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**GROSS      OVERRIDING ROYALTY AGREEMENT**

**THIS      DEED **

**BETWEEN**

**(1)**
**BALTIC      PETROLEUM (E&P) LIMITED**
**Grantee**

**(2)      OOO ZAURALNEFTEGAZ**
**Grantor**

**WHEREAS**

**(“ZL”)**
**(“SEG”)**

**(“CF”)**

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**NOW      THEREFORE THIS AGREEMENT WITNESSES**

| 1. | **Definitions** |
|----|-----------------|

|   | In                this Agreement, unless the context otherwise                requires: |
|--------|-----------------------------------------------------------------------------------------|

|   | 1.1 | “Acreage”                means the lands more particularly described in the Schedule attached                hereto, in which the Grantor holds any right or interest and includes                the                Petroleum Substances which, upon or under such lands, together with                the                right to explore for and recover same insofar as such rights are                granted                by the Documents; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.2 | “Documents”                means the Oil, Petroleum Substances and/or Gas Licences, leases,                farmouts,                options or other agreements to which the Grantor is or becomes a                party,                including any extensions or renewals thereof and any new grant acquired                in                addition to the Licences or pertaining to the                Acreage; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.3 | “Gas”                means and refers to all natural gas produced from the premises (including                casinghead gas) and all of its constituent elements, including but                not                limited to sulphur contained in the gas, and natural gasoline, condensate,                distillate, butanes, propanes, and other hydrocarbons condensed,                absorbed,                or separated out of or from the gas after it leaves the lease, including                without limitation casinghead gas and flared or vented                gas; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.4 | “Licence(s)”                means the exploration licences in the Kurgan region of the Russian                Federation held by the Grantor at the Acreage (as more particularly                detailed in the Schedule) and including any other licences obtained                by the                Grantor; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.5 | “Oil”                means and refers to any hydrocarbons produced from the premises,                regardless of gravity, capable of being produced in liquid form at                the                well by ordinary production methods including without limitation                condensate, distillate and other liquid hydrocarbons recovered from                oil or                gas run through a separator or other equipment at the lease. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.6 | “Petroleum                Substances” means the Grantor’s share of Oil, petroleum and natural Gas                and related hydrocarbons, all other gases and all minerals and substances                (whether condensate, liquid or solid and whether hydrocarbons or                not) in                association with any of the foregoing or found in any water contained                in                an Oil and/or Gas reservoir but only insofar as and to the extent                that the                same are granted; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2. | **Interpretations** |
|----|---------------------|

|   | 2.1 | References                to a statute or statutory provision include that statute or provision                as                from time to time modified or re-enacted or consolidated whether                before or                after the date of this Agreement so far as such modification or                re-enactment or consolidation applies or is capable of applying to                any                transactions entered into in accordance with this Agreement and (so                far as                liability thereunder may exist or can arise) shall include also any                past                statutory provision (as from time to time modified or re-enacted                or                consolidated) which such provision has directly or indirectly                replaced. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.2 | The                expressions “holding company” and “subsidiary” shall have the same                meanings in this Agreement as their respective definitions in the                Act. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.3 | References                to this Agreement include any Recitals and Schedules to it and this                Agreement as from time to time amended and references to Clauses                and                Schedules are to Clauses of and Schedules to this                Agreement. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.4 | Headings                shall be ignored in construing this                Agreement. |
|--------|-----|---------------------------------------------------------------------------------------|

|   | 2.5 | Any                provision of this Agreement which is expressed to bind more than                one                person shall, save where inconsistent with the context, bind them                jointly                and each of them severally. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.6 | References                to time of day are to London, United Kingdom time unless otherwise                stated. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------|

|   | 2.7 | References                to the winding-up of a person include the amalgamation, reconstruction,                reorganisation, administration, dissolution, liquidation, merger                or                consolidation of such person and any equivalent or analogous procedure                under the law of any jurisdiction in which that person is incorporated,                domiciled or resident or carries on business or has                assets. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8 | Any                reference to books, records or other information means books, records                or                other information in any form including paper, electronically stored                data,                magnetic media, film and microfilm. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.9 | Any                reference to any English legal term or concept (including for any                action,                remedy, method of judicial proceeding, document, legal status, statute,                court, official governmental authority or agency) shall, in respect                of any                jurisdiction other than England, be interpreted to mean the nearest                and                most appropriate analogous term to the English term in the legal                language                in that jurisdiction as the context reasonably requires so as to                produce                as nearly as possible the same effect in relation to that jurisdiction                as                would be the case in relation to                England. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 2.10 | Any                previously undefined reference to a term commonly used in the oil                and gas                industry shall be as defined from time to time on **www.glossary.oilfield.slb.com**                or                any successor website. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | **Gross                Overriding Royalty** |
|----|---------------------------------------------|

|   | 3.1 | The                Grantor hereby reserves out, grants, sets over and conveys to the                Grantee                an interest in the Licences, the Petroleum Substances and the Documents                in                the form of a gross overriding royalty of 3% (**THREE                PERCENTUM)**                percent of the Grantor’s gross interest in all Petroleum Substances                (and/or turnover of the Grantee deriving therefrom) to be found to                exist                or deemed to exist within, upon or under the Licences or in the Acreage                and which are produced, marketed and/or saved therefrom (hereinafter                called the “Royalty”). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | The                Royalty shall be paid free and clear of any and all cost or expense                of                every kind and nature whatsoever incurred in (inter alia) connection                with                maintaining, renewing and extending, exploring, drilling, re-completing,                side-tracking, producing, co-mingling of wells and reservoirs, and                processing, treatment and compressing and operating costs of such                Petroleum Substances subject to the provisions of Clause 8 hereof                and save                that the no Royalty shall be payable on any VAT validly charged by                the                Grantor on any sale of Petroleum Substances on behalf of the Grantee                under                the terms hereunder. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.3 | The                Royalty will apply until the Grantor has received the total aggregate                figure of US$ 20,000,000 (**TWENTY                MILLION DOLLARS)**                from the gross sales of all or any Petroleum Substances production                produced or occuring at the Wellhead in the Acreage, such value to                be                calculated by reference to the best prevailing                market price                of                the relevant Petroleum Substances at the wellhead in Kurgan, Western                Siberia, Russian Federation** **and                in the event the sale price is in roubles then the conversion rate                for                dollars shall be at the rate between $ (dollars) to R (rouble) being                the                mid price on the relevant day as detailed in the Financial                Times. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Term**

**Sale      of Petroleum Substances**

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**Right      to Take in Kind **

**Storage      and Deliverability **

**Transportation      and Plant Charges**

**Books      and Records**

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**Development**

**Forfeiture      and Surrender**

| 12. | ** Lien                for Royalty** |
|-----|-------------------------------------------|

|   | (a) | The                Grantee shall be entitled to and shall have a lien upon the Grantor’s                share of all Petroleum Substances from time to time produced from                the                Licences to secure the payment of the gross overriding royalty granted                to                the Grantee under this Agreement. Such lien shall not operate to                release                the Grantor from its liability for monies due to the Grantee. Such                lien                shall attach to the Grantor’s share of the Petroleum Substances sold or                otherwise disposed of from the Licences. Upon default occurring in                payment                by the Grantor of monies payable to the Grantee, the Grantee shall                notify                the Grantor of same and request the default to be remedied within                fourteen                days. If the default is not remedied within the said fourteen days,                such                lien shall operate as an assignment to the Grantee in respect of                the                consideration thereafter payable to the Grantee for the Petroleum                Substances sold up to the amount owed to the Grantee and not so paid                by                the Grantor. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Service                of a copy of this Agreement upon the Grantor and any purchaser of                Petroleum Substances together with written notice from the Grantee                shall                constitute written authorization on the part of the Grantor for such                purchaser to pay to the Grantee the proceeds from any sale or sales                of the                Grantor’s share of the Petroleum Substances up to the amount owed to the                Grantee by the Grantor and such purchaser is authorized to rely upon                the                statement of the Grantee as to the amount owed to the Grantee by                the                Grantor. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | The                books and records kept by the Grantee shall constitute written proof                of                the existence of such default, although no purchaser shall be obliged                to                examine same before acting upon such notice of                default. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 13. | **Further                  Assurances** |
|-----|-----------------------------------------|

**Successors      and Assigns**

**Supersedes      Prior Agreements**

**Public      announcements**

|   | 16.1 | Shareholder                approval |
|--------|------|-------------------------------------|

|   |   | None                of the parties shall make any public announcement or issue any circular                relating to this Agreement or any matters or information provided                pursuant                hereto without the prior written approval of the other Parties. This                does                not affect any announcement or circular required by law or any regulatory                body or the rules of any recognised stock exchange, but the Party                with an                obligation to make an announcement or issue a circular shall consult                with                the other Party/Parties so far as is reasonably practicable before                complying with such obligation. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 16.2 | Oral                statements |
|--------|------|--------------------------------|

|   |   | The                Parties intend that any oral statements made or replies to questions                given                by either Parties relating to the Group shall be consistent with                any such                public announcements or circulars. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Confidential      Information**

|   |   | The                parties shall use all reasonable endeavours to keep confidential                and to                ensure that their respective Associated Companies and their respective                officers, employees, agents and professional and other advisers keep                confidential any information (the “**Confidential** **Information**”): |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Restrictions**

|   | 18.1 | No                party may use for its own business purposes or disclose to any third                party                any Confidential Information without the consent of the other                parties. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 18.2 | This                Clause does not apply to: |
|--------|------|-----------------------------------------------|

|   | (a) | information                which is or becomes publicly available (otherwise than as a result                of a                breach of this Clause); |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | information                which is independently developed by the relevant party or acquired                from a                third party, to the extent that it is acquired with the right to                disclose                it; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | information                which was lawfully in the possession of the relevant party free of                any                restriction on disclosure; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | information                which following disclosure under this Clause, becomes available to                the                relevant party from a source which is not bound by any obligation                of                confidentiality in relation to such                information; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | the                disclosure by a party of Confidential Information to its principal                shareholders or its directors or employees or to those of its Associated                Companies who need to know that confidential information in its reasonable                opinion for purposes relating to this Agreement but those principal                shareholders, directors and employees shall not use that Confidential                Information for any other purpose; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | the                disclosure of information to the extent required to be disclosed                by law or                any court of competent jurisdiction, any governmental official or                regulatory authority (including the London Stock Exchange, the Financial                Services Authority, the Panel on Takeovers and Mergers and the United                States Securities and Exchange Commission) or any binding judgment,                order                or requirement of any other competent                authority; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | the                disclosure of information to any tax authority to the extent reasonably                required for the purposes of the tax affairs of the party concerned                or any                member of its group; or |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (h) | the                disclosure to a party’s professional advisers of information reasonably                required to be disclosed for purposes relating to this                Agreement. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 18.3 | Each                party shall inform any shareholder, officer, employee or agent or                any                professional or other adviser advising it in relation to matters                relating                to this Agreement, or to whom it provides Confidential Information,                that                such information is confidential and shall instruct                them: |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Notices**

|   | 19.1 | Addresses |
|--------|------|-----------|

|   |   | Any                notice, claim or demand in connection with this Agreement shall be                in                writing in English (each a “Notice”) shall be sufficiently given if                delivered or sent to the recipient at its fax number, telex number                or                address set out in the Schedule or any other fax number, telex number                or                address notified to the sender by the recipient for the purposes                of this                Agreement. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 19.2 | Form |
|--------|------|------|

|   |   | Any                Notice shall be in writing in English and may be sent by messenger,                telegram, telex, fax or prepaid first class post (first class in                the case                of service in the United Kingdom and airmail in the case of international                service). Any Notice shall be deemed to have been received on the                next                working day in the place to which it is sent, if sent by telegram,                telex                or fax, or 60 hours from the time of posting, if sent by                post. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Whole      agreement and remedies**

|   | 20.1 | Whole                agreement |
|--------|------|--------------------------------|

|   |   | This                Agreement contains the whole agreement between the parties relating                to the                subject matter of this Agreement at the date hereof to the exclusion                of                any terms implied by law which may be excluded by contract and supersedes                any previous written or oral agreement between the Parties in relation                to                the matters dealt with in this Agreement. In this Clause “this Agreement’                includes all documents entered into pursuant to this Agreement. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.2 | JV                Agreement |
|--------|------|-----------------------------|

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|   | 20.3 | Legal                advice |
|--------|------|-----------------------------|

|   |   | Each                party to this Agreement confirms it has received independent legal                advice                relating to all the matters provided for in this Agreement, including                the                provisions of this Clause, and agrees, having considered the terms                of this                Clause and the Agreement as a whole, that the provisions of this                Clause                are fair and reasonable. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 20.4 | No                inducement |
|--------|------|------------------------------|

|   |   | Each                of the Parties acknowledges that it has not been induced to enter                into                this Agreement by any representation, warranty or undertaking not                expressly incorporated into it. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**General**

|   | 21.1 | Survival                of rights, duties and obligations |
|--------|------|-----------------------------------------------------------|

|   |   | Termination                of this Agreement for any cause shall not release a Party from any                liability which at the time of termination has already accrued to                another                Party or which thereafter may accrue in respect of any act or omission                prior to such termination. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.2 | No                partnership |
|--------|------|-------------------------------|

|   |   | Nothing                in this Agreement shall be deemed to constitute a partnership between                the                Parties nor constitute any party the agent of any other party for                any                purpose. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.3 | Release |
|--------|------|---------|

|   |   | Any                liability to any party under this Agreement may in whole or in part                be                released, compounded or compromised or time or indulgence given by                that                party in its absolute discretion as regards any party under such                liability                without in any way prejudicing or affecting its rights against any                other                party under the same or a like liability, whether joint and several                or                otherwise. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.4 | Waiver |
|--------|------|--------|

|   |   | No                failure of any party to exercise, and no delay by it in exercising,                any                right, power or remedy in connection with this Agreement (each a“Right”)                shall operate as a waiver of that Right, nor shall any single or                partial                exercise of any Right preclude any other or further exercise of that                Right                or the exercise of any other Right. The Rights provided in this Agreement                are cumulative and not exclusive of any other Rights (whether provided                by                law or otherwise). Any express waiver of any breach of this Agreement                shall not be deemed to be a waiver of any subsequent                breach. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 21.5 | Payments |
|--------|------|----------|

|   |   | All                payments due under this Agreement shall be paid in full without any                deduction or withholding other than as required by law or under this                Agreement and the paying party shall not be entitled to assert any                credit                set off or counterclaim against any other party in order to justify                withholding payment of any such amount in whole or in                part. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.6 | Variation |
|--------|------|-----------|

|   |   | No                variation of this Agreement shall be effective unless in writing                and                signed by or on behalf of each of the                parties. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.7 | Assignment |
|--------|------|------------|

|   | 21.7.1. | This                Agreement shall be binding on and inure to the benefit of the parties                and                their successors and permitted assigns. The parties may not assign                or                transfer all or any part of their rights or obligations under this                Agreement nor any benefit arising under or out of this Agreement                without                the prior written consent of the other                parties. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.7.2 | Except                as otherwise expressly provided in this Agreement, the benefit of                the                provisions of this Agreement may not be assigned to any Associated                Company. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.8 | Time                of the essence |
|--------|------|------------------------------------|

|   |   | Time                shall be of the essence of this Agreement, both as regards any dates,                times and periods mentioned and as regards any dates, times and periods                which may be substituted for them by agreement in writing between                the                parties. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.9 | Further                assurance |
|--------|------|----------------------------------|

|   |   | At                any time after the date of this Agreement the parties shall, and                shall use                all reasonable endeavours to procure that any necessary third party                shall,                at the cost of the relevant party execute such documents and do such                acts                and things as that party may reasonably require for the purpose of                giving                to that party the full benefit of all the provisions of this                Agreement. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 21.10 | Illegality |
|--------|-------|------------|

|   |   | If                any provision in this Agreement shall be held to be illegal, invalid                or                unenforceable, in whole or in part, under the law of any jurisdiction,                the                legality, validity or enforceability of such provision or part under                the                law of any other jurisdiction and the legality, validity and                enforceability of the remainder of this Agreement shall not be                affected. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.11 | Counterparts |
|--------|-------|--------------|

|   |   | This                Agreement may be entered into in any number of counterparts, all                of which                taken together shall constitute one and the same instrument. Any                party may                enter into this Agreement by executing any such                counterpart. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.12 | Costs |
|--------|-------|-------|

|   |   | Each                party shall bear all costs incurred by it in connection with the                preparation, negotiation and entry into this Agreement and the documents                to be entered into pursuant to it. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.13 | Language |
|--------|-------|----------|

|   |   | This                deed may be executed in English and in Russian. In case of any conflict                between the English and Russian versions, the terms of the English                version                shall prevail |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Contracts      (Rights of Third Parties) Act 1999**

**    Governing      law and submission to jurisdiction**

|   | 23.1 | Governing                law |
|--------|------|------------------------------|

|   |   | This                Agreement shall be governed by and construed in accordance with English                law. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | 23.2 | Jurisdiction |
|--------|------|--------------|

|   |   | All                the parties irrevocably agree that the courts of England are to have                exclusive jurisdiction to settle any dispute which may arise out                of or in                connection with this Agreement. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 23.3 | Submission                and waiver |
|--------|------|--------------------------------------|

|   |   | All                the parties irrevocably submit to the jurisdiction of such courts                and                waive any objection to proceedings in any such court on the ground                of                venue or on the ground that the proceedings have been brought in                an                inconvenient forum. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 23.4 | Appointment                of Process Agent |
|--------|------|---------------------------------------------|

|   |   | The                Grantee (the “**Principal**”)                irrevocably appoints Tim Peara of 24 Hoop Lane, London NW11 8BU (the                “**Agent**”)                as its agent to accept service of process in England in any legal                action                or proceedings arising out of or in connection with this Agreement                provided that: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 23.4.1  | service                  upon the Agent shall be deemed valid service upon the Principal                  whether or                  not the process is forwarded to or received by the Principal;                                                                                                                                                                                                                                                                                    |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 23.4.2  | the                  Principal shall inform all other parties to this Agreement, in                  writing, of                  any change in the address of the Agent within 28 days of such                  change;                                                                                                                                                                                                                                                               |
| 23.4.3  | if                  the Agent ceases to be able to act as a process agent or to have                  an                  address in England, the Principal irrevocably agrees to appoint                  a new                  process agent in England acceptable to the other parties and to                  deliver to                  the other parties within 14 Business Days a copy of a written acceptance                  of appointment by the new process agent; and  |
| 23.4.4  | nothing                  in this Agreement shall affect the right to serve process in any                  other                  manner permitted by law.                                                                                                                                                                                                                                                                                                                             |

**Authority      to deliver**

**IN      WITNESS WHEREOF**

| **EXECUTED**as                    a**DEED**by              | )    |
|-----------------------------------------------------------------|-----------|
| **Baltic                    Petroleum (E&P) Limited**  | )    |
| acting                    by a Director and                | )    |
| a                    Director/Secretary                    | *)*  |

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| **EXECUTED**as                    a**DEED**                    by  | )  |
|-------------------------------------------------------------------------|---------|
| **OOO                    Zauralneftegaz**                          | )  |
| acting                    by General Director                      | )  |

**Key:      ° = Degrees, ' or ’ = Minutes, N.L. = North Latitude, E.L. = East      Latitude**

**Southern-      Voskesensky**

**)      Lebyazhevsky**

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**)      Petuhovsky**

**Privolny**

**Mokrousovsky**

**Orlovo-Pashkovsky**

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**West-Suersky**

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