<PAGE>

                                                                   Exhibit 10.8

                                             Confidential
                                             Reg.No. 1407 Copy No.1

                                     LICENSE
                          FOR THE RIGHT OF SUBSOIL USE

       XMH                                 00756                              HP
series XMH        round seal       number  10588              type of license HE

ISSUED TO       Open Joint Stock Company
                ----------------------------------------------------------------
                "Nazymgeodobycha"
--------------------------------------------------------------------------------
               (business operating entity -holder of this license)

REPRESENTED BY  Pershin Alexander Pavlovitch, the General Director
                --------------------------------------------------------------
                (full name of the person representing business operating entity)

FOR THE PURPOSE OF AND FOR THE FOLLOWING TYPES OF OPERATIONS: geological study
--------------------------------------------------------------------------------
of subsoil, prospecting and production of oil and gas within OLKHOVSKOYE
--------------------------------------------------------------------------------
licensed area
--------------------------------------------------------------------------------

SUBSOIL PLOT IS LOCATED in Beloyarsk districts of Khanty Mansiysk Autonomous
                        -------------------------------------------------------
Okrug, Tuymen Region
--------------------   ---------------------------------------------------------
                             (name of district, region, area, republic)

DESCRIPTION OF THE BOUNDARIES OF THE SUBSOIL PLOT, COORDINATES OF THE ANGLE
POINTS, THE COPIES OF THE SURVEY PLANS AND CROSS - SECTIONS, ETC., ARE ATTACHED
IN ANNEXES NO. 1,2.
               ----
            (# of Annex)

THE RIGHT FOR USE OF LAND PLOTS RECEIVED FROM

--------------------------------------------------------------------------------
      (name of the body, issuing permission, number and date of resolution)

THE COPIES OF THE DOCUMENTS AND THE DESCRIPTION OF A LAND PLOT ARE ATTACHED IN
ANNEX

--------------------------------------------------------------------------------
                       (number of Annex, number of pages)

SUBSOIL PLOT HAS THE STATUS OF              subsoil allotment
                               -------------------------------------------------
                                        (geological or subsoil allotment)

THE EXPIRATION DATE OF THIS LICENSE                  05/06/2018

<TABLE>
<S>                                             <C>

 Ministry for natural resources                 Khanty-Mansiysk Autonomous Okug
 of Russian Federation                          Committee for natural resources
 Russian Federal geological fund                Territorial Fund of geological information
 REGISTERED                                     REGISTERED
 02/19/1998                                     03/25/1998
In the registrar No.632/KMN 10588-NE            In the registrar No.KMN 00756-NR
</TABLE>


<PAGE>



THE FOLLOWING DOCUMENTS ARE THE INTEGRAL PARTS OF THIS LICENSE:

1. License Agreement on prospecting and production of oil and gas within
--------------------------------------------------------------------------------
Olkhovskoye licensed area - 19 pages
--------------------------------------------------------------------------------
                          (document, number of pages)

2. Topographic Plan of Olkhovskoye license area - 1 sheet
--------------------------------------------------------------------------------







<TABLE>
<S>                                                        <C>

AUTHORIZED REPRESENTATIVE OF THE MINISTRY OF NATURAL       AUTHORIZED REPRESENTATIVE OF THE STATE BODY OF THE
RESOURCES                                                  SUBJECT OF FEDERATION
Chairman of the Committee of Natural Resources             Head of the Administration of Khanty-Mansiysk
----------------------------------------------             ---------------------------------------------
Khanty-Mansiysk Autonomous Okrug                           Autonomous Okrug
----------------------------------------------             ---------------------------------------------

Sergeeva Nadezhda Alexandrovna                             Filipenko Alexander Vasilievich
----------------------------------------------             ---------------------------------------------
Round seal                                                 Round seal
Signature, date 19/01/97                                   Signature, date 01/22/98
</TABLE>




              MANAGEMENT OF THE ENTERPRISE HOLDER OF THIS LICENSE:
               Pershin Alexander Pavlovitch, the General Director
               --------------------------------------------------
                              OJSC Nazymgeodobycha
               --------------------------------------------------

                                   Round seal
                            Signature, date 01/09/98

<PAGE>


                                                                   Addendum No.1
                                                      To License XMH No 10588 HE

                                LICENSE AGREEMENT
                            ON OIL AND GAS PRODUCTION
                        IN THE OLKHOVSKOYE LICENSED AREA
                       WITHIN KHANTY-MANSI AUTONOMOUS AREA

                                    PREAMBLE

         This License Agreement (hereinafter referred to as the "Agreement")
was executed in furtherance of the License Agreement of May 7, 1993 (License
XMH No 00019 HE) between the Ministry of Natural Resources of the Russian
Federation (hereinafter referred to as the Ministry) acting as a federal
authority for the management of state-owned subsurface, the executive
authority of the Khanty-Mansi Autonomous Area represented by the
Administration of the Khanty-Mansi Autonomous Area (hereinafter referred to
as the Administration), on the one hand, and Open Joint Stock Company
"NAZYMGEODOBYCHA" (hereinafter referred to as OJSC "NAZYMGEODOBYCHA")
registered by the regulation of the State Registration Chamber of the
Ministry of Economy of the Russian Federation, registration No.P-6582 of
June 2, 1997, on the other hand.

         This Agreement shall supersede and terminate original Addendum No.1
"License Agreement..." and Addendum No. 2 "Angular Coordinates" to License XMH
No 0023 HE and form an integral part of License XMH No 10588 HE issued on
February 19, 1998.

         The License shall be re-registered pursuant to Article 17-1 of the
Federal Law "On Subsurface" following the change of the company name from
Open-End Joint Stock Company "NAZYMGEODOBYCHA" to Open Joint Stock Company
"NAZYMGEODOBYCHA" under the Law "On Joint Stock Companies".

         The Parties agreed as follows:

                             ARTICLE 1. DEFINITIONS

         1.1. Unless otherwise expressly specified in this Agreement words used
in singular include plural and words used in plural shall include singular.

         1.2. The Parties agreed upon the following meaning of the terms given
below:

         BUDGET shall mean a document reflecting itemized earnings and
expenditures of OJSC "NAZYMGEODOBYCHA" Oil Operations over a Calendar Year.

         CALENDAR YEAR shall mean a Gregorian year beginning from the date of
registration and ending on December 31 of the same year. Subsequent years shall
start on January 1 and end on December 31.

         COMMERCIAL DISCOVERY shall mean one or more fields or accumulations
within the Licensed Area collectively or individually scheduled for commercial
operation.


<PAGE>

         OIL FIELD shall mean a subsurface accumulation of hydrocarbon deposits
in one or several reservoirs or horizons located one under another and deemed a
single occurrence for the purposes of efficient development.

         ROYALTY shall mean a payment for subsurface use.

         POOL shall mean a subsurface accumulation of hydrocarbon deposits
within the same reservoir.

         OIL OPERATIONS shall mean any operations pertaining to oil field
exploration, construction, development, production, transportation, storage and
distribution of Hydrocarbons and any other works relating to operations
contemplated hereunder.

         AUTHORITIES shall mean the Ministry of Natural Resources of the Russian
Federation or its regional branch and the Administration of the Khanty-Mansi
Autonomous Area authorized to regulate the use of mineral resources pursuant to
the Law of the Russian Federation "On the Subsurface".

         PROGRAM shall mean a document describing a detailed scope of works
under all types of the Oil Operations to be performed by OJSC "NAZYMGEODOBYCHA"
during a Calendar Year.

         AGREEMENT shall mean this document and all addenda forming its integral
part including any amendment, addition, substitution, etc. which may be made
subsequently and upon approval by the Parties.

         PRODUCTION AREA shall mean a part of the Licensed Area allocated to
OJSC "NAZYMGEODOBYCHA" to organize production of the oil field, which has a
commercial definition.

         LICENSED AREA shall mean an area specified in Article 2 of this
Agreement located within the boundaries and described in detail in Article 3
where the Authorities shall grant OJSC "NAZYMGEODOBYCHA" an exclusive right of
oil and gas exploration and production.

         HYDROCARBONS (HC) shall mean an aggregate of solid, liquid and/or
gaseous hydrocarbons and all other associated and co-produced substances
including but not limited to Crude Oil, Natural and Associated Gas, Condensate
and their products.

         CONDENSATE shall mean a natural mixture of light hydrocarbon compounds
(C5 and higher) separated or extracted in a liquid state from Natural Gas.

         ASSOCIATED GAS shall mean gaseous hydrocarbons produced together with
Crude Oil.

         NATURAL GAS shall mean hydrocarbons in gaseous state in the atmospheric
environment at normal temperature and pressure as well as nitrogen, hydrogen
sulfide, helium and other gases.

         CRUDE OIL shall mean a mixture of hydrocarbons and any associated
substances extracted from wells in a liquid state at atmospheric pressure as
well as bitumen, ozocerite and condensate obtained from Natural Gas.

         SUBSOIL ALLOTMENT shall mean a geometrized subsoil block granted to a
subsoil user under a license for the development of mineral resources.


                                       2
<PAGE>

         GEOLOGICAL ALLOTMENT shall mean a subsurface area granted to a subsoil
user under a license for geological study without material infringement of the
integrity of the subsurface.

         PLANNED CAPACITY shall mean output by year.

         ATTAINING PLANNED CAPACITY shall mean the date of commencement of field
development subject to approved levels of oil and gas production.

         CCD shall mean the Central Commission for the Development of Oil and
Gas Fields of the Ministry of Fuel and Energy of the Russian Federation.

         SER shall mean the State Expertise of Reserves of the Russian
Federation.

         RRC shall mean the Regional Reserves Commission.

         RCRD shall mean the Regional Commission for Reserves Development.

         CCR oil shall mean the Central Commission of the Russian Ministry of
Natural Resources charged with state expertise of oil, natural gas and gas
condensate reserves.

                         ARTICLE 2. SUBJECT OF AGREEMENT

         2.1. This Agreement shall set forth terms and conditions of oil and gas
production (including exploration) within the Licensed Area.

         2.2. The Agreement shall form an integral part of the License for use
of mineral resources of the OLKHOVSKOYE Licensed Area and specifies the basic
terms of subsurface use to produce oil and gas (including exploration thereof)
within the territory assigned the status of a subsoil allotment limited by the
depth of the weathering zone designated on the survey map by angular points with
coordinates given in the table below:


                                       3
<PAGE>




<TABLE>
<CAPTION>
--------- ----------------- ------------------ ----------------- ------------------ ---------------------
  No.      Latitude north    Longitude east          No.          Latitude north       Longitude east
--------- ----------------- ------------------ ----------------- ------------------ ---------------------
<S>       <C>               <C>                <C>               <C>                <C>
   1          62 30 00          68 27 00              4              62 21 00             68 54 00
--------- ----------------- ------------------ ----------------- ------------------ ---------------------
   2          62 30 00          68 48 00              5              62 12 00             68 54 00
--------- ----------------- ------------------ ----------------- ------------------ ---------------------
   3          62 21 00          68 48 00              6              62 12 00             68 27 00
--------- ----------------- ------------------ ----------------- ------------------ ---------------------
</TABLE>

                   ARTICLE 3. DESCRIPTION OF THE LICENSED AREA

         3.1. The size of the Licensed Area shall be 668 sq km.

         3.2. The Licensed Area shall include the Olkhovskoye area of the
Beloyarski oil field within the Beloyarsky District and the adjacent territory
outlined under Clause 2.2 of this Agreement.

         3.3. As of June 1, 1995, within the Agreement Area ancestral plots are
not registered.

         3.4. Part of the Licensed Area requires additional development.

                     ARTICLE 4. AUTHORIZATION OF OPERATIONS
                       AND DISPOSAL OF EXTRACTED RESOURCES

         4.1. OJSC "NAZYMGEODOBYCHA" shall be authorized to perform
exploration, construction, development, production and sales of production
extracted in the Licensed Area and other works required to attain the objectives
hereof.

         4.2. Under this Agreement and applicable law of the Russian Federation
and regulations of the Khanty-Mansi Autonomous Area the license holder (OJSC
"NAZYMGEODOBYCHA") shall be granted title to the volume of produced hydrocarbons
as specified in a bilateral acceptance certificate which confirms the metered
quantity.

         The output shall be recorded by meters installed at the exit point of
production from the Licensed Area (such meters shall comply with requirements
for commercial meters).

         4.3. The entire well stock drilled in the Olkhovskoye field shall be
delivered to the license holder (OJSC "NAZYMGEODOBYCHA") pursuant to the
Regulations for the Delivery and Operation of Deep Oil and Gas Wells Drilled at
the Cost of the Federal Budget and Reflected on Balance Sheets of State-Owned
Survey Entities approved by the Committee for Subsurface of the Russian
Federation (on March 27, 1995), State Committee for the Management of State
Property of the Russian Federation (on August 7, 1995), State Mining Safety
Inspection (on April 1, 1995) and the Ministry of Fuel and Energy of the Russian
Federation and registered by the Ministry of Justice of the Russian Federation
under No. 953 on September 25, 1995 within the period specified in this
Regulation.

         Any wells abandoned or scheduled for abandonment within the Licensed
Area funded from the federal budget (including the mineral replacement tax)
shall be delivered to OJSC "NAZYMGEODOBYCHA" (license holder) to exercise
supervision of their condition.

                                ARTICLE 5. TITLE


                                       4
<PAGE>

         5.1. OJSC "NAZYMGEODOBYCHA" may own, manage and dispose of the assets
acquired by OJSC "NAZYMGEODOBYCHA" from its profits and loans as provided for by
applicable civil law. The owner shall be entitled to manage such assets at his
discretion provided it complies with applicable laws and regulations and does
not infringe on legal interests of third parties.

         5.2. Provisions of Clause 5.1. shall not apply to assets owned by third
parties or leased by OJSC "NAZYMGEODOBYCHA".

                      ARTICLE 6. GEOLOGICAL SUBSURFACE DATA

         Initial data and results of its processing shall include those funded
by the government and by OJSC "NAZYMGEODOBYCHA".

         The title to geological and other subsurface data shall be protected as
provided for by applicable law of the Russian Federation.

         6.1. Under Article 27 of the Law "On Subsurface" any information funded
by the government shall be deemed the property of the government. The
Authorities shall cause the transfer to OJSC "NAZYMGEODOBYCHA" of geological
data available in regional and district geological and geophysical databases in
compliance with the Regulations for Storage, Use and Transfer of Subsurface Data
Funded by the Government" dated November 15, 1994, No. 61/2952, approved by the
Committee for Subsurface of the Russian Federation and the Administration of the
Khanty-Mansi Autonomous Area.

         6.2. Additional subsurface data on the Licensed Area not included in
the mandatory list compiled pursuant to approved industry instructions and
regulations shall be acquired by OJSC "NAZYMGEODOBYCHA" under direct agreements
with data producers in compliance with applicable law.

         Information on executed transactions shall be forwarded within 10 days
to the regional branch of the Ministry of Natural Resources to be registered and
kept confidential.

         6.3. Subsurface data and results of its processing funded by OJSC
"NAZYMGEODOBYCHA" shall be deemed the property of OJSC "NAZYMGEODOBYCHA".

         OJSC "NAZYMGEODOBYCHA" shall provide the Authorities with such data
free in the format and within time limits established by the Authorities and
specify the terms of its use.

         6.4. For the purpose of production or research OJSC "NAZYMGEODOBYCHA"
may use 50% of the core material sawn axially throughout the length. The
remaining core shall be deemed national wealth in state ownership and shall be
kept by the entity according to applicable standards.

         If the Authorities decide to accumulate core materials OJSC
"NAZYMGEODOBYCHA" shall transfer the core to the Authorities free.

                           ARTICLE 7. TERM OF VALIDITY

         7.1. Provisions of this Agreement shall come into effect on the date of
re-registration of the License.

         7.2. This Agreement shall become effective on the date of
re-registration of License XMH No 00019 HE under the Law of the Russian
Federation "On Subsurface" and terminate on May 6, 2018 concurrently with the
expiration of original License XMH No 00019 HE.


                                       5
<PAGE>

         OJSC "NAZYMGEODOBYCHA" may apply for extension of the term of the
License and the Authorities may grant such extension according to the approved
development project provided that OJSC "NAZYMGEODOBYCHA" fulfills the approved
Program of Operations as required by the Law of the Russian Federation "On
Subsurface".

         7.3. OJSC "NAZYMGEODOBYCHA" shall be entitled to terminate the
Agreement at any time sending a written notification to the Authorities ninety
(90) days prior to the desirable termination date. Such termination shall not
exempt OJSC "NAZYMGEODOBYCHA" from fulfilling the outstanding obligations under
the Agreement. The above obligations shall be met as required by the Agreement
before delivering a termination notification.

         7.4 The Authorities may suspend or terminate this Agreement by a
written notice to OJSC "NAZYMGEODOBYCHA" if OJSC "NAZYMGEODOBYCHA" fails to
comply with substantial requirements under Articles 20, 21 and 23 of the Law "On
Subsurface", Articles 28 and 29 Law "On the Use of Subsurface" of the
Khanty-Mansi Autonomous Area, Article 15 of the "Regulations for Licensing the
Use of Subsurface" and the "Regulations for the Use of Subsurface in the
Khanty-Mansi Autonomous Area", namely upon occurrence of any of the following
events:

         -        OJSC "NAZYMGEODOBYCHA" bankruptcy;

         -        failure to comply with the Requirements to and Special
                  Conditions of Environmental Safety During the Development of
                  Oil, Gas and Other Mineral Deposits in the Khanty-Mansi
                  Autonomous Area issued by the Committee for Environment
                  Protection and Natural Resources of the Khanty-Mansi
                  Autonomous Area;

         -        failure to comply with established terms and schedule of
                  payments for subsurface use under applicable tax law. Each
                  payment shall be deemed made on the date the payment order
                  receipt;

         -        development of the field contrary to the technology provided
                  for by the Project resulting in abnormal losses of subsurface
                  raw materials compared with established standards;

         -        continuous non-observance of terms, schedules and volumes of
                  providing the Authorities with data specified herein;

         -        failure to conclude socio-economic agreements with the owners
                  of ancestral lands located in the Licensed Area within periods
                  specified herein;

         -        lack or inoperativeness of well measuring equipment except for
                  regular maintenance, repair or replacement within prescribed
                  time limits or lack of control over the level of field
                  production.

         If this Agreement is terminated upon occurrence of any event described
above OJSC "NAZYMGEODOBYCHA" shall have at least a ninety (90) days notice.

         7.5. OJSC "NAZYMGEODOBYCHA" may relinquish the Licensed Area and
terminate this Agreement with a three months notice to the Authorities. In this
case OJSC "NAZYMGEODOBYCHA" shall pay all outstanding debts and make all wells
and other facilities technically safe as required by the Authorities
(conservation, dismantling, etc.). Upon signing a statement of the safety of all
facilities OJSC "NAZYMGEODOBYCHA" shall be exempted from all payments.

                ARTICLE 8. UNDERTAKINGS OF OJSC "NAZYMGEODOBYCHA"

         8.1. OJSC "NAZYMGEODOBYCHA" shall perform all works in compliance with
subsurface, environmental and other laws and regulations of the Russian
Federation, legal acts and regulations of the Khanty-Mansi Autonomous Area
enacted under Russian law and applicable in the territory of the Khanty-Mansi
Autonomous Area.


                                       6
<PAGE>

         8.2. OJSC "NAZYMGEODOBYCHA" shall develop the Licensed Area according
to project specifications duly approved by the RCRD (CCD).

         8.3. OJSC "NAZYMGEODOBYCHA" shall provide required funding and procure
or lease all equipment and materials required for operations as specified in the
annual Program and Budget.

         8.4. OJSC "NAZYMGEODOBYCHA" shall bear full responsibility for the
preparation and efficient implementation of the annual Program and Budget.

         8.5. When selecting contractors and subcontractors to supply machinery,
equipment and materials, OJSC "NAZYMGEODOBYCHA" shall give preference to Russian
vendors provided they are competitive (in terms of quality, conditions and
warranties of timely delivery, prices, timely fulfillment, etc.).

         When selecting contractors and subcontractors to perform operations and
services in the Licensed Area OJSC "NAZYMGEODOBYCHA" shall give preference to
business entities incorporated and operating in the Khanty-Mansi Autonomous
Area.

         8.6. OJSC "NAZYMGEODOBYCHA" shall perform all operations in a safe and
proper way according to applicable rules and requirements, and take every effort
to avoid adverse impact on environment including inter alia air, water, flora
and fauna, other natural resources and property.

         In case of failures, accidents or other emergencies OJSC
"NAZYMGEODOBYCHA" shall take all reasonable steps to cope with an emergency,
protect human lives and property, prevent and indemnify damage to natural
resources, environment and people's health and its consequences.

         8.7. OJSC "NAZYMGEODOBYCHA" shall provide training to the Russian
personnel.

         8.8. Before the beginning of operation OJSC "NAZYMGEODOBYCHA" shall
conduct an ecological base line study within the Licensed Area and by January 1,
1999 submit to Khantymansiyskgeolcom and the Committee for Environment
Protection and Natural Resources of the Khanty-Mansi Autonomous Area the
approved Program of environmental enhancement of the Licensed Area including
annual updates and a schedule (month and year) of specific actions to be kept in
the license file.

         OJSC "NAZYMGEODOBYCHA" shall perform its operations in compliance with
Article 45 of the Russian Law "On Environment Protection", and observe
established discharge and release standards or provisional hazardous discharge
and release standards.

         8.9. OJSC "NAZYMGEODOBYCHA" shall meet safety standards set forth in
the project specifications and approved by the State Mining Safety Inspection.

         8.10. Upon deciding on conservation (abandonment) of oil production or
a part of subsurface or a part of the licensed area, the subsurface user shall
within 3 weeks present the Statement of Works relating to the conservation
(abandonment) and reclamation thereof to be approved by the regional branch of
the State Mining Safety Inspection, Committee for Land Resources and Land
Management and Committee for Environment Protection and Natural Resources.

         The Statement of Works shall be subject to approval by the Authorities.

         Upon approval of the Statement of Works, the subsurface user shall
develop the Project of conservation (abandonment) of oil production or a part of
the subsurface or a part of the licensed area and reclamation thereof to be
agreed upon with the regional branch of the State Mining Safety


                                       7
<PAGE>

Inspection, Committee for Land Resources and Land Management and Committee for
Environment Protection and Natural Resources and approved by the Authorities.

         Such abandonment and conservation operations shall be as specified in
the Project and Article 26 of the Russian Law "On Subsurface" within time limits
stipulated therein.

         8.11. OJSC "NAZYMGEODOBYCHA" shall perform construction of projects
having positive opinion of the State Ecological Expertise.

         8.12. OJSC "NAZYMGEODOBYCHA" shall perform works in conformity with the
Russian Law "On Protection and Use of Historical and Cultural Monuments" and
include in the Project archaeological examination and indemnification for
destruction of or damage to historical and cultural monuments.

         8.13. Relations between OJSC "NAZYMGEODOBYCHA" and the Administration
of the Beloyarsky District shall be governed by socio-economic agreements
concluded at the time of the License issue and thereafter by "Resolution of the
Administration of the Khanty-Mansi Autonomous Area and the Committee for
Subsurface of the Russian Federation No. 284/20" dated August 7, 1996 to be
renewed every three years.

         The agreements referred to above shall be submitted to
Khantymansiyskgeolcom and the Administration of the Autonomous Area to be kept
in the license file.

         8.14. The Parties have agreed to revise and adjust separate provisions
of the Agreement according to the schedule given below:

         -        production level provisions - annually upon receipt of the
                  RCDD (CCD) Protocol;

         -        exploration scope provisions - annually upon reviewing
                  prospecting plans;

         -        oil recovery factor provisions- upon approval of reserves by
                  the SER and CCR oil.

         8.15. OJSC "NAZYMGEODOBYCHA" shall implement the exploration program
within 5 years from the license registration. In case of a discovery of
production reserves of hydrocarbons, OJSC "NAZYMGEODOBYCHA" shall prove the size
of reserves in SER (CCR oil) and submit oil exploration project documentation to
the Authorities.

         8.16. OJSC "NAZYMGEODOBYCHA" shall restore the site and return the
license to the Authorities adhering to the procedure stipulated by the Customer
in the event OJSC "NAZYMGEODOBYCHA" does not discover production reserves of
hydrocarbons and enter them in the State balance of reserves upon expiration of
the exploration stage (5 years from the date of the license registration).

                   ARTICLE 9. POWERS OF OJSC "NAZYMGEODOBYCHA"

         9.1. Upon consultation with the Authorities OJSC "NAZYMGEODOBYCHA" may
suspend the field development subject to applicable industry regulations and
standards. The period of such suspension shall be included in term of the
License validity.

         9.2. OJSC "NAZYMGEODOBYCHA" shall enjoy free use of any samples (core),
seismic tapes, results of a geophysical prospecting of wells and any other
documents prepared during operations hereunder and submit such materials for
processing, analysis and reviewing to any entities including foreign entities
pursuant to applicable law of the Russian Federation.


                                       8
<PAGE>

         9.3. Within the Licensed Area OJSC "NAZYMGEODOBYCHA" may be licensed
for the production of wide-spread natural resources including but not limited to
clay, sand, limestone, gypsum and other similar materials required for the Oil
Operations provided payment of fees and taxes imposed under applicable law.

         9.4. Within the Licensed Area OJSC "NAZYMGEODOBYCHA" may drill water
wells under a duly issued license for subsurface water production and use water
resources for its operations provided there is compliance with applicable
regulations and payment of water use fees as required under the law of the
Russian Federation.

         9.5. To enable required operations OJSC "NAZYMGEODOBYCHA" may use land
plots and infrastructure facilities (motor and rail roads, communication lines,
public health centers, cultural facilities, etc.) on generally accepted terms
making appropriate payments at applicable or special rates.

         9.6. Land allotments required for operations under License
XMH No ___________ HE shall be granted in accordance with the Land Law and duly
approved project documents.

                              ARTICLE 10. REPORTING

         10.1. Upon request of the Authorities, OJSC "NAZYMGEODOBYCHA" shall
provide the Authorities access to all original documents pertaining to its
operations within the Licensed Area, including but not limited to geological,
geophysical and geological engineering, well construction, field development
reports, financial and accounting records, etc. (which list shall not be deemed
exhaustive) as required by applicable Federal Law, laws and regulations of the
Khanty-Mansi Autonomous Area and this Agreement.

         10.2. OJSC "NAZYMGEODOBYCHA" shall present to the Authorities an annual
license progress report not later than March 1 each year, in the format and
manner specified in Resolution "On Reporting on the Compliance with Subsurface
Use Regulations" No. 142-171 adopted by the Committee for Geology and Subsurface
Use and the Administration of the Khanty-Mansi Autonomous Area on July 15-20,
1994.

         Upon consultations with OJSC "NAZYMGEODOBYCHA" the Authorities shall
specify the formats, contents and frequency of additional reports to be
submitted by OJSC "NAZYMGEODOBYCHA".

         The Authorities shall keep received information confidential.

         10.3. OJSC "NAZYMGEODOBYCHA" shall within one month inform the
Authorities of any discovery of oil and gas deposits within the Licensed Area
and provide all data pertaining to such discovery.

         10.4. The Authorities may conduct audits of any Oil Operations and
therefore supervise all operation stages and be represented at well testing and
other types of operations.

           ARTICLE 11. SUBJECTS OF LICENSING AND HYDROCARBON RESERVES

         11.1. The License shall cover the following formations:

<TABLE>
<CAPTION>
------------------------------------------------------------------ --------------------------------------
                    Deposit stratigraphic ID                              Deposit cadaster number
------------------------------------ ----------------------------- --------------------------------------
<S>                                  <C>                           <C>
in State Balance of                          in cadaster
</TABLE>


                                       9

<PAGE>

<TABLE>
<S>                                  <C>                           <C>
Mineral Reserves
AS3                                  AS3                           1870
------------------------------------ ----------------------------- --------------------------------------
</TABLE>

         11.2. Hydrocarbon reserves in the Olkhovsloye Licensed area as stated
in the State Balance of Mineral Reserves (Issue VI, OIL, Volume 6, West Siberia,
Khanty-Mansi Autonomous Area, Moscow, 1996) as of January 1, 1997 are given in
the table below:

<TABLE>
<CAPTION>
------------------------------------------ --------------- ----------------------------------------------
               DESCRIPTION                    CATEGORY                      TOTAL
                                                 OF        -------------- ------------ ------------------
                                              RESERVES         OIL           GAS
------------------------------------------ --------------- -------------- ------------ ------------------
<S>                                        <C>             <C>            <C>          <C>
Geological reserves:                             C1
  oil, thousand t                                C2
  gas, mln cu m                               C1 + C2
  condensate, thousand t
------------------------------------------ --------------- -------------- ------------ ------------------
Recoverable reserves:                            C1            2790           70
  oil, thousand t                                C2            17914          448
  gas, mln cu m                               C1 + C2          20704          518
  condensate, thousand t
------------------------------------------ --------------- -------------- ------------ ------------------
Oil recovery factor,
fractional
------------------------------------------ --------------- -------------- ------------ ------------------
</TABLE>

         11.3. In 2002 OJSC "NAZYMGEODOBYCHA" shall submit to the RRC and the
SER the estimate of reserves within the Licensed Area.

                       ARTICLE 12. GEOLOGICAL EXPLORATION

         12.1. As of June 1, 1995 the Licensed Area accommodated 9 prospecting
boreholes.

         12.2. OJSC "NAZYMGEODOBYCHA" shall perform the following works in the
OLKHOVSKOYE licensed area pursuant to the Prospecting and Exploration Program
for 1998-2002:

in 1998:

         -        revise the exploratory and appraisal well stock of the
                  licensed area including the technical condition, replacement
                  costs of the wells suspended, wells expecting to be suspended
                  or abandoned and wells uncompleted;

         -        estimate the well recovery cost and the cost of wells repair,
                  abandonment and behavior control;

         -        submit the information to the commission to facilitate a
                  decision on sale of the well stock in 1998-1999;

         -        perform restoration, recovery, re-activation and re-testing of
                  the wells in 1998-1999;

         -        carry out detailed seismic surveys (400 km of seismic
                  profiles) of OLKHOVSKOYE licensed area in 2000;

         -        with the purpose of additional exploration, carry out
                  exploratory/appraisal drilling:1 well (No. 303), 2850 m in
                  2000 and 1 well (No. 300), 2850 m

         12.3. OJSC "NAZYMGEODOBYCHA" after analyzing the geological exploratory
operations shall submit the OLKHOVSKOYE Field Exploration Draft Plan for
approval of the Authorities before July 1, 2000.

         12.4. OJSC "NAZYMGEODOBYCHA" shall be entitled to develop new pools
discovered by OJSC "NAZYMGEODOBYCHA" within the boundaries of the licensed area
adhering to the
                                       10
<PAGE>

depth restrictions. The relevant articles of the Agreement shall be adjusted
within a year after the discovery of a new pool.

         12.5. Should OJSC "NAZYMGEODOBYCHA" prove, in the course of works in
the licensed area, that a pool under development or exploration spreads into
adjacent areas unlicensed by other companies, the Authorities shall either
extend the boundaries of the licensed area on request of the mineral resources
user or enter into another license agreement on the adjacent area with OJSC
"NAZYMGEODOBYCHA" pursuant to the current legislation of the Russian Federation
or take a decision to invite bidders for the adjacent area.

                         ARTICLE 13. TAXES AND PAYMENTS

         13.1. OJSC "NAZYMGEODOBYCHA" shall make all payments provided for by
applicable Russian law and regulations of the Khanty-Mansi Autonomous Area.

         13.2. The license holder shall make regular payments specified in
applicable tax law of the Russian Federation, i.e.:

         -        for the right of prospecting and appraisal operations - 1%
                  (one) of the prospecting and appraisal budget for the period
                  of their execution.

         -        for the right of exploration prior to bringing the field into
                  development - 3% (three) of the estimated costs of ongoing
                  geological exploration in the OLKHOVSKOYE licensed area.

         Land tax shall be assessed as provided for in the Law "On Land
Payments" of the Russian Federation.

         13.3. OJSC "NAZYMGEODOBYCHA" shall make payments referred to in Clause
13.2 above in Roubles or products, the form of such payment to be approved by
the Administration of the Khanty-Mansi Autonomous Area by November 1 of the year
preceding the year of planning.

         13.4. Payments for the right of the subsoil use shall be adjusted after
a commercial discovery of hydrocarbons in the licensed area.

                         ARTICLE 14. OIL AND GAS PRICES

         14.1. In the event the Licensed Area yields products of a considerably
different quality prices shall be fixed for each product type (oil, gas, etc.)
and grade (quality).

                 ARTICLE 15. RECORDING OF PRODUCED HYDROCARBONS

         15.1. Production from the Licensed Area shall be metred by the license
holder and reflected in accounts as specified by applicable law.

         15.2. OJSC "NAZYMGEODOBYCHA" shall measure the volumes and quantity of
extracted Hydrocarbons by methods and instruments meeting applicable standards.


                                       11
<PAGE>

         15.3. The Authorities have the right to inspect installed instruments
and control measuring methods and results.

         15.4. OJSC "NAZYMGEODOBYCHA" shall maintain records and control
hydrocarbons production at all licensed sites listed in Article 11 unless
developed as a single entity.

         15.5. OJSC "NAZYMGEODOBYCHA" shall equip each producing and injection
well with measuring devices enabling daily measurement of the production rate of
producing wells and injectivity of injection wells.

         15.6. OJSC "NAZYMGEODOBYCHA" shall provide for precise measuring of
each producing well's production rate and each injection well's injectivity at
least once a week, with a compulsory registration of the obtained data. The
frequency of such recording may be further adjusted subject to actual
productivity.

         15.7. At least once a week OJSC "NAZYMGEODOBYCHA" shall provide for
precise measuring of water content of each producing well. The frequency of such
recording may be subject to further adjustment.

         15.8. Development and control over development of the Licensed Area and
licensed deposits shall be performed in accordance with the Regulations for the
Development of Oil and Gas-and-Oil Field, laws and regulations of the Russian
Federation and the Khanty-Mansi Autonomous Area.

                      ARTICLE 16. NATURAL AND ASSOCIATED GAS

         16.1. In the event of a discovery of Natural Gas reserves, OJSC
"NAZYMGEODOBYCHA" shall upon proper study and consultations with the
Authorities, determine the Commercial Nature of the discovery. Should the
discovery be declared commercial all provisions of this Agreement shall apply.

         In such case OJSC "NAZYMGEODOBYCHA" may be granted other special
concessions provided they are justified by particular conditions of the Natural
Gas Field.

         If it is necessary to determine the quality of Natural Gas for
production sharing and cost recovery purposes, then it shall be assumed that
1,150 cu m of gas are equivalent to 1 t of oil.

         This convention may be adjusted after the discovery of the Natural Gas
deposits subject to actual quality and composition of Natural Gas.

         16.2. A part of Associated and Natural Gas neither intended for sale
nor included in the product required for the Oil Operations shall be efficiently
used to enhance Crude Oil production through injection into gas-bearing
reservoirs. The flaring of Associated and Natural Gas shall comply with
standards approved by the Authorities, the State Mining Safety Inspection and
the Regional Committee for Protection of the Environment and Natural Resources.

                    ARTICLE 17. OIL AND GAS PRODUCTION LEVELS

         17.1. OJSC "NAZYMGEODOBYCHA" shall ensure the oil and gas production
levels specified in Protocol No. 2148 dated May 22, 1997 of the Central
Commission for the Development of Oil and Gas and-Oil Fields for the Russian
Ministry of Fuel and Energy and approved by the Oil and Gas Committee of the
Administration of the Khanty-Mansi Autonomous Area.


                                       12
<PAGE>

         17.2. Hydrocarbons extraction during the Pilot Project shall not exceed
5% maximum of total recoverable reserves (C1 + C2), i.e. maximum 1035.2 thousand
t.

         17.3. The oil and gas production levels in 1999 and the years to follow
shall be adjusted in additional agreements with the Committee for Oil, Gas and
Natural Resources of the Administration of the Khanty-Mansi Autonomous Area
before November 1 of each year preceding the projected of planning based of the
CCD protocols.

         Such additional agreements for oil and gas production levels shall be
submitted to Khantymansiyskgeolcom to be kept in the license file.

         17.4. Upon receipt of a new Program oil production levels for the
entire period of the field development shall be subject to revision.

                        ARTICLE 18. ACCOUNTING AND AUDIT

         18.1. All production from the Licensed Area shall be recorded by the
license holder and reflected in the sales accounts in case of transfer to other
entities.

         18.2. For the purposes of this Agreement the Russian principles of
accounting and auditing shall be applied.

         18.3. All the originals of accounting books and registers as well as
the relevant documentation shall be kept in the territory of the Russian
Federation. A foreign partner of OJSC "NAZYMGEODOBYCHA" shall be entitled to
take the copies of the accounting documents abroad if this is not contradictory
to the agreed-on confidentiality conditions.

         18.4. The Authorities shall bear their own expenses, costs and risks
relating to inspections and audits.

         18.5. OJSC "NAZYMGEODOBYCHA" shall at its own expense provide transport
facilities for inspections to be conducted in the Licensed Area.

                           ARTICLE 19. CONFIDENTIALITY

         19.1. All information received or acquired by a Party during its
operations shall be deemed confidential. The procedure and conditions of such
information use and protection shall be specified by the information owner
pursuant to the Russian Federation Law "On Information, Information Technology
and Protection of Information ".

         19.2. Any information not subject to unauthorized access to avoid
damage to its owner, holder, user or other parties shall be duly protected. The
information proprietor may execute control over compliance with information
owner requirements and prohibit or suspend processing of such information in
case of non-compliance.

         19.3. Unless otherwise provided for by applicable law confidentiality
provisions contained in this Article shall remain in effect for five (5) years
after termination hereof.


                                       13
<PAGE>

                   ARTICLE 20. RESPONSIBILITIES OF THE PARTIES

         20.1. OJSC "NAZYMGEODOBYCHA" shall be solely responsible to the
Authorities and/or third parties for the consequences of any actions, decisions
or omissions of OJSC "NAZYMGEODOBYCHA" or its employees.

         20.2. OJSC "NAZYMGEODOBYCHA" shall not be liable for any damage caused
by the Authorities or third parties during the term hereof.

         20.3. The Authorities shall bear full responsibility for their actions
and indemnification for misconduct under applicable law of the Russian
Federation.


                                       14
<PAGE>



                               ARTICLE 21. WAIVER

         21.1. Any waiver of undertakings by either Party shall be executed in
writing and signed by both Parties.

                               ARTICLE 22. NOTICES

         22.1. Any notices, applications, requests, etc. required or permitted
hereunder shall be in writing and shall be deemed duly executed or made if
delivered by courier, mail, telegraph, teletype or fax.

         The Parties shall inform each other in writing of relevant addresses
and any modifications thereof.

         22.2. A notice shall become effective at the time of its receipt or
rejection.

                            ARTICLE 23. GOVERNING LAW

         23.1. This Agreement, its provisions and Articles shall be governed,
interpreted and construed according to law of the Russian Federation and
regulations of the Khanty-Mansi Autonomous Area.

                             ARTICLE 24. ARBITRATION

         24.1. The Parties shall take every effort to settle all disputes which
may in connection with the performance of this Agreement during its term or
thereafter by means of amicable negotiations.

         24.2. If the Parties fail to settle a dispute referred to in Clause
24.1 above within ninety (90) day of a written notification by either Party,
either Party may give the other Party a ninety (90) days notice of its intention
to submit the matter for final settlement by arbitration in the manner provided
for by applicable Russian law.

                              ARTCILE 25. INSURANCE

         25.1. Within ninety (90) days after the Agreement is put in force, OJSC
"NAZYMGEODOBYCHA" shall develop and submit for approval of the Authorities an
analysis of risks, appraisal of the values to be insured for justification of
insurance units and insurance premiums as well as a general operations insurance
program pursuant to the Federal laws and with due account of international
standards and rules.

         OJSC "NAZYMGEODOBYCHA" shall be fully responsible for acquiring and
maintaining an insurance police which OJSC "NAZYMGEODOBYCHA" shall decide
appropriate.

         The insurance system shall provide, among other things, for a
commercially reasonable recovery of losses or damage to all constructions and
technical aids used in the process of operations, environmental provisions,
property insurance and reliability of third parties.

         25.2. OJSC "NAZYMGEODOBYCHA" shall secure the Authorities from any
claims, suits, actions or proceeding brought against the AUTHORITIES by OJSC
"NAZYMGEODOBYCHA" employees or their dependants for an injury, professional
disease, death or damage to personal


                                       15
<PAGE>

property occurred in connection with or arising from implementation of the
Agreement or a failure to implement thereof or a negligence or an omission of
OJSC "NAZYMGEODOBYCHA".

         25.3. OJSC "NAZYMGEODOBYCHA" shall select insurers at its own
discretion, giving a preference to Russian companies if they offer competitive
prices and prove their creditworthiness towards other foreign companies.

         25.4. The insurance premium cost plus indemnities for uncovered losses
less the compensations for damages or losses received from insurers shall be
accounted for pursuant to the established procedure.

                            ARTCILE 26. MISCELLANEOUS

         25.1. The headings of the Agreement are used solely for convenience and
shall not affect its construction or interpretation.

         25.2. Any amendments, corrections, additions or repeals of these
provisions shall be executed in writing and signed by both Parties.

         25.3. The Authorities shall timely provide OJSC "NAZYMGEODOBYCHA" with
all legal acts, standards and other official documentation of the Russian
Federation and the Khanty-Mansi Autonomous Area or any entities or institutions
affecting the performance of the Oil Operations.

         25.4. If any provisions hereof becomes invalid such provisions shall be
deemed deleted from this Agreement and remaining provisions shall remain valid
and effective provided there is a written consent of the Parties.

                   ARTICLE 26. LEGAL ADDRESSES OF THE PARTIES

         THE MINISTRY OF NATURAL RESOURCES OF THE RUSSIAN FEDERATION:

         4/6 B. Gruzinskaya Str., Moscow 123812, Russian Federation

         THE ADMINISTRATION OF THE KHANTY-MANSI AUTONOMOUS AREA:

         5 Mira Str., Khanty-Mansiysk, Tyumen Region, Khanty-Mansi Autonomous
Area 626200, Russian Federation

         THE LEGAL ADDRESS OF OPEN JOINT STOCK COMPANY "NAZYMGEODOBYCHA":
12, ul. Stroitelei, the city of Khanty-Mansiysk, the Khanty-Mansiysk district,
the Khanty-Mansiysk Autonomous Okrug, the Tyumen region, 626200, the Russian
Federation.


                                       16
<PAGE>



                           ARTICLE 27. EFFECTIVE DATE

This Agreement shall become effective on the date of the License renewal.

For the Russian Federation:                  For Subdivision of the Russian
                                             Federation:
AUTHORIZED REPRESENTATIVE OF THE             GOVERNOR OF THE KHANTY-MANSI
MINISTRY OF NATURAL RESOURCES OF             AUTONOMOUS AREA
THE RUSSIAN FEDERATION, CHAIRMAN OF
THE COMMITTEE FOR NATURAL RESOURCES
OF THE KHANTY-MANSI AUTONOMOUS AREA
NADEZHDA ALEXANDROVNA SERGEEVA               ALEXANDER VASILYEVICH FILIPENKO


------------------------------------         -------------------------------
          (signature)                                  (signature)
         __________, 1997                            __________, 1997

Seal: Ministry of Natural Resources          Seal: Administration of the Khanty-
of the Russian Federation                    Mansi Autonomous Area, Tyumen
Committee for Natural Resources of           Region
the Khanty-Mansi Autonomous Area

                          FOR OPEN JOINT STOCK COMPANY
                               "NAZYMGEODOBYCHA",
                                    LICENSEE:

                                DIRECTOR GENERAL
                           OF OPEN JOINT STOCK COMPANY
                                "NAZYMGEODOBYCHA"
                           ALEXANDR PAVLOVICH PERSHIN

                            -------------------------
                                   (signature)
                                __________, 1998


                                       17