Exhibit 10.36





                Letter Agreement and Restated Amendment No. 1 to

                       Loan Agreement and Promissory Note


     This Letter  Agreement and Restated  Amendment No. 1 dated as of the 18 day
of March,  1999  (hereinafter  "Restated  Agreement  No.  1"),  is made  between
Challenger  Oil Services,  PLC, a company  organized  under the laws of England,
Company  Registration  No. 3449260,  with its principal office located at 72 New
Bond Street,  London W1Y9DD,  England  (hereinafter  called  "Challenger"),  and
Chaparral  Resources,  Inc., a Colorado  corporation,  with an office located at
2211  Norfolk,   Suite  1150,   Houston,   Texas  77098,   (hereinafter   called
"Chaparral").  Challenger and Chaparral are hereinafter collectively referred to
as the "Parties".

     WHEREAS, the Parties have entered into a Loan Agreement and Promissory
Note,  both dated  September  10, 1998,  pursuant to which  Chaparral has loaned
Challenger  one million,  eight  thousand  seven  hundred and sixty eight United
States Dollars (US$1,008,768) (the "Principal Amount"); and

     WHEREAS,  after the Loan Agreement and Promissory  Note were executed,  the
Parties  subsequently  executed a document entitled  Amendment No. 1 to the Loan
Agreement which was stated to be effective as of September 10, 1998  ("Amendment
No. 1"); and

     WHEREAS,  the  Parties  wish  to  further  amend  the  Loan  Agreement  and
Promissory Note to reflect certain changes agreed to by them;

     NOW,  THEREFORE,  for valuable  consideration  and the mutual covenants and
agreements set forth below, Challenger and Chaparral agree as follows:

1.   Capitalized  terms used herein  shall have the same  meaning as in the Loan
     Agreement  unless otherwise  specified.  In the event there is any conflict
     between  the  provisions  of this  Restated  Amendment  No.  1 and the Loan
     Agreement or Promissory Note, the provisions of this Restated Amendment No.
     1 shall govern.

2.   This Restated  Amendment No. 1 shall be  substituted  for and shall replace
     the Amendment  No. 1 referred to in the  preamble,  which shall be null and
     void, ab initio, and of no further force and effect.

3.   Paragraph 3.1 of the Loan Agreement is amended to read as follows:

     "The Parties  agree that until the first payment is made by or on behalf of
     KKM to Challenger  towards  amounts owed by KKM under  invoices for January
     1999  services  which  Challenger  will  soon be  issuing  to KKM under the
     Drilling  Contract,  as amended,  or March 1, 1999,  whichever  shall first
     occur ("Repayment Commencement Date"), interest on the Loan shall accrue at
     the Interest Rate."



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4.   In recognition of the change in the term of the Drilling  Contract  between
     Challenger and KKM, in which Chaparral has an indirect interest through its
     wholly owned subsidiary Central Asian Petroleum (Guernsey), Inc., which has
     an  interest  in KKM,  the  first  sentence  of  Paragraph  3.2 of the Loan
     Agreement and the first sentence of Paragraph 1.1(b) of the Promissory Note
     are amended to provide as follows:

     "Beginning  on the date of the first payment made by or on behalf of KKM to
     Challenger  towards  amounts  owed by KKM under  invoices  for January 1999
     services  which  Challenger  will soon be issuing to KKM under the Drilling
     Contract,  and on the dates of the next twenty-three monthly payments to be
     made by or on behalf of KKM to Challenger towards amounts arising under the
     next  twenty-three  (23) monthly invoices to be issued by Challenger to KKM
     under  the  Drilling  Contract,  Maker  will pay to  Payee  the  amount  of
     forty-two  thousand and thirty-two  United States  dollars and  twenty-five
     cents  (US$42,032.25)  plus  interest  at the  Interest  Rate on the unpaid
     principal of the Loan Amount."

5.   In recognition of the change in the term of the Drilling  Contract  between
     Challenger and KKM, in which Chaparral has an indirect interest through its
     wholly owned subsidiary Central Asian Petroleum (Guernsey), Inc., which has
     an  interest in KKM,  Paragraph  3.3 of the Loan  Agreement  is deleted and
     replaced with the following:

     "Challenger  agrees that effective as of the date of the first payment made
     by or on  behalf of KKM to  Challenger  towards  amounts  owed by KKM under
     invoices for January 1999 services which Challenger will soon be issuing to
     KKM under the Drilling  Contract,  it shall assign to an independent  third
     party financial  institution selected by CRI ("Fiscal Agent"), the right to
     receive all payments made or to be made by KKM under the Drilling Contract.
     CRI selects such Fiscal Agent to be Chase Bank of Texas,  N.A.,  located at
     712 Main Street, 3 CBB East,  Houston,  Texas  77002-8087.  Upon receipt of
     such  payments  from,  or made on behalf of, KKM, the Fiscal Agent shall be
     instructed to immediately  pay to CRI the amount of forty-two  thousand and
     thirty-two United States dollars and twenty-five cents (US$42,032.25), plus
     the  quarterly  interest  payment  when due and any late fees,  defaults or
     other  charges  permitted to be collected by CRI  hereunder  (which  amount
     shall be provided  to the Fiscal  Agent by CRI not later than ten (10) days
     prior to the end of each calendar quarter).  The Fiscal Agent shall also be
     instructed that any amounts received by the Fiscal Agent from KKM which are
     in excess of the  foregoing,  will be promptly  paid to  Challenger  within
     three (3) days after their receipt by the Fiscal Agent."

6.   Except as otherwise amended herein,  the Loan Agreement and Promissory Note
     shall  remain  unchanged  and shall  continue  in full  force and effect as
     originally written.

7.   There exists in the files of Chaparral and Challenger an agreement  between
     Challenger and Chaparral which purports to be effective as of April 7, 1998
     (the "Letter of Credit Agreement") pursuant to which Chaparral is allegedly
     required to post a letter of credit to secure the  obligations of KKM under
     the  Drilling  Contract  in the event of certain  changes in the  executive
     management  or  control  of  Chaparral.  It  is  agreed  by  Chaparral  and
     Challenger that immediately  upon execution of this Restated  Amendment No.
     1,  the  Letter  of  Credit  Agreement  shall  be  deemed  to  be  invalid,
     unenforceable and void from the beginning.

8.   In view of the fact that Chaparral is a publicly traded company, Challenger
     herein  represents  that neither it nor any of its  affiliates has made any
     payment or promise to pay any funds or other  offer or gift of  anything of
     value, directly or indirectly,  to or for the use or benefit of any officer
     or director of Chaparral in  connection  with the Drilling  Contract or any
     amendments made thereto. Furthermore, Challenger shall provide to Chaparral
     on or before  May 1,  1999,  full and  appropriate  documentation  that all
     proceeds of the Loan Agreement wired to Mr. Yalmez Tatanaki's personal bank
     accounts  flowed from such  personal  bank  accounts to either a Challenger
     bank  account  or  to a  creditor  of  Challenger  in  payment  of a  valid
     Challenger debt.

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     IN  WITNESS  WHEREOF,  the  Parties  hereto  have  executed  this  Restated
Amendment No. 1 as of the date first above written.

CHAPARRAL RESOURCES, INC.                    CHALLENGER OIL SERVICES, PLC


By: /s/ Dr. Jack Krug                        By: /s/ Y.S. Tatanaki
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