Exhibit 10.3


          The security represented by this instrument was originally
          issued on May 10, 2002 [Completion Date] and has not
          been registered under the Securities Act of 1933, as
          amended. The transfer of such security is subject to the
          conditions specified in the Master Agreement dated as of
          May 9, 2002 between the issuers (the "Companies") and
          a certain investor. The Companies reserve the right to
          refuse the transfer of the security represented by this
          instrument until such conditions have been fulfilled with
          respect to the transfer. Upon written request, a copy of
          such conditions will be furnished by the Companies to the
          holder hereof without charge.


                            PROMISSORY NOTE



May 10, 2002                                                    U.S. $ 4,000,000


Chaparral Resources, Inc., a Delaware corporation ("Chaparral"), and Central
Asian Petroleum (Guernsey) Limited, a Guernsey corporation ("CAP-G"), hereby
jointly and severally promise to pay to the order of Central Asian Industrial
Holdings N.V. and its successors and assigns (the "Holder") the principal amount
of U.S. $4,000,000, together with interest thereon calculated from the date
hereof in accordance with the provisions of this Note.

This Note was issued pursuant to a Master Agreement dated as of May 9, 2002 (the
"Master Agreement") between the Chaparral and Central Asian Industrial Holdings
N.V. This Note is the "Note" referred to in the Master Agreement. The Master
Agreement contains terms governing the rights of the Holder with respect to this
Note, and all provisions of the Master Agreement are hereby incorporated herein
in full by reference.

Chaparral and CAP-G are referred to herein collectively as the "Companies" and
each individually as a "Company." Certain other capitalized terms used in this
Note are defined in Section 5. Unless otherwise indicated herein, capitalized
terms used in this Note have the same meanings set forth in the Master
Agreement.

Section 1. Payment of Interest. Except as otherwise provided in Section 3.2(a),
interest will accrue at the rate of 12 percent per annum on the unpaid principal
amount of this Note outstanding from time to time or, if less, at the highest
rate then permitted under applicable law. The Companies will pay to the holder
of this Note all accrued interest on the last day of each March, June, September
and December, beginning first quarter-end after the Completion Date, 2002 (the
"Interest Payment Dates"). Unless prohibited under applicable law, any accrued
interest which is not paid on the date on which it is payable will bear interest
at the same rate at which interest is then accruing on the principal amount of
this Note. Any accrued interest which for any reason has not theretofore been
paid will be paid in full on the date on which the final principal payment on

<PAGE>


this Note is paid. Interest will accrue on any principal payment due under this
Note and, to the extent permitted by applicable law, on any interest which has
not been paid on the date on which it is payable until such time as payment
therefor is actually delivered to the Holder.

     Section 2.    Payment of Principal.
     ---------     --------------------

     2.1 Scheduled Payment. The Companies will pay the outstanding principal
amount of this Note to the Holder on the third anniversary of the Completion
Date, being [ ].

     2.2 Prepayments. The Companies may, at any time and from time to time
without premium or penalty, prepay all or any portion (in whole number multiples
of $100,000 only) of the outstanding principal amount of this Note on any
Interest Payment Date. A prepayment of less than all of the outstanding
principal amount of this Note will not relieve the Companies of their obligation
to pay the principal amount of this Note on the scheduled payment date provided
in Section 2.1.

     Section 3.    Events of Default.
     ---------     -----------------

     3.1 Definition. For purposes of this Note, an Event of Default will be
deemed to have occurred if:

     (a) the Companies fail to pay when due the full amount of interest then
     accrued on this Note or the full amount of any principal payment on this
     Note;

     (b) either Company fails to perform or observe any other provision
     contained in this Note or in the Master Agreement;

     (c) any representation, warranty or information contained in the Master
     Agreement or required to be furnished to the Holder pursuant to the Master
     Agreement, is false or misleading in any material respect on the date made
     or furnished;

     (d) either Company or any Subsidiary makes an assignment for the benefit of
     creditors or admits in writing its inability to pay its debts generally as
     they become due; or an order, judgment or decree is entered adjudicating
     either Company or any Subsidiary bankrupt or insolvent; or any order for
     relief with respect to either Company or any Subsidiary is entered under
     the United States Bankruptcy Code; or either Company or any Subsidiary
     petitions or applies to any tribunal for the appointment of a custodian,
     trustee, receiver or liquidator of such Company or any Subsidiary, or of
     any substantial part of the assets of such Company or any Subsidiary, or
     commences any proceeding (other than a proceeding for the voluntary
     liquidation and dissolution of any Subsidiary) relating to such Company or
     any Subsidiary under any bankruptcy, reorganization, arrangement,
     insolvency, readjustment of debt, dissolution or liquidation law of any
     jurisdiction; or any such petition or application is filed, or any such
     proceeding is commenced, against either Company or any Subsidiary and
     either (i) such Company or any such Subsidiary by any act indicates its
     approval thereof, consent thereto or acquiescence therein or (ii) such
     petition, application or proceeding is not dismissed within 60 days;

<PAGE>


     (e) a judgment in excess of U.S. $100,000 is rendered against either
     Company or any Subsidiary and, within 60 days after entry thereof, such
     judgment is not discharged or execution thereof stayed pending appeal, or
     within 60 days after the expiration of any such stay, such judgment is not
     discharged; or

     (f) either Company or any Subsidiary defaults in the performance of any
     obligation if the effect of such default is to cause an amount exceeding
     U.S. $100,000 to become due prior to its stated maturity or to permit the
     holder or holders of such obligation to cause an amount exceeding U.S.
     $100,000 to become due prior to its stated maturity.




     3.2      Consequences of Events of Default.
              ---------------------------------

     (a) If an Event of Default of the type described in Section 3.1(a) or (b)
     has occurred and continued for 15 days or any other Event of Default has
     occurred, the interest rate on this Note will increase immediately by an
     increment of two percentage points to the extent permitted by law.
     Thereafter, until such time as no Event of Default exists, the interest
     rate on this Note will increase automatically at the end of each succeeding
     fiscal quarter by an additional increment of one percentage points to the
     extent permitted by law (but in no event will the interest rate exceed 18
     percent per annum). Any increase of the interest rate resulting from the
     operation of this Section 3.2(a) will terminate as of the close of business
     on the date on which no Events of Default exist (subject to subsequent
     increases pursuant to this Section).

     (b) If an Event of Default of the type described in Section 3.1(d) has
     occurred, the principal amount of this Note (together with all accrued
     interest thereon and all other amounts payable in connection therewith)
     will become immediately due and payable without any action on the part of
     the Holder, and the Companies will immediately pay to the Holder all
     amounts due and payable with respect to this Note.

     (c) If an Event of Default of the type described in Section 3.1(a) or (b)
     has occurred and continued for 15 days and if an Event of Default of the
     type described in Section 3.1(b) has occurred and continued for 30 days, or
     any other Event of Default (other than under Section 3.1(d)) has occurred,
     the Holder may declare all or any portion of the outstanding principal
     amount of this Note (together with all accrued interest thereon and all
     other amounts due in connection therewith) due and payable and demand
     immediate payment of all or any portion of such amount. If the Holder
     demands immediate payment and all or any portion of the amounts due under
     this Note, the Companies will immediately pay to the Holder all amounts
     demanded to be paid with respect to this Note.

     (d) The Holder will also have any other rights which it may have been
     afforded under any contract or agreement at any time and any other rights
     which the Holder may have pursuant to applicable law.

<PAGE>


     (e) Each Company hereby waives diligence, presentment, protest and demand
     and notice of protest and demand, dishonor and nonpayment of this Note, and
     expressly agrees that this Note, or any payment hereunder, may be extended
     from time to time and that the Holder may accept security for this Note or
     release security for this Note, all without in any way affecting the
     liability of the Companies hereunder.

     Section 4. Amendment and Waiver. The provisions of this Note may be amended
and the Companies may take any action herein prohibited, or omit to perform any
act herein required to be performed by them, only if the Companies have obtained
the prior written consent of the Holder. No other course of dealing between the
Companies and the Holder or any delay in exercising any rights hereunder will
operate as a waiver of any rights of the Holder.

     Section 5. Definitions. For purposes of this Note, the following
capitalized terms have the following meaning.

"Person" means an individual, a corporation, a partnership, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

"Subsidiary" means any corporation, partnership, limited liability company,
association, joint stock company, trust or other business entity of which (a) a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors is at
the time owned or controlled, directly or indirectly, by Chaparral, one or more
Subsidiaries of Chaparral or a combination thereof or (b) a majority of the
partnership, membership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by Chaparral, one or more
Subsidiaries of Chaparral or a combination thereof. For purposes of this Note, a
Person will be deemed to have a majority ownership interest in a partnership,
limited liability company, association, trust or other business entity if such
Person is allocated a majority of partnership, membership, association, trust or
other business entity gains or losses or controls the general partner, managing
member, trustee or other controlling Person of such partnership, limited
liability company, association, trust or other business entity.

     Section 6. Cancellation. After all principal and accrued interest at any
time owed on this Note has been paid in full, this Note will be surrendered to
the Companies for cancellation and will not be reissued.

     Section 7. Place of Payment. Payments of principal and interest are to be
delivered to the Holder at the following address:




     or to such other address or to the attention of such other Person as
specified by prior written notice to the Companies.

<PAGE>


     Section 8. Costs of Enforcement. In addition to the other amounts provided
in this Note, the Holder will be entitled to recover all costs and expenses
(including reasonable attorney's fees and expenses) incurred by the Holder in
connection with the enforcement of this Note against the Companies.

     Section 9. Usury Laws. It is the intention of the Companies and the Holder
to conform strictly to all applicable usury laws now or hereafter in force, and
any interest payable under this Note will be subject to reduction to the amount
not in excess of the maximum legal amount allowed under the applicable usury
laws as now or hereafter construed by the courts having jurisdiction over such
matters. If the maturity of this Note is accelerated by reason of an election by
the Holder resulting from an Event of Default, voluntary prepayment by the
Companies or otherwise, then earned interest may never include more than the
maximum amount permitted by law, computed from the date hereof until payment,
and any interest in excess of the maximum amount permitted by law will be
canceled automatically and, if theretofore paid, will at the option of the
Holder either be rebated to the Companies or credited on the principal amount of
this Note, or if this Note has been paid, then the excess will be rebated to the
Companies. The aggregate of all interest (whether designated as interest,
service charges, points or otherwise) contracted for, chargeable or receivable
under this Note will under no circumstances exceed the maximum legal rate upon
the unpaid principal balance of this Note remaining unpaid from time to time. If
such interest does exceed the maximum legal rate, it will be deemed a mistake
and such excess will be canceled automatically and, if theretofore paid, rebated
to the Companies credited on the principal amount of this Note, or if this Note
has been repaid, then such excess will be rebated to the Companies.

     Section 10. Joint and Several Liability. Each of the Companies will be
jointly and severally liable for all of the obligations to the Holder arising
pursuant to the Master Agreement and this Note. The Holder will be entitled to
enforce all of such obligations against the Companies jointly, or against either
of the Companies separately, as may be determined by the Holder in its sole
discretion. The enforcement of such obligations against either Company
separately will not constitute an election of remedies by the Holder and will
not give rise to any defense in any subsequent action or proceeding brought by
the Holder to enforce this Note against the other Company.

     Section 11. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS NOTE WILL BE GOVERNED BY THE INTERNAL LAW,
AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.


     Section 12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ITS RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE. EACH OF THE PARTIES AGREES THAT ALL
MATTERS OF LAW AND FACT IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING WILL BE
HEARD AND DECIDED SOLELY BY THE COURT BEFORE WHICH SUCH ACTION OR PROCEEDING IS
BROUGHT IN ACCORDANCE WITH SECTION 13

<PAGE>


     Section 13. Submission to Jurisdiction. The Companies and the Holder each
hereby submit to the exclusive jurisdiction of any state or federal court
sitting in Wilmington, Delaware, in any action or proceeding arising out of or
relating to this Note, agree that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agree not to bring
any action or proceeding arising out of or relating to this Note in any other
court. The Companies and the Holder each hereby waive any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waive any bond, surety or other security that might be required of any other
party with respect thereto. The Companies and the Holder each agree that a final
judgment in any action or proceeding so brought will be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law.

                                    * * * * *


     IN WITNESS WHEREOF, the Companies have each executed and delivered this
Note on May 10, 2002.



                                            CHAPARRAL RESOURCES, INC.

                                            By  /s/  James A. Jeffs
                                                --------------------------------

                                            Its  Co-Chairman
                                                 -------------------------------


                                            CENTRAL ASIAN PETROLEUM
                                            (GUERNSEY) LIMITED

                                            By  /s/  James A. Jeffs
                                                --------------------------------

                                            Its  Director
                                                 -------------------------------