font></b></h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated and effective as of February 14, 2002,<b><font style="font-weight:bold;"> THIS AGREEMENT </font></b>regulates all
business activity of SOJSC Caspi Neft TME (hereinafter &#147;Company&#148;).</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 1<br>
<u>DEFINITIONS AND TERMINOLOGY</u></font></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.1.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Definitions</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
this Agreement:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.1.&#160;&#160;&#160;&#160;&#160; &#147;Affiliate&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means, when
used in relation to any Person,</font></p>

<p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 56.7pt;text-align:left;text-indent:-20.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">any other Person which shall be at that time directly or
indirectly in control of, or controlled by, or under common control with, such
Person, and for the purposes of this definition:</font></p>

<p align="left" style="margin:0in 0in .0001pt 56.7pt;text-align:left;text-indent:-20.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 56.9pt;text-indent:-20.9pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>a company is
directly controlled by another company or individual holding shares carrying, in
the aggregate, the majority of votes exercisable at general meetings; and</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 56.9pt;text-indent:-20.9pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>a particular
company is indirectly controlled by a company or companies (&#147;the parent company
or companies&#148;) if a series of companies can be specified, beginning with the
parent company or companies and ending with the particular company, so related
that each company of the series, except the parent company or companies, is
directly controlled by one or more of the companies earlier in the series.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.2.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Competent Body </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means government
executive body of the Republic of Kazakhstan empowered with the rights directly
associated with execution and implementation of the Exploration Contract.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.3.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Agreement&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means this
Shareholders&#146; Joint Operating Agreement, including the Annexes to this
Agreement.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.4.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Approval by the Board&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> or <b><font style="font-weight:bold;">&#147;Approved by the Board&#148;</font></b> and similar
expressions means receiving the affirmative vote of the Directors that.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.5.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Appraisal Well&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
well whose purpose at the time of commencement of drilling such well is the
determination of the extent or the volume of Petroleum reserves contained in an
existing Discovery, and &#147;<b><font style="font-weight:bold;">Appraise</font></b>&#148; and other derivatives shall have
corresponding meanings.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.6.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Board of Directors&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
Board of Directors of the Company duly executed by the Shareholders.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.7.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Budget&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means
estimates of investments and expenditures for Joint Operations or Sole Risk
Operations for a specified period of time for an item or the entirety of a Work
Program, and the term &#147;<b><font style="font-weight:bold;">Budget</font></b>&#148; shall include, as the context
requires, preliminary, proposed or finally adopted versions, as well as any
revisions or supplements to a Budget.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='2',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.8.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Cash Surplus&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means such
of the Company&#146;s cash as may be lawfully available to the Company under the
Legal Requirements after making reasonable allowance for the cash requirements
provided for under Clause 9.1.1. for the financial needs of the Company for its
contractual commitments and for satisfying the requirements of the law.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.9.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Class A Shares&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
Shares designated as Class A common voting shares in the Company&#146;s Foundation
Documents.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.10.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Class A Shareholder&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a
Shareholder owning Class A Shares.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.11.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Class B Shares&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
Shares designated as Class B common voting shares in the Company&#146;s Constating
Documents.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.12.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Class B Shareholder&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a
Shareholder owning Class B Shares.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.13.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Commercial Discovery&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any discovery of Petroleum field, which is sufficient
to entitle the Company to apply for authorization from the Government to
commence Development.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.14.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Completion&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means an
operation intended to complete a well through the Christmas tree as a producer
of Petroleum including, but not limited to, the setting of production casing,
perforating, stimulating the well and production testing conducted in such
operation, and &#147;<b><font style="font-weight:bold;">Complete</font></b>&#148; and other derivatives shall be construed
accordingly.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.15.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Consenting Shareholder&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means a shareholder whose Director gives Company
authority to implement Sole Risk Project.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.16.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Day&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> or <b><font style="font-weight:bold;">&#147;Days&#148;</font></b>
means a calendar day or days.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.17.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Deepening&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means an
operation whereby a well is drilled to an objective zone below the deepest zone
in which the well was previously drilled, or below the deepest zone previously
Approved by the Board, whichever is the deeper, and <b><font style="font-weight:bold;">&#147;Deepen&#148;</font></b> and other
derivatives shall be construed accordingly.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.18.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Development&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
drilling of Development Wells, construction of flow lines, pipelines,
separators, storage tanks, and other production or transportation facilities,
and all other activities associated with the development and exploitation of a
commercial field.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.19.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Development Plan&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
plan of Development for a commercial field to be presented to the Governmental
Authorities in accordance with Legal Requirements and the Exploration Contract.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.20.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Development Well&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
well drilled for the production of Petroleum pursuant to a Development Plan
under the License and the Exploration Contract.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.21.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Discovery&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
discovery of an accumulation of Petroleum which existence until that moment was
unknown.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='3',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.22.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Director&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means each
natural person who is, from time to time, duly elected or appointed by a member
of the Board of Directors.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.23.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Dollars&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> and/or the
symbol <b><font style="font-weight:bold;">&#147;$&#148;</font></b>
means lawful currency of the U.S.A.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.24.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Exploration Contract&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the contract under License No.AI 1557 (oil) for the
exploration of hydrocarbons of Yuzhny Alibek oilfield entered into between the
Company and the Investmnet Agency of the Republic of Kazakhstan.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.25.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Exploration Well&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
well drilled during the course of exploration work other than an Appraisal Well
or Development Well.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.26.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Eligible Project&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a
project described in a Work Program and Budget for: (i) the drilling of an
Exploration Well, or (ii) the drilling of an Appraisal Well, or (iii) the
Deepening and/or Testing of an Exploration Well, or (iv) the Deepening and/or
Testing of an Appraisal Well, or (v) the Deepening and/or Testing of any other
well, provided that such activity does not interfere with or jeopardize current
or future Joint Operations.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.27.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Financial Statements&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a balance sheet, statement of net income and cash
flow, and a schedule of capital expenditures for the Company prepared annually
as of the end of each Year in accordance with Generally Accepted Accounting
Principles.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.28.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Generally Accepted Accounting Principles&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means generally accepted accounting principles and
standards in the Republic of Kazakhstan consistently applied.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.29.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Government&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
Government of the Republic of Kazakhstan.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.30.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Governmental Authority&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any court, administration, government legislature,
council, government department, commission, board, bureau, agency,
instrumentality, or other governmental authority appropriately empowered.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.31.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Gross Negligence and/or Wilful Misconduct&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a reckless and wanton or intentional and
conscious disregard of a manifest duty arising from any provision of this
Agreement by senior management personnel acting within the scope of their
authority (including, but not limited to, the managers of drilling,
exploration, accounting, engineering and drilling superintendents), but shall
not include any error of judgment or mistakes made by such senior management
personnel in the exercise, in good faith, of any function, authority or
discretion conferred upon the individual in question; provided, however, senior
management personnel shall not by reason solely of the gross negligence or
wilful misconduct complained of be deemed to be acting outside the scope of
their authority.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.32.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Joint Account&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
account or accounts maintained by the Operator to which charges and credits are
made in the course of and in connection with Joint Operations.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>


<div align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:11.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:11.0pt;">
<!-- SEQ.=1,FOLIO='4',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.33.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Joint Operations&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means all
activities (other than Sole Risk Operations) conducted by the Operator for the
purpose of Project implementation, including, but not limited to, Petroleum
Exploration, Development, transportation, production and marketing activities
under the Exploration Contract.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.34.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Legal Requirement&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
applicable national, state, local or foreign law ordinance or regulation.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.35.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;License&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means
License No. AI 1557 dated 29 April 1999 issued to CASPI NEFT TME by the
Government of the Republic of Kazakhstan.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.36.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Net Loss&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
net loss of the Company determined from the Company&#146;s Financial Statements
prepared in accordance with Generally Accepted Accounting Principles.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.37.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Net Profit&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
net profit of the Company determined from the Company&#146;s Financial Statements
prepared in accordance with Generally Accepted Accounting Principles.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.38.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Non-consenting Party&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means the Shareholder who waives to approve the Work Program
and the Budget proposed for Eligible Project or Sole Risk Development as
provided for in Clause 10 of this Agreement.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.39.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;<b><font style="font-weight:bold;">Operator</font></b>&#148; means the &#147;Operator&#148; duly
appointed by the Shareholders, who is Caspi Neft TME on the date of signing of
this Agreement.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.40.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Party&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means each
Person who is a signatory to this Agreement or otherwise becomes a party to it,
and <b><font style="font-weight:bold;">&#147;Parties&#148;</font></b>
means all of the Parties collectively.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.41.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Percentage Interest&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a
Shareholder&#146;s percentage ownership of the total outstanding Shares of the
Company.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.42.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Person&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
individual, corporation, partnership, association, trust, incorporated
organization or administration (or any agency or political subdivision
thereof), or other entity.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.43.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Petroleum&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means all
crude oil, natural gas and associated hydrocarbon substances that are the
subject matter of the License and the Exploration Contract.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.44.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Prime Rate&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means, with
respect to any Day: (i) the rate of interest announced publicly by The Chase
Manhattan Bank, N.A., at New York, New York, U.S.A., as such bank&#146;s prime or
base lending rate in effect on such day, or (ii) if such rate is not so
announced, the rate of interest published by The Wall Street Journal as the
prime or base lending rate of interest of money center commercial banks in the
U.S.A. in effect on the business Day next preceding such Day.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.45.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Project&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
obligation of the Company and joint undertaking of the Parties for the
exploration, development, transportation, production and</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>


<div align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:11.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:11.0pt;">
<!-- SEQ.=1,FOLIO='5',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">marketing of
Petroleum in accordance with the License and the Exploration Contract.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.46.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Proposing Party&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means the
Shareholder offering the Eligible Project or Sole Risk Development as provided
for in Clause 9 of this Agreement.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.47.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Proprietary Data&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means any
and all geophysical, geological, drilling, geochemical, financial and other
exploration and production data and other information of any kind (including
plans, programs, maps, records, reports and tapes) received by or for the
Company.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.48.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Quorum&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means 2 (two)
Directors (one from each Shareholder) convened at a duly constituted meeting
called in accordance with the provisions of this Agreement to consider business
properly brought before it.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.49.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Share&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> or <b><font style="font-weight:bold;">&#147;Shares&#148;</font></b>
mean the shares in the capital of the Company currently comprised of Class &#147;A&#148;
and Class &#147;B&#148; Shares.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.50.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Shareholder&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a duly
and properly registered holder of any Share or Shares from time to time, and &#147;<b><font style="font-weight:bold;">Shareholders</font></b>&#148;
means TME, KSP as of the </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">da</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">te of this Agreement.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.51.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sidetracking&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
directional control and intentional deviation of a well so as to change the
bottom hole location unless done to straighten the hole or to drill around junk
in the hole or to overcome other mechanical difficulties.&#160; &#147;<b><font style="font-weight:bold;">Sidetrack</font></b>&#148; and other derivatives shall be
construed accordingly.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.52.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sole Risk Advance&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the
advances that are made to the Company by the Shareholders who comprise the Sole
Risk Party to fund all Sole Risk Cost; these advances shall be non-interest
bearing and nonrecourse.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.53.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sole Risk Costs&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means all
costs incurred by the Company for the account of the Sole Risk Parties for a
Sole Risk Operation.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.54.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sole Risk Operation&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means work
to implement an Eligible Project or Sole Risk Development which a Sole Risk
Party is having, and the Company performs at its sole cost, risk and expense
pursuant to Article 9.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.55.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sole Risk Party&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means one or
more Shareholders participating in a Sole Risk Operation.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.56.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Sole Risk Payment&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means cash
payment specifically described in Section 9.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.57.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Tax&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">any tax,
charge, fee, duty, levy or other assessment imposed by a Governmental
Authority, including, without limitation, all income, withholding, collected
through deductions, alternative minimum, minimum, gross receipts,
environmental, valu</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">e</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">added, capital gain, excise, ad valorem, property real
property, sales, assets, production, occupation, use, service, service use,
transfer, payroll, franchise, royalty, severance, bonus and similar taxes,
charges and assessments (including any interest, penalties or additions</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>


<div align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:11.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:11.0pt;">
<!-- SEQ.=1,FOLIO='6',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">to tax attributable to or imposed on or
with respect to any such assessment) and all stamp or documentary taxes and
fees.</font></p>

<p align="left" style="margin:0in 0in .0001pt 70.9pt;text-align:left;text-indent:-34.9pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.58.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Testing&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means an
operation intended to evaluate the capacity of a zone to produce Petroleum; and
&#147;<b><font style="font-weight:bold;">Test</font></b>&#148;
and other derivatives shall be construed accordingly.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.59.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Program of Works&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a
program for Joint Operations and Sole Risk Operations, as applicable, setting
out in reasonable detail, work proposed to be carried out, materials to be
purchased and facilities to be erected therefor, including but not limited to,
justification for the proposed activity estimated costs, location, depth,
objective field, Development Plans, economic analysis, and other relevant data,
and the term &#147;<b><font style="font-weight:bold;">Work Program</font></b>&#148; shall include, as the context requires,
preliminary, proposed or finally adopted versions, as well as any revisions or
supplements to a Work Program.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.60.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Year&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means a
calendar year.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.61.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Legislation&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means
Constitution of the Republic of Kazakhstan, codes, laws, decrees of the
President of the Republic of Kazakhstan including those that have the force of
the law, resolutions of the Parliament and the Presideent, other statutory
legal acts issued in the Republic of Kazakhstan, as well as international
agreements with Kazakhstan Republic as a party.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.62.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Law on Joint Stock Companies&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means the Law on Joint Stock Companies of the Republic of
Kazakhstan dated July 10, 1998, #281 with all amendments to it.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1.1.63.</font></b><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Oil Field&#148;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> &#150; South
Alibek oil field located in Mugolzhar region, Aktyubinsk oblast, Republic of
Kazakhstan.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">.<b><font style="font-weight:bold;">1.64.</font></b></font><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Work Program&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">- All types of plans, prepared by the Company to
implement subsurface works in the Oil Field as well as other types of plans to
be approved in the Competent Body according to the legislation of the republic
of Kazakhstan.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">.<b><font style="font-weight:bold;">1.65.</font></b></font><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Loan Agreement&#148; &#150;</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;"> means the Loan Agreement for US$20,000,000 (twenty)
million dollars loan from OJSC Bank TuranAlem to SOJSC Caspi Neft TME.</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">.<b><font style="font-weight:bold;">1.66.</font></b></font><b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&#147;Management Chairman&#148; or &#147;President&#148; </font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">means the first executive officer of the Company being
the head of the executive body or a person replacing him.</font></p>

<p align="left" style="margin:0in 0in .0001pt 70.9pt;text-align:left;text-indent:-34.9pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.2.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Terminology</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt .75in;text-align:left;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Titles of articles and clauses are for convenience only, and
neither limit nor amplify the provisions of this Agreement.&#160; All references to Articles, Clauses or
Exhibits shall refer to the corresponding Article, Clause or Exhibit of this
Agreement, unless specific reference is made to an article, clause or exhibit
of another document or instrument.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>


<div align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:11.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:11.0pt;">
<!-- SEQ.=1,FOLIO='7',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt .75in;text-align:left;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any reference to an agreement, certificate, document or
instrument is to the same as amended or extended from time to time.</font></p>

<p align="left" style="margin:0in 0in .0001pt .75in;text-align:left;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in .0001pt .75in;text-align:left;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">The division of this Agreement into Articles and Clauses,
the provision of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 2<br>
<u>TERM, PURPOSE AND SCOPE</u></font></b></h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.1.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Term</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
term of this Agreement shall, to the extent permitted by law, correspond to the
duration of the Company.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.2.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Purpose</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Each
of the Parties enters into this Agreement to regulate and determine, as
provided in this Agreement, certain of their respective rights and obligations
inter se the Shareholders, and with the Company, for the purpose of conducting
Joint Operations comprising the Project.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.3.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Disclaimer of Partnership Status</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Each
Shareholder expressly disclaims any intention to create a partnership.&#160; Except for specific, limited purposes
expressly provided for in this Agreement, nothing in this Agreement shall
constitute any Party as the agent of any other Party.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.4.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Authorized Capital</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As
of the date of this Agreement, the Company&#146;s authorized capital is </font><font size="3" style="font-size:12.0pt;">&#149;</font> Class A Shares and <font size="3" style="font-size:12.0pt;">&#149;</font> Class B Shares, of which 19,100 (nineteen
thousand one hundred ) Class A Shares.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="80%" style="border-collapse:collapse;margin-left:77.75pt;width:80.0%;">
 <tr>
  <td width="25%" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:25.4%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Shareholder</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Percentage Interest</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.46%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Number of Shares</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.46%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Class of Shares</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.74%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:25.4%;">
  <p align="center" style="margin:0in 0in .0001pt 10.0pt;text-align:center;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TME</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">50</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="20%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9,550</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="20%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Class &#147;A&#148;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.74%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="bottom" style="padding:0in 0in 0in 0in;width:25.4%;">
  <p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt 10.0pt;text-align:center;text-indent:-10.0pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" style="padding:0in 0in 0in 0in;width:20.82%;">
  <p align="right" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:right;">&nbsp;</p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.46%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" style="padding:0in 0in 0in 0in;width:20.82%;">
  <p align="right" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:right;">&nbsp;</p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.46%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" style="padding:0in 0in 0in 0in;width:20.82%;">
  <p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.74%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="25%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:25.4%;">
  <p align="center" style="margin:0in 0in .0001pt 10.0pt;text-align:center;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">KAZSTROIPROEKT</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="20%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">50</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="20%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9,550</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="20%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:20.82%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Class &#147;A&#148;</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.74%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='8',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 3</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;"><br>
</font><font size="2" face="Times New Roman" style="font-size:10.0pt;"><br>
MANAGEMENT OF THE COMPANY</font></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Management Bodies of the Companies</font></h2>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.25in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">&nbsp;</font></b></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Guided by the
current legislation of the Republic of Kazakhstan and under this Agreement,
Shareholders determine the following structure of Company management:</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>The Bodies of the Company are:</p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 92.7pt;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.1.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b>the highest body &#150; General Meeting of
Shareholders;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 92.7pt;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.2.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b>a management body &#150; Board of Directors;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 92.7pt;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.3.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b>an executive body &#150; collective Management;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 92.7pt;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.1.4.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160; </font></b>a supervisory body &#150; a collective Auditing
commission.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.2.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">General Meeting of Company Shareholders</font></h2>

<p style="margin:0in 0in .0001pt 35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">General Meeting of
the Company Shareholders shall be carried out in the time and order determined
by Legislation of the Republic of Kazakhstan and Charter of the Company.</font></p>

<p style="margin:0in 0in .0001pt 35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Exclusive Competence of General Meeting of
Company Shareholders</font></h2>

<p style="margin:0in 0in .0001pt 21.3pt;text-indent:-21.3pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 21.3pt;text-indent:-21.3pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Within exclusive competence of
General Meeting Of Company Shareholders are the following matters:</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>introduction of changes and
additions into the Charter of Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>alteration of the Company
type;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>reorganization and
liquidation of Company on its own accord (with the exceptions determined by the
legislation of the Republic of Kazakhstan);</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>election of the Board of
Directors, determination of number of its members and early termination of
authority of its members;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>alteration of the amount of
the declared authorized capital stock;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.6.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>election of an auditing
commission and early termination of its authorities;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.7.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>approval of membership of
the counting commission, with the exceptions determined by the Law of the
Republic of Kazakhstan on Joint Stock Companies;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.8.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>approval of the annual
finance report and audit report of the Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.9.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>determination of the form
of notification of Shareholders of the Company on the forthcoming General
Meeting of Shareholders and publication of such information in print papers;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.10.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>splitting up and
consolidation of shares;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.11.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the procedure for
determination of value of Shares in public buying out according to the Law on
Securities Market;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.12.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>order of distribution of the
net profit of the Company</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.13.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the amount of
dividends in the year of account;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.14.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>taking a desicion on
participation of the Company in creation or in business activity of other legal
entities by assigning a part or several parts of the assets making up to 25%
and more out of all assets belonging to the Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.15.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of major and other
transactions in accordance with the Law of the Republic of Kazakhstan on Joint
Stock Companies;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='9',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.16.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>terms and order for issuance
of bonds and other securities of the Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.17.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>taking a decision on the
increase of the Company&#146;s liabilities for the amount making up 25% and more of
the amount of ownership capital of the Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.18.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the amount of
remuneration and/or compensation for the officers of Company including members
of the Board of Directors;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.19.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the auditor of
Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.20.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the Work Program
of the Company;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.21.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the Budget of the
Company, changes to it and approval of the Development Plan;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 58.3pt;text-indent:-36.7pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3.22.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>determination of the order of
furnishing information to Shareholders on business activities of Company
including publication unless such procedure is determined by the Charter of the
Company.</p>

<p style="margin:0in 0in .0001pt 56.7pt;text-indent:-35.4pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 35.45pt;text-indent:-17.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Other
issues of the Company activities may also be referred to the exclusive
competence of the General Meeting of the Shareholders by the Charter of the
Company.</p>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:-17.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>The
issues related to the exclusive competence of the General Meeting of the
Shareholders may not be transferred to the Board of Directors of the Company to
make decision, except as otherwise provided for in the Law on Joint Stock Companies.</p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160; </font>The
General Meeting of the Shareholders has the right to cancel any decision of the
Board of Directors of the Company on the issues regarding the internal activity
of the Company.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 27.0pt;text-indent:-27.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.4.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160; </font>Decision-making
by the General Meeting of Shareholders</b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 40.8pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Decisions
on the matters listed in the subsections 3.3.1. &#150; 3.3.3. of this Article 3 are
made by qualified majority of the voting Shares of Company (which is 2/3 out of
the total number of shares).</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 40.8pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Decisions
on other matters within exclusive competence of General Meeting are made by a
simple majority of votes from the total number of the voting Shares taking part
in voting, unless bigger number specified in the Law on Joint Stock Companies
and the Charter of the Company.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 41.05pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>The
bigger number of Shareholder&#146;s votes to decide on early termination of
authorities of the Board member can not be determined by the Charter.</p>

<p style="margin:0in 0in .0001pt 21.3pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.5. Board of Directors of the Company</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Board
of Directors is elected by Shareholders in equal number and consists of 4
(four) members. Each Shareholder has the right to appoint 2 (two) his own
representatives.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Members
of the Board of Directors elect the Chairman among them. Members of the Board
of Directors are replaced by General Meeting of Shareholders.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.6.</font></b>  <b><font style="font-weight:bold;">Exclusive competence of the Board of Directors</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Within
exclusive competence of the Board of Directors are the following matters:</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='10',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.1. determination of
priority in business activities of the Company;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>making a decision on calling of annual and
extraordinary General Meetings of Shareholders of the Company with the
exceptions determined by Law;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>formation of a counting commission for postal
voting without conducting General Meeting;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>approval of the agenda of General Meeting of
Shareholders;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>determination of the date for making a list of
Shareholders entitled to take part in General Meeting and other matters
relating to preparation and conducting of General Meeting;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.6.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>submission of the matters to be considered by
General Meeting as provided for in the Law on Joint Stock Companies;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.7.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>making a decision on the decrease of the issued
(paid) capital of the Company and buying out of the issued Shares of the
Company, bonds and other securities as provided for in the Law on Joint Stock
Companies and legislation of the Republic of Kazakhstan;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.8.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>election of the executive body of the Company
and early termination of its authorities, determination of the amount of
remuneration and compensation if these matters are not determined by the
Charter of the Company as being within the competence of General Meeting of
Shareholders;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.9.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>determination of the amount of remuneration for
the members of auditing commission (controller) of the Company and
determination of the amount of the fee for the auditor;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.10.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>making a decision on the amount, sources and order
of payment of dividends according to the results of the quarter or half-year;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.11.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>determination of the order of utilization of the
net profit, funds of the reserved capital and other funds of the Company;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.12.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the internal documents of the Company
determining the procedure of business activity of the Company;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.13.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>making decisions on establishing of branches and
representations of the Company;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.14.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>making a decision on taking part in creation and
business activity of other entities with the exceptions provided for in the Law
on Joint Stock Companies;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.15.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>making a decision on conclusion of major transactions
in the order established by the Law on Joint Stock Companies;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.16.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the agreement with independent
registrar;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.17.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>determination of confidential information as a
commercial secret of the Company;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.18.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>sale, lease or exchange of all or material part of
all of the property of the Company;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='11',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.19.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>the
determination of the size and shape of any area required to be surrendered in
accordance with the terms and conditions of the License and the Exploration
Contract; if no proposal attains the support of such voting, then the proposal
supported by a simple majority of Percentage Interests shall be deemed Approved
by the Board;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.20.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a surrender of
all or any part of the area included within the License and the Exploration
Contract where such surrender is not required as a condition of the License and
the Exploration Contract;</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.21.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>consideration
of a proposal to extend the term of any phase of the License and the
Exploration Contract, a proposal to enter into any new phase of the License and
the Exploration Contract and a proposal to extend the term of the License and
the Exploration Contract; and consideration of a proposal to plug and abandon
any well drilled by the Company and not characterized as a Sole Risk Operation
hereunder; provided that if all of the Directors do not agree to the
abandonment of such well, those Directors wishing to continue the conduct of
activities with respect thereto shall be entitled to require the Company to
conduct such further activities pursuant to Article 9 hereof.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.22.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of the tender
committee of the Company;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 35.45pt;text-indent:-35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.23.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>approval of Commitees&#146;members, determination of
their authorities, objectives, and payment for their service;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 35.45pt;text-indent:-35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.24.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>reviewing and approval of Work Program, Program of
Works, Budget and Development Plan;</p>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:-35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 35.45pt;text-indent:-35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.6.25.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>other matters outside exclusive competence of
General Meeting of Shareholders as envisaged by the Law on Joint Stock
Companies and Charter of the Company.</p>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:-35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:-35.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)&nbsp;&nbsp;&nbsp;Matters, referred to the
exclusive competence of the Board of Directors of the Company can not be
transferred to the executive body of the Company for decision-making.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.7. Election of the Board of Directors of the Company</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Members
of the Board of Directors of the Company are elected by annual general meeting
of Shareholders and re-elected by general meeting in case of early termination
of the authorities of the members of the Board of Directors elected before in
the order provided for in the Law on Joint Stock Companies and Charter of the
Company.</p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>A
legal entity may not be a member of the Board of Directors.</p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Members
of the management of the Company with the exception of its President may not be
members of the Board of Directors. A person individually performing functions
of the executive body and Chairman of the Management may not be at the same
time Chairman of the Board of Directors of the Company.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 42.55pt;text-indent:-21.25pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Members
of the Board of Directors are elected by cumulative voting. A Shareholder has the
right to give his voting Shares for one candidate or distribute them among</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='12',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt .6in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">several candidates to the
members of the Board of Directors. The candidates who receive the highest
number of votes are considered to be elected to the Board of Directors.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.8. Term of office of a member of the Board of Directors</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>The
persons elected to the Board of Directors may be re-elected unlimited number of
times if this complies with the acting law and unless provided otherwise by
Charter of the Company.</p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>According
to a decision made by General Meeting of Shareholders, authorities of any (and
all) member of the Board of Directors may be terminated ahead of time on any
grounds. If members of the Board of Directors were elected by cumulative voting
then General Meeting of Shareholders may make the decision on early termination
of authorities only in relation to all members of the Board of Directors.</p>

<p style="margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Term
of authorities of the preceding member of the Board of Directors expires at the
time of conducting of General Meeting of Shareholders where election of a new
member of the Board of Directors takes place. Notwithstanding the term of
authorities of the member of the Board of Directors is expired the latter continues
to fulfil his functions until a new member of the Board of Directors assumes
office or until number of members of the Board of Directors is reduced.</p>

<p style="margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>A
member of the Board of Directors to be elected to take a vacant position is
elected for the remaining time of office of his predecessor</p>

<p style="margin:0in 0in .0001pt 42.55pt;text-indent:-21.25pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.9. Termination of authority of Member of the Board of
Ditectors</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Termination
of authority of a member of the Board of Directors of the Company on his own
initiative may be effected at any time by written notification sent to the
Board of Directors.</p>

<p style="margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.45pt;text-indent:-19.45pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Authority
of a member of the Board of Directors is considered to be terminated from the
time of receipt of the notification by the Board of Directors, if the latter
provides no specific time that shall not be more than six months to be approved
by the majority of votes of the members of the Board of Directors.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.10. Chairman of the Board of Directors</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Chairman
of the Board of Directors of the Company is elected from the members of the
Board by majority of secret votes.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>
The Board of Directors has the right to elect a new chairman at any time by
majority of votes.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Chairman
organizes functioning of the Board of Directors, calls meetings of the Board
and acts in the chair, provides for keeping written records in the order
established by the Law of the Republic of Kazakhstan and Charter of the
Company, however, his vote is not a casting one when making decisions by the
Board of Directors.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>In
absence of Chairman of the Board of Directors, his functions are executed by
one of the members of the Board of Directors as agreed by the Board.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='13',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.11. Calling of a Meeting of the Board of Directors</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>A
meeting of the Board of Directors is called by the Chairman of the Board on his
own initiative, on demand of any member of the Board of Directors, by Auditing
commission (controller) of the Company or by independent Auditor of the
Company, by Management of the Company as well as by a Shareholder of the
Company having 50% or more Percentage Interest, at any time upon obligatory
written notification to the members of the Board of Directors prior to 10 (ten)
Days of the forthcoming meeting.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Such
notification should have the date, time, place and agenda of the meeting,
however, if the issue that requires a decision-making arises later than 10
days, then such notification can be sent later with designation of reason of
delay in post.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Any
Party may add matters to an agenda for the meeting of the Board of Directors by
giving similar thereof prior to 5 (five) days of the meeting to which the
agenda pertains.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(D)</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160; </font></b>A
member of the Board of Directors has to notify the Chairman of the Board or his
substitute beforehand if he is unable for some reason or other to take part in
the forthcoming meeting.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>No
decision shall be taken at the meeting on any matter not listed on the agenda
for that meeting unless at least one Director present at the meeting of the
Board of Directors elected by a Shareholder of each class of Shares agrees to
consider such non-agenda matters.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(F)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Whenever
notice is required to be given as provided in Section 3.11 (A), a written
waiver of that notice, signed by the Person entitled to the notice (whether
before or after the time stated in the notice) shall be deemed equivalent to
having received timely notice.&#160;
Attendance at a meeting shall also be deemed waiver of notice of that
matter, unless the express purpose of such attendance is to object, at the
beginning of the meeting, to the transaction of any business because the
meeting is not properly called or convened.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 69.15pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(G)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>
Procedure of and conducting of the meeting of the Board is determined by the
Charter or by internal papers of the Company.</p>

<p style="margin:0in 0in .0001pt 49.65pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.12. The Meeting of the Board of Directors</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Quorum
for a meeting of the Board of Directors is specified by Charter of the Company
but it shall not be less than half the number of the elected members of the
Board. If the number of the members of the Board becomes less than provided by
the Charter then an extraordinary meeting of the Shareholders shall be called
for election new members of the Board. The remaining members of the Board have
the right to make decisions only on calling such an extraordinary General
Meeting of the Shareholders of the Company.</p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Within
the given period of time, the Board of Directors has the right to make
decisions on the extraordinary matters specified by the Charter with their
subsequent approval by the General Meeting of Shareholders. If the General
Meeting of Shareholders does not agree with the decision made by the Board of
Directors on extraordinary matters then such a decision is deemed to be
invalid.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='14',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Decisions
of the meeting of the Board of Directors are taken by majority of votes of the
present members of the Board unless provided otherwise by the Charter. In
making decisions each member of the Board has one vote.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Transfer
of the votes from one member of the Board to the other member of the Board is
not allowed.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 21.3pt;text-indent:-7.1pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.13. Decision-making without a
Meeting of the Board of Directors</font></b></p>

<p style="margin:0in 0in .0001pt 21.3pt;text-indent:-7.1pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting, if all
of the Directors consent thereto in writing, setting forth the action taken,
and the writing or writings are filed with the minutes of the meetings of the
Board of Directors.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .25in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.14. Place of Meeting of the Board
of Directors</font></b></p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All meetings of the Board
of Directors shall be conducted in the Operator&#146;s office in Almaty, Republik of
Kazakhstan, or elsewhere as all Directors may agree.</font></p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .25in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.15. Minutes of the Board of
Directors</font></b></p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>At all meetings
of the Board of Directors, Chairman of the Management&#160; (President) shall prepare a written record of the proceedings and
coordinate all matters incidental to the conduct of the matters at such
meeting.</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Chairman of the
Management&#160; (President) shall provide
each Director with copies of the minutes of each Board of Directors meeting
within Three (3) Days after the end of the meeting, signed by the person in the
chair and the secretary.</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The minutes of the meeting show:</p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15.1. full name and place of Joint Stock Company;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15.2. place and date of the meeting;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15.3. people present at the meeting;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15.4. agenda of the meeting;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15.5. voting matters and vote results;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15.6. decisions taken.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Each Director shall have Fifteen (15) Days after receipt of such minutes
to give notice of its objections to the minutes to the Chairman of the
Management (President).&#160; A failure to give
notice specifying objection to such minutes within the Fifteen (15) Day period
shall be deemed to be approval of such minutes.</p>

<p style="margin:0in 0in .0001pt .25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt 24.0pt;page-break-after:auto;text-align:left;text-indent:-24.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.16.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Functions of the Board of Directors</font></h2>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="1" face="Times New Roman" style="font-size:8.5pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Board of Directors shall manage the business and affairs of the
Company consistent with the terms and conditions of this Agreement, including,
without limitation, establishing the overall policies and procedures of the
Company therefor, declaration of dividends and other distributions by the
Company and the prosecution and defense of litigation.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='15',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h2 align="left" style="margin:0in 0in .0001pt 24.0pt;page-break-after:auto;text-align:left;text-indent:-24.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.17.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;"> Sale of Shares</font></h2>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">When, as provided for in Article 11, a Shareholder
transfers Shares, it shall, (either at the request of the Company or the
assignee of those Shares and at its own expense and without any right of
compensation for such termination of any Director) take all actions as may be
within its power to cause the resignation or removal of the Director appointed
by such Shareholder as provided in Section 3.5. that had been elected by the
transferor as owner of the transferred Shares.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt 24.0pt;page-break-after:auto;text-align:left;text-indent:-24.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.18.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Replacement Director</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A
replacement Director may be appointed by the transferee of Shares and the
remaining Shareholders shall take all action as may be within their power to
cause such individual to be elected.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt 24.0pt;page-break-after:auto;text-align:left;text-indent:-24.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.19.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Officers of Company</font></h2>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>The officers of the Company shall be elected by Approval of the Board.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font> An officer need not be a member of the Board of Directors.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Directors, officers and employees of the Company may continue to be
directors, officers and employees of a Shareholder and its Affiliates.</p>

<h6 style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h6>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.20. Committees</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
President may form various committees to administer certain functions and the
Board of Directors shall approve their members, authorities, objectives and
service payment. The Committees are established to develop a program or
programs of the actions connected with the implementation of the Program of
Works including determination of the types and range of the equipment to be
purchased and specific actions to be taken by the Operator Such committees
shall report to the President and the Board of Directors and shall only act in
an advisory capacity.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 21.0pt;text-indent:-21.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.21.&#160; Structure of
Committees</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Number of members of each Committee shall be determined by the President
and approved by the Board of Directors.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Each Committee shall include the member of the Management of the Company
in charge of the actions to be taken by the Committee. The Committees employ
experts highly-qualified in the field assigned to the Committee.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>According to the results of the activities taken by the Committees the
latter submit their opinion to the Board of Directors.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>All members of the Committees will have equal rights. If their opinions
differ, each member of the Committee submits his individual opinion in the form
acceptable for the President and the Board of Directors.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 73.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The Committees are formed for a specific period of time to deal with the
problems set by the President and by the Board of Directors.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='16',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h6 style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.22.</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Competence
of Executive Body of the Company</font></h6>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Within competence of the Executive Body of the Company
are all matters of provision for business activities of the Company not
relating to exclusive competence of General Meeting and Board of Directors as
determined by the Law on Joint Stock Companies, Charter of the Company or other
regulations and legal documents approved by General Meeting and Board of
Directors.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.23. Management Activity</font></b></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Management is elected by the Board of Directors as determined by Charter
of the Company.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>The Board of Directors elects chairman of the Management unless the
Charter of the Company provides for the election of the Chaiman by the members
of the Management.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Order and procedure for business activity of the Management and
decision-making are determined in the Charter of the Company.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Management of the Company shall consist of four members with two
representatives from each Shareholder.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Chairman of the Management (President) shall be a representative of TME
and Vice-President on Finance shall be a representative of KSP entitled to sign
all payment documents and contracts.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(F)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Any payment, transaction, issue of guarantees and bills, acquisition or
sale of any assets of the Company shall be effected at least with two
signatures available those of the Chairman of Management (President) of the
Company and Vice-President on Finance. The said order must be reflected in the
Charter of the Company. Violation of the said provision shall make any transaction
or deal invalid.Responsibility for the actions of an officer who violates the
order specified in this Clause shall be taken by the Party represented by the
officer or who proposed to appoint the officer as Chairman of the Management
(President) of the Company or Vice-President on Finance, and the Company has
the right to claim compensation for losses caused by such actions of the
Chairman of Management (President) or Vice-President on Finance of the Company.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3.24.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">General principles of management of the Company</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All
bodies of administration and management of the Company shall function to
achieve the best results in the commercial activities of the Company. If any
Shareholder caused substantial damage for the Company by his action or inaction
then Company may have recource to the law in order to exclude such a
shareholder from the Shareholders of the Company. The shares of this
Shareholder shall be bought out by the Company at the price determined by the
Court on the basis of value of the net assets of the Company to the total
number of the issued Shares.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='17',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 4<br>
<br>
<u>CONFIDENTIALITY</u></font></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Confidential Information</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A) The
Shareholders agree that all Proprietary Data is subject to the terms and conditions
on confidentiality contained in the License and the Exploration Contract.&#160; Subject to the provisions of the License,
the Exploration Contract and Clause 4.1(B) hereof, each Shareholder shall at
all times have access to and shall be entitled to obtain copies at their cost
of the Proprietary Data or any interpretation developed there from by or for
the Company.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B) No
Shareholder or any of its Affiliates shall be entitled to publish or disclose
to any third party any Proprietary Data obtained by such Shareholder or any of
its Affiliates from the Company which is the property of or was generated
within the Company, except:</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
an Affiliate, provided such Affiliate maintains confidentiality as provided in
this Article;</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
the Government as required by the License and the Exploration Contract;</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
the extent such data and information is required to be furnished in compliance
with any applicable laws or regulations, or pursuant to any legal proceedings
or because of any order of any court binding upon a Party;</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
potential contractors, consultants and professionals retained by any Party
where disclosure of such data or information is essential to such contractors&#146;,
consultants&#146; or professionals work;</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
a bona fide prospective transferee of a Party&#146;s Shares (including any entity
with whom a Party is conducting bona fide negotiations directed toward a
merger, consolidation or the sale of a majority of its or an Affiliate&#146;s
shares);</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.6.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
a bank or other financial institution to the extent appropriate for a Party
arranging for funding for its obligations under this Agreement;</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.7.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
the extent such data and information must be disclosed pursuant to any rules or
requirements of any government or stock exchange having jurisdiction over such
Shareholder or an Affiliate;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='18',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.8.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>to
its respective employees, subject to each Party taking customary precautions to
ensure such data and information is kept confidential; or</p>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1.9.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>if
any such data or information which, through no fault of a Party, becomes a part
of the public domain.</p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Disclosure
pursuant to Clauses 4.1.4 to 4.1.6, inclusive, shall not be made unless prior
to such disclosure the disclosing Party has obtained a written undertaking from
the recipient party to keep the data and information confidential except for
the express purpose for which disclosure is to be made.</p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right to Information</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company shall obtain and send to Shareholders reports and information generated
by or for the Company as reasonably requested by any Shareholder.&#160; Any Shareholder may request at its cost
duplicate Minute Books of the Company.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Press Releases</font></h2>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The Operator
appointed in accordance with Article 5 shall be responsible for the preparation
and release of all public announcements and statements regarding this
Agreement, Joint Operations and Sole Risk Operations; provided that, no public
announcement or statement shall be issued or made unless prior to its release the
Approval of the Board has been obtained.</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font> Where a public
announcement or statement becomes necessary or desirable because of danger to
or loss of life, damage to property or to the environment, the Operator is
authorized to issue and make such announcement or statement without prior
Approval of the Board, but shall promptly furnish all the Shareholders with a
copy of such announcement or statement.</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>No press release
or other public announcement (other than those necessary to comply with any
Legal Requirements) respecting any aspect of Joint Operations, Sole Risk
Operations or the Company shall be made by any Shareholder or its Affiliates
without first obtaining Approval of the Operator or the Board.</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 5-</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">  <br>
</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">I<u>MPLEMENTATION
OF THE AGREEMENT</u></font></h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1. Certain Shareholder Covenants</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>In order to
accomplish and give effect to this Agreement, each Shareholder covenants and
agrees to vote the Shares it owns, or to cause them to be voted, in accordance
with the terms and provisions of this Agreement and Exploration Contract.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Each Shareholder
covenants and agrees that it will at all times vote and act, and in all
respects, take all such steps as may be reasonably within its power, and use
its best endeavours to cause the Company to act in accordance with the
provisions of this Agreement and Exploration Contract, including the entering
into agreements by the</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='19',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Company with one
or more of the Parties or other Persons; provided, however, that nothing in
this Clause 4.1.(B) shall be so construed as to prevent, restrict or in any way
interfere with the rights, duties or obligations of the Company contained in
any agreement to which the Company is a party on the effective date of this
Agreement.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Shareholders shall have responsibility proportionally to their
Percentage Interest and guarantee for the Operator and his consultants, agents,
employees, officers and Directors (Creditors of the Contract of indemnity)
compensation of any and all costs and expenses (including reasonable fees for
lawyers) and financial liabilities resulting from any claims, demands and
requirements submitted by himself or on behalf of any person or entity in
connection with any damage or loss inflicted to property or environment or in
connection with bodily injury, illness or death of any person if such damages,
losses,illness or death were the result or connected with any action or
inaction by the Creditors of the Contract of indemnity or by any of them in the
process of implementation or in connection with Operations whatever the cause
of the damage, loss, bodily injuries or illness are, and even if the cause was
traced to any previously existed faults, negligence (either individual,
collective or parallel), objective responsibility or other legal infringement
of Operator (or any Affiliated Person); provided that if Gross Negligence
and/or Intentional Illigal Action of Operator leads directly to the damage,
loss, bodily injuries or death then Operator incurs all such costs, expenses
and financial liabilities.</p>

<p style="margin:0in 0in .0001pt 37.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 37.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Notwithstanding the above-said, under no circumstances Creditors of the
Contract of indemnity (with the exception of those acting as Shareholder
according to this Agreement) incur any costs, expenses and financial liabilities
for any indirect environmental damage or loss included but not limited to
damages or losses arising from suspension of business activity, disturbance of
a productive bed or formation, failure to extract oil, lost profit, pollution
control and rehabilitation of the environment.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.2. Company Covenants</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The Company
consents to the terms of this Agreement and covenants with each of the
Shareholders that it will be governed by this Agreement during its term in
carrying out its business and affairs, and shall give or cause to be given such
notices, execute or cause to be executed such deeds, transfers and documents
and do or cause to be done all such acts, matters and things as may, from time
to time, be necessary or conducive to the carrying out of the terms and intent
of this Agreement.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Without limiting
the generality of the foregoing, the Company covenants and agrees that it will
adopt and follow the Generally Accepted Accounting Procedures. </p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.3. Unanimous Shareholders&#146; Agreement</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Parties agree that this Agreement is intended to have the effect of a unanimous
shareholders&#146; agreement such that at all times all Shareholders are to be bound
by the provisions of this Agreement.&#160; No
Shareholder shall grant any Person the right to acquire any interest in any
Shares unless such Person first agrees to become a Party upon acquisition of
such Shares.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">20</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='20',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h6 style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.4.
Financing Funds of the Company</font></b></h6>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160; </font>Financing
funds of the Company are provided by Shareholders or by Company itself by
issuing bonds or raising a loan.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Initial
obligations:</p>

<p style="margin:0in 0in .0001pt 106.35pt;text-indent:-34.35pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.4.1. KSP arranges a US$20,000,000 (twenty) million
dollars loan for the Company for 3(three) years.</font></p>

<p style="margin:0in 0in .0001pt 106.35pt;text-indent:-34.35pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.4.2. KSP arranges a US$30,000,000 (thirty) million
dollars loan for the Company.</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Further
financing for Oil-field Development work is provided from the funds and assets
owned by the Company.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>Until
the Work Program is fulfilled, and oil production volume and the quantity of
the oil produced will not be enough for the Company to attain the
self-repayment stage the dividends shall not be distributed for the
Shareholders.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 36.75pt;text-indent:-18.75pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>As
decided by Shareholders, Company may issue bonds in order to attract additional
funds to finance Oil-Field Development Work.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ARTICLE 6<br>
<u>OPERATOR</u></font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.1</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Operator</font></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company acts hereby as the Operator represented by its executive body and shall
continue to serve as the Operator unless Shareholders decide to appoint another
company to be the Operator.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Resignation</font></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Operator may at any time resign as the Operator hereunder by forwarding at
least ninety (90) Days&#146; written notice to such effect to the Board of
Directors.&#160; Such resignation to become
effective in accordance with Clause 5.4 hereof,</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.3</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Removal of
Operator</font></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Operator may be removed by
a decision of the General Meeting of Shareholders.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.4</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Effective Date
of Removal/Resignation</font></b></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Resignation or removal of the Operator shall be effective ninety (90)
Days after the forwarding of the notice of resignation or sixty (60) Days after
the date upon which both the Operator&#146;s removal and its replacement by the new
Operator are approved by the Government, or such earlier date after approval by
the Government as the new Operator shall prefer.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Upon the effective date, the new Operator shall undertake all duties,
rights and authority prescribed herein for the Operator.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>After either the resignation or removal of the Operator, as herein
provided, the Board of Directors shall immediately arrange the conduct of an
audit and an inventory of the</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">21</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='21',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">equipment,
materials and supplies acquired by the Operator for and on behalf of the
Company.</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>By the effective date of the resignation or removal of the Operator, the
Operator shall have delivered to the replacement Operator all Company books,
records, equipment, materials, supplies, and other assets then in its custody
as the Operator and shall have accounted for that portion it was unable to
deliver.&#160; The Operator shall also
deliver to the replacement Operator any and all rock and fluid samples, log
surveys, seismic data records and all other data that came into its possession
in its capacity as the Operator.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>On the effective date of resignation or removal, the previous Operator
shall be released and discharged from all further obligations, rights and
liabilities as the Operator but without prejudice to the obligations, rights
and liabilities of the Company or the Shareholders accrued prior to the
effective day of such resignation or removal.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.5</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Conduct
of Operations</font></h2>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In accordance with the approved Work Program and Budget and subject to
whatever instructions, supervision and direction of the Board of Directors, the
Operator shall have the exclusive charge of and conduct all Joint Operations
and Sole Risk Operations under this Agreement.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>All such Joint Operations and Sole Risk Operations hereunder shall be
conducted by the Operator or by its duly authorized agents or by independent
contractors engaged by it.</p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.6</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Selection of
Employees</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subject to the License, the Exploration Contract and this Agreement, a
number of employees, selection of such employees, working hours and
compensation to all employees in connection with the Joint Operations and the
Sole Risk Operations hereunder shall be determined by the Operator.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The Operator shall employ only such employees, agents and contractors as
are reasonably required in conducting the Joint Operations and the Sole Risk
Operations hereunder.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>All employees or contractors used or employed to conduct operations
hereunder shall be the employees or contractors of the Operator.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.7</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Responsibilities
of Operator</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
conducting the Joint Operations and the Sole Risk Operations, the Operator
shall:</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.1</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>endeavor to diligently conduct all activities in accordance with
practices generally followed at the international petroleum industry, to
conform to good and prudent oil field and engineering practices in the Deposit
and accepted conservation principles generally followed by the international
petroleum industry under similar circumstances, and to perform such operations
in an</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='22',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">efficient
and economic manner and in compliance with provisions of the License, the
Exploration Contract and this Agreement and subject to all applicable laws and
regulations;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.2</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>proceed with due diligence to acquire for the Company any and all
permits, rights to use land and all other rights that may be required for or in
connection with the conduct of the Joint Operations and the Sole Risk
Operations;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.3</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>permit representatives of any Shareholder to have full access to the
area, the subject matter of the License and the Exploration Contract, at all
reasonable times with the right to observe any and all activities being
conducted and to inspect all Company materials, equipment, technical data and
other property including rock and fluid samples; all observations and
inspections by Shareholder representatives shall be at the sole risk and
expense of such Shareholder;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.4</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>maintain the License and the Exploration Contract in full force and
effect.&#160; In this respect, the Operator
shall promptly pay and discharge all liabilities and expenses incurred in
connection with the Joint Operations and the Sole Risk Operations and take all
reasonable efforts to keep and maintain the Company assets free from all liens,
pledges and encumbrances arising therefrom;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.5</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>pay to the Government Authority, within the periods and in the manner
prescribed by the License, the Exploration Contract, in accordance with all
applicable laws and regulations, and also Taxes, fees and other payments
pertaining to the Joint Operations and the Sole Risk Operations, but excluding
any taxes measured by the incomes of the individual Shareholders;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.6</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>have, in accordance with the decisions of the Board of Directors, the
exclusive right and obligation to represent the Company in all dealings with
the Governmental Authorities, in respect of matters arising under the License
and the Exploration Contract.&#160; The
Operator shall immediately notify the Board of Directors of any such meetings
called to consider significant matters.&#160;
Each Shareholder shall be entitled to have representatives attend such
meetings if he/she deems it necessary but such representatives will not be
allowed to participate therein;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.7</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>take all necessary and proper measures for protection of life, health,
environment and property in the case of an emergency; provided, however, that
the Operator shall immediately notify the Board of Directors of the details of
such an emergency and measures taken;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>prepare and furnish the Company and the Governmental Authorities (as may
be required) the following listed data, information and reports as they are
produced or compiled:</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.1</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of all electrical logs or surveys;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.2</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of daily drilling progress reports, including a statement of
cumulative costs incurred to date;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.3</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of all drill stem tests and core analysis reports;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='23',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.4</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of all plugging reports in the event any well is completed as a
dry hole or is otherwise abandoned;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.5</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of the final geological record and the time drilling record on
all wells;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.6</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of all geological and geophysical data, reports and maps relating
to work performed by the Operator;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.7</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of field and well performance reports, including reservoir
studies and reserve estimates;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.8</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of all reports relating to Operations furnished by the Operator
to the Government Authorities;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.9</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>a copy of progress and operations reports not less than once each month,
including a statement of cumulative costs incurred to date;</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.10</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>a copy of engineering studies, development schedules and progress
reports on development projects:</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.11</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>a copy of other reports as frequently as is justified by the activities
or as instructed by the Board of Directors; and</p>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.8.12</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>such additional information for the Company or the Shareholders as they
or any of them may request, provided that the requesting party or parties pay
the costs of preparation of such information and that the preparation of such
information will not unduly burden Operator&#146;s administrative and technical
personnel.</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.9</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The Operator shall supply the Sole Risk Parties with the same data,
information and reports with regard to the Sole Risk Operations; carry for the
benefit of all Company and the Operator such insurance as is set forth and
described in Exhibit &#147;C&#148; and as may be required by all applicable laws, rules
or regulations of the Republic of Kazakhstan and as may be required by OJSC
&#147;Bank TuranAlem&#148; for the period of effect of the Loan Agreement; the Operator
shall promptly notify the Shareholders of the insurance to be so obtained, and
if so requested, provide the Shareholders with certificates evidencing such
insurance; the Operator shall be responsible for filing any claims under such
insurance and collecting the resulting proceeds of settlement; such insurance
shall include, if practical and obtainable, waivers of subrogation in favor of
the Operator and the Shareholders; no other insurance shall be provided by the
Operator unless approved by the Board;&#160;
any Shareholder may procure and maintain at its own cost and expense such
other insurance as it shall determine, and any such insurance shall be solely
for the benefit of such Shareholder procuring the insurance.&#160; Any Shareholder procuring such other
insurance shall arrange to have its insurers agree to waivers of subrogation in
favor of all other Shareholders, the Operator and the Company;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='24',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.10</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160; </font>require its contractors and subcontractors to carry such insurance for
the benefit of the Company and the Operator, as the Operator may determine,
subject to any specific instructions that the Board of Directors may prescribe;</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.7.11</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160; </font>use its best efforts to obtain from contractors and subcontractors
adequate indemnification protecting interests of the Company and the
Shareholders and to require all such contractors and subcontractors to name the
Company and the Operator as additional insureds on contractor&#146;s or
subcontractor&#146;s insurance policies or to obtain from their insurers waivers of
all rights or recourse against the Operator and the Company.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">6.8</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Use of
Operator&#146;s Equipment</font></b></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If
it so desires but subject to the approval of the Board, the Operator may employ
equipment of good quality that is exclusively or partially owned by the
Operator or an affiliate of the Operator in the conduct of the Joint Operations
and the Sole Risk Operations hereunder, provided that such equipment is
suitable for the type of operation for which it is employed, the charges
therefor are in accordance with the Accounting Principles, and such work is performed
by the Operator under the same terms and conditions as are customary and usual
in contracts with independent contractors who is doing work of a similar nature
in a similar area.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ARTICLE 7<br>
FINANCIAL ARRANGEMENTS / BUDGET</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash
Requirements</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)
Cash requirements of the Company for the Joint Operations shall be approved by
the Board.&#160; The funds necessary to
satisfy cash requirements for the Joint Operations in excess of the Company&#146;s
cash flow which has not been distributed may be obtained first by return of
Cash Surplus received by the Shareholders prior to declaration of
dividends.&#160; During any calendar quarter,
prior to the declaration of dividends, the Shareholders shall, upon request,
return amounts of such Cash Surplus as may be required to meet cash
requirements of the Company.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)
Annual Budget of the Company shall be prepared by the Operator and approved by
the Board and Shareholders.&#160; Should the
Budget or revisions contemplate that additional funds, other than repayment of
Cash Surplus made in accordance with Clause 6.1(A), will be required from the
Shareholders for the Joint Operations, each Shareholder shall contribute, as a
cash contribution, its Percentage Interest of the aggregate amount
required.&#160; Each contribution shall be
made in immediately available funds.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)
All costs and expenses of whatsoever kind that are incurred in the conduct of
the Joint Operations under this Agreement shall be determined and settled in
the manner provided for in the Accounting Procedures, and the Operator shall
keep its records of costs and expenses in accordance with the Accounting
Procedures.&#160; In the event of conflict
between this Agreement and the Accounting Procedures, the provisions of this
Agreement shall prevail.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">25</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='25',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)
Operator may commingle with its own funds in such bank accounts, but not with
those of its Affiliates, the monies which it receives from or for the Joint
Account pursuant to this Agreement.&#160;
Notwithstanding that monies of a Shareholder have been commingled with
Operator&#146;s funds in the Joint Account, the Operator shall account to the
Shareholders for the monies of each Shareholder advanced or paid to the
Operator, whether for the return of Cash Surplus or dividends.&#160; Such monies shall be applied only to their
intended use and shall in no way be deemed to be funds belonging to the
Operator.&#160; Furthermore, the Board of
Directors shall have the right to require the Operator to segregate from its
own funds the monies which it receives from or for the Joint Account pursuant
to this Agreement.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)
Within thirty (30) Days after the end of each month the Operator shall submit
to the Board of Directors a statement of the costs and expenses incurred by it
for the Company during such month as provided for in the Accounting Procedures.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(F)
The books and records of the Operator pertaining to the Joint Operations under
this Agreement shall be maintained in accordance with the Accounting Standards
and shall be subject to periodic inspection and audit by any Shareholder.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">7.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Default</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A) If a Shareholder
(&#147;Delinquent Shareholder&#148;) fails to repay, contribute or advance to the Company
all or any portion of a repayment of Cash Surplus or a cash contribution or
advance in accordance with this Clause 6.1, within thirty (30) days after the
date scheduled for such repayment, contribution, or advance, the Company shall
notify all Shareholders, and the other Shareholder(s) shall advance the amount
of such deficiency to the Company for the account of the Delinquent
Shareholder.&#160; The amount of the
deficiency due by the Delinquent Shareholder shall bear interest from the date
scheduled for repayment, contribution or advance at the Prime Rate plus five
(7%) percent.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B) If non-defaulting
Shareholders shall advance and pay a Delinquent Shareholder&#146;s share in the
amount of default as provided in this Article, and such Delinquent Shareholder,
within thirty (30) Days after receiving written notice thereof, has not then
paid the amount then due and owing by it together with all interest due
thereon, as above provided, such Delinquent Shareholder shall thereby be deemed
to have forfeited to the non-delinquent Shareholders (in the ratio of their
Percentage Interests) which paid such Delinquent Shareholder&#146;s share, all rights
of the Delinquent Shareholder under this Agreement.&#160; Promptly thereafter, but without limiting such forfeiture, and
after being requested to do so, such Delinquent Shareholder shall execute such
instruments of transfer and take such other action and steps as may be
necessary or appropriate to evidence the said non-delinquent Shareholders&#146;
ownership in the rights and interests so forfeited.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='26',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ARTICLE 8</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">WORK PROGRAMS
AND BUDGETS</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Annual
Work Program</font></h2>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
or before the 15th of September of each year, the Operator shall deliver to the
Board of Directors a proposed Work Program and Budget detailing the Joint
Operations to be performed under the License and the Exploration Contract for
the following Year.&#160; On or before the
30th of September of each year, the Board of Directors shall meet to consider
and to endeavor to agree on a Work Program and Budget.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.2</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Discovery</font></h2>

<p style="margin:0in 0in .0001pt 56.25pt;text-indent:-20.25pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 56.25pt;text-indent:-20.25pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>If a Discovery is made, the Chairman of the Management (President)
shall, as soon as possible, submit to the Board of Directors a report
containing available details concerning the Discovery and the Chairman of the
Management (President)&#146;s recommendation as to whether the Discovery merits an
appraisal.&#160; If the Board of Directors
determines that the Discovery merits an appraisal, the Chairman of the
Management (President) shall, within one hundred and twenty (120) days, deliver
to the Board of Directors a proposed Work Program and Budget for the Appraisal
of the Discovery.</p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 56.25pt;text-indent:-20.25pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Within ninety (90) Days of such delivery, or earlier if necessary to
meet any applicable deadline under the License and the Exploration Contract,
the Board of Directors shall meet to consider, modify and then either approve
or reject the Appraisal Work Program and Budget.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 56.25pt;text-indent:-20.25pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>If the Appraisal Work Program and Budget are approved by the Board of
Directors, the Chairman of the Management (President) shall take such steps as
may be required under the License and the Exploration Contract to secure
approval of the Appraisal Work Program and Budget by the Government.&#160; In the event the Government requires to
amend the Appraisal Work Program and Budget, the matter shall be resubmitted to
the Board of Directors for further consideration.</p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.3</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Included
Operations</font></h2>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:.55pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:.55pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any Work Program and Budget, which includes the
following, is deemed to be approved by the Board:</font></p>

<p style="margin:0in 0in .0001pt 35.45pt;text-indent:.55pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">an Exploration Well with
drilling, deepening or sidetracking, approval for all expenditures necessary
for drilling, testing and completing such Exploration Well; or</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">an Appraisal Well with
drilling, deepening or sidetracking, approval for all expenditures necessary
for drilling, testing and completing such Appraisal Well.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.4</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Development
Plan</font></h2>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>If the Board of Directors determines that a Discovery may be commercial,
the Chairman of the Management (President) shall, as soon as practicable,
deliver to</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">27</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='27',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .9in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the
Board of Directors a Development Plan together with the first annual Work
Program and Budget and preliminary Work Program and Budget for the remainder of
the Development of the Discovery, which shall contain:</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.4.1.
details of the proposed work to be undertaken, personnel required and
expenditures to be incurred, including the timing of the same, on a yearly
basis;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.4.2.
an estimated date for the commencement of production;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.4.3.
a delineation of the proposed development area; and</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.4.4.
any other information requested by the Board of Directors.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>After receipt of the Development Plan, or earlier if necessary to meet
any applicable deadline under the License and the Exploration Contract, the
Board of Directors shall meet to consider, modify and then either approve or
reject the Development Plan and the first annual Work Program and Budget for
the Development submitted by the President.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font> If the Development Plan is approved by the Board of Directors, the
President shall, as soon as possible, deliver any notice of Commercial
Discovery required under the License and the Exploration Contract and take such
other steps as may be required under the License and the Exploration Contract
to secure approval of the Development Plan by the Government.&#160; In the event the Government requires to
amend the Development Plan, the matter shall be resubmitted to the Board of
Directors for further consideration.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>If the Development Plan is approved, such work shall be incorporated
into and form part of annual Work Program and Budgets, and the Operator shall,
on or before September 15, of each year submit a Work Program and Budget for the
development area, for the following year.&#160;
Within thirty (30) Days after such submittal, the Board of Directors
shall endeavor to agree to such Work Program and Budget, including any
necessary or appropriate revisions to the Work Program and Budget for the
approved Development Plan.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.5</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Contents
of Work Programs and Budgets</font></h2>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
preparing the proposed Work Program and Budgets and Development Plans
contemplated in this Article 7, the Management shall consult with the Board of
Directors regarding the contents of such Work Programs and Budgets and
Development Plans. Each Work Program and Budget and Development Plan submitted
by the Management shall contain an itemized estimate of the costs and
expenditures to be made for the Joint Account during the year in question.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.6</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Authorities
for Expenditure (AFE)</font></h2>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prior
to incurring any commitment or expenditure which is estimated to be in excess
of Two Hundred Thousand Dollars ($200,000), the Operator shall send to each
Shareholder the Operator&#146;s best estimate, containing AFE, of the total funds
required to carry out such work, the estimated timing of expenditures, and any
other necessary information.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">28</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='28',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.7</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Informational
AFE&#146;s</font></h2>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All
AFE&#146;s shall be for information purposes only and, provided the work and the
funds to be expended therefor are authorized in the current Work Program and
Budget, the Operator shall not be required to obtain an approval for such AFE
prior to the commencement of work.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.8</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Overexpenditures
of Work Programs and Budgets</font></h2>

<p style="margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>For expenditures of an approved Work Program and Budget, the Operator
shall be entitled to incur, without furnishing a supplemental AFE, an
overexpenditure up to ten percent (10%) of the authorized amount.&#160; In the case that the Operator is certain
that the limits specified in this Clause will be exceed, the Operator shall
furnish a supplemental AFE for the estimated overexpenditures to the Board of
Directors for its approval including details of such overexpenditures.&#160; The Operator shall promptly give notice of
the amounts of overexpenditures actually incurred.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .9in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>The Operator shall also be authorized to exceed the expenditure limits
contained in an approved Work Program and Budget whenever necessary for
protection of life, health, environment and property as a result of an
emergency.&#160; The Operator shall promptly
notify the Board of Directors of the details of such emergency and actions
taken and costs and expenses incurred.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt .25in;page-break-after:auto;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 9<br>
SOLE RISK WHEN APPROVAL OF THE BOARD HAS NOT BEEN OBTAINED</font></u></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Eligible Projects</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>If approval of the Board is not obtained to
proceed with an Eligible Project, a Proposing Party may then notify all other
Shareholders that it intends to have the Eligible Project performed at its sole
risk.&#160; If all of the other Shareholders
reply that they wish their Director or Directors vote to be recast to approve
the proposal for the Eligible Project, and those votes are so recast, the
Eligible Project shall proceed as part of Joint Operations.&#160; If any Shareholder replies that it does not
wish its Director or Directors to approve the Eligible Project or fails to
respond to the Proposing Party&#146;s notice within fourteen(14) Days (or two (2)
Days, if there is a drilling rig on location), the Proposing Party and any
other Shareholder whose Director or Directors voted to participate in the
Eligible Project may each, at their election, and subject to Clause 9.5
undertake the Eligible Project as a Sole Risk Operation in accordance with the
following provisions:</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>The Sole Risk
Party shall furnish all Sole Risk Costs by one or more Sole Risk Advances.&#160; Sole Risk Costs shall be covered at the
expense of the profit made by the Company from sale of such Eligible Project in
the proportion of one to three, i.e. the Proposing Party will get three dollars
of profit made from sale of such Eligible Project for each invested dollar of
the Sole Risk Costs. All profit remained from operating the Eligible Project
shall be the Company&#146;s property.Moreover, reimbursement amounts of Sole Risk
Expenses of the Proposing Party shall not be subject to any taxes, duties and
etc. that may decrease the reimbursement amount of Sole Risk Expenses of the
Proposing Party.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">29</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='29',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>Performance
of Sole Risk Operation shall not be a reason for violating delivery of the work
program or annual work program approved by the Company with the Governmental
Authority.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>To perform
Sole Risk Operations the Sole Risk Operation Party shall, if required, aside
from financing the Sole Risk Operations, provide the Operator with the
equipment other than the equipment used by the Operator to deliver the annual
work program.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>If the Sole
Risk Operation is abandoned or is not diligently pursued, or if no Commercial
Discovery results from the Sole Risk Operation, the Sole Risk Costs shall be
reimbursed at the expense of the Proposing Party. Besides, the Proposing Party
shall defray all direct costs of the Company incurred by the Company as a
result of implementation of Eligible Project.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>If a
Commercial Discovery results from a Sole Risk Operation for the Eligible
Project and the Development of same is approved by the Board, and if all
Non-Consenting Parties elect to have the Sole Risk Operation for the Eligible
Project carried out as part of Joint Operations, the Sole Risk Advance will be
repaid out of the funds generated by the Joint Operations of the Company, with
the timing of that repayment being as Approved by the Board.&#160; But if a Sole Risk Exploration is pursued as
a result of the Sole Risk Operation for the Eligible Project, the Sole Risk
Advance will be repaid exclusively from the funds generated by the Sole Risk
Exploration, and the timing of such repayment shall be determined by the Sole Risk
Party.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.6.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>At any time
before the decision by the Board to declare a Discovery resulting from a Sole
Risk Operation, a Commercial Discovery, all Non-Consenting Parties may elect to
have that Sole Risk Operation carried out as part of Joint Operations.&#160; That election shall be made by all
Non-Consenting Parties giving written notice to the Sole Risk Party and
agreeing to pay the Sole Risk Payment provided for in Clause 9.1.8. As soon as
such notice is sent, that Sole Risk Operation shall be conducted as part of
Joint Operations.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.7.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>When a
Non-Consenting Party elects to participate as a Sole Risk Party in a Sole Risk
Operation, it becomes responsible for its proportional share of all Sole Risk
Costs incurred after that election.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.8.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>Each Non-Consenting
Party electing to participate in a Sole Risk Operation, either as part of Joint
Operations or as a Sole Risk Operation, shall make a Sole Risk Payment to the
Company, as a contribution to the Company.&#160;
The amount of the Sole Risk Payment, which shall be calculated by the
Sole Risk Party, will comprise an amount that is three times more than the
total amount of the Sole Risk Costs of the Proposing Party, that have been
incurred prior to the date of the Non-Consenting Party&#146;s election to participate.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.9.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font>A Sole Risk
Payment is made without prejudice to the Non-Consenting Party&#146;s right to audit,
as provided in Clause 10.5, and to dispute the calculated amount of the Sole
Risk Payment with the Sole Risk Party and the obligation of both of them to meet
in good faith to resolve any such dispute.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">30</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='30',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.1.10.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>A
Non-Consenting Party that fails to make the Sole Risk Payment shall be deemed
to have irrevocably withdrawn its election to participate in the Sole Risk
Operation.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.2</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indemnity</font></h2>

<p style="margin:0in 0in .0001pt 22.5pt;text-indent:-22.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 22.5pt;text-indent:-22.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Each Sole Risk Operation, whether for an
Eligible Project or for Sole Risk Development, shall be carried out at the
exclusive risks of the Sole Risk Party conducting it.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 22.5pt;text-indent:-22.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font> Neither the Company nor any
Non-Consenting Party shall bear any liability to any Party or to any other
Person for any action, suit, claim, demand liability, loss, tax, cost or
expense, arising out of any Sole Risk Operation.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 22.5pt;text-indent:-22.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font> The Sole Risk Party agrees to
indemnify and hold harmless the Company and all Non-Consenting Parties and
their Affiliates from any and all actions, suits, claims, demands, liabilities,
losses, taxes, costs or expenses arising out of its Sole Risk Operation.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.3. Separate Records</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company shall
maintain separate books, records and accounts for Sole Risk Costs, as
appropriate, which will provide: (i) the basis for all cash to be furnished by
the Sole Risk Party to the Company to fund a Sole Risk Operation, and (ii) a
determination of Net Profits and Cash Surplus associated with the Sole Risk
Operation available for distribution to the Sole Risk Party in accordance with
Clause 9.1(C).</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.4. Interference with Joint Operations</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No Sole Risk Operation shall be carried out which would interfere with
existing Operations or any prior Sole Risk Operation, or any planned fulfilment
of obligations under the License and Exploration Contract.&#160; No Sole Risk Operation conducted by a Sole
Risk Party comprising more than one Shareholder shall be commenced until the
Sole Risk Party has submitted to the Board of Directors, and Approval of the
Board (which shall not be unreasonably delayed or withheld) has been given to
binding procedures for decision making within the Sole Risk Party.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.5.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Time Period for Commencement</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A Sole Risk Operation for </font>the Eligible
Project must commence within seventy-five (75) Days after the Proposing Party&#146;s
notice, and a Sole Risk Development must commence within one hundred eighty
(180) Days after the Proposing Party&#146;s notice.&#160;
However, if the Sole Risk Party is unable to conduct a Sole Risk
Operation due to force majeure, conflicts with operations, the respective
periods set forth in the preceding sentence shall be extended for a period not
to exceed an additional seventy-five (75) Days or one hundred eighty (180)
Days, as the case may be, unless such extension results in interruption of
delivery of the Work Program by the Company.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.6.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Lapse</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If a Sole Risk Operation is not commenced within the period specified in
Clause 9</font>.5, the right to commence it shall lapse.&#160; The Eligible Project or Sole Risk
Exploration that was the subject of the Sole Risk Operation shall again be
subject to the requirements of this Article 9.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='31',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.7. Operatorship</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator&#146;s rights and obligations with respect to the conduct of Joint
Operations hereunder shall apply to all Sole Risk Operations, mutatis
mutandis.&#160; If Sole Risk Party does not
include Operator, such Sole Risk Party may replace Operator with respect to a
Sole Risk Development as contemplated herein.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.8. Board of Directors</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For purposes of
Sole Risk Operations, the Board of Directors shall be deemed to include only
those Directors appointed by the Sole Risk Parties.&#160; Directors representing Non-consenting Parties shall have no power
or authority with respect to Sole Risk Operations and the provisions of this
Agreement shall apply to the activities of the Directors representing the Sole
Risk Parties, <i><font style="font-style:italic;">mutatis mutandis</font></i>.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 10</font></u></b></h1>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">DISTRIBUTION OF CASH SURPLUS</font></u></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.</font></b><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Distribution of Cash Surplus</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The Company
shall retain such of its cash as may be reasonably necessary for the financial
needs of the Company, its contractual commitments (including payments required
by this Agreement) and to meet Legal Requirements.&#160; The Parties agree to
distribute Cash Surplus between the Shareholders in accordance with the Law on
Joint-Stock Companies and Charter of the Company.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>By
reason of ownership of Shares, a Shareholder shall share in Net Profits or Net
Losses of the Company and in the surplus, if any, in accordance with its
Percentage Interest, except as otherwise provided elsewhere in this Agreement.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(D)</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>If the Sole Risk Party receiving any
distribution of cash surplus comprises more than one Shareholder, that
distribution shall be proportional to its Percentage interest at the
appropriate time except for all costs of the Sole Risk Party to be paid to the
Proposing Party in proportion of one to three i.e. for one dollar of costs the
Sole Risk Party receives 3 USD.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 11</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">BANK ACCOUNTS,
REPORTS, AUDIT AND TAX STATUS</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.1. Fiscal Year</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The fiscal year of the
Company shall be an annual period ending on the date Approved by the Board.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.2. Accounts</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Board shall provide for detailed, full, accurate and itemized accounts and records
of the Company to be prepared and maintained.&#160;
The Company accounts shall be maintained at such</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">32</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='32',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">place
or places as Approved by the Board, and shall be maintained on the accrual
basis in accordance with Generally Accepted Accounting Principles and kept in
Dollars.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.3. Bank Accounts and Use of Funds</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The funds of the Company shall be kept in the name of
the Company in one or more separate bank accounts with banks or trust companies
or investments as Approved by the Board.&#160;
Withdrawals from such accounts or investments shall be made by the
persons approved by the Board, Chairman of Management with payment documents
signed by his First Deputy on financial matters.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.4. Auditors</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The auditors of the Company shall be Approved by the
Board.&#160; The Company&#146;s auditors shall
have access to all books of account, records, cheques, vouchers, papers and
documents which relate to the Company&#146;s business.&#160; The remuneration of the appointed auditors shall be Approved by
the Board.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.5. Audits</font></b></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any
Shareholder, upon at least thirty (30) Days&#146; advance notice to the Company,
shall have the right, at all reasonable times during usual business hours and
at its sole expense, to examine and conduct internal audits of all or any
portion of the Company&#146;s accounts, including, without limiting the generality
of the foregoing and subject to confidentiality restrictions, records, invoices
and the contracts and agreements of the Company.&#160; This right may be exercised by any of such Shareholder&#146;s agents,
employees or representatives.&#160; All
Shareholders shall be entitled to participate in any such audit with a
reasonable number of their own representatives.&#160; Each Shareholder participating in any such audit shall be
entitled to determine its own scope of audit.&#160;
Unless otherwise Approved by the Board, the audit right contained in
this Clause 10.5 may be performed only once for any given Year, within
twenty-four months following the end of that Year.&#160; If no audit is conducted within that twenty-four (24) months, all
matters in respect of such Year shall be deemed to be true and correct.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.6.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Tax Status,
Allocations and Reports</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The
Company shall file, on a timely basis, and store all Tax returns and
statements, if any, which must be filed on behalf of the Company with any
taxing authority having jurisdiction over the business of the Company.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The
Company shall make such elections and take such actions as may be reasonable
and necessary on behalf of the Company to obtain beneficial tax treatment for
the Company under Legal Requirements.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Each
of the Parties agrees to join in the execution of such documents and elections
as may be required in this connection.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">33</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='33',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 12<br>
TRANSFER OF SHARES</font></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Transfer</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>To
effect a transfer of its Shares, or any portion thereof, to a non-Affiliate, a
transferee shall first obtain the Approval of the Board.&#160; Upon receipt of such approval, the
transferee shall execute and deliver to the non-transferring Shareholders an
instrument by which it agrees to be bound by all provisions of this Agreement,
as if it is substituted for the transferring Shareholder as to the Shares
transferred (including, but not limited to) the repayment of Cash Surplus
pursuant to Article 9 and the transferor shall repay all deficiency advances
made to it under Clause 6.2(A) and discharge all its obligations as a
Delinquent Shareholder.&#160; Upon the
execution and delivery of such instrument, repayment and discharge, the transferee
shall, subject to the Legal Requirements, become a Shareholder in the place of
the transferor as to the Shares transferred and shall have all the rights,
power, duties and obligations as to the Shares transferred by the transferor
under this Agreement.&#160; The transferor
shall then cease to be a Shareholder as to those Shares and shall have no
further rights, powers, duties and obligations under this Agreement in regards
to such Shares; provided, however, that the transferor shall remain liable
under all of its indemnities to the Company under this Agreement as if it had
continued to own the Shares being transferred.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>The Shareholders
agree to cause the Company, and the Company agrees, to be bound by the terms of
this Article 11, to comply with any obligations this Article imposes upon it,
and to not register any transfer of Shares, unless this Agreement has been
fully complied with.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Upon
execution and delivery of the instrument referred to in Clause 11.1(A) and
fulfilment of all other requirements of this Article, any Shareholder who has
disposed of all of its Shares shall no longer be bound by any of the provisions
of this Agreement, other than the provisions dealing with confidentiality and
the indemnities (including, without limitation, cash contributions in respect
of those indemnities contained in this Agreement).</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Any
transfer tax and all other expenses appertaining to sales or transfers of
interest in the case of assignment by a Shareholder to a third party, shall be
the joint and several obligation of the transferor and transferee.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Any
Party may transfer all or any part of its Shares to an Affiliate without the
Approval of the Board, provided, however, that any Shareholder which transfers
to an Affiliate shall remain responsible for the performance of the financial
and other obligations under this Agreement to the same extent as if the
transfer had not occurred and provided further that such Shareholder shall
notify the other Shareholders, the Operator and the Company of any such transfer.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='34',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h2 align="left" style="margin:0in 0in .0001pt 24.0pt;page-break-after:auto;text-align:left;text-indent:-24.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.2.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;"> Binding Transfer</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No
transfer of Shares shall be binding upon the Company or the remaining
Shareholders until copies of all instruments executed and delivered pursuant to
or in connection with that transfer have been delivered to the Company.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 12<br>
WITHDRAWAL</font></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Withdrawal</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Any Shareholder may, at its option and by
notice to the Company withdraw from this Agreement by surrendering its shares
to the Company.&#160; The Company will
receive the shares as Treasury shares. The Company shall have no obligations to
buy out such shares or to compensate the transferring party for the transferred
shares provided that:</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-52.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .7in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Withdrawal is not prohibited under the Legislation;</p>

<p style="margin:0in 0in .0001pt .7in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .7in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Such redemption
shall not release such Shareholder from its obligations to the Company for its
share of costs and expenses incurred by the Company and the Operator and those
included in Work Programs and Budgets approved by the Board of Directors prior
to the notice of withdrawal;</p>

<p style="margin:0in 0in .0001pt .7in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .7in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Such
Shareholder shall provide the Company with either funds or acceptable security
so as to allow the Company to discharge its abandonment and reclamation
obligations with respect to Operations conducted prior to effecting the withdrawal;
provided that the Shareholder&#146;s obligation to provide such funds or security
shall be limited to its Percentage Interest of the estimated costs of such
abandonment and reclamation.</p>

<p style="margin:0in 0in .0001pt .7in;text-indent:-.4in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.2</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effect of Notice</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>On receipt of a
Shareholder&#146;s notice set forth in Clause 12.1 above, such Shareholder shall cease to be
entitled to vote on any matter put before the Shareholders and the
Shareholder&#146;s designated representative on the Board of Directors shall tender
his resignation effective as of the same date.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>Upon
such withdrawal, the Shareholder shall cease to be a Party to this Agreement,
subject, however, to the rights and obligations that continue to apply to such
withdrawing Shareholder as specified herein.</p>

<p style="margin:0in 0in .0001pt .3in;text-indent:-.3in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 13</font></b></h1>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">GOVERNING LAW AND JURISDICTION</font></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">13.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Governing Law and Jurisdiction</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Agreement
shall be governed by and construed and enforced in accordance with the Laws and
Regulations of the Republic of Kazakhstan.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">13.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Claims</font></b></p>

<p style="margin:0in 0in .0001pt .55in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any
and all claims and actions to the extent they are not provided for by insurance
resulting from the conduct of the Joint Operations and Sole Risk Operations
pursuant hereto, may be resolved amicably and settled or contested by the
Operator on behalf of the Company;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">35</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='35',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">provided
that, however, the Operator does not pay any amount in excess of the equivalent
of two hundred thousand US dollars (USD 200,000) in consideration of any claim
or action, having failed to obtain a sanction of the Board of Directors. Any
claim or action for the amount in excess of the equivalent of two hundred US
dollars (USD 200,000) should be immediately reported to the Board of Directors,
and the Operator shall comply with any instructions issued by the Board of
Directors with respect to such claim or action.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">13.3.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Operator&#146;s Obligations</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Except for the foregoing in this Agreement, the
Operator shall not incur any costs, expenses or account liabilities resulted
from fulfillment of the Operator&#146;s responsibilities and functions.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ARTICLE 14</font></b><b><font style="font-weight:bold;"><br>
FORCE MAJEURE</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt 35.45pt;page-break-after:auto;text-align:left;text-indent:-35.45pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">14.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">If any Party is prevented by Force
Majeure from carrying out any obligation hereunder, the obligations of the
Party insofar as its obligations are affected by the Force Majeure, shall be
suspended while (but only so long as) the Force Majeure continues to prevent
the performance of the said obligations.&#160;
Any Party prevented from carrying out any obligation by Force Majeure
shall promptly give the other Parties notice of the Force Majeure including reasonably
full particulars in respect thereof.</font></h2>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>

<h2 align="left" style="margin:0in 0in .0001pt 35.45pt;page-break-after:auto;text-align:left;text-indent:-35.45pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">14.2</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">The Party claiming suspension of its
obligations as aforesaid shall promptly remedy the cause and effect of the
Force Majeure described in the said notice insofar as it is reasonably able so
to do; provided that the terms of settlement of any strike, lockout or other
industrial disturbance shall be wholly in the discretion of the Party claiming
suspension of its obligations hereunder by reason thereof and that Party shall
not be required to ac</font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">t</font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;"> to meet the demands of its opponents in any strike, lockout or
industrial disturbance solely to remedy promptly the Force Majeure thereby
constituted.</font></h2>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></h2>

<h2 align="left" style="margin:0in 0in .0001pt 35.45pt;page-break-after:auto;text-align:left;text-indent:-35.45pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">14.3</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">Notwithstanding anything contained in
this Article 14, lack of finances shall not be</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">  </font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">considered a Force Majeure nor shall any Force Majeure suspend any obligations
for the payment of money due hereunder.</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt 35.45pt;page-break-after:auto;text-align:left;text-indent:-35.45pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">14.4</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;font-weight:normal;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:normal;">For the purposes hereof, &#147;Force Majeure&#148;
means any one or more of the following events:</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .4in;text-indent:-.4in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>an act of God;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .4in;text-indent:-.4in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a war, revolution,
insurrection, riot, blockade, or any other unlawful act against public order or
authority;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .4in;text-indent:-.4in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a strike, lockout, or other
industrial disturbances;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .4in;text-indent:-.4in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>a storm, fire, flood,
explosion or lightning, a governmental restraint; or</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .4in;text-indent:-.4in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>any other event which is not
reasonably within the control of the Party hereto claiming suspension of its
obligations hereunder due to Force Majeure.</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">36</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='36',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h1 style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 15<br>
GENERAL PROVISIONS</font></b></h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.1</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Communications</font></h2>

<p style="margin:0in 0in .0001pt 21.3pt;text-indent:-21.3pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 21.3pt;text-indent:-21.3pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font>All notices or requests provided for or permitted to be given pursuant
to this Agreement (&#147;Communications&#148;) must be in writing or confirmed in writing
and may be given or sent to the Party to be notified by telex, facsimile or
first-class, registered or certified mail (postage prepaid), or by delivering
it to that Party.&#160; Communications shall
be effective upon receipt.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>All Communications to TME shall be to:</p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Transmeridian Exploration Inc.<br>
11811 North Freeway, Suite 500<br>
Houston, Texas&#160; 77060<br>
Attention:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Mr. Lorrie T. Olivier,
President COO<br>
Telephone:</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">281.591.4777&#160;&#160; Facsimile:&#160;
281.591.4778</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)
All Communications to Kazstroiproekt shall be to:</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kazstroiproekt, Ltd.</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">68 Abai Ave. Office 74</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Almaty, Kazakhstan</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attention:</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Telephone:</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(D)
All Communications to the Company shall be to:</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">OPEN JOINT STOCK COMPANY CASPI NEFT TME</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Almaty, Kazakhstan, 67 Aitike bi Street, Office 428</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attention:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Mr Nurzhan Kumanov</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Telephone:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">7-3272-548425&#160; Facsimile:&#160; 7-3272-548425</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(E)
By a communication to all other Parties, and with at least Ten (10) Days&#146;
advance notice, a Party may from time to time and at any time specify any other
address as its address.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.2</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Time of the Essence</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Time
shall be of the essence of this Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.3</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Binding Effect</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
Agreement shall be binding upon the Shareholders and the Company and their
successors and assigns.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">37</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='37',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.4</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Entire Agreement</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 19.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font><font size="2" style="font-size:10.0pt;">This Agreement, together with its
Exhibits, constitutes the entire agreement of the Parties with respect to its
subject matter and supersedes any prior oral and written understandings and
communications in respect thereof.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 19.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(B)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font><font size="2" style="font-size:10.0pt;">This Agreement inures to the benefit of
and is binding upon the Parties and their respective successors and assigns
according to its terms.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 19.5pt;text-indent:-19.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(C)</font><font size="1" style="font-size:8.5pt;">&#160;&#160; </font><font size="2" style="font-size:10.0pt;">In the event of a conflict between the
provisions of this Agreement and the Company&#146;s Constating Documents, the
provisions contained in this Agreement shall prevail and the Parties shall
cause the amendment of the Company&#146;s Constating Documents to remove such
conflict.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 align="left" style="margin:0in 0in .0001pt .5in;page-break-after:auto;text-align:left;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.5.</font></b><font size="1" face="Times New Roman" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amendments</font></h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
Agreement may be amended or altered by the Parties only through the duly
authorized execution of a written installment expressly so stating.&#160; No waiver by a Party of any matter,
non-compliance or breach of any provision of this Agreement shall be binding,
unless such waiver is made expressly and evidenced or confirmed in
writing.&#160; Any such waiver shall relate
only to the matter, non-compliance or breach as expressly waived and shall not
apply to a repetition thereof or any other subsequent matter, non-compliance or
breach.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 16</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTICES</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">16.1. Manner of Notices</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(A)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>All notices, notifications, submissions, approvals or other
communications (hereafter together referred to as &#147;notices&#148;) which may be or
are required to be given hereunder shall be in writing and shall be deemed to
have been properly and effectively given and delivered to a party when
delivered in person to any authorized representative of that party whose name
and address shall have been notified by that party in accordance with this
Article, or when sent by telex or facsimile (and confirmed by mail) to that
party&#146;s number and address as appropriate as specified hereunder.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Parties hereto may notify changes of address or
additional addressees in accordance wit this Article, and upon receipt of such
notice by the other party all the notices shall be sent to this or additional
address for the service of notices hereunder.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">16.2</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font style="font-weight:bold;">Addresses</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For
the purposes of services of notices the respective addresses of the Company and
Member are:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">OPEN JOINT STOCK COMPANY CASPI NEFT TME</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Republic of Kazakhstan, Almaty, 480051, Dostyk Ave, 105, &#147;Alatau&#148; Hotel</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attention:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Mr. Anatole Kunevich</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Telephone:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">7-3272-503418&#160; Facsimile:&#160; 7-3272-503419</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">38</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='38',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">caspinefttme@se.arna.kz</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">TRANSMERIDIAN EXPLORATION INC.<br>
11811 North Freeway, Suite 500<br>
Houston, Texas&#160; 77060<br>
Attention:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Mr. Lorrie T. Olivier,
President COO<br>
Telephone:</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">281.591.4777&#160;&#160; Facsimile:&#160;
281.591.4778<br>
Email:</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">lolivier@tmei.com</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">KAZSTROIPROEKT TOO</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">68 Abai Ave. Office 74</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Almaty Kazakhstan</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attention: Mrs. Serlina I.V.</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Telephone:</font></b><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Fax:</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt 1.0in;text-indent:-11.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Email:</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 17</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">WAIVER</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No waiver by either Party
of any provision of this Agreement shall be binding unless made expressly and
expressly confirmed in writing. Further, any such waiver shall relate only to
such matter, non-compliance or breach as it expressly relates to and shall not
apply to any subsequent or other matter, non-compliance or breach.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">ARTICLE 18. LANGUAGE OF AGREEMENT</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
Agreement is made in two copies in Russian and English having equal legal
operation. In case of conflict, Russian text of the Agreement shall prevail.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN
WITNESS WHEREOF THIS AGREEMENT has been entered into the day and year first
above written.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Signed for and
  on behalf of <b><font style="font-weight:bold;">TRANSMERIDIAN EXPLORATION INC.</font></b></font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.06%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">BY:/s/</font></p>
  </td>
  <td width="13%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:13.32%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Lorrie T. Olivier</font></p>
  </td>
  <td width="75%" valign="top" style="padding:0in 0in 0in 0in;width:75.62%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TITLE: President, CEO</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">DATE: February 14, 2002</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">39</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='39',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Signed for and
  on behalf of <b><font style="font-weight:bold;">KAZSTROIPROEKT TOO</font></b></font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.84%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">BY:</font></p>
  </td>
  <td width="8%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:8.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Serlina</font></p>
  </td>
  <td width="87%" valign="top" style="padding:0in 0in 0in 0in;width:87.94%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">DATE: </font>February 14, 2002</p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">40</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

</div>


<!-- SEQ.=1,FOLIO='40',FILE='C:\jms\jfernan\04-6295-1\task131207\6295-1-kc.htm',USER='jfernandez',CD='May 19 10:44 2004' -->
</body>

</html>

</TEXT>
</DOCUMENT>
