Commission Agreement
                                  #N 17/914-13

Almaty                                                               07.03, 1998
                                                                     -----

Export-Import  Firm of  Munay-Impex  hereinafter  referred to as the Firm in the
person of the General  Director Mr. A. D. Esenzhanov  acting on the basis of the
Charter on the one side and Karakudukmunay Inc.  hereinafter  referred to as the
Enterprise in the person of the General  Directors Mr. N.D. Klinchev and Mr. Jay
McGee  acting on the basis of the  Articles  of  Association  on the other  side
together hereinafter referred to as the Parties have concluded this Agreement as
follows:

                           1. SUBJECT OF THE AGREEMENT

1.1.     The Firm shall, on its behalf and by order of the Enterprise, to export
         crude oil belonging to the Enterprise  (hereinafter  referred to as the
         Commodities)  to both the CIS and other  countries  in  batches  in the
         amount up to 100,000 (one hundred  thousand)  metric tons  according to
         the schedule of shipment of Kazakstan oil during the year of 1998.

1.2.     Price and date of  payment  of each  batch of the  Commodities  will be
         specified in the Exhibits hereto.

                          2. OBLIGATIONS OF THE PARTIES

2.1.     The Firm shall:

     -    independently  conclude contracts with the Buyer on exportation of the
          oil;
     -    accept the  Commodities as specified in Article 1.1. and carry out its
          export   transportation   according  to  the  terms  of  delivery  and
          conditions of the contract;
     -    obtain a passport of the export transaction;
     -    obtain a certificate of origin of the Commodities;
     -    execute customs declaration of the Commodities;
     -    deliver the indicated Commodities to the Buyer up to the loading point
          stipulated  in the  contract  with  allowance  made for losses  during
          transportation of the Commodities;
     -    control over the Buyer's  fulfillment  of the terms and  conditions of
          the contract;
     -    carry out all necessary  settlement with the Buyer and  transportation
          organizations on its behalf;
     -    return the currency received for the sold oil to the Enterprise at the
          average  weighted  exchange  rate  of  Almaty  Financial   Instruments
          Exchange  (AFINEX)  effective  on  the  date  preceding  the  date  of
          wire-transferring the money minus the bank's commission;
     -    provide  the  Enterprise  with  information  concerning  the status of
          fulfillment of this Agreement;


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     -    during  the  period  of  effect  of  this  Agreement  fulfill  all its
          provisions, as well as any other terms and conditions agreed upon with
          the Enterprise.

2.2.     The Enterprise shall:

     -    provide  the Firm with the  Commodities  in the  amount  specified  in
          Article 1.1. hereof.
     -    to  reimburse  the  Firm for all  costs  incurred  connected  with the
          accomplishment  of the  Enterprise's  order subject to presentation of
          confirming documents;
     -    upon  accomplishment  of the order, pay the Firm  compensation for the
          services rendered;
     -    make all  necessary  settlements  with the  budget  concerning  excise
          taxes, VAT and other obligatory payments;
     -    during  the  period  of  effect  of  this  Agreement  fulfill  all its
          provisions, as well as any other terms and conditions agreed upon with
          the Firm.

                           3. COMPENSATION OF THE FIRM

3.1.     Commission rate of the Firm under this Agreement is equal to: including
         the VAT (20%)  1.5% of the  contract  price of each  supplied  batch of
         Commodities.

                              4. PAYMENT PROCEDURE

4.1.     Upon receiving the money from the Buyer for the  Commodities  sold, the
         Firm shall compensate the following costs at the Enterprise's expense:

     -    transportation and forwarding costs;
     -    bank fees;
     -    cost of obtaining the  certificate  of origin of the  Commodities;  
     -    cost of execution of customs declaration of the Commodities;
     -    other obligatory payments, if such occur;
     -    the Firm's commission according to Article 3.1;
     -    the balance shall be  transferred to the  Enterprise's  account within
          three bank days.

                                   5. QUALITY

5.1.     Quality of the Commodities shall be in compliance with the oil supplied
         by the Western affiliate of KazTransOil to Samara.

                       6. TERM AND CONDITIONS OF SHIPMENT

6.1.     The  Commodities  indicated  in Article  1.1.  shall be supplied by the
         Enterprise to the Western affiliate of KazTransOil before the beginning
         of the month of the shipment.



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6.2.     The Firm shall have the right to supply  the  Commodities  to the Buyer
         with an  admissible  deviation of +/- 10% from the quantity  previously
         agreed upon by the parties.

6.3.     The Firm shall supply the  Commodities in 1998 in batches not less than
         5-10 thousand tons.

6.4.     Date  of  the  last  acceptance-delivery  certificate  of  a  batch  of
         Commodities  at the point of transfer to the Buyer shall be  considered
         to be the date of shipment of that batch.

                7. RIGHT OF OWNERSHIP AND RISK OF ACCIDENTAL LOSS

7.1.     The right of ownership  to the  Commodities  sold under this  Agreement
         shall be passed on to the Buyer upon  transferring  the Commodities and
         the shipment documents according to the terms of delivery.

                             8. LEGAL RESPONSIBILITY

8.1.     In the  case  of  delay  in  supply  of  the  Commodities  through  the
         Enterprise's fault and charging a penalty by the Buyer because of that,
         the Enterprise  shall pay this penalty.  The  Enterprise  shall have no
         right to require the Firm to pay that penalty.

8.2.     If charging a penalty or  reimbursement  of a loss takes place  through
         the Firm's fault, such expenses shall be incurred by the Firm.

8.3.     Payment of the penalty and  reimbursement of the loss shall not release
         the Parties from fulfillment of their obligations hereunder.

8.4.     Reimbursement of the loss shall be made by the guilty party in part not
         covered by the penalty.

                            9. TERM OF THE AGREEMENT

9.1.     This Agreement shall become effective upon its signing and extend until
         the full and  complete  settlement  with the  Enterprise  for the whole
         volume of the Commodities supplied.

9.2.     This  Agreement may be terminated  (except  non-payment  of any sum due
         hereunder)  within 30 days of sending a written  notification by one of
         the Parties.

                                10. FORCE-MAJEURE

10.1.    The Parties shall be released from  liability for their partial or full
         non-fulfillment of obligations under this Agreement (except non-payment
         of any  sum  due  hereunder)  if  this  non-fulfillment  is  caused  by
         force-majeure circumstances that the Parties could


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         neither foresee, nor prevent by any reasonable actions, namely: acts of
         God, fire, flood, ice conditions or other calamities,  military actions
         of any character,  blockade, prohibition of export, pipeline emergency,
         etc.

10.2.    The Party for which an  impossibility  of fulfillment of its obligation
         under  this  Agreement  arose  due to the  circumstances  specified  in
         Article  10.1.  shall  immediately  inform  the other  Party of that in
         writing.  In such a case,  representatives  of the Parties shall in the
         shortest  possible  time  agree  upon  the  course  of  actions  to  be
         undertaken by the Parties.

10.3.    If  the  above   circumstances   prevent  normal   fulfillment  of  the
         obligations  hereunder for more than six months beginning from the date
         of their emergence, the Party for which an impossibility to fulfill its
         obligations exists, may refuse to execute this Agreement further on. In
         such a case, the Parties shall make mutual  settlements  connected with
         fulfillment of their obligations  hereunder as of the date of emergence
         of the force- majeure circumstances.

10.4.    Reports  issued by the  Chamber of Commerce of the country in which the
         force- majeure  circumstances  happened shall be considered an adequate
         proof of existence of such circumstances.

          11. DISPUTES AND DISAGREEMENTS, PROCEDURE OF THEIR RESOLUTION

11.1.    Any disputes or  disagreement  incidental  to this  Agreement  shall be
         resolved through an amicable agreement.

11.2.    In the case,  when the Parties  fail to reach an agreement on a dispute
         question,  such questions  shall be submitted to the Board for economic
         cases of Almaty municipal court.

11.3.    Any relations between the Parties incidental to this Agreement shall be
         governed by the civil laws of the Republic of Kazakstan.

                         12. OTHER TERMS AND CONDITIONS

12.1.    Neither  of the  Parties  has the right to assign  any of its rights or
         obligations under this Agreement to any third parties without a written
         agreement of the other Party thereupon.

12.2.    Any  alterations or amendments to this Agreement  shall be deemed valid
         only if executed in writing and signed by authorized representatives of
         the Parties.  Facsimile communication may be used for signing the above
         mentioned alterations and amendments.



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12.3.    Upon  signing  this  Agreement  any  previous  oral   negotiations  and
         correspondence relating to the Agreement shall have no legal force.

12.4.    Any  correspondence relating to this  Agreement shall be in the Russian
         language.

12.5.    On any matters not stipulated in this Agreements the relations  between
         the Parties shall be governed by the effective  laws of the Republic of
         Kazakstan.

12.6.    The Parties shall guarantee  their  observance of  confidentiality  and
         take  all  necessary   measures  to  prevent  divulging   documents  or
         information  obtained under this  Agreement or their  disclosure to any
         third parties without agreement of both the Parties thereupon.

12.7.    This  Agreement has been signed in 2 (two)  authentic  copies,  1 (one)
         copy for each of the Parties,  with both the copies  having equal legal
         force.

           13. LEGAL ADDRESSES AND PAYMENT INSTRUCTIONS OF THE PARTIES

             FIRM:                                      ENTERPRISE:
         Munay-Impex                            Karakudukmunay Inc.

480009,31-a, Gagarin str., Almaty               466200,82, District 3, Aktau
Tel.: (3272) 414391, fax 412252                 Mangistau oblast
RNN 600900039944                                Tel,: (32192) 513975, fax 518336
Bank instructions:                              RNN 430600001175
Almaty Commercial-Financial Bank, Almaty        Bank instructions:
Tenge account #200901                           Neftebank, Aktau
MFO 190501956                                   Tenge account #609614
                                                MFO 192901705

              FIRM                                      ENTERPRISE



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