Exhibit 10.5

                                 AMENDMENT No. 2
                            TO THE AGREEMENT FOR THE
                           PURCHASE AND SALE OF SHARES

     AMENDMENT  No.2  made  this  18 day of  December  2000  between  AIL  Alpha
Corporation Ltd., a company  established under the laws of the Isle of Man, with
its legal address at Prospect  Chambers,  Prospect  Hill,  Douglas,  Isle of Man
(hereinafter  "Alpha"),  represented  by Murat  Beisenbekovich  Safinov,  acting
pursuant to authority granted in accordance with a power of attorney dated March
28, 2000;  Transmeridian  Exploration Inc., a company established under the laws
of the British Virgin Islands with its principal  offices  located at 85 Chester
Square,  London,  England  (hereinafter the "Purchaser"),  represented by Nurjan
Sarsekenovich  Kurmanov,  acting pursuant to a Power of Attorney dated September
21, 2000; and OJSC Caspi Neft  (hereinafter  "Caspi Neft"),  an open joint stock
company established under the laws of the Republic of Kazakhstan, represented by
Murat Beisenbekovich Safinov, acting pursuant to a power of attorney No. 2 dated
November 10, 1999. (Alpha and Caspi Neft are hereinafter referred to together as
the "Sellers,"  and Purchaser and the Sellers are from time to time  hereinafter
referred to individually as a "Party" and collectively as the "Parties".)

                                    RECITALS

     WHEREAS,  Sellers and Purchaser entered into the Agreement for the Purchase
and Sale of Shares dated March 24, 2000 (the "Sale and Purchase Agreement"),  in
accordance  with which Sellers agreed to sell, and Purchaser  agreed to purchase
the Shares of the subsidiary of Caspi Neft, "OJSC Caspi Neft TME";

     WHEREAS,  in  accordance  with  Section  II (E) of the  Sale  and  Purchase
Agreement Purchaser's payment of the Final Installment and Caspi Neft's delivery
of the Shares and transfer to Purchaser should take place on the Closing Date;

     WHEREAS,  on the Closing  Date (June 22, 2000) Caspi Neft  transferred  the
Shares to Purchaser,  but the  Purchaser's  obligation  for payment of the Final
Installment was extended until November 15, 2000 according to Amendment No. 1 to
the Sale and  Purchase  Agreement  executed  on  September  21,  2000  among the
Parties:

     WHEREAS,  Purchaser  intends to extend the payment of the Final Installment
until January 31, 2001 and Sellers agree to such extension; and

     WHEREAS, the Parties,  although intending to effectuate the purposes of the
Sale and Purchase  Agreement also wish to amend the Sale and Purchase  Agreement
in light of the foregoing developments.

     NOW, THEREFORE, the Parties agree as follows:

I.   The capitalized  terms and  expressions  used in this Amendment No. 2 shall
     have the  meanings  ascribed to them as set forth in the Sale and  Purchase
     Agreement.


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<PAGE>

II.  Purchaser shall pay Alpha Two Million United States Dollars (USD 2,000,000)
     from the total amount of the Final  Installment  on December 18, 2000,  and
     shall pay the balance owing of the Final  Installment  in the amount of One
     Million Three Hundred  Eighty Five Thousand  Eight Hundred Forty Two United
     States Dollars (USD  1,385,842) to Alpha and Caspi Neft in accordance  with
     the  procedure  established  in Section II (G)(2) of the Sale and  Purchase
     Agreement on or before January 31, 2001.

III. This Amendment No.2 is an integral part of the Sale and Purchase  Agreement
     and is in substitution  of Amendment No. 1. Except as expressly  amended by
     the terms of this Amendment  No.2, all terms and conditions of the Sale and
     Purchase  Agreement  shall remain in full force and effect.  This Amendment
     No.2 may be amended only by an instrument  in writing  signed by all of the
     Parties.

IV.  This   Amendment  No.2  has  been  executed   simultaneously   in  six  (6)
     counterparts,  three (3) in Russian and three (3) in English, each of which
     shall be deemed an original, but all of which together shall constitute one
     and the same instrument.  The English and Russian versions of the Amendment
     No.2 shall have equal force.

IN WITNESS  WHEREOF,  the Parties have executed this  Amendment No.1 on the date
first above written.

For Transmeridian Exploration Inc.

By: /S/ Nurjan Sarsekonovich Kurmanov
-----------------------------.
Name: Nurjan Sarsekonovich Kurmanov
Title:  Authorized representative

For AIL Alpha Corporation Ltd.

By: /S/ Murat Beisenbekovich Safinov
-----------------------------.
Name: Murat Beisenbekovich Safinov
Title:  Authorized representative

For OJSC Caspi Neft.

By: /S/ Murat Beisenbekovich Safinov
-----------------------------.
Name: Murat Beisenbekovich Safinov
Title:  Authorized representative


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