**THIS      DEED OF VARIATION TO THE LOAN AGREEMENT DATED 9**
**TH**

**      NOVEMBER 2005 **

**BETWEEN**

**OOO      ZAURALNEFTEGAZ**
**ZNG**

**CASPIAN      FINANCE LIMITED**
** **
**Lender**

**WHEREAS**

| A. | ZNG                and the Lender entered into a loan agreement on 9th                November                2005 **(“Loan Agreement**”), whereby, inter alia, the Lender                agreed to make available to ZNG a new loan facility of US$6,874,325                (the                “**Initial                Facility**”). |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | ZNG                and the Lender further entered into a Deed of Variation of the Loan                Agreement dated 16 January 2007 (“**Jan Agreement**”)                whereby, inter alia, the Lender agreed to make available to ZNG an                additional loan facility of US$2,000,000 (“**Jan                Facility**”) |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C. | ZNG                and the Lender further entered into an additional Deed of Variation                of the                Loan Agreement dated 23rd                April 2007                (“**Apr Agreement**”) whereby, inter alia, the Lender agreed                to make available to ZNG an additional loan facility of US$300,000                (“**Apr Facility**”) (together the Loan Agreement, the Jan                Agreement, the Apr Agreement and this Deed are referred to as the                “**ZNG Loan                Agreements**”). |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  D. | ZNG                has drawn down in full each of the Initial Facility and the Jan Facility.                The Apr Facility has at the date hereof been drawn down in the amount                of                US$156,276.41. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  E. | The                Lender is willing to make available to ZNG a further additional loan                amount of US$7,359,190 (the “**Additional Loan**”) upon and                subject to the terms of this Deed and the Loan                Agreement. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**IT      IS THEREFORE AGREED AS FOLLOWS:**

| **1.** | **Terms                and Definitions** |
|--------|------------------------------------------|

| 1.1 | Terms                and Definitions used in this Deed shall have the same meaning as                given in                the Loan Agreement unless otherwise defined herein or the context                otherwise requires. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.2 | Save                as expressly varied or amended by or otherwise stated in this Deed,                the                terms and conditions of the Loan Agreement shall remain in full force                and                legal effect and shall apply                to this Deed and the Additional Loan mutatis                mutandis. |
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|   |  |
|--------|--|

| **2.** | **Loan                and Purpose** |
|--------|-------------------------------------|

| **3.** | **Drawdown** |
|--------|--------------|

| **4.** | **Variation** |
|--------|---------------|

| 4.1 | The                Lender and ZNG hereby agree to delete clause 6.2 of the Loan Agreement                as                follows and replace the same as follows for all purposes with effect                from                the date of the Loan Agreement: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | the                earlier of (i) the date on which ZNG’s monthly turnover as shown by its                monthly management accounts exceeds US$200,000 and (ii) the fifth                anniversary of this Deed; and |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | thereafter,                on a monthly basis on the final day of each calendar month using                all                available turnover provided that if the interest due in any amount                thereafter exceeds the monthly turnover of ZNG then all of the turnover                save for the direct budgeted operating expenses of ZNG and management                fees                agreed to be paid to SEG under the Joint Venture Agreement shall                be                allocated prior to the payment of the said interest and any interest                not                able to be paid under this clause 4.1(b) shall accrue and be payable                as                soon as the level of turnover (less the said SEG fees)                permits.” |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | Clause                4.5, 8.1and 8.3 of the Loan Agreement shall not apply to the Additional                Loan Sum. The work programme and budget attached at schedule 2 hereto                shall replace the Work Programme and Budget in respect of the Additional                Loan. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5.** | **Warranties** |
|--------|----------------|

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| **6.** | **Notices** |
|--------|-------------|

| ZNG:c/o                Zauralneftegaz Limited18b                Charles StreetLondon                W1J 5DUUnited                Kingdom With                a copy to: Siberian                Energy Group Inc.275                Madison Avenue6th                floorNew                York, NY 10016USA | Attn.: Company                Secretary  Attn: David                Zaikin | Fax: +44                20 7667 6471  Fax: +1                (905) 771-9198 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|
| The                Lender: Caspian                Finance Limitedc/o                SalansMillennium                Bridge House2                Lambeth HillLondon                EC4V 2AJUnited                Kingdom                                                                                            | Attn                : Laura                Raynor                                         | Fax: +44                20 7429 6001                                                       |

| **7.** | **Law                and Disputes** |
|--------|-------------------------------------|

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| **8.** | **Language** |
|--------|--------------|

**IN      WITNESS WHEREOF**

| **Executed                as a Deed**by**OOO                ZAURALNEFTEGAZ:** |             /S/                Oleg ZhuravlevAuthorised                signatory [General                Director]                Oleg                ZhuravlevName |
|-------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Executed                as a Deed**by**CASPIAN                FINANCE LIMITED**acting                by two Directors/a                Director and the Secretary**:** | /S/                Simon                EscottDirectorSimon                EscottName/S/                Robert                WildeDirector/SecretaryRobert                WildeName |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SCHEDULE      1**

**Form      of Request for an Advance**

| To: | Caspian                Finance Limited                (“**Lender**”) |
|-----|----------------------------------------------------------------------------------|

| From: | OOO                Zauralneftegaz.                (“**ZNG**”) |
|-------|---------------------------------------------------------------------------|

**Request      for an Advance**

**Loan      Agreement**

*Specify      purpose*

*To bank as detailed in clause 3.2 *

|   | Yours                faithfully |
|--------|---------------------------------|

|   | By: |
|--------|-----|

|   | Authorised                Signatory |
|--------|-------------------------------------|

|   | for                and on behalf of |
|--------|-------------------------------------|

|   | OOO                Zauralneftegaz |
|--------|-----------------------------------|

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**SCHEDULE      2**

**Work      Programme and Business Plan**

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