EX-10.1






	



EXHIBIT 10.1




CONSULTANCY AGREEMENT



This Agreement is entered into and made Between AMERICAN
INTERNATIONAL PETROLEUM CORPORATION hereinafter referred to as (the COMPANY) in
behalf of its Kazakstan affiliate AMERICAN INTERNATIONAL PETROLEUM CORPORATION
KAZAKSTAN, a Nevada Corporation with office at 444 Madison Avenue, New York
City, New York, and NURZHAN S. KURMANOV hereinafter referred to as (CONTRACTOR),
an independent consultant registered to do business in the Republic of
Kazakhstan with offices located at Prospect Dostik # 44-95, Almaty 480100,
Republic of Kazakhstan. 




WITNESSETH:



WHEREAS, The COMPANY represents that its affiliate AMERICAN
INTERNATIONAL PETROLEUM CORPORATION KAZAKHSTAN (hereinafter referred to as
“AIPK”) is interested in participating in a Republic of Kazakstan Open
Tender for the purpose of acquiring the Shagyrly-Shomyshty gas field in Western
Kazakstan. 



WHEREAS, The COMPANY desires to retain the consulting and legal
services of CONTRACTOR to support the COMPANY in all legal and tax research,
contract drafting, and presentations to the Government regarding this Tender and
subsequent drafting and execution of an Operating Contract.; 



WHEREAS, CONTRACTOR agrees to make its services available to the
COMPANY subject to the terms and conditions of this Agreement, and further
represents that it has the staff and sub contractors available to support the
legal, tax and contractual tasks required in the time frame by AIPK. 



NOW, THEREFORE, in consideration of the mutual promises herein
contained, the COMPANY and CONTRACTOR agree as follows: 








	1.0
		Consultancy.







		1.1
		The
COMPANY on behalf of its Kazakstan affiliate AMERICAN INTERNATIONAL PETROLEUM
CORPORATION KAZAKSTAN contracts with CONTRACTOR as a consultant and CONTRACTOR
hereby accepts such contract subject to the terms and conditions contained in
this Agreement. CONTRACTOR is engaged as a consultant to the COMPANY and
neither CONTRACTOR nor the COMPANY intend to create a joint venture,
partnership or other relationship which might impose a fiduciary obligation on
the part of CONTRACTOR other than as an independent contractor and not as an
employee of the COMPANY in performance of this Agreement.






	2.0
		Duties
of CONTRACTOR







		2.1
		CONTRACTOR
shall provide Legal, tax and contract negotiation support and advisory services
on behalf of AIPK with respect to all matters relating to or affecting AIPK in
the drafting and negotiation of the various Tender documents and Operating
Contract associated in the acquisition of the Shagyrly-Shomyshty gas field in
Western Kazakstan.






		2.2
		CONTRACTOR
agrees to use its resources and subcontractors as necessary to draft and
develop all legal, tax, and regulatory matters involved in the development and
execution of the documents and contracts associated with the Tender process and
the issuance of an acceptable Operating Contract. CONTRACTOR shall use its best
efforts to support the COMPANY’s efforts, when requested to negotiate and
consummate the acquisition of the Operating Contract, its registration, and
issuance of a license to develop and produce the Shagyrly-Shomyshty gas field.







		2.3
		CONTRACTOR
will use its best efforts when requested to facilitate, negotiate, and
consummate the acquisition of all permits contracts, and documentation
necessary to the successful development and exploitation of the
Shagyrly-Shomyshty gas field.


















		2.4
		Throughout
the term of this Agreement, CONTRACTOR will provide it’s services to the
COMPANY on a part-time basis and will devote the time and attention reasonably
necessary to perform it’s duties and will use it’s best efforts to
achieve the objectives of the COMPANY as described above.






		2.5
		It
is understood and agreed that CONTRACTOR’s services to the COMPANY are
only exclusive as per Section 11.0 of the Agreement. CONTRACTOR may continue to
be engaged as a consultant by third parties regarding services that are not
related to the Shagyrly-Shomyshty gas field Tender and Operating Contract.






	3.0
		Compensation







		3.1
		The
COMPANY agrees to compensate CONTRACTOR for the services provide in accordance
with the billing schedule attached hereto for the respective personnel actually
involved in rendering the services. The services will be billed in invoice form
after the completion of the project.






		3.2
		The
COMPANY will also recognize a satisfactory completion bonus of $200,000 In
recognition of a timely and acceptable completion and registration of the
Operating Contract.






		3.3
		The
COMPANY will also reimburse all reasonable out of pocket costs incurred by the
CONTRACTOR or his various sub contractors in the execution of this Agreement.






		3.4
		Any
other services provided by the CONTRACTOR as requested by the COMPANY or AIPK
must be invoiced in accordance with scheduled time rates or as agreed by the
parties.






	4.0
		Taxes







		4.1
		CONTRACTOR
assumes full and exclusive liability for payment of all taxes, levies and
contributions imposed by the government of any country or any political
subdivision, including those measured by wages, salaries or other remuneration
paid to persons engaged or employed by CONTRACTOR in the performance of
services rendered under this Agreement, and shall report and pay such taxes and
contributions directly when required by law and otherwise comply with the law
and other applicable regulations.






	5.0
		Payments







		5.1
		The
COMPANY will pay invoiced amounts under this Agreement for services to AIPK in
US dollars via wire transfer as provide by written instructions related to the
completion of each contractual event described in Section 3.1 of the Agreement.






		5.2
		The
COMPANY may also at its election pay the invoiced amounts in equivalent value
of registered and freely tradable shares of the COMPANY’s common stock.






	6.0
		Confidentiality







		6.1
		CONTRACTOR
agrees to keep and maintain strict confidentiality as to all data, reports,
analysis, information and affairs of the COMPANY its Affiliates, its
contractors, subcontractors, and associated companies, which may be revealed to
CONTRACTOR in the execution of this Agreement.. . CONTRACTOR will not disclose
or discuss in any form the affairs of the COMPANY or AIPK with representatives
of any government, organization or person, without specific written
authorization of the COMPANY or AIPK. CONTRACTOR agrees to defend, indemnify
and hold the COMPANY and AIPK harmless from any claim or action resulting from
a breach of this confidentiality obligation. This agreement to maintain
confidentiality shall continue beyond the termination of this Agreement until
CONTRACTOR has been given release in writing to publish or reveal part or all
of such information.






		7.0
		Entire
Agreement



















	 	
7.1
This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter herein contained, and no modification hereof will
be effective unless made by a supplemental written agreement executed by all of
the parties hereto.






	8.0
		Disclosure
to Government Agencies







		8.1
		It
is understood, that the COMPANY or AIPK shall have the right, in its sole
discretion, to disclose the covenants, representations, terms and conditions of
this Agreement (as it may be amended from time to time), including without
limitations, fees paid under this Agreement, to agencies of the United States
of America, to agencies of the government of the Territory, or to agencies of
the government of CONTRACTOR’s principal place of business or domicile.






	9.0
		Attorneys’ Fees







		9.1
		If
any party institutes an action or proceeding against any other party relating
to the provisions of this Agreement or any default hereunder, the unsuccessful
party to such action or proceeding will reimburse the successful party therein
for the reasonable expenses of attorneys’ fees and disbursements and
litigation expenses incurred by the successful party.






	10.0
		Term







		10.1
		This
Agreement will commence on May 1, 1999 and be in force through out the
tendering and contact preparation process for the Shagyrly-Shomyshty gas field.









		10.2
		The
contracted services may continue with the mutual consent of both parties. 







	11.0
		Termination.







		11.1
		This
Agreement may be terminated by either party by giving notice of ten (10) days.






		11.2
		Unilateral
notice of termination by the COMPANY will require the immediate payment of all
costs and fees incurred by CONTRACTOR up until the date of notice of unilateral
termination.






	12.0
		Notice







		12.1
		Any
notice, payment, demand or communication required or permitted to be given by
any provision of this Agreement will be in writing and will be deemed to have
been given when delivered personally or by facsimile to the party designated to
receive such notice, or on the date following the day sent by overnight
courier, or on the third (3rd) business day after the same is sent by certified
mail, postage and charges prepaid, directed to the following address or to such
other or additional addresses as any party might designate by written notice to
the other party:





		
	To:  The COMPANY	 	American International Petroleum Corporation	 
		 	2950 North Loop West Suite 1000	 
	  	 	Houston, Texas 77092	 
	  	 	Telephone: 713-802-0087	 





		
	To: CONTRACTOR	 	Nurzhan Kurmanov	 
	 	 	Prospect Dostik # 44-95	 
	 	 	Almaty 480100	 
	  	 	Republic of Kazakstan	 






	13.0
		Conflicts







		13.1
		The
parties assure one another of their good faith. Any disputes shall be resolved
by amicable discussions and negotiations. Any remaining dispute, controversy or
claim arising out of or in relation to or in connection with this Agreement or
operations carried out under this Agreement, including without limitation any
dispute as to the construction, validity, interpretation, enforceability or
breach of this Agreement, shall be exclusively and finally settled by
arbitration, and any party may submit such a dispute, controversy or claim to
arbitration; and English Law shall apply.





















		13.2
		The
arbitration shall take place in Paris, France under the rules for arbitration
established by the International Chamber of Commerce, which are herewith
referred to and declared part of this present Agreement; and the decision of
the arbitration will be binding and final on the parties. The losing party will
pay for the reasonable costs and legal fees of the other side incurred in
reference to the arbitration. All proceeding will be conducted in the English
language.







	14.0
		Suppression







	 	
This
Agreement is the final, complete and exclusive expression of the agreement
between the COMPANY, AIPK and CONTRACTOR and supersedes and replaces in all
respects any prior agreements written or verbal. Upon execution of this
Agreement by the COMPANY and CONTRACTOR, the relationship between the AIPC and
CONTRACTOR will be governed by terms of this Agreement and not by any prior
agreements.





	


IN WITNESS WHEREOF, the undersigned authorized
representatives of the Parties hereto have executed this Agreement in duplicate
this 22 day of April 1999. 






		
	COMPANY	 	American International Petroleum Corporation	 
	 	 	  	 
	   	 	By: ______________________	 
	  	 	Lorrie T. Olivier	 
	   	 	Vice President Operations	 
	 	 	  	 
	 	 	  	 
	CONTRACTOR:	 	Nurzhan S. Kurmanov

______________________	 
















	





ANNEX 1.




BILLING SCHEDULE








		
	Position:	 	U.S. $ Per Hour	 
	 	 	  	 
	Senior Lawyer	 	350.00	 
	 	 	  	 
	Staff Lawyer	 	75.00	 
	 	 	  	 
	Other Services:	 	  	 
	 	 	  	 
	Secretarial Services	 	$ 800 per month	 
	 	 	  	 
	Car / Driver	 	$ 1,250 per month