EXHIBIT 4.12

      THIS JOINT VENTURE AGREEMENT is made the 3rd day of February 2002

      BETWEEN:      Canneft Inc., a company incorporated and existing under the
                    Laws of Province of Alberta, Canada (hereinafter called
                    "CNI" which expression shall include the permitted
                    successors in title transferees and assigns of CNI)

                                 OF THE ONE PART

      AND:          Tracer Petroleum Corporation, a federally-incorporated
                    company in Canada (hereinafter called "TPC" which expression
                    shall include the permitted successors in title transferees
                    and assigns of the TPC)

                                OF THE OTHER PART

WHEREAS:

      (A)   CNI has exclusive negotiation rights and has a protocol, signed
            March 26, 2001, with Turkmengeological to complete a Joint Operating
            Agreement and form a Joint Operating Company for the purposes of
            securing a Production Sharing Agreement ("PSA") for the Adzhiyap
            project in southwest Turkmenistan (the "Project").

      (B)   By an agreement dated the 3rd of February 2002 (the "Joint Venture
            Agreement") made between CNI and TPC, the parties agree to form a
            mutually-beneficial Joint Venture for the development of the
            Project. This Joint Venture refers solely to the combined working
            interests of CNI and TPC in the Project, as well as whatever
            additional non-Turkmenistan parties join the Project.

      (C)   TPC agrees to advance to the Joint Venture US$30,000 per month for 5
            months, starting on February 15, 2002, to cover the remaining
            estimated costs to secure the PSA.

      (D)   TPC and CNI will use their best efforts to secure a competent
            technical partner to join the Project as Operator. This Operator may
            or may not wish to invest in the Project as a part of the Joint
            Venture with CNI and TPC. If this Operator does not invest in the
            Project, then it will act solely as a contracted Operator. The
            involvement of a technically-competent Operator is crucial to
            securing a PSA for the Project, and the choice of Operator will be
            subject to approval of the Competent Body in Turkmenistan.


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      (E)   If the Operator chooses not to invest in the Project as a working
            interest holder in the Joint Venture, then TPC will have the option
            to earn a 60% interest in the Joint Venture by investing 100% of the
            capital required to develop the Project. The amount of capital
            required is subject to completion of a Joint Operating Agreement,
            which will require approval of CNI and TPC. It is currently
            estimated that up to US$25 million of outside capital (i.e. net of
            cash flow) will be required for the Project. For providing 100% of
            the capital, TPC will receive 90% of the distributable cash flow for
            the Joint Venture until achievement of invested fund payout, and 60%
            after payout.

      (F)   If the Operator chooses to invest in the Project as a partner in the
            Joint Venture, TPC will have the option to earn a minimum 20% in the
            Joint Venture by providing its pro-rata share of the required
            capital for the Project (i.e. 20/60 equals 1/3 of the required
            capital), and will earn its pro-rata share of distributable cash
            flow as in (E) above. TPC will also have the option of earning
            whatever remaining interest in the Joint Venture between 20% and 60%
            that is not taken up by the Operator.

      (G)   CNI and TPC agree to use their best efforts to secure a PSA for the
            Project as soon as is practicable.

      (H)   CNI and TPC will work on a timely-basis to complete the necessary
            formal Joint Operating Agreement and other agreements that will
            guide the Joint Venture between CNI and TPC.

      (I)   TPC's involvement in the Project may be subject to approval of the
            Competent Body in Turkmenistan.

      (J)   This agreement is subject to the consent of the Board of Directors
            of both, CNI and TPC, and shall be governed and construed solely
            according to the Laws of the Province of Alberta, Canada.

IN WITNESS WHEREOF Canneft Inc. has caused its Common Seal to be hereunto
affixed by and this Joint Venture Agreement to be signed by its duly authorized
persons in that behalf the day and year first above written.

THE COMMON SEAL of
Canneft Inc. was hereunto

affixed by Henk Jelsma                    Per:_______________________
                                                 President and CEO

and by                                    Per:_______________________
                                                      Director


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AND Tracer Petroleum Corporation has agreed to the terms of this Joint Venture
Agreement as signed by the duly authorized persons in that behalf the day and
year first above written.


Per: __________________________________________
      David Robinson, President, CEO & Director


Per: __________________________________________
      David W. Harrison, Corporate Secretary


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