EXHIBIT  10.23




                               OIL EXPLORATION AND
                              EXPLOITATION CONTRACT


                          OFFSHORE NO. 1 AND SEME BLOCK


                                     BETWEEN

                         THE GOVERNMENT OF THE REPUBLIC
                                    OF BENIN

                                       AND

                         ADDAX PETROLEUM -- ABACAN BENIN

                                   CONSORTIUM

<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


PREAMBLE
<S>           <C>                                         <C>

I             DEFINITIONS                                   5

II            OBJECT OF THE CONTRACT                       12

III           VALIDITY PERIOD OF THE CONTRACT              13

IV            OWNERSHIP OF ASSETS, DATA AND
              HYDROCARBONS                                 16

V             RELINQUISHMENTS                              19

VI            MINIMUM WORK OBLIGATIONS                     20

VII           JOINT TECHNICAL COMMITTEE                    22

VIII          PERFORMANCE OF THE OPERATIONS, WORK
              PROGRAM, BUDGETS, REPORTS                    24

IX            DECLARATION OF COMMERCIAL DISCOVERY
              AND DESIGNATION OF THE DEVELOPMENT AREA      28

X             SOLE RISK OPERATIONS                         32

XI            ANNUAL DEVELOPMENT AND PRODUCTION
              PROGRAMS                                     34

XII           GOVERNMENT PARTICIPATION                     35

XIII          COST RECOVERY AND PRODUCTION SHARING         37

XIV           MEETING THE REQUIREMENTS OF DOMESTIC
              CONSUMPTION                                  39

XV            APPLICABLE TAX SYSTEM                        41

XVI           MEASURE, DISPOSAL, EVALUATION AND SALE
              OF HYDROCARBONS                              43

                                        1
<PAGE>

XVII          NATURAL GAS                                  46

XVIII         DAMAGES, ENVIRONMENT PROTECTION AND SAFETY   49

XIX           PROVISIONS REGARDING CHANGE                  53

XX            EMPLOYMENT AND TRAINING                      54

XXI           ACCOUNTING                                   55

XXII          CONFIDENTIAL NATURE OF THE DATA              56

XXIII         ASSIGNMENT OF RIGHTS                         58

XXIV          FORCE MAJEURE                                59

XXV           ARBITRATION AND EXPERT EVALUATION            60

XXVI          TERMINATION                                  63

XXVII         BANK GUARANTEE                               65

XXVIII        NOTIFICATION                                 66

XXIX          APPLICABLE LEGISLATION,
              STABILIZATION AND COMPENSATION               67

XXX           INFRASTRUCTURE                               68

XXXI          GUARANTEE OF PARENT COMPANIES                69

XXXII         TRANSITIONAL PERIOD                          70

XXXIII        FINAL PROVISIONS                             72

                                        2
<PAGE>

APPENDICES



APPENDIXA A:  COORDINATES OF THE CONTRACT AREA

APPENDIXA B:  MAP OF THE CONTRACT AREA

APPENDIXA C:  BANK GUARANTEE

APPENDIXA D:  ACCOUNTING ANNEX

APPENDIXA E:  ABANDONMENT PROCEDURE
</TABLE>


                                        3
<PAGE>
                                    PREAMBLE

WHEREAS:

In  accordance  with  Ordinance  No.  73-33  of  April  13, 1973, concerning the
Petroleum  Code  of  the  Republic  of  Benin  as well as the legislation issued
thereafter,  in particular Ordinance No. 73-34 of April 13, 1973, concerning Oil
Taxation  and  Decree No. 73-130 of April 13, 1973 concerning the application of
the  Petroleum  Code,  the  prospecting,  exploration,  exploitation,  holding,
transportation,  marketing and trade of Hydrocarbons in the territory and in the
territorial  waters  of  the  Republic  of  Benin  and on the continental margin
adjacent  thereto,  shall  be  subject to the provisions of said Ordinance which
furthermore  stipulates that the liquid and gaseous Hydrocarbon fields belong to
the  State  and  constitute  assignable  mineral  substances.

In  accordance  with  Article  10  of  this  Code,  the  State may undertake any
Petroleum  Operations  either solely, or in association with private capital; it
may  also  obtain  for  itself or issue to any department or public company with
legal  status,  the  exploration  and  exploitation permits, the concessions and
provisional  authorizations  to  exploit.

In  accordance  with  Article  8  of the Code, the State of Benin may also grant
petroleum  rights  to  natural  persons  or  legal  entities.

In  accordance  with  Article  17  of  the Code, prior to granting a Hydrocarbon
Exploration  permit, the Ministry in charge of Mines shall enter into a contract
with  persons  who  have  the  required  technical and financial capabilities to
undertake  such  activities,  defining  the rights and obligations of the future
permit  holder  in  both  the  exploration  and  the  exploitation  periods.

Further  to  the  above,  the Government of the Republic of Benin has decided to
enter  into  this  Contract  with the ADDAX PETROLEUM-ABACAN BENIN Consortium, a
company  incorporated  and  registered  under the laws of the Republic of Benin,
with  a  head  office  in  Cotonou,  Republic  of  Benin,  in order to allow the
Hydrocarbon  exploration  and  exploitation  in accordance with the articles and
provisions  specified  in  this  Contract.

IN  WITNESS  WHEREOF:

The  undersigned  Parties  represented,  on the one part, by MR. EMMANUEL GOLOU,
MINISTER  OF MINES, ENERGY AND HYDRAULICS and on the other part, by MESSRS. MARC
LORENCEAU,  PRESIDENT  OF ADDAX PETROLEUM BENIN AND WADE CHERWAYCO, PRESIDENT OF
ABACAN  RESOURCE  LIMITED  (BENIN)

agree  as  follows:

                                        4
<PAGE>
                                    ARTICLE 1

                                   DEFINITIONS

The  terms  below  appearing in the Contract shall be defined as follows, unless
otherwise  indicated,  or  unless  otherwise  mutually  agreed  upon between the
Parties.  The  definitions  are  the  same whether they are used in the singular
form  or  in  the  plural  form.

1.1     "AFFILIATE"  or "AFFILIATED COMPANY" means a company or any other entity
controlling  one  or  several  entities  forming  the  Contractor,  or  which is
controlled  by  one  or  several  entities  forming  the Contractor, or which is
controlled  by  an  entity which controls the Contractor.  The control means the
direct  or  indirect  ownership  of  more than fifty percent (50%) of the shares
making  up  the  capital  of  the  controlled  company,  thus  granting  to  the
controlling entity, the majority of the voting rights in the controlled company.

1.2     "CALENDAR  YEAR"  means  a  period  of  twelve  (12)  consecutive months
beginning  on  January  first and ending on the following December thirty-first.

1.3     "CONTRACT  YEAR"  means  a period of twelve (12) consecutive months from
the  Effective  Date  of  the Contract or the anniversary of the signature date.

1.4     "APPENDIX"  means  an  appendix  to the Contract and forming an integral
part thereof.  If there is a disagreement or a conflict between the Contract and
one  of  the  annexes,  the  provisions  of  the  Contract  shall  prevail.

1.5     "ACCOUNTING  APPENDIX"  means  the  accounting  procedures  and  methods
established  in  Appendix  "D".

1.6     "ARTICLE"  means  any  numbered provision of the Contract, including all
its subdivisions, unless it is expressly indicated that it relates to an article
of  the  Code.

1.7     "BARREL"  means  U.S.  Barrel,  or  a quantity or unit of measure of oil
equivalent  to 158.9884 litres or 42 American gallons, measured at a temperature
of  15.5556  degrees  Celsius  or  60  degrees Fahrenheit and at the atmospheric
pressure.

1.8     "AVAILABLE  CRUDE"  means  the  remaining  quantity  of  the Total Crude
Production  extracted  from  the  Contract  Area  after  deduction of the losses
relating to the Petroleum Operations and of the Oil Production Tax in accordance
with  Article  13.4  hereof.

1.9     "COST-OIL"  means  the  volume  of  Crude  reserved  for the recovery of
Petroleum  Costs.

1.10     "PROFIT-OIL" means the remaining Crude each year after deduction of the
Cost  Oil.

1.11     "BUDGET"  means  the  financial  estimate  of  all petroleum activities
contained  in  an  Annual  Work  Program.


                                        5
<PAGE>
1.12     "CODE"  means  Ordinance  No.  73-34  of April 13, 1973, concerning the
Petroleum  Code  of  the Republic of Benin as well as subsequent legislation, in
particular  Ordinance  No. 73-34 of April 13, 1973, concerning Oil Taxation, and
Decree No. 73-130 of April 13, 1973, concerning the application of the Petroleum
Code.

1.13     "CONTRACTOR"  means ADDAX PETROLEUM - ABACAN BENIN and their successors
and/or  any  assignee  granted  any  of  their  rights  under  the Contract, the
assignment  of  which  is  in  accordance  with  Article  XXIII.

1.14     "CONTRACT"  means  this  document  as  originally drawn up, duly signed
including  its Appendices as well as any additional agreements or any amendments
made  by  the  Parties  at  a  later  date.

1.15     "PRODUCTION COSTS" means the costs and expenses incurred as a result of
the  carrying  out  of  the Production Operations, excluding the new investments
that  have  occurred  during  this  phase.

1.16     "PETROLEUM  COSTS"  means  all  the  costs  and expenses related to the
Petroleum Operations specified in the Accounting Appendix and in accordance with
the  Contract.

1.17     "EXPLORATION  COSTS"  means  the  costs  and  expenses  related  to the
Exploration  Operations.

1.18     "DEVELOPMENT  COSTS"  means  the  costs  and  expenses  related  to the
Development  Operations.

1.19     "START-UP  DATE  OF  COMMERCIAL PRODUCTION" means the date of the first
delivery  of  Hydrocarbons  in  commercial  quantities  to the delivery point in
Benin.

1.20     "EFFECTIVE  DATE" means the date on which this Contract has been signed
by  the  duly  authorized  representatives  of  the  two  Parties.

1.21     "DISCOVERY"  means  the  evidence  of the presence of Hydrocarbons in a
reservoir  or geologic structure where such Hydrocarbons had not been previously
identified,  resulting  from  the  Petroleum  Operations  in accordance with the
Contract,  and  when  these  Hydrocarbons  are  recoverable  at  the  surface by
conventional  methods  used  in  the  international  oil  industry.

"COMMERCIAL  DISCOVERY"  means  a  Discovery  of  Hydrocarbon reserves following
Exploration  Operations,  which  is  deemed  commercial  in  accordance with the
provisions  of  Article  IX.

1.22     "CURRENCY"  means any foreign currency freely convertible and generally
accepted  by  the  international  banking  community.

1.23     "DOLLARS"  means the official currency of the United States of America.

1.24     "FCFA"  means  the  official  currency  of  the  Republic  of  Benin.

1.25     "DATA"  means  any  document,  report  and information of a geological,
geophysical  or  petrophysical  nature  of  the  Contract  Area.

                                        6
<PAGE>
1.26     "EXPATRIATE  EMPLOYEE"  means  an  employee  of  the Contractor or of a
subcontractor  who  has  been  recruited  as  such and assigned to the Petroleum
Operations  in  Benin.

1.27     "STATE" means the Republic of Benin, its Government, its administrative
structures  and  any  subdivisions  and  political  institutions.

1.28     "EXPLORATION"  means the planning, execution and evaluation of any type
of  geological,  geophysical,  geochemical  and  other  studies,  as well as the
drilling of Exploration Wells for the purpose of making a Hydrocarbon Discovery.

1.29     "ASSOCIATED  GAS"  means the Gas extracted from a well at the same time
as  the  Crude  Oil.

1.30     "NATURAL  GAS"  or  "GAS"  means  the Hydrocarbons in the gaseous state
under normal atmospheric pressure and temperature conditions, including, without
limitation,  the  combination  gas,  the dry gas, the wellhead gas and any other
gaseous hydrocarbon, including the residual gas after condensation or extraction
of  liquids,  but  not  including  said  condensates  or  extracted  liquids.

1.31     "NON-ASSOCIATED  GAS"  means  the Natural Gas which is not exploited at
the same time as the Crude Oil or which exists at the same time as the Crude Oil
which  cannot  be  commercially  produced  when said Natural Gas is commercially
produced.

1.32     "GAS  FIELD"  means  one  or  several  accumulations  of  Natural  Gas
vertically  superincumbent  in  the  Contract  Area,  with  a  commercial  value
established  in  accordance  with  the  Good  Practices  of  the  Oil  Industry.

1.33     "OIL  FIELD"  means  an  accumulation  of  Crude  Oil,  or  several
accumulations  of  Crude  Oil vertically superincumbent in the Contract Area and
with a commercial value established in accordance with the Good Practices of the
Oil  Industry.

1.34     "GOVERNMENT"  means  the  body  regrouping all the State Ministers.  In
this  Contract,  this  means  the  Government  of  the  Republic  of  Benin, its
representatives  or  authorized  agents.

1.35     "HYDROCARBONS"  means  the  Crude  Oil  and/or  the  Natural  Gas.

1.36     "WORKING  DAY" means all working days from Monday to Friday, except for
the  days declared in full or in part non-working days in Cotonou, Benin, by the
competent  government  authorities.

1.37     "MINISTER" means the Minister in charge of Hydrocarbons in the Republic
of  Benin.

1.38     "EXPLORATION  OPERATIONS"  means the operations performed in accordance
with  the  Contract for the purpose of discovering Hydrocarbon accumulations and
for  evaluating  the extent and the volume of these accumulations, the reservoir
characteristics and their possible behaviour during production.  The Exploration
Operations  include the geological, geophysical and geochemical exploration, the
analyses  and studies, the drilling, deepening, abandonment or completion of the
wells  and  their  evaluations  as  well  as  any  operations  relating thereto.


                                        7
<PAGE>
1.39     "DEVELOPMENT  OPERATIONS"  means  any operations performed according to
the  General  Development  Program for the purpose of exploiting the Hydrocarbon
accumulations  found  in the subsoil of the Development Areas.  These Operations
include:

     -    The drilling,  completion  and sampling of the  development  well, the
          drilling and completion of the well for gas or water injection;

     -    The  laying  of  gathering  lines,  the  installation  of  separators,
          reservoirs,  pumps,  artificial  chargers  and  other  production  and
          injection  facilities  required  for the  production,  processing  and
          transportation of Hydrocarbons to the Hydrocarbon  storage  facilities
          or to the offshore or onshore gas processing facilities; and

     -    The laying  inside or outside  the  Contract  Area of  pipeline to the
          storage or delivery points,  the setting up of these Crude Oil storage
          facilities or Gas processing  facilities and all ancillary  operations
          that are not clearly  indicated herein but which are necessary for the
          development and production of these Hydrocarbon  accumulations and for
          the delivery of Crude Oil and/or of the Gas to the Delivery  Point, in
          accordance with the Good Practices of the Oil Industry.

1.40     "PETROLEUM  OPERATIONS" means all operations authorized by the Contract
related  to the exploration, development, production, separation and processing,
storage,  transportation and sale or transfer of Hydrocarbons to the exportation
point  or to the Delivery Point agreed to in Benin or to the delivery point in a
refinery  in  Benin  in accordance with the Contract; they cover the Natural Gas
processing  operations  but  do  not  include the Crude Oil refining operations.

1.41     "PRODUCTION  OPERATIONS"  means  the  operations undertaken in order to
produce  the  Hydrocarbons  of  the Contract Area such as extraction, injection,
stimulation,  processing,  storage,  transportation  to  the  delivery point(s),
loading,  including  the  exportation  of  these  Hydrocarbons  as  well  as the
maintenance  and  abandonment  of  all  the  necessary  facilities.

1.42     "PARTIES"  means  the  Government  and  the  Contractor.

1.43     "TRANSITIONAL PERIOD" means the maximum period of three (3) months from
the  date  of  signature  of  the  Contract  which  is  the  Effective  Date.

1.44     "CRUDE  OIL"  means  the  crude mineral oil, asphalt, ozokerite and all
other  types  of  Hydrocarbons and bitumen in the solid or liquid form, in their
natural  state  or obtained from Natural Gas through condensation or extraction.

1.45     "DELIVERY POINT" means the final exit Point of the flowlines downstream
of  the  storage facilities from where the Oil or Gas is delivered for shipment.
The  location  of  the  Delivery  Point  shall  be agreed to between the two (2)
Parties.

1.46     "COMMERCIAL PRODUCTION" means the quantity of Crude Oil or Natural Gas,
or  both,  which  may  be delivered to the Delivery Point according to a regular
production  and  sale  program.

                                        8
<PAGE>
1.47     "TOTAL CRUDE PRODUCTION" means the quantity of Crude extracted from the
Contract  Area  after  extraction  of  the  water,  foreign substances and after
deduction  of  the  quantities  used  in  the  Petroleum  Operations.

1.48     "WORK PROGRAM" means all plans prepared every year to carry through the
Petroleum  Operations.

1.49     "GENERAL  DEVELOPMENT  PROGRAM"  means  a  plan  established  for  the
development  of  an  Oil Deposit or a Gas Deposit agreed to between the Parties.

1.50     "SEME  PETROLEUM  PROJECT" (PPS) means the state company charged by the
Government  of  managing  the  Seme  Oil  Field.  The Seme Petroleum Project and
activities  may  terminate  at  the  end  of  the  Transitional  Period.

1.51     "EVALUATION WELL" means a well, other than an exploration well, drilled
for  the purpose of evaluating the commercial viability of a geologic trap where
hydrocarbons  have  been  discovered.

1.52     "EXPLORATION  WELL"  means any well drilled within the framework of the
Exploration  Operations  including  dry  wells  and  discovery  wells.

1.53     "DEVELOPMENT  WELL"  means  a  well  drilled  in  order  to  produce
Hydrocarbons  from  a  known  Reservoir  that  has been evaluated and tested, to
maintain  the  production  increase,  or  to  speed  up  the extraction thereof,
including  the  production  and  injection  wells.

1.54     "CONTRACT  AREA"  means  all the geographic area defined by the two (2)
perimeters  the  coordinates  of  which  appear  in  Appendix  "A" and which are
represented on the map appearing in Appendix "B", with the exception of any part
for  which the Contractor has, from time to time, abandoned or waived its rights
under the Contract.  One of these perimeters include the Oil Deposit called Seme
and  this  perimeter  shall be referred to in the Contract and in Appendixes "A"
and  "B" as the "Seme Block"; the other perimeter shall be referred to as "Block
1".  In  the event of disagreement or conflict between Appendix "A" and Appendix
"B",  Appendix  "A"  shall  prevail.

1.55     "GOOD PRACTICES" means all good, safe, economic and efficient practices
generally  accepted  in  the  international  oil  industry.

1.56     "RESERVOIR" means the subsoil rock containing hydrocarbons in its pores
and  having a common pressure system in its dimensions.  This rocky body must be
capable  of  producing  hydrocarbons  in  measurable  quantities.

1.57     "BASEMENT"  means  on  the  one hand, the igneous, metamorphic or other
rocks  which,  by  their  nature, and in accordance with the knowledge generally
accepted in the international oil industry, cannot contain Hydrocarbon deposits,
and  on  the other hand, the impenetrable rocky substances such as salt and clay
domes  as well as any other rock which may render impracticable or unjustifiable
from  a  financial  viewpoint  the  continuation of drilling activities with the
modern  drilling  technology  normally  used  in the international oil industry.


                                        9
<PAGE>
1.58     "SUBCONTRACTOR"  means  any natural person or legal entity hired by the
Contractor  to  provide  services  related  to  the  Contract.

1.59     "LIBOR RATE" means the interest rate at closing for the dollar deposits
for  a  period of six (6) months on the London interbank market and published by
the  London  branch  of  "The  Bank  of  America" or by any other bank agreed to
between  the  Parties, on the date in question or on the banking day immediately
preceding  if  the  day  in  question  is  not  a  banking  workday  in  London.

1.60     "CONTRACT  INTEREST  RATE"  means  the  "LIBOR  RATE" plus one percent.

1.61     "OIL PRODUCTION TAX" means the Royalty (proportional mining royalty) as
defined  in  the  Code,  and  equal  to  a  maximum  of 12.5% of the Total Crude
Production.

1.62     "QUARTER"  means  a period of three (3) consecutive months from January
first,  April  first, July first and October first respectively of each Calendar
Year.

1.63     "SALE TO THIRD PARTIES" means the sales of Hydrocarbons produced in the
Contract  Areaand  meeting  the  following  conditions:

     (a)     The  agreed  price  shall  be  the only consideration for the sale;

     (b)     The  sale  conditions  shall  not be subject to any trade  relation
other than  that  created by the actual sale contract between the seller and the
buyer or  any  of  their  Affiliates;

     (c)     Neither  the  seller  nor  any  of  its  Affiliates has a direct or
indirect interest  in  the  resale or subsequent assignment of the  Hydrocarbons
or of any derivative;

     (d)     No  paid  processing,  exchange or barter agreement must take place
as a result  of  these  sales.

1.64  a)     "DEVELOPMENT  AREA"  means  the  part  of  the Contract Area which,
following  the  seismic  information  and the well data available, is reasonably
deemed to cover the horizontal area of a Hydrocarbon accumulation constituting a
Commercial  Discovery  and designated as such in an approved General Development
Program.  The  Development  Area  includes  the  depth  corresponding  to  the
reservoirs  that  have  been  evaluated  and  tested between the surface and the
basement.

      b)     "SEME  AREA"  means the prism formed by the surface points BEDC for
which the  geographic  coordinates  and the map appear as Appendix B, on the one
hand, and  by  the  depth  between  the  sea  level and the oil-water  interface
of the producing  reservoir  H6,5  situated  at two thousand one hundred (2,100)
metres under  the  sea  level.

      c)     "BLOCK  1" is defined by the area delineated by the points AFGH for
which the  geographic coordinates and the map appear as Appendix B, the Beninese
coast constituting  the  North  geographic  limit  and excluding the  Seme  Area
defined above.

                                       10
<PAGE>

                                   ARTICLE II

                             OBJECT OF THE CONTRACT

2.1     By  this Contract, the Government grants to the Contractor the exclusive
right  to carry out Petroleum Operations in the Contract Area for the purpose of
exploring,  developing  and  producing  Hydrocarbons in this area, in accordance
with  the  provisions  of  the Code and the Contract, and in accordance with the
laws  and  regulations  in  force  in  the  Republic  of Benin.  The State shall
implement  all  administrative  procedures  required to enable the Contractor to
enjoy  its  rights  and  fulfill  its  obligations.

2.2     The  Contractor declares having the technical and financial capabilities
required and undertakes to carry out the Petroleum Operations in accordance with
this  Contract  and  according  to  the  Good  Practices  of  the  Oil Industry.

2.3     With regard to Block 1, once a General Development Program relating to a
Hydrocarbon  Discovery  has  been  approved as quickly as possible in accordance
with  the  terms of the Contract, the Contractor shall have full rights to carry
through  the  Development and Production Operations and  to have the usufruct of
the  financial  benefits  resulting  from  these  activities,  provided that the
obligations  under  the  Contract  and  the  Code  have  been  fulfilled.

2.3.1     With  regard  to  the  Seme  Block  which includes an Oil Deposit, the
Contractor shall enjoy the rights listed in Article 2.3.1. as from the Effective
Date  of  the  Contract,  subject  only  to  the  provisions  of  Article XXXII.

2.4     The  Contractor  shall  provide  all  technical,  financial,  human  and
economic  resources  required  for  the  Petroleum  Operations.  Subject  to the
proportional  participation  of  the  State,  if  applicable,  all  costs  and
disbursements  incurred  for  the  Petroleum  Operations  shall  be  at  the
responsibility  of  the  Contractor  and  shall  be  borne  exclusively  by  it.
Furthermore,  the  Contractor shall be technically, financially and economically
responsible  for  the  Petroleum  Operations  during  the validity period of the
Contract.

2.5     The Minister, in his capacity as the Government representative, shall be
responsible  for  the supervision of the Petroleum Operations in order to ensure
that  the  Contractor  fulfills its obligations in accordance with the Contract.
The  Minister  shall exercise this duty through its technical departments at any
reasonable time.  The Contractor shall be required to provide easy access to its
facilities,  to  the  Minister's  representatives  in  order  to  enable them to
discharge their duties.  The costs related to these duties shall be borne by the
Government.

                                       11
<PAGE>
                                   ARTICLE III

                         VALIDITY PERIOD OF THE CONTRACT

3.1     The  Contract shall enter into effect from the date of its signature and
shall  end  on  the  date fixed below, subject to the provisions of Article XXVI
relating  to termination and those of Article XXXII relating to the Transitional
Period.

3.2     VALIDITY  PERIOD  RELATING  TO  BLOCK  1

3.2.1     With  regard to Block 1 only, the period covered by the Contract shall
be  divided into two periods:  an exploration period and an exploitation period.

3.2.2     The  exploration  period  shall be for an initial period of two years,
with  two  (2)  possible  extension  phases of two years each.  These extensions
shall  be  granted  by  right,  subject  to  the  provisions  relating  to
relinquishments,  provided  that the Contractor has met all its work obligations
and  expense  commitments  and  other  substantial  obligations  relating to the
preceding  phase.

3.2.3     Provided  it has fulfilled all the obligations relating to the initial
phase,  the  Contractor  may request the Minister in writing for an extension of
the  exploration  period  beyond the initial phase, at least sixty (60) calendar
days  before  the  end of said phase.  If this request has not been submitted in
time  and if a commercial Discovery has not been made, the Contract shall expire
at  the  end  of  the  initial  phase  of  the  exploration  period.

3.2.4     Subject  to  the  provisions  relating  to termination and provided no
Hydrocarbon  Discovery has been made during the exploration period, the Contract
shall  expire  at  the  end  of  this  period.  If  at  least one (1) Commercial
Discovery has taken place before the end of the exploration period, the Contract
shall  remain  in  effect  with  regard  to the corresponding Development Areas.

3.2.5     If, at the expiration date of the initial exploration period or of one
of  the  extension  phases,  an  exploration well is in the process of drilling,
coring, casing, testing or closing, the Minister shall grant to the Contractor a
special  extension  in  order  to  enable  it  to complete the drilling, coring,
casing,  testing  and/or  the  closing  of the well in question, to evaluate the
results  of  these  operations and to determine if they constitute a Hydrocarbon
Commercial  Discovery.  This  special extension cannot, under any circumstances,
extend  the  total  exploration  period  by  more  than  six  (6)  months.

3.2.6     If  a  Natural  Gas  Discovery occurs that the Contractor considers as
having the potential of being commercially viable, in addition to the procedures
and  conditions  specified  herein,  the  Minister may grant to the Contractor a
special  extension  of the initial exploration phase for a minimum period of two
(2)  years  to  allow  the  full evaluation of this Discovery.  To that end, the
Minister  may  ask the Contractor to carry out additional studies or tasks which
would  reasonably  appear  necessary  for the good evaluation of the Natural Gas
Discovery.

                                       12
<PAGE>
3.2.7     In  the  event  of  a Hydrocarbon Commercial Discovery, the Government
shall  grant  to  the  Contractor  by  right,  at  the request of the latter, an
exploitation  permit  covering the Development Area, the perimeter of which will
have  been  approved as part of a General Development Program in accordance with
the  provisions  of  Article IX.  The duration of the exploitation permit during
which the Contractor shall be authorized to ensure the production of each of the
Oil  Deposits  and  Gas  Deposits  discovered shall be fixed at twenty-five (25)
years  from  the  day  on  which  the  Discovery  has been declared a Commercial
Discovery  in  accordance  with  the  provisions  of  Article  IX  hereof.

During  the period of the Contract, the Contractor may relinquish one or several
Development  Areas,  object  of an exploitation permit subject to the Government
approval.

3.2.8     If, at the expiration of the twenty-five (25) year exploitation period
defined above, a commercial exploitation remains possible, the Contractor may be
authorized, at its request, to continue the exploitation for a further period of
ten  (10)  years, provided that it has fulfilled all its contractual obligations
during  the  preceding  exploitation  period.

3.3     VALIDITY  PERIOD  RELATING  TO  THE  SEME  BLOCK

The  Seme  Block  being  an  Oil  Deposit  as  of  the  Effective Date, it shall
constitute  as  of  that date a Development Area and the Minister shall grant to
the  Contractor  an  exploitation  permit  covering  the  Seme  Block.  This
exploitation permit relating to the Seme Block shall expire when the Hydrocarbon
commercial exploitation shall not be viable anymore in the Seme Block, either in
the  present  Oilfield  of  Seme,  or  in  any  other Reservoir contained in the
perimeter of Block 1, with a maximum period of twenty-five (25) years and with a
possible  extension  of  ten  (10)  years.

3.4     PROVISIONS  RELATING  TO  BLOCK  1

3.4.1     At  the  expiration  of  the  last  exploitation permit granted to the
Contractor,  the  rights  and obligations defined in this Contract shall be null
and  void.

3.4.2     The  Contractor shall provide to the Government for the granting of an
exploitation  authorization,  an  exact  delimitation of the perimeter in such a
manner  that  it  includes  all  the  presumed  area  of  the  discovered Field.

3.4.3     If, during operations subsequent to the discovery, it appears that the
field  has  an  extension  exceeding that initially anticipated according to the
preceding  paragraph,  the  Government  shall grant to the Contractor, under the
exploitation  authorization already allocated, the additional area in such a way
so  that  it  covers  all the field, provided that the above mentioned extension
forms  an  integral  part  of  the  Contract Area as defined at the time of said
modification.  If  said  additional  area  is  outside  the  Contract  Area, the
Minister  shall grant to the Contractor this additional area provided that it is
not  the  subject  of  mining  rights  already  granted to a third party or of a
request  aiming  at  granting  such  rights.

                                       13
<PAGE>
                                   ARTICLE IV

                   OWNERSHIP OF ASSETS, DATA AND HYDROCARBONS

4.1     OWNERSHIP  OF  ASSETS

4.1.1     The  lands  shall become the property of the State as soon as they are
acquired  by  the  Contractor.  The Minister must cooperate in order to complete
the  procedures  on  behalf  of the Contractor and at the written request of the
latter,  for  obtaining the licences, permits, surface rights, easements, rights
of  free  access to the Contract Area and exit therefrom, the utilization of the
waters  and  any  other  types  of  encumbrances on any land or water expanse of
public  or  private  nature  to  enable the Contractor to finalize the Petroleum
Operations  on  the  territory of Benin, in accordance with the laws in force in
the  country.

4.1.2     Notwithstanding  the  above  provisions,  the ownership of movable and
immovable  properties  acquired  for  the  Petroleum  Operations  shall  be
automatically  transferred  by the Contractor to the State as soon as their cost
has  been  fully  amortized  by the Contractor, or, otherwise, at the end of the
Contract.  At  the  expiration of the Contract, the Contractor shall be required
to  forward  to  the  Beninese State, through the Minister and unencumbered, the
ownership of the lands, works, facilities, appurtenances and permanent equipment
which it shall have acquired during the performance of the Petroleum Operations.
The  Contractor  shall  then be released from any obligation with regard to said
properties,  including  any objection resulting from abandonment procedures, and
restoration  of  environment,  as  concerns  said  properties,  in  the event of
contribution  of  activities  of  the  field.  During the validity period of the
Contract,  the  Contractor  shall  keep  and  safeguard  in a good condition the
movable  and  immovable properties acquired for the execution of the Operations.

4.1.3     The  ownership  of  the properties rented or of the movable properties
leased  belonging  to  subcontractors  or  to  Affiliates  and  the intellectual
property of third parties shall remain with said Subcontractors or Affiliates or
third  parties

4.1.4     During  the period of the Contract, the Contractor shall be authorized
to  use and to make use of all movable and immovable properties acquired for the
Petroleum  Operations under the Contract.  The Contractor shall be authorized to
transfer  or  to  sell  said  properties  if they are no longer required for the
Petroleum  Operations.  The  beneficiary  of  the  sale  revenues  from  these
properties  shall  be  as  follows:

 .     If the ownership of said properties has been transferred to the State, the
proceeds  must  be  paid  to  the  latter;

 .     The Contractor shall keep these revenues when the properties have not been
the  subject  of  any  amortization;

 .     In  the  event  of partial amortization, the proceeds corresponding to the
amortization  proportion  must  be  paid  to  the  State.


                                       14
<PAGE>
The disposal or transfer of movable or immovable properties during the period of
the  Contract  must  have  the  prior  approval  of  the  Minister.

4.2     OWNERSHIP  OF  DATA

The  State  is  the  owner  of  all  the geological, geophysical and geochemical
information and of the data relating to the drilling, engineering, recording and
production  of  any  other  data,  samples,  logs,  coring,  tapes,  maps,
interpretations,  reports  and  any other support or information obtained at the
end of the Petroleum Operations.  However, the Contractor shall be authorized to
keep  this information, at no cost, and to use same for the Petroleum Operations
subject  to  the  obligations  connected  to  their  confidential  nature.

The  Government  will  provide  the  Contractor  access  to  all  the technical,
operational, accounting and financial information available, this list not being
exhaustive,  at  the  Effective date of the Contract.  It is understood that the
Contractor  will  treat  these data and information confidentially, in according
with  article  22  of  the  present  Contract.

4.3     OWNERSHIP  OF  HYDROCARBONS

All  the Hydrocarbons contained in the Reservoirs of the subsoil of the Contract
Area or produced in the Contract Area belong to the State in accordance with the
Code  and with the Constitution of the Republic of Benin.  The Contract does not
confer any ownership right on the Contractor with regard to the Crude Oil and/or
Gas extracted from the Contract Area, which shall continue to be the property of
the  State  until they are measured at the Delivery Point.  The ownership rights
of  the  Contractor with regard to the Crude Oil and/or to the Gas in accordance
with  the  provisions  of the Contract shall be granted to it at the appropriate
Delivery  Point.

4.4     OWNERSHIP  OF  THE  ASSETS  OF  THE  SEME  OIL  PROJECT

The  assets belonging to the Seme Oil Project, property of the Government, shall
be  handled from the end of the Transitional Period as stipulated in Article 32,
as  follows:

     A. The  following  shall be put at the  disposal  of the  Contractor,  as a
matter of priority, for the validity of the Contract:

     -    A storage  facility  including a portion of the land  intended for the
          construction of a quay.

     -    A buoy mooring of CBM-PLEM type.

     -    A loading facility.

     -    The  Contractor  shall be allowed to use the resupply  base of Cotonou
          harbour under conditions agreed by the parties.


                                       15
<PAGE>
The  Government  shall  guarantee to the Contractor that the facilities shall be
managed in accordance with the good practices of the international oil industry.
The  Contractor  will  finance  the restoration of the Seme facilities, and will
manage  these  facilities according to Good Petroleum Practices, and taking into
account the production forecast for Seme and Block 1, in accordance with Article
32.

If  other  users are involved, the Government shall exploit its ownership rights
through  the  Bureau  of  Petroleum  Operations or any other structure designed.

B.     With  regard  to  the  assets  directly  associated  or  related  to  the
Production Operations and which include, in particular, the producing wells, the
Platforms  including  the test and production separators, the oil pipelines, the
submarine  cables,  without  this listing being restrictive, shall be put at the
disposal of the Contractor, free of charge, subject to the provisions of Article
18.5.  The  Contractor  shall  be  have  the  right  to use, with the Government
approval,  some  existing  wells  in  order  to  find  new  reserves in the deep
reservoirs  according  to  the  Good  Practices  of  the  Oil  Industry.

C.     The Parties shall agree on the methods of sale of the surplus spare parts
available.  In  the  event  that the Contractor is interested to purchase all or
part  of  this  surplus,  it  will  repay  the  price  thereof.

D.     The  other assets which are not directly related to the operations of the
Seme  Field  shall  remain  the  property  of  the  Government.

                                       16
<PAGE>

                                    ARTICLE V

                                 RELINQUISHMENTS

5.1     At  the  end  of the first extension phase of the exploration period and
provided  the  Contractor  has  discharged all its obligations connected to this
phase,  if the latter decides to continue with the Exploration Operations in the
Contract  Area  during the extension phases for said period, it shall relinquish
fifty  percent  (50%)  of  the  remaining  Contract Area, after deduction of any
Development  Area  and  of  the  Seme  Block.

5.2     At  the  end  of the last extension phase of the exploration period, the
Contractor  shall  only  keep  the  Development  Area  or  Areas  if  any.

5.3     The  Areas  that  have been relinquished by the Contractor must be lying
together  and must be of an appropriate geometrical form  in order to enable the
performance  of the Petroleum Operations by other entities.  The Contractor must
notify the Minister in writing of the Area or Areas it intends to relinquish, no
later  than  sixty  (60) days before the end of the period considered, and shall
include  a map showing the geographic location and giving the coordinates of the
connection  points of the boundary lines.  Within thirty (30) days following the
notification  date,  the Minister must inform the Contractor of its decision and
the  Contractor  must  comply  therewith.

5.4     From  the date of expiration of the Contract, the Contractor is supposed
to  have  transferred  all  the  Contract  Area.

5.5     Two  months following each relinquishment, the Contractor must report to
the  Minister  the surface areas to be returned and forward to him all documents
and  files related thereto as well as the facilities contained thereon, but will
have  the  right  to  make  a  copy  of documents and file, while respecting the
confidentiality  of  the  data.

                                       17
<PAGE>

                                   ARTICLE VI

                            MINIMUM WORK OBLIGATIONS

6.1     The  Contractor  must  commence  the  Petroleum  Operations  as  of  the
Effective  Date  of  this  Contract subject to the provisions of Article 32.  To
that end, the Contractor shall inform the Minister of the nominal composition of
the  team  responsible for the conduct and execution of the Contract in Benin as
well  as  the  main  terms  of  its  agreement  with  its  partner  or partners.

6.2     During the initial Phase of the exploration period, the Contractor shall
undertake  to  do  the  following  works:

     -    Reprocessing  and  interpretation  of 500 km of 2D seismic  lines,  or
          acquisition of 300 km of seismic lines during this period.

     -    Exhaustive  evaluation of the productivity of the gas contained in the
          H8 reservoir of Seme and assessment of the economic potential thereof.

     -    Drilling of one (1) well in Block 1 in accordance  with Clause 6.5. In
          the event the deep  reservoirs  under the Seme Area prove to be a more
          attractive  prospect than in Block 1, this  drilling  shall be carried
          out in said deep reservoirs.

6.3     During  the  first  extension  phase  of 2 years, the Contractor must at
least  complete  the  following  works:

     -    Acquisition  of 300 km of seismic lines,  if the  acquisition of these
          seismic lines has not been realized during the initial phase;

     -    Drilling of a well in accordance with Clause 6.5.

6.4     During  the  second  extension  of  the initial phase of the exploration
period,  the  Contractor  must  at  least  complete  the  following  works:

     -    Acquisition  and  reprocessing  of 300 km of 2D seismic lines or their
          equivalent of 3D seismic.

     -    Drilling of a well in accordance with Clause 6.5.

6.5     Any  Exploration  Well  drilled  must  at least be drilled at one of the
following  depths:

     (a) the basement

     (b) H8 horizon

     (c) 2800 (two thousand eight hundred) metres TVD (True Vertical Depth)


                                       18
<PAGE>
     (d) at the depth under which any additional drilling becomes  impracticable
and would not be carried out by a prudent and  reasonable  operator in identical
or similar conditions according to the Good Practices of the Oil Industry.

     (e) at any other depth defined by the Parties by mutual agreement.

6.6     If  during  a  phase of the exploration period the Contractor undertakes
works  which  exceed  the  minimum  work obligations relating to this phase, the
excess  shall  be  deducted  from the work obligations relating to the following
phase.

6.7     The  difficulties  which  shall  occur  during the implementation of the
provisions  of  this  Article  shall  be  first  settled  in accordance with the
provisions  of  Articles  8.2.2  and  9.9.

                                       19
<PAGE>

                                   ARTICLE VII

                            JOINT TECHNICAL COMMITTEE

7.1     Within three (3) months following the Date of signature of the Contract,
the  Parties  shall  form  a Joint Technical Committee (CCT) composed of six (6)
members,  three  (3)  representing  the  Minister and three (3) representing the
Contractor,  including  the  General  Manager  of  the  Contractor.

7.2     Notwithstanding  the  provisions  of  Article  2  and  the  rights  and
obligations  of the Contractor relating to the daily management of the Petroleum
Operations,  nor its other rights and obligations mentioned in the Contract, the
CCT  shall  have  the  main  following  objectives:

     -    To ensure the good communication and cooperation between the Parties;

     -    To review on the conduct and  management of the Petroleum  Operations,
          in particular:

          (i)  the  evaluation  of  the  results  of the  drilling,  geological,
               geophysical and petroleum engineering programs;

          (ii) the budgets and their execution;

          (iii) the important modifications of the work programs;

          (iv) the allocation of the markets relating to the work programs;

          (v)  any other matters submitted to it by the Parties.

The CTT shall make and forward recommendations to the Parties with regard to all
the  matters  reviewed.

7.3     The CCT shall be chaired by one of the representatives designated by the
Minister.  One  of the representatives designated by the Contractor shall act as
Secretary.  The  Parties  may  send other representatives to the meetings of the
CCT  as  experts  or  substitute  members.

7.4     The  CCT  shall  hold  an  ordinary  meeting at least once every six (6)
months  or when the members decide by mutual agreement.  The Chairman of the CCT
may  convene  extraordinary  meetings  at  the request of the Minister or of the
Contractor  by  giving  to  the members at least fifteen (15) days' notice, or a
shorter notice if the Parties so decide.  The corresponding notice must indicate
the  date,  the  place  and  the  agenda  of  the  meeting.

7.5     The  quorum  for  the  meetings of the CCT shall be composed of four (4)
members,  two  (2)  for  each  Party.

7.6     The  CCT  submits  his  conclusions  to  the  Parties.  In  the event of
disagreement,  between Parties, they will act according to the provisions of the
present  Contract.

                                       20
<PAGE>

                                  ARTICLE VIII

                         PERFORMANCE OF THE OPERATIONS,
                         WORK PROGRAM, BUDGETS, REPORTS
                                   AND CONTROL

8.1     PERFORMANCE  OF  THE  OPERATIONS

8.1.1     During  the  period  of  the  Contract, the Contractor shall carry out
directly  the  exploration and exploitation activities in the Contract Area.  In
order  to  better  undertake  its  activities,  it  shall  be authorized to hire
specialized  subcontractors.  However, the Contractor shall keep the control and
the  general  responsibility  of  the  operations  or  activities  undertaken.

8.1.2     The  Contractor  must  proceed  diligently with the performance of the
Petroleum  Operations in accordance with the Good Practices of the Oil Industry,
taking  into  account  the  local conditions and other special conditions in the
Contract  Area.

8.1.3     The  Contractor  must first notify the Minister of any substantial and
planned Petroleum Operations such as, for example, the geological or geophysical
research  and the start-up of the well drilling activities.  The Contractor must
also  notify  the  Minister  in  writing  of  any suspension of drilling or well
abandonment.  If this notification is impossible, the Contractor must notify the
Minister  in  writing  of this suspension or abandonment within twenty-four (24)
hours.

8.2     WORK  PROGRAM  AND  BUDGETS

8.2.1     Within  ninety (90) days following the Effective Date of the Contract,
the  Contractor  must  prepare  the  first  Work Program and its budget.  If the
Effective  Date  of  the  Contract  occurs the first day of the month of July or
before,  the first Program and its budget shall be prepared for the remainder of
the  corresponding  calendar year.  If the Effective Date of the Contract occurs
after  the  first  day  of  the month of July, this first Program and its budget
shall  be  prepared  for  the current calendar year as well as for the following
calendar  year.  The  Contractor must submit the Work Program and its budget for
the Minister's approval.  Subject to the above provisions, the Contractor shall,
no  later  than  October  30 of each calendar year, prepare a Work Program and a
budget  for  the  following  calendar  year  and  submit same for the Minister's
approval.  Within  the  month  following the date of receipt of the Work Program
and  of the budget, the Minister shall approve same as proposed or shall suggest
amendments,  failing  which  the  Work  Program  and  the budget shall be deemed
approved.  The  Work  Programs  during  the  exploration period must include the
minimum  works  as  stipulated  in  this  Contract.


                                       21
<PAGE>
8.2.2     In  the  event  the  Minister  wishes  to  make amendments to the Work
Program  and  to the corresponding Budget, he must advise the Contractor thereof
in  writing  no  later than fifteen (15) days following the receipt of the above
mentioned documents and the Parties shall meet and attempt to reach an agreement
on  the proposed amendments.  If the Contractor and the Minister do not reach an
agreement  on the proposed amendments no later than two months after the date of
receipt  of  the  Work Program and the Budget, an Expert shall be called upon to
settle  the matter in accordance with the provisions relating to arbitration and
expert  evaluation.

8.2.3     The  Contractor  may,  with  the  Minister's approval, revise the Work
Program  during  the  calendar year in question in order to be able to take into
account  newly  acquired  information,  a  revised  evaluation of the conditions
concerned,  or  any  other  valid  reason.

8.3     REPORTS

8.3.1     Within  the  framework  of this Contract, the Contractor shall prepare
and  keep up to date all the records relating to the Petroleum Operations in the
Contract  Area.

8.3.2     Subject  to  its general rights and obligations, the Contractor shall:

     (a) Register in an original or reproducible  version of good quality, or on
magnetic  support,  if any, any geological and  geophysical  information and any
data related to the Contract Area and acquired by the Contractor.

     (b) Keep all the files containing all the details  concerning the following
aspects:

          i)   The  drilling,   implementation,   deepening,  production  tests,
               sealing or abandonment of the wells;

          ii)  The formations crossed by the wells;

          iii) The casing laid in the wells and any modification to said casing;

          iv)  Any hydrocarbons, water and other minerals of economic benefit or
               dangerous substances encountered;

          v)   The areas in which geological or geophysical activities have been
               carried out.

8.3.3     The  well  logs,  maps,  magnetic tapes, coring and samples, and other
geological  and  geophysical  information  obtained by the Contractor during the
Petroleum  Operations  shall belong to the Government, and shall be forwarded to
it as soon as they have been obtained or prepared, and the Contractor shall have
the  right to make copies of said documents and files, subject to the observance
of  the  confidentiality  clauses.


8.3.4     During  the  execution  of  its  contractual  obligations,  unless the
Parties  otherwise  agree,  the  Contractor  shall:

     a) Keep copies of the material  constituting  the Data during the period of
the Contract;

     b) Keep for a period required by Petroleum Operations,  with the Government
approval,  the original data provided that said data can be reproduced  and that
copies thereof have been provided to the Minister.


                                       22
<PAGE>
     c) Export for  processing,  review or laboratory  tests and for a period of
one year, the samples and any matters  constituting the petroleum data, provided
that  samples of  equivalent  dimensions  and  quality or, when such data may be
reproduced, copies of an equivalent quality have been forwarded to the Minister.

8.3.5     The  Contractor  shall  regularly  inform  the  Minister  of  the main
developments  occurring  in  the Petroleum Operations and shall provide him with
all  available  information,  data,  reports,  evaluations  and  interpretations
related  to  the  Petroleum  Operations.  In  addition,  the  Contractor  shall:

     a) Prepare daily drilling reports within the framework of its activities;

     b) Prepare and forward to the Minister a monthly  report within a period of
fifteen (15) days following the end of the month concerned which shall include a
description  of the  activities  covered  during  said month with plans and maps
indicating the sites where the works described have been executed;

     c) Prepare  and forward to the  Government  a  quarterly  report,  within a
period of thirty (30) days after the end of each Calendar  Quarter,  which shall
include a description of the  activities  covered during said quarter with plans
and maps indicating the sites where the works described have been executed;

     d) Prepare and forward to the Government an annual report,  within a period
of two (2) months after the end of each Calendar Year,  which will integrate and
develop the  revised  quarterly  reports,  if  required,  of the  Calendar  Year
considered.

8.4     The  Minister  shall  assume his obligations under this Contract through
the  DIRECTORATE  OF  ENERGY  (DEN)  and  the DEPARTMENT OF PETROLEUM OPERATIONS
(BOP).

8.4.1     The  duties  of  THE  DIRECTORATE OF ENERGY (DEN) shall be inter alia:

     -    to ensure that the Petroleum Operations conducted by the Contractor or
          other government  entities comply with the oil policy of the State and
          to the applicable regulations;

     -    to bring as much as possible to the Contractor any assistance required
          in order to enable it to fulfill its obligations  within the framework
          of the present Contract;

     -    to ensure that the  Contractor  implements a true policy of technology
          transfer  and of  training  of  Beninese  nationals  in the  field  of
          Petroleum Operations.

8.4.2     The  duties  of  THE DEPARTMENT OF PETROLEUM OPERATIONS (BOP) shall be
inter  alia:

     -    to guarantee the financial  settlements between the Contractor and the
          State;

     -    to receive, value and market the State's Hydrocarbon share;


                                       23
<PAGE>
     -    to ensure that the cost  accounting of the expenses and the keeping of
          the  records and of the conduct  reports of the  Petroleum  Operations
          shall be undertaken according to this Contract and with the accounting
          principles generally accepted in the oil industry.

                                       24
<PAGE>

                                   ARTICLE IX

                       DECLARATION OF COMMERCIAL DISCOVERY
                     AND DESIGNATION OF THE DEVELOPMENT AREA



9.1     As soon as a Discovery of Hydrocarbons is made in the Contract Area, the
Contractor  must  immediately  report same to the Minister and the provisions of
this  Article shall then apply.  In the event of a Gas Discovery, the provisions
of  the  relevant Article shall apply should there be a conflict or a difference
in  the  processing  of  this  Discovery  with  this  Article.

9.2     After  the  Discovery  of  Hydrocarbons and as soon as the Contractor is
able to do so, and in any case within thirty (30) days following said Discovery,
the  Contractor  must  forward  to  the  Minister  a  first report of Discovery.

No  later  than  two  (2)  months  following the Discovery, the Contractor shall
forward  to  the Minister a detailed report on the Discovery, indicating whether
this  Discovery  must  be  evaluated  or  not.  If the Contractor deems that the
Discovery  is  worth  being  evaluated,  the  report  must include an evaluation
program  and  a  schedule  of  activities  in order to implement an adequate and
efficient  evaluation.  The Contractor must carry through the evaluation program
submitted  to  the  Minister  during  the  exploration  period  according to the
approved  evaluation  program  and  schedule  of  activities.

9.3     No  later  than  ninety  (90)  days  following the end of the evaluation
program,  the  Contractor  shall  submit  for  the  Minister's review a detailed
evaluation  report  proving the commercial viability of the proposed Development
Area.  This  report  must  include:

     -    The description of the Development  Area, in particular the structural
          configuration, the physical properties and the extent of the reservoir
          rocks, the surface areas, the thickness and the depth of the producing
          areas;

     -    An estimate of the initial and recoverable  oil and gas reserves,  the
          characteristics  of the recovery,  the expected  production  return by
          reservoir;

     -    An estimate of the number of wells required for an efficient  drainage
          of the reserves, the fluid characteristics  including,  in the case of
          Crude Oil, the density, the sulfur, sediment and water content and the
          shrinkage of the product;

     -    The economic projections and the expected cash flows.

9.4     The  Contractor  must  declare  in the report whether in its opinion the
Discovery  is  commercially  viable,  and  in this case, it shall be entitled to
develop  same  and to produce the Hydrocarbons in accordance with the provisions
of  this  Contract.


                                       25
<PAGE>
9.5     Within  thirty  (30) days following the date of submission of the report
in  which  the Contractor advises the Minister of its opinion that the Discovery
is  commercially  viable, the latter shall notify his approval to the Contractor
in  writing,  and  the  date  of  approval by the Minister shall be the "Date of
Commercial  Discovery".  If  at  the  end  of  this  thirty (30) day period, the
Minister  has  not  notified  said  approval  in writing, the Date of Commercial
Discovery  shall  be  the  day  following the expiration of the thirty (30) days
mentioned  above.  The  Minister  shall  then  grant  to  the  Contractor  the
exploitation  permit  if  the  latter  requests  it.

9.6     If  the  Contractor deems that the Discovery is not commercially viable,
it  must  advise the Minister of the reasons on which it has based its decision.
If the Minister challenges the grounds of the technical or financial analysis of
the  Contractor  on  the  non-commercial  nature of the Discovery, or if for any
other  reason  he  deems that the Discovery may be economically developed by the
Contractor  in  accordance  with the clauses and conditions of the Contract, the
Minister must then, within sixty (60) days if he so wishes, submit the matter of
the  commercial  viability to an Expert in accordance with the Contract.  If the
Expert  confirms  that  the  Discovery is commercial, the Contractor may, within
thirty  (30) days following the date of receipt of the Expert's decision, either
declare that the Discovery is a commercial Discovery under the provisions of the
Contract  and  the  date  of  declaration  shall  become  the Date of Commercial
Discovery,  or  waive  its  rights  regarding  the Discovery.  In this case, the
Minister  shall  have  the  right  to  develop  the area of the Discovery and to
produce  Hydrocarbons  in  accordance  with the provisions relating to sole risk
operations.  The  Contract  shall  remain in effect on the remaining part of the
Contract  Area.

9.7     Within  ninety (90) days following the Date of Commercial Discovery, the
Contractor must submit to the Minister a General Development Program indicating:

     (a) the proposed Development Area;

     (b) the Development  Operations to be carried out, including any additional
delineation  of the  Development  Area  and the  method  of  development  of the
Associated Gas, if any;

     (c) the  Contractor's  plans  concerning the drilling and completion of the
wells,  the new  production,  storage,  transportation  and delivery  facilities
required  for the  production  of  Hydrocarbons.  The  plans  must  contain  the
following information:

          (i)  the expected number of Development Wells and their positioning;

          (ii) the  details  relating  to the  production  equipment  and to the
               storage facilities;

          (iii) the delivery points of Crude Oil and Natural Gas; and

          (iv) the details of any other  technical  equipment  required  for the
               Hydrocarbon Operations.

     (d) the estimated  projections of Crude Oil and Natural Gas production from
the Oil or Gas Deposits, and the estimated commercial duration of said deposits;

     (e) the cost estimates of the equipment and current expenses;

                                       26
<PAGE>

     (f) the economic  feasibility  studies  prepared by the  Contractor and the
other methods,  if any, devised for the development of the Discovery taking into
account:

          (i)  its location;

          (ii) any pertinent meteorological condition;

          (iii) expected investment costs and current expenses; and

          (iv) any other information required for its evaluation.

     (g) the safety measures to be adopted during the Development and Production
Operations, including the emergency measures;

     (h) the measures to be adopted for the protection of the environment.

     (i) the  unforeseeable  events that may affect the Contractor's  capability
during the implementation of the General Development Program.

9.8     The  General  Development  Program  proposed  by  the Contractor must be
prepared  according  to the geological, engineering and financial principles and
according  to  the  Good Practices of the Oil Industry.  Furthermore, it must be
realized  with  a  view  to ensuring the optimum recovery of Hydrocarbons of the
Development  Area  and  to  preventing  their  wasting.

9.9     The General Development Program of the Contractor may be reviewed by the
Minister  who  shall  give  his  approval  if he deems that it has been prepared
according  to  the  above  provisions.  If  the  Minister deems that the General
Development  Program submitted by the Contractor has not been prepared according
to  these  provisions,  he  shall suggest that revisions be made thereto and the
Contractor  may  amend  same in reply.  If within ninety (90) days following the
date  of submission of the Program, the Minister and the Contractor cannot agree
on  said  Program, the matter or matters which are the subject of a disagreement
must  be  submitted to an Expert who shall settle same.  In case of disagreement
and  submission  to  an  expert,  the  exploitation period of 25 years shall not
include  the period spent by referring to the expert (including the procedure of
this  submission).

9.10     During  the  course  of  the Development and Production Operations, the
Contractor  may  suggest  additions  or  revisions  to  the  General Development
Program.  He  shall  then  submit  same to the Minister for review and approval,
utilizing  the procedures detailed in article 9.9.  If within a period of eighty
(90)  [N.B.  Sic]  days  following  the  date of submissions of the additions or
             ---
revisions  of  the  General Development Program, the Minister and the Contractor
cannot  agree,  the  question  or  questions  which  are  the  subject  of  the
disagreement  shall be submitted to an expert, mutadis mutandis according to the
procedure specified in article 9.9 and the exploitation period of 25 years shall
not  include  the  period  of  said  procedure.


                                       27
<PAGE>
9.11     If  the  Contractor  wishes  to finance the Development Operations with
funds  obtained  from  banks  or  other  sources of financing, the Minister must
assist the Contractor by providing all the information that the banks or sources
of financing may reasonably request, provided that the Minister does not have to
assume  any  additional  obligation of any type, whether financial or otherwise.

                                       28
<PAGE>

                                    ARTICLE X

                              SOLE RISK OPERATIONS

10.1     If  during  the  exploration  period,  the  Minister  wishes  to  test
additional  reservoirs  at the final depth point agreed upon, or deepen the well
and  test  deeper  reservoirs  than this final depth point, the Government shall
have  the  right,  subject  to  the  provisions  of  Clause 10.4, to request the
Contractor,  by notice, to test certain additional reservoirs or to continue the
drilling  and  test  new  reservoirs, at the exclusive risk and on behalf of the
Government,  until  the Government objectives have been reached.  The Government
shall  notify  the  Contractor as soon as possible before or during the drilling
but  under no circumstances after the Contractor has started the well completion
or  abandonment  activities.

10.2     If  during  the  exploration  period,  the  Parties cannot agree on the
Government  recommendation for the drilling of additional exploration wells, the
Minister shall have the right after the initial period to request the Contractor
to drill in the Contract Area at the sole risk and expense of the Government one
(1)  exploration  well  provided  that this Operation does not delay, hinder and
disturb  the  exploration  and evaluation activities of the Contractor.  In this
case,  the  Minister  shall  have a maximum period of six (6) months in which to
provide  the  Contractor with a well site report indicating the drilling details
as  well  as  the  financing  plan  of  the  operation  in  question.

10.3     If  the  operations described under Clauses 9.3, 10.1 or 10.2 lead to a
Discovery  or  to  a Commercial Discovery, the Minister shall have the right, at
its  exclusive  expense,  risk and benefit, to evaluate said Discovery and/or to
develop and produce the Oil from the reservoir connected to this Discovery.  The
Contractor  shall  notify  the  Minister in writing, before the beginning of the
commercial  production  of  the oil reservoir discovered within the framework of
said  sole  risk  operations,  if  it  wishes  to  be responsible for the future
development and/or production operations of said oil-bearing reservoir according
to  the  terms of this Contract.  In this case, the Contractor shall pay in cash
or  in  kind  to  the Minister, in addition to one hundred percent (100%) of the
exploration  costs and the exploration immobilization costs, if any, incurred by
the  Government  with  regard  to  the sole risk operations and connected to the
discovered  oil-bearing  reservoir,  an additional amount equal to three hundred
percent  (300%)  of  said  exploration  and  immobilization  costs.

10.4     The  conditions for the execution of the sole risk operations shall be:

     (a) The production  tests of additional  formations or the  penetration and
the  production  tests  of  deeper  formations  or the  drilling  of  additional
exploration wells must be technically feasible;

     (b) The deepening of a well under the  exclusive  risk  operations  may not
take place if the well has already penetrated the producing reservoirs;

     (c) No exclusive risk  exploration  well may be drilled in an  exploitation
area or on the site of a Commercial Discovery;


                                       29
<PAGE>
     (d) The  Minister  may hire a third party for the  performance  of the sole
risk operations mentioned above. However, the Minister cannot hire a third party
for this purpose  without  having first  offered to the  Contractor a preemption
right for the  execution  on his behalf of said  exclusive  risk  operations  at
conditions  similar to those  acceptable by said third party.  If the Contractor
does not  accept to perform  these  operations  within  sixty (60) days from the
receipt of the  Minister's  notice,  the latter shall then be at liberty to hire
the third party  under the  conditions  that this third party shall  observe the
confidentiality clauses regarding data, reports and information held or prepared
by the  Contractor  and received by said third party within the framework of the
present article or of article IX and in agreement with article XXII.

                                       30
<PAGE>

                                   ARTICLE XI

                             ANNUAL DEVELOPMENT AND
                               PRODUCTION PROGRAMS

11.1     The  Contractor  shall  be required to carry through the Production and
Development  Operations  in  all  the  Development  Areas in accordance with the
General  Development  Programs  and  according  to  Good  Practices  of  the Oil
Industry.

11.2     The  Work  Program  submitted  for  the  Calendar  Year  during which a
Commercial  Discovery  occurs,  must  be modified by the Contractor within sixty
(60)  days  following the date of approval of the General Development Program in
order  to  comply  with  the  latter.

11.3     The  Work Programs and the budgets corresponding to the Development and
Production  Operations  must  have  as  objective  the  efficient  and  economic
exploitation of all the Development Areas according to the Good Practices of the
Oil  Industry.  The  Minister  shall  approve  the Work Programs and the budgets
prepared  and  submitted  in  accordance  with  the provisions of this Contract.

Within  thirty  (30)  days following the date of receipt of a Work Program and a
budget,  the  Minister  shall  approve  same  as  proposed or shall suggest that
amendments  be  made; if no approval notice or suggestion of amendments has been
received within said period of thirty (30) days, the Work Program and the budget
shall  be  deemed  approved.

11.4     If  the  Minister wishes to amend the Work Program or the corresponding
budget, he must inform the Contractor in writing no later than fifteen (15) days
following  the  receipt  of  the  documents  mentioned above.  The Parties shall
consult each other and shall endeavour to agree on the amendments suggested.  If
the  Minister  and  the  Contractor  do  not  reach  an agreement concerning the
amendments  suggested  no later than two (2) months after the date of receipt of
the Work Program and the corresponding budget, an Expert shall be called upon to
settle  the matter in accordance with the provisions relating to arbitration and
expert  evaluation.  The  twenty-five  (25)  year  exploitation  period,  or the
additional  period of ten years, if applicable, shall not include the time spent
for  referring  the  matter  to  an  expert  (including the procedure for same).

11.5     The  Contractor  may,  with  the  Minister's  approval, revise the Work
Program  and the budget during the Calendar Year in question in order to be able
to  take  into  account  newly acquired information, a revised evaluation of the
conditions  concerned,  or  any  other  valid  reason.

                                       31
<PAGE>

                                   ARTICLE XII

                            GOVERNMENT PARTICIPATION

12.1     The Government shall have the option to acquire a maximum participation
of  15%  of the rights and obligations of the Contractor relating to a discovery
when  the  combination  of  the  daily  production of all the discoveries of the
Contract Area reach for the first time a level of 20,000 barrels during at least
six  (6)  consecutive  months.

12.2     The  Government  must  exercise  its option of participation by written
notification to the Contractor within thirty (30) days following the last day of
the  6th month of the production level of 20,000 barrels/day.  In the absence of
a  written  notice  during  this period of thirty (30) days, the option shall be
deemed  refused.

12.3     If  the  Government exercises its option of participation in accordance
with  Article  12.1,  the  Contractor shall assign to the Government the portion
that  has  been  claimed.  To  that  end,  the  Contractor shall propose a draft
agreement  for  the  Minister's  evaluation.

12.4     The Government Participation shall take effect from the date of receipt
by  the  Contractor  of the written notification mentioned in Article 12.2.  The
Government  shall  then  pay  its share of the Petroleum Costs, in proportion to
said  participation,  when  said  costs  have  been committed by the Contractor.

12.5     If  the  Government  exercises  its  option  of  participation, it will
reimburse  to  the  Contractor in proportion to said participation, its share of
the Petroleum Costs incurred by the Contractor with respect to the Contract Area
before  the  date  on which its decision to participate has been notified to the
Contractor  who  shall assist it without cost in the search for necessary funds.

Said  share of Petroleum Costs that is reimbursable to the Contractor shall bear
an  interest from the date on which the Petroleum Costs have been incurred until
the  actual date of participation by the Government, at the interest rate of the
contract  fixed  the  day  before  the  settlement  date.

12.6     The  reimbursement  mentioned  in Clause 12.5 shall be at the option of
the  Minister  and  notified  to  the  Contractor,

     -    either in cash by payment in dollars  within a period to be determined
          by mutual agreement,

     -    or in kind  through  lifting  by the  Contractor  of a portion  of the
          Hydrocarbon share stipulated in Article 13, to which the Government is
          entitled,  up to fifty percent (50%) of said share.  The value of this
          portion being  calculated in accordance with the provisions of Article
          16,  and this  share  shall be equal in value to the amount due on the
          date of  notification  mentioned in Article  12.2,  plus the interests
          related thereto calculated according to Article 12.5.


                                       32
<PAGE>
12.7     If during the three (3) months following the due date for reimbursement
agreed to between the Parties, the Government does not pay to the Contractor its
share  of the Petroleum Costs as stipulated in Clause 12.5, the Contractor shall
have  the  right to retain fifty percent (50%) of the share of Profit-Oil of the
Government  until  total  recovery  of  said  costs.

12.8     If  the  Government exercises its option of participation, the Minister
shall  establish as soon as possible with the Contractor, an operating agreement
in accordance with the international Petroleum Operations which shall govern the
rights  and  obligations  of  the  Parties.

                                       33
<PAGE>

                                  ARTICLE XIII

                                COST RECOVERY AND
                               PRODUCTION SHARING

13.1     Subject  to  the  provisions  relating to participation, the Contractor
shall  assume  and  pay all the Petroleum Costs incurred during the execution of
the  Petroleum  Operations,  and  it  shall  recover said costs according to the
methods  defined  in  Accounting  Appendix  D.

The  costs  directly  attributable  to  the  development  and  production  of
Non-Associated  Gas  shall be subject to a specific agreement in accordance with
the  provisions  of  this  Contract.

However,  the  costs  directly attributable to the deepening of the wells with a
view  to evaluating and testing the gas from the Seme Field shall be recoverable
in  accordance  with  the  provisions  of  Article  13.2b  hereof.

13.2     The  Petroleum Costs, within the limits authorized by the provisions of
Appendix  "D",  shall  be  recovered from the Crude Cost Recovery, limited every
year to sixty-nine percent (69%) of the Available Crude for Block 1, and for the
Seme  Block  to  seventy-nine  percent (79%) of the Available Crude for the Year
considered.

     The  cost  recovery  shall  occur  as  follows:

     (a) The recovery of the  exploitation  costs shall be made entirely  during
the Year when such costs have been incurred.

     (b) The recovery of the  exploration  costs shall be made from the start-up
Year of the first commercial production deriving from the Development Area.

     (c) The development investments shall be amortized over five (5) Years from
the start-up Year of the first production.

     (d) The investments  related to the  exploitation  phase shall be amortized
over five (5) Years from the date of their realization.

However,  when  the  total  production  has  reached the economic marginality as
defined  in  clause  13.7  hereinafter,  the Parties shall consult each other in
order  to  reach  a  joint  decision.  This  consultation will take place within
thirty  (30) days from the date of receipt by the Minister of the written notice
by  the  Contractor.

13.3     Inasmuch  as the Petroleum Costs recoverable during a given Year exceed
the  value  of  the Crude of the Cost Recovery ("Cost-Oil") available this Year,
the  recovery  of  the  surplus shall be carried forward to the following Years.


                                       34
<PAGE>
13.4     The  Contractor shall deduct on behalf of the Government from the total
production  of  the  Crude extracted from the discovery area, after deduction of
the  losses  related  to  the  Petroleum Operations, a portion equivalent to the
amount  of  the tax on oil production equal to 12.5% (twelve and a half percent)
for  oil  and  10% (ten per cent) for condensate.  The remaining quantity of the
crude  shall  be  referred  to  as  "Available  Crude".

13.5     The  remainder of the Available Crude every year after deduction of the
recoverable  Petroleum  Costs,  hereinafter called "Profit-Oil", shall be shared
between the Government and the Contractor, whether the Government shall exercise
or  not  its option of participation to the rights and obligations in accordance
with  Article  12,  according  to  the  following  progressive  scale:

(A)     For  oil

<TABLE>
<CAPTION>
AVERAGE DAILY PRODUCTION   GOVERNMENT SHARE   CONTRACTOR SHARE
-------------------------  -----------------  -----------------
       (BARRELS/D)
-------------------------
<S>                        <C>                <C>
0 to     5,000                           50%                50%
5,001 to   10,000                        55%                45%
10,001 to   20,000                       60%                40%
20,001 to   50,000                       65%                35%
50,001 to 100,000                        70%                30%
Over 100,000                             75%                25%
</TABLE>

(b)     For  condensate

<TABLE>
<CAPTION>
AVERAGE DAILY PRODUCTION   GOVERNMENT SHARE   CONTRACTOR SHARE
-------------------------  -----------------  -----------------
       (BARRELS/D)
-------------------------
<S>                        <C>                <C>
  0 to 100,000                           50%                50%
Over 100,000                             55%                45%
</TABLE>

13.6     With regard to the Seme Field produced on the H6 and H6.5 horizons, the
sharing  determination  of  the Available Crude each year after deduction of the
Petroleum  Costs  in  accordance  with  Article  13.2  shall  be:  60%  for  the
Government  and  40%  for  the  Contractor.

13.7     The Parties agree that if the Economic Limit of a field is reached (eg.
if  Petroleum  Costs  incurred  by the Contractor exceed the cash flows deriving
from  the  sale  of  the production so as to cause the early abandonment of this
field,  they  shall  consult  each  other in order to study the amendments to be
brought  to the cost recovery plan for the purpose of extending the life of said
field.

                                       35
<PAGE>

                                   ARTICLE XIV

                           MEETING THE REQUIREMENTS OF
                              DOMESTIC CONSUMPTION

14.1     Three  (3)  years  after the start up of the Production Operations, the
Government shall have the right to purchase and the Contractor shall be under an
obligation  to sell, in a specific Delivery Point, a quantity of Hydrocarbons in
Crude  form or an equivalent quantity of refined products or gas equivalent such
as  agreed  to  between the parties equivalent at most to fifty percent (50%) of
the share of Profit-Oil to which the Contractor is entitled in order to meet the
domestic  consumption of Benin.  The assignment of Oil shall be made within this
framework  in  accordance  with  the  provisions  of  Article  16.2.

If  within  a  period not exceeding sixty (60) days from the date of delivery of
Hydrocarbons, the Government does not pay the invoice, the Contractor may obtain
payment  by  lifting  from  the  Government  Profit-Oil  share.

14.2     With  regard to Crude Oil, the Contractor's obligation to sell rests on
the  principle  according  to  which all producers of Crude Oil or exporter from
Benin,  including  the Government, bring part of their production, at any moment
and  in a proportional manner, to meet the requirements of domestic consumption.
In  order  to  take advantage of its acquisition right, the Minister must give a
three  (3)  months' written notice to the Contractor, indicating the quantity of
Crude  Oil  representing  the  Contractor's  remuneration that shall be acquired
during  the three (3) calendar months following the above mentioned notice.  The
monthly  variation  of  this  quantity cannot exceed a range of more or less ten
percent  (10%).

14.3     If  due to a case of Force Majeure, other contractors or the Government
cannot proportionally contribute to the requirements of the domestic market, and
that,  consequently,  the volume of participation of the Contractor and of other
contractors  to  the  sales  of  the  domestic  market  must  be  increased, the
Contractor  must  sell the additional quantities required in accordance with the
above  clauses  and conditions until the case of force majeure has been resolved
and  until  the contribution intended to proportionally cover the requirement of
the  domestic  market  has been re-established.  This additional obligation does
not  include  the  volumes  of  production  which  have  been  the subject of an
exportation  contract  for  which the loading period has been fixed within forty
(40)  working  days  following  the  date  on  which the Contractor has received
notification  from  the  Minister  as  to  the  case  of  force  majeure.

14.4     With regard to Natural Gas, the Contractor's obligation to sell must be
established taking into account the criteria used to meet the requirement of the
domestic  market  stipulated above, and taking into account the price of Natural
Gas  determined  in  accordance  with  this  Contract.

14.5     All  payments  made  to the Government for the Contractor's Hydrocarbon
sales  in accordance with the provisions of this Article must be made in dollars
and  by  bank  transfer to the bank account designated by the Contractor outside
Benin,  within  a  period  of  thirty (30) days from the date of delivery to the
Delivery  Point  of  the  Hydrocarbons  acquired  by  the  Government.

                                       36
<PAGE>

                                   ARTICLE XV

                              APPLICABLE TAX SYSTEM

15.1     For the duration of the Contract and in accordance with the legislation
in  force  in  the Republic of Benin, the Contractor shall be subject to the tax
system  currently  applied  to  companies  in  general, and to oil activities in
particular.

15.2     The  Contractor  shall be required to pay, under the conditions and the
due  dates established by the Beninese tax legislation, all the taxes and duties
to  which  it  is  subject,  in  particular  Income Tax equal to 55% (fifty-five
percent)  of  the taxable profit and the Export Revenue Tax at the rate of three
period  twelve  percent  (3.12%)  of  the  FOB  value.

15.3     It  is  understood  that  in  application of Article 15.2, the Minister
shall  lift  from the Profit-Oil share to which the Government is entitled under
Article  13.5  an  amount  corresponding  to  the  Income Tax, and to the Export
Revenue  Tax  mentioned  in  the  Petroleum  Code.  He shall pay said tax to the
institution  designated  for  this purpose on behalf of the Contractor and shall
have delivered to the Contractor the receipts related thereto.  The same applies
for  the  Export  Revenue  Tax.  In this case, the Profit-Oil share to which the
Contractor  is  entitled  under Article 13.5 shall be considered free of tax and
shall  not  be  subject  to  any tax whatsoever.  In other words, the Contractor
shall be released from any tax obligations which, by definition, are included in
the  Profit-Oil  received by the Government as well as in the Oil Production Tax
also  received  by  the  Government.

15.4     The  Contractor  and its subcontractors shall be exempt from the duties
and  taxes  on  the equipment, exploitation material and engines imported by the
Contractor  and  its  subcontractors  within  the  framework  of  the  Petroleum
Operations.  These  goods  and  equipment may be re-exported at the end of their
use  according  to  the  temporary  admission  system.

15.5     The  Contractor  and  its  subcontractors  shall  be  also  exempt:

     (a) from the Value Added Tax (VAT) on the  activities  strictly  related to
the Petroleum Operations;

     (b) from the Franchise Tax for a period of five (5) financial years;

     (c) from the surface royalties mentioned in the Code; and

     (d) for expatriate  personnel,  from  contributions  to the Social Security
Department of Benin (OBSS), from the employer's contribution (V.P), and from the
apprenticeship charge.


                                       37
<PAGE>
15.6     The  expatriate  personnel  employed  by  the  Contractor  and  its
subcontractors  may  import  free  of duties and taxes with the exception of the
road  tax,  their  personal effects which shall be used during the first six (6)
months  of their arrival.  They shall also import a vehicle per household by way
of  temporary  admission.

15.7     The  Government shall agree to take into consideration any modification
to  the fiscal conditions which the Contractor may request at any time, provided
that:

     (a) Such modification does not adversely affect all the financial gains and
other  benefits that the Government  will derive from the Petroleum  Operations;
and

     (b) The only reason for proposing such modification  shall be to permit any
person  forming  the  Contractor  or any other  Affiliated  Company to obtain in
another  country a tax  credit  relating  to the taxes paid in the  Republic  of
Benin.

15.8     The  Contractor  shall  be required to pay to the State the income from
the  taxes  and  duties mentioned in this Contract through a national structure.
The  designation  of  the  national structure in question shall occur within one
hundred  and  eighty  (180)  days  following  the  Effective  Date.

15.9     Within  thirty  (30) days following the date of payment, the Government
shall  issue,  a  receipt  in  the  Contractor's  name  for  said  payment.

                                       38
<PAGE>
                                   ARTICLE XVI

                         MEASURING, DISPOSAL, EVALUATION
                            AND SALE OF HYDROCARBONS

16.1     The  Contractor must measure all the Crude Oil and Natural Gas produced
in  the  Contract Area according to the Good Practices of the Oil Industry.  The
Contractor  must  keep  full  and  accurate  records  of  all  the  measures  of
Hydrocarbons  produced in the Contract Area after extraction of the water and of
its  foreign substances, and of all the Hydrocarbons that may be marketed, which
will allow by difference to determine the quantities that have been used for the
Operations and the unavoidable losses.  The Minister's representatives must have
access  to  these  records  and  measures.

The  Minister  shall  have  the  right  to examine and to test all the measures,
measuring  equipment,  graphics and any other measuring or testing equipment and
information  material.

If,  at  the  end of an examination or test, it appears that measuring equipment
are  not  in  working  order,  that  they  are  damaged  or  badly adjusted, the
Contractor  must  put  them  in  good  working  order  or shall proceed with the
required  adjustments  immediately  at  its  own  cost.

If,  within  a  reasonable period not exceeding thirty (30) days, the Contractor
does not assume this obligation, the Minister may take the necessary measures so
that  said  equipment be made operational or have the equipment adjusted and may
invoice to the Contractor the cost of this operation at the interest rate of the
Contract  +  1%.  If  according  to  the  Minister,  the error caused by the bad
adjustment,  or any other failure of a measuring equipment, appears to be at the
origin  of  a  considerable  difference in the production measuring, the Parties
shall  consult  each other for the purpose of examining the appropriate measures
to  be taken.  In the event of disagreement, the matter shall be submitted to an
expert  so  that  the  latter  can  determine if a retroactive adjustment of the
production  figures  should  be  made.  If  the Contractor deems it necessary to
replace  measuring  devices  or  instruments,  it  must  notify the Minister for
approval  and  give  to  the  Minister's  representatives  the opportunity to be
present  during  the  operation  and  to  take  part  thereto.

16.2     Under  this  Contract, the price of Crude Oil for each quarter shall be
the  weighted  average of the FOB prices received by the Contractor for sales to
third  parties  which  are  not  related to the Parties during the corresponding
quarter.

If  during  a  given quarter the Contractor does not sell at least forty percent
(40%) of the total production of Crude Oil of the Contract Area to third parties
which  are  not  related to the Parties, the price of Crude Oil for that quarter
shall  be  the weighted average of the FOB prices established by comparison with
the Crude Oil Price on the international market taking into account the quality,
density  and  transportation  differentials.


                                       39
<PAGE>
In  the  absence  of  an  agreement between the Parties within fifteen (15) days
following  the  end  of the Quarter concerned, pending the opinion of an Expert,
the sale price agreed to for the Quarter preceding the Quarter in question shall
apply temporarily subject to the retroactive adjustments which would be required
after  expert  evaluation.  The  expert  evaluation requested under this article
shall  occur within a period not exceeding thirty (30) days after the end of the
Quarter  concerned.

16.3     Under  this  Contract,  the  price  of Natural Gas sold on the domestic
market of Benin shall be the price received by the Contractor for sales to third
parties.  Taking into account the fact that the gas market is not very developed
in  Benin, the Minister must assist the Contractor inasmuch as possible in order
to  find possible consumers for the Gas and to negotiate reasonable sale prices.
The Natural Gas price applicable to the Gas sold to a public Beninese company or
to  a body whose capital with voting right is the direct or indirect property of
the  State,  shall  be  established  by mutual agreement between the Parties, it
being understood that this price must reflect the commercial value of the energy
source  that  the  Gas  sold  is  deemed  to  replace,  according  to the modern
technology  generally used and taking into account the cost of the gas produced.
The price that applies to the Natural Gas exports shall be the price received by
the  Contractor  for  sales  to  third  parties,  subject to the same conditions
normally  governing  the  sale  of  Crude.

16.4     The  Contractor shall have the right to freely dispose, load, transport
and  export  the  Hydrocarbons  to which it is entitled under the Contract.  The
Minister  may request the Contractor to sell all or part of the oil to which the
State  is entitled in accordance with Article 13 and under the market conditions
stipulated  in  Article  16.2,  and provided that the Parties have agreed on the
provisions  concerning  marketing.

16.5     No  later  than  sixty  (60)  days  before  the  Start-up  Date  of the
Commercial  Production in each Development Area, and thereafter at the beginning
of  each  Quarter,  the  Contractor  must  prepare and provide to the Minister a
projection indicating the total quantity of Hydrocarbons which, according to the
Contractor,  shall  be  produced  during  the following four (4) Quarters in the
corresponding  Development  Area, from a production rate mutually agreed upon to
optimize  the  recovery of Hydrocarbons in the Development Area according to the
Good  Practices  of  the  Oil Industry.  Each Quarter, the Contractor shall make
reasonable  efforts  to  produce  the  quantity  of Hydrocarbons estimated to be
produced  by it.  The Contractor shall be authorized to use, free of charge, the
quantities  of  Hydrocarbons  produced in the Contract Area, in their natural or
processed  state,  required  for  the  carrying  out of the Petroleum Operations
(including the Operations of Gas loading) according to the Good Practices of the
Oil  Industry.  Whatever  the quantity of hydrocarbons used for this purpose, it
shall  not  be  considered  as  being  part  of  the  Commercial  Production.

                                       40
<PAGE>

                                  ARTICLE XVII

                                   NATURAL GAS

17.1     Benin's domestic market shall benefit from a preferential right for the
acquisition  of  the  Natural Gas produced in any Development Area and  which is
not  required  for  the  Petroleum  Operations  in accordance with this Article,
provided  that  the  commercial  proposals made are as favourable as those under
which  the  gas  in  question  may be exported.  The Natural Gas not sold on the
domestic  market  may  be  exported.

In  the  event  of discovery of a commercial accumulation of gas, a gas purchase
contract  ("Take or Pay" contract) shall be discussed between the Government and
the  Contractor  as  soon  as possible.  If the direct generation of electricity
would  appear  more  favourable  for  the  two Parties, the latter shall meet to
determine  the  conditions  thereof.

17.2     ASSOCIATED  NATURAL  GAS

17.2.1     If a Crude Oil Discovery occurs that the Contractor shall consider to
be  commercially  viable  under  this  Contract  and  this  discovery  contains
Associated  Gas,  the  Contractor  must  indicate in its evaluation report if it
anticipates  that  the  estimated  production of Associated Gas shall exceed the
quantities  of  Associated  Gas required for the Crude Oil Production Operations
(this  surplus shall be referred to hereinafter as "surplus Associated Gas") and
if  the surplus Associated Gas can be produced in commercial quantities.  If the
Contractor  declares that this Associated Gas exists and that it can be produced
in  commercial  quantities, it shall indicate in the General Development Program
prepared  for  the Hydrocarbon Discovery, the details relating to the gathering,
processing,  compression  and  transportation  facilities  required  for  the
exploitation  of  the surplus Associated Gas for commercial purposes, as well as
the  corresponding  costs.

17.2.2     Within  ninety  (90)  days  following  the  date of submission of the
General Development Program, the Minister shall advise the Contractor whether he
himself or any other public entity in Benin designated by him, wishes to dispose
of  the  surplus  Associated  Gas  on  the  domestic  market.

17.2.3     If,  in  accordance  with  this article, the Minister advises that he
wishes  to  dispose  of  the  surplus Associated Gas on the domestic market, the
Contractor  may,  by  notice  within  ninety  (90)  days  following  the date of
notification  of  the  Minister,  participate  in  the  costs  of the facilities
required  for  the  production  of  the  surplus Associated Gas and the proceeds
deriving  from  the  sale  of  said  Gas.

17.2.4     If the Contractor decides to participate in accordance with the above
provisions:


     (a) It shall build gathering, processing,  compression,  transportation and
storage facilities  required for the production and the delivery to the Delivery
Point of the surplus Associated Gas in accordance with the specifications of the
General Development Program;

                                       41
<PAGE>

     (b) The price of the  Associated  Natural  Gas is the price of Natural  Gas
determined in accordance with this Contract.

17.2.5     If the Contractor decides not to participate, it shall deliver to the
Minister,  or to the public Beninese company designated by the Minister for this
purpose,  to  a  Delivery  Point  designated as "EXIT", and at its expense which
shall  be  included  in  the  recoverable  costs,  all the quantities of surplus
Associated  Gas  produced.

17.2.6     Subject  to  the  provisions  relating  to  the  protection  of  the
environment,  the  Contractor  may  burn any surplus Associated Gas that has not
been  used.

17.3     NON-ASSOCIATED  GAS

17.3.1     If a Discovery of Non-Associated Gas occurs in the Contract Area, the
Contractor  must  submit  a  report  in  accordance  with the provisions of this
Contract.  If  the Contractor deems that the Discovery is worth being evaluated,
it  must  prepare  an  evaluation,  with  a  reserve estimate, of the production
potential,  the  development  costs  and  the production costs as well as of the
economic  viability.  In  this  report,  the Contractor must also declare if the
Discovery is commercially viable.  If the Contractor deems that the Discovery of
Non-Associated  Gas  is  not  worth  being evaluated, the provisions relating to
Crude  Oil  shall  apply  mutatis  mutandis.

17.3.2     If  the  Contractor  deems  that  the  Discovery  can be commercially
viable, the Minister shall assist it in the evaluation of the gas requirement on
the  domestic  market  as well as in the transformation and marketing activities
required  for its distribution to the consumers of said market. In the same way,
the  Contractor  shall  be  at  liberty  to  evaluate  the  viability of the Gas
exportation.  During  the  calendar year following the date of submission of the
detailed  evaluation report of the Contractor, the Parties must meet in order to
determine if the sale points and other pertinent factors justify its development
and  production  for sale on the domestic market and/or if it is considered that
this  market  is  not  big  enough  and  therefore  the  Gas  must  be exported.

17.3.3     If  the Contractor deems that the development of the Discovery of the
Non-Associated  Gas  is  justified,  it  must  submit  to the Minister a General
Development  Program  for  said  Discovery  and  the  provisions relating to the
commercial  discovery  and those  relating to the Government participation shall
apply  to  the  development  and production of said Gas as if it concerned Crude
Oil.  If  the  Contractor  deems  that  the  development  of  the  Discovery  of
Non-Associated  Gas  is  not justified, the provisions relating to the Crude Oil
shall then apply mutatis mutandis to the development and production of said Gas.


                                       42
<PAGE>
17.3.4     If  it  has  been determined that the Discovery of Non-Associated Gas
cannot  be  used on the domestic market while the Contractor considers that said
Discovery  of Non-Associated Gas may be commercially viable for exportation, the
Contractor shall then have full freedom to develop the Gas Deposit provided that
it  submits  to  the  Minister a General Development Program.  If the Contractor
begins  the  Development Operations for exportation, the Minister shall take the
necessary measures to facilitate the construction of the appropriate facilities.
The  provisions  relating  to  the  commercial  Discovery  and to the Government
participation  shall apply mutatis mutandis to the development and production of
said  Non-Associated  Gas as if it concerned Crude Oil.  Once the Contractor has
started  up the Development Operations for exportation, the right granted to the
Contractor  for exportation under this Article shall remain in effect during the
period  of  the  Contract unless the two Parties change the procedures by mutual
agreement.

17.3.5     Under  this Contract, the price of the Non-Associated Gas produced by
a  Gas  Deposit  intended  to  be used in Benin shall correspond to the price of
Natural  Gas  determined  in  accordance  with  the provisions of this Contract.

17.3.6     In  compliance  with the safety and environment protection standards,
the  Contractor shall have the right following the Minister's approval, to build
facilities for the separation of gas for the purpose of producing liquid gas and
condensate.

                                       43
<PAGE>

                                  ARTICLE XVIII

                         DAMAGES, ENVIRONMENT PROTECTION
                                   AND SAFETY

18.1     The  Contractor  shall be responsible for all damages and injuries that
may be caused as a result of its operations to individuals or to the State.  The
Contractor  shall be required to safeguard the Government against any damage for
which  it may be responsible as a result of its activities under the Contract or
of  any  operation  or activity deriving therefrom.  To that end, the Contractor
must,  at  any  time, release the Government from any responsibility against any
claim  and  obligation  resulting from death, accidents or damages caused by its
activities, including those carried out under the Contract, or non-compliance by
the  Contractor  with the laws and regulations in force in Benin.  This Contract
shall  not  have  any  effect on the rights claimed by third parties against the
Contractor  under  the  laws  in  force  in  Benin.

18.2     The  Parties  acknowledge  that,  due  to  their  nature, the Petroleum
Operations  may produce an ecological imbalance in the Contract Area as a result
of environment pollution.  Consequently, during the performance of the Contract,
the  Contractor  must  adopt  the  necessary  measures in order to prevent or to
reduce  to  a  minimum  the  pollution  of the ground, atmosphere and water, and
ensure  that  this  pollution  does not harm the plants and the wildlife and, in
general,  prevent everything that could materially harm the environment.  If the
Contractor  cannot  prevent  the  pollution of the environment, it must take the
necessary  measures  to reduce to a minimum the effects thereof according to the
international  standards.  These  measures  must be notified to the Minister for
approval.

18.3     In  order  to  reduce  to  a  minimum  or  eliminate the pollution, the
Contractor  must  use  adequate  technical  means,  approved  by  the  Minister.

18.4     The  government is responsible for damages caused to third parties as a
result  of environmental pollution resulting from Petroleum Operations conducted
before  the  end  of  the Transitional Period.  In accordance with the Code, the
Contractor  shall be responsible for damages caused to third parties as a result
of  the  pollution  of  the  environment.

18.5     The  Contractor  shall  undertake  to call on experts in this regard in
order  to  examine  the  probable  impact  of  the  Petroleum  Operations on the
environment.  This  study  must  include:

     (a) the state of the environment and the level of pollution existing in the
Contract Area and in the neighbouring areas before the petroleum operations;

     (b) the impact that the Petroleum Operations may have on the environment.

     The  study  indicated  in  paragraph  (a) must be carried out in two steps:

1)     a  preliminary  study  delivered by the Contractor to the Minister before
the  seismic  survey  of  the  Contract  Area  and


                                       44
<PAGE>
2)     the  final study applicable to all the exploration period and which shall
be  submitted  to the Minister before the drilling of the first well.  The study
indicated  in paragraph (b) must be carried out and delivered to the Minister at
least  ninety  (90)  days  prior  to  the  drilling  of  said  well.

18.6     The  studies  listed  above  must  include  the procedures used for the
elimination or reduction to a minimum, inter alia, of the wastes mentioned below
as  well  as  the  way  to  neutralize  same:

     (a) Drilling muds and  Hydrocarbons  resulting from the tests,  completion,
workover and abandonment of the wells;

     (b) Polluted underground layers;

     (c) Solvents, lubricants and other products used during the operations;

     (d) Organic  waste,  detritus and unusable  products from the work and camp
areas.

18.7     The  Contractor  must  design  and build its facilities endeavouring to
reduce  to  a  minimum the pollution of the environment and it must, inter alia,
adopt  the  following  procedures on the drilling sites and the location site of
the  exploitation  equipment:

     (a) Drainage/recovery  system of Crude Oil spillage,  and other derivatives
as well as polluted waters;

     (b) Waste recovery system.

18.8     The  Contractor  shall  undertake  to  include  the  provisions of this
Article  in  all  the contracts negotiated with third parties and related to the
Petroleum  Operations.

18.9     If  the  Contractor does not comply with the provisions of this Article
and a spillage of  Crude Oil or of any other product occurs in the soil, the sea
bottom  or  in  the sea, or if the Contractor's activities cause another form of
pollution  or, damage the water springs or the animal or plant life in any other
manner,  the  Contractor  must  take immediately all steps according to the Good
Practices  of  the  Oil  Industry  in  order to control the pollution, clean any
spillage of Crude Oil or of any other product, or repair as much as possible any
damage  caused.

18.10     If,  as  a  result  of  the  direct  effect  of  a gross or deliberate
negligence  on  the  part  of  the Contractor, a spillage or an act of pollution
occurs,  the  cost of the control, cleaning and repair operations shall be borne
by  the  Contractor  and  shall  not  be  considered  Petroleum Costs under this
Contract.

18.11     In  the  event  of  danger  which  may  affect  the  environment,  the
Contractor  must  immediately  notify same to the Minister and take the measures
prescribed  in  the emergency procedures adopted by the Parties according to the
Good  Practices  of  the  Oil  Industry.


                                       45
<PAGE>
18.12     At  the  end  of  the  Contract,  in  any  other  situation  than  the
abandonment  case,  the  Contractor must take the measures according to the Good
Practices of the Oil Industry to restore the environment and the sites where the
Petroleum  Operations  have  been  performed  to  their  original  state  on the
Effective Date of the Contract, taking into account the rules of the abandonment
procedure.

At  the  time of submitting the General Development Program, the Contractor must
submit  to  the  Minister  for  review  and  approval a schematic summary of the
restoration  activities  of  the  environment once the Petroleum Operations have
ended,  indicating the manner in which the corresponding costs shall be financed
using  a  special  account for the specific purpose of financing the obligations
concerning  the  restoration  of  the environment and the abandonment procedure.
Thereafter  and  at  the  same  time  as  the Work Program and the Budgets, such
schematic  summary  shall  be submitted to the Minister for review and approval.

18.13     The  Contractor  must  take  the necessary steps according to the Good
Practices  of the Oil Industry, to carry through the activities mentioned in the
contract  in all safety, and must comply with the laws and regulations of Benin,
including  the  regulations  in  force  with  regard  to  the  work, environment
protection,  health  and  safety.  The  Contractor  must refrain from any action
endangering  the  health  or  the  safety  of  the  persons.

18.14     The  Minister shall have the right to inspect all the sites, buildings
and  facilities  in  the Contract Area.  In order to have access to these sites,
the  Minister  must  first  inform  the  Contractor.

18.15     The  Contractor  must  ensure  the sure and effective treatment of the
water  and  residual  oil  and the plugging of the wells before abandoning same.

18.16     The  Contractor shall cement and abandon all producing wells following
the  current  oil  practices  immediately after stopping their production inside
Block  1  or  the  Seme  Field.

However,  the  expenses  relating  to  the  abandonment  of  the  Seme field and
facilities  shall not be borne by the Contractor except the wells worked over or
drilled  to  reach  the  deep  zones.

18.17     The  Contractor  shall  remove  and clear according to the abandonment
procedure  appearing  as  an  Appendix  all the platforms installed by it in the
Contract  Area.

18.18     The  Contractor  shall remove and clear the existing platforms and the
monopod  facilities after the expiration of the Contract or after the suspension
of  the  production of Block 1 and/or of the Seme field.  The removal, clearing,
or  abandonment  of  the  facilities  set  up by the Contractor shall take place
according to the standards of the oil industry generally accepted in the Gulf of
Mexico.  On the other hand, the facilities underwater or others shall be left in
such  a  state  so  as  not  to  present  an  obstacle  to  ships.

18.19     The Contractor shall leave all pipelines and facilities free of oil at
the  expiration  of  the  Contract  according  to  the  current  oil  practices.


                                       46
<PAGE>
18.20     The  Government  explicitly  agrees that the Contractor shall not have
any  responsibility with regard to abandonment or restoration of the environment
other  than  that  expressly  stipulated  herein.

18.21     Any  change  to  this agreement with regard to the abandonment must be
agreed  upon  by  the  two  Parties.

18.22     If  laws  or  regulations  relating to the environment in force on the
date  of signature of the Contract are amended so as to substantially modify the
economic  equilibrium of the Contract, the Parties shall refer to the provisions
of  Article  29.2.

                                       47
<PAGE>

                                   ARTICLE XIX

                           PROVISIONS REGARDING CHANGE

19.     Under  the  regulations  in force in Benin, the Ministry shall guarantee
that  for  the  duration  of  the  Contract, the Contractor and the non-Beninese
subcontractors  shall  be  authorized  to:

     (a) pay in foreign currency, in full or in part, the salaries,  refunds and
other indemnities;

     (b) open,  keep and use bank  accounts  in  foreign  currency  in Benin and
abroad and accounts in local currency in Benin;

     (c) directly pay abroad, in foreign currency, to foreign subcontractors for
the  acquisition  of equipment  and supply of services  related to the Petroleum
Operations;

     (d) receive,  transfer and keep abroad and freely  dispose of all the funds
including,  inter  alia,  all  the  payments  received  for the  exportation  of
Hydrocarbons and any payment received from the Government;

     (e) obtain from abroad all the loans required for the Petroleum Operations;

     (f) buy the local  currencies  required for the  Petroleum  Operations  and
convert in foreign  currency  all local  currencies  in excess of the  immediate
domestic needs in accredited banks of exchange bureaus;

     (g)  transfer  abroad  all  foreign  currencies  in  excess  of  the  local
requirements  of  the  Contractor.  The  rights  given  to  the  Contractor  and
Subcontractors under this Article shall also apply to expatriate employees.

                                       48
<PAGE>

                                   ARTICLE XX

                             EMPLOYMENT AND TRAINING

20.1     EMPLOYMENT

In  compliance  with the labour legislation in Benin, the Contractor shall be at
liberty  to  hire the personnel and the Subcontractors required to carry through
the  Petroleum  Operations  in  accordance  with  the  Contract.

However,  with  regard  to  the recruitment of employees and to the extent where
this  is  in  accordance  with  an efficient and responsible exploitation of the
Petroleum  Operations,  the Contractor must give preference to citizens of Benin
qualified,  through  their  training  and  experience, to exercise the duties in
question.  With regard to the selection of Subcontractors for the performance of
the  Petroleum  Operations,  the  Contractor  must  give  preference to Beninese
Subcontractors  to  the  extent  where the latter are competitive with regard to
quality,  costs  and  technical  expertise  to keep the established schedules of
activities.

20.2     TRAINING

The  Contractor  shall  undertake  to  offer  adequate  training to the Beninese
citizens  employed  for  the  Petroleum  Operations  during  the validity of the
Contract.

To  that  end,  within three (3) months following the Effective Date, a training
program  relating  to  the  Exploration  period  for  an  annual amount of fifty
thousand  US  dollars (US$50,000) at least shall be established and submitted by
the  Contractor to the Minister.  Within thirty (30) days following the start-up
of the Commercial Production, the Contractor shall also submit to the Minister a
training  program relating to the Exploitation period for an annual amount of at
least  one  hundred  thousand  US  dollars  (US$100,000).

20.3     SEME  OIL  PROJECT  PERSONNEL  (PPS)

Within  the  framework  of  the  redevelopment of Seme and of the exploration of
Block  1  around  Seme,  the  Parties  have  agreed  to  take  advantage  of the
Transitional  Period  to  jointly  decide  whether to use all or part of the PPS
personnel.

                                       49
<PAGE>

                                   ARTICLE XXI

                                   ACCOUNTING

21.1     The  Contractor  must  keep  its  accounting  as  well as any financial
information,  books  and  registers  concerning  the  Petroleum  Operations,  in
national  currency  and  in  the  form  required  by  the law in force in Benin.

21.2     The  accounting  procedures  to  be  applied by the Contractor shall be
those  established  in  the  Accounting  Appendix  D.

21.3     The  audited  accounts  of  the  Contractor  must  be  submitted to the
Minister  for  approval  no  later  than  three  (3) months after the end of the
Calendar  Year.

21.4     The Minister may, by submitting notice to the Contractor, no later than
six  (6)  months  following  the  date  of submission of the financial accounts,
submit all financial accounts of the Contractor relating to the Calendar Year in
question  to  the auditing of an International Company of Chartered Accountants,
appointed by agreement between the Parties.   The cost of this auditing shall be
borne  by  the  Government.

21.5     Unless  the  Parties  find a solution by mutual agreement, the Minister
may  submit  any  objection  regarding  the  Contractor's  accounts to an expert
decision.  Before  giving a decision in connection with the objection submitted,
the  expert  must  take  into account the results of the financial auditing made
according to the provisions of this Article.  If the Minister's objection is not
submitted to an expert within twelve (12) months following the receipt by him of
the  accounts,  the  objection  in  question  shall  be null.  If the Minister's
objection  is  validated by the Expert, the Contractor must correct the accounts
in question and bear the costs related to the auditing and the expert evaluation
notwithstanding  the  above  provisions.

                                       50
<PAGE>

                                  ARTICLE XXII

                         CONFIDENTIAL NATURE OF THE DATA

22.1     All  the  reports,  data  and  information  obtained or prepared by the
Contractor,  to the extent where they relate to all or part of the Contract Area
shall  be  the  full  property  of  the  Beninese  State  and  shall  be treated
confidentially.  Each  Party  undertakes  not  to  divulge same except after the
prior  approval  of  the  other  Party,  to:

     (a) An Affiliated company or a subcontractor of the Contractor;

     (b) A financial institution for the purpose of obtaining a loan;

     (c) A stock exchange;

     (d) Any potential assignee in application of Article 23.

This  clause  shall  not  prevent  the  Minister  from  communicating  certain
information to any government entity and to any trustworthy person interested in
securing  a  right  of  exploration  and exploitation for Hydrocarbons in Benin.

22.2     All  reports,  data and information communicated by the Minister or the
Contractor  to  a  third party in accordance with the above provisions, shall be
made according to agreements the terms of which shall guarantee that these data,
information  or  reports  are treated by the recipient as strictly confidential.

22.3     The  reports,  data  and  information  relating  the  Contract Area and
considered as important by the Minister for the execution by a third party of an
exploration  program  in  a  bordering  area, shall be communicated to it by the
Minister.  In  exchange,  the  Contractor  shall  have  access  to  the  data,
information and reports obtained by said third party concerning a bordering area
of  a comparable exploratory nature.  The confidentiality clauses shall apply to
this  third  party.

22.4     All  the  reports,  data and information, including the interpretations
and  evaluations  relating to any area that no longer forms part of the Contract
Area  following retrocession of an area or expiration of this Contract, shall be
treated  by  the  Contractor  as  strictly confidential for a period of five (5)
years  from  the  date on which said area has ceased to form an integral part of
the  Contract  Area  or  from  the  date  of  expiration  of  this  Contract.

22.5     Any  failure  to  comply  with the confidentiality Clauses mentioned in
this  Article  shall  be reproved according to the regulations in force in Benin
regarding  the  divulging  of  professional  secrets.

22.6     Any  press  publication initiated by the Contractor and relating to the
results  of the operations conducted under this Contract shall be subject to the
prior  authorization  of  the  Minister.

                                       51
<PAGE>

                                  ARTICLE XXIII

                              ASSIGNMENT OF RIGHTS

23.1     The  Parties  may  assign  all  or part of their rights and obligations
deriving  from  this  Contract.  If the Contractor intends to assign or transfer
its  rights  totally  or  partially,  in  accordance  with the Contract, it must
immediately  submit  to the Minister a written authorization request, unless the
transfer is to an Affiliate in which case it must notify the Minister in writing
of  its intention to transfer sixty (60) days prior to the effective date, or at
a  later date agreed to with the Minister, following which the transfer shall be
effective  without the need for an authorization from the Minister.  Any request
must  indicate  the  name,  the  address  and any appropriate information on the
technical  and  financial capabilities of the assignee.  Within thirty (30) days
following  the  receipt  of  the  request,  the  Minister must decide whether he
approves  or not the proposed assignment.  Any disagreement by the Minister must
be  based  on  reasonable  causes  related  to  the  technical  and  financial
capabilities  of  the  proposed  assignee.

23.2     If  one  of  the  Parties  makes a partial assignment of its rights and
obligations  deriving  from  this  Contract,  the assignee shall be responsible,
jointly  and  severally, for the guarantees, responsibilities and obligations of
the  assignor.  If  the  assignment  is  total,  the  assignee  shall  be solely
responsible  for  said  obligations and guarantees.  Any assignee must adhere to
the  bank  guarantees  and  supply  a  guarantee  from  its  parent  company, if
applicable,  as  required  by  this  Contract.

                                       52
<PAGE>
                                  ARTICLE XXIV
                                  FORCE MAJEURE
24.1     The  Parties  shall not be responsible in the event of failure or delay
in  the  fulfillment  of their obligations resulting from this Contract provided
this  failure  or  delay  is  due  to  a  case  of  Force  Majeure.

24.2     A case of Force Majeure shall mean any act or event which does not fall
within  the  reasonable limits of control of the Parties, and which prevent them
indefinitely  or  temporarily  from  fulfilling  their  obligations  under  the
Contract.  Thus, the Force Majeure shall include the cases listed below, without
this  list  being  limitative:  war or similar situations, embargoes, blockades,
earthquakes,  floods, fire, strike or lock-out, terrorism act, riots, government
action.

24.3     The  Party  invoking  the  case  of  Force  Majeure  shall:

     a) Advise the other Party as early as  possible by any means and  confirmed
by registered  letter with  acknowledgment  of receipt  describing  the event in
detail;

     b)  Take  as far as  possible  all  appropriate  and  legal  provisions  to
eliminate the cause of Force Majeure;

     c) Inform  the other  Party in the  manner  indicated  above as soon as the
Force Majeure has been  eliminated  and resume the execution of its  contractual
obligations.

24.4     If  the case of Force Majeure lasts for more than three (3) months, the
Parties  to the Contract shall meet in order to determine the appropriate action
to  be  taken.

24.5     It  has  been  agreed  that if for reasons of Force Majeure, a Party is
unable  to  fulfill an obligation or to exercise a right under the Contract, the
period granted to fulfill the obligation or to exercise the right, including any
subsequent  obligations  or  rights, shall then be extended by a period equal to
the  duration  of  the  Force  Majeure.

                                       53
<PAGE>

                                   ARTICLE XXV

                        ARBITRATION AND EXPERT EVALUATION

25.1     ARBITRATION

25.1.1     Subject  to  the  provisions hereunder relating to expert evaluation,
any  dispute  or  claim  related  to  a  matter  or operation falling within the
Contract  or  connected  therewith,  including, inter alia, any dispute or claim
relating  to  its validity, interpretation, execution or omission of obligations
which  it claims cannot be amicably settled between the Parties, must be finally
and  exclusively  settled  by  arbitration at the initiative of one or the other
Party.

25.1.2     The  arbitration  procedure  shall  be  implemented  by  three  (3)
arbitrators  in accordance with the rules of conciliation and arbitration of the
International  Centre  for the Settlement of Investments Disputes (CIRDI) of the
World  Bank  Group.

25.1.3     Unless  the  Parties  otherwise  mutually agree in writing, the third
arbitrator  appointed  as  indicated  above  must not be a citizen of Benin or a
person  of  the  same  nationality  as  the  Contractor.

25.1.4     For  any  arbitration  procedure  in  accordance  with  this Article:

     (a) The  procedure  must take place in Paris,  France,  unless the  Parties
otherwise mutually agree;

     (b) The French language shall be the official language in all respects; and

     (c) The  parties  shall be bound by the  decision  of the  majority  of the
arbitrators.

25.1.5     If  an  arbitration  procedure has been instituted, the Parties shall
continue  to  fulfill  their obligations under the Contract unless this has been
made  impossible  due  to  the  case  of  Force  Majeure.

25.1.6     The  cost of the arbitration procedure must be borne according to the
methods  defined  by  the  arbitration  tribunal.

25.1.7     Under  this  Article,  the  Parties  shall  waive  any  jurisdiction
immunity.  For  the  execution  of  the  judgments  rendered  by the arbitration
tribunal  of  CIRDI, the Parties shall waive the execution immunity with respect
to  their  property.  The  seizure  and  adjudication  of property to which this
immunity  may  give  rise  include,  with  regard  to the Government, only those
accounts,  income  and property related to the Hydrocarbon field in the Contract
Area.

25.2     EXPERT  EVALUATION


                                       54
<PAGE>
25.2.1     Any  Party wishing to submit a matter to the decision of an expert in
accordance  with  a  provision of the Contract which provides for this procedure
including,  the Accounting Appendix, or any other matter that the Parties decide
to  submit  by  joint agreement to the decision of an expert under this Article,
must  notify  same to the other Party.  This notification must include a list of
at  least  three  (3)  proposed  experts.  The  other  Party  must reply to this
notification  within  thirty  (30)  days following the date of receipt either by
accepting  one  (1)  of  the experts proposed or by proposing at least three (3)
other  experts.  In  the  latter  case,  the Party who has presented the initial
notification  shall have thirty (30) days to accept one (1) expert or reject all
the  experts  proposed  by the other Party.  Non-notification shall constitute a
rejection  of  the  experts  proposed.

25.2.2     If the Parties do not reach an agreement with regard to the selection
of an expert within sixty (60) days following the date of the first notification
under  the  above  paragraph,  any  of  the  Parties  may  request the Centre of
technical  experts  of  the  International Chamber of Commerce (CCI), whose head
office  is  in  Paris,  to  appoint  an  expert  in  accordance  with its rules.

25.2.3     If  the  expert  agreed  to by the Parties or appointed in accordance
with  the  above provisions refuses the Parties' request, dies or, for any other
reason,  is  unable  to  act  as an expert, the Parties must meet immediately in
order  to  appoint  an  expert  in  replacement.  If the Parties cannot reach an
agreement  within  thirty  (30)  days  following  the  date on which it has been
established  that the first expert could not act, any of the Parties may request
the  Centre  of  technical  experts  of  the  CCI  to  appoint another expert in
accordance  with  its  rules.

25.2.4     The  Parties  shall be required to cooperate with the expert inasmuch
as  possible  and each Party must ensure the cooperation of its Affiliates.  The
Parties  must  ensure  access  to  the data and information which the Parties or
their  Affiliates may provide and which, in the expert's opinion, may contribute
to  his  decision.  The Parties' representatives shall have the right to consult
the expert and to provide him with written information but the expert can impose
reasonable  limits  to  this  right.  He  shall  be at liberty to assess to what
extent  any  document and information submitted for his review is duly justified
or  pertinent.

25.2.5     All  costs  related  to  the  selection and utilization of the expert
shall  be  jointly  and  equally  paid  by  the  Parties.

25.2.6     Any  decision  rendered by the expert in accordance with this Article
under  a  provision  of the Contract which expressly provides for this procedure
shall  be final and enforceable for the Parties.  No Party may submit the matter
which  was the subject of an expert decision to an arbitration procedure such as
provided  in  this  Contract.  By  joint  decision  of  the Parties, the matters
submitted  to  the  decision of an expert may be subject to a final and definite
decision  through  arbitration,  if the Parties agree to accept it at the time a
decision  was  made  to  submit  the  matter  to  an  expert.

                                       55
<PAGE>

                                  ARTICLE XXVI

                                   TERMINATION

26.1     In case of non-compliance by the Contractor with the provisions of this
Contract,  the  Minister  may  terminate the Contract if the Contractor does not
rectify  same.

26.2     If  the  Minister  deems  that the Contractor has not complied with the
provisions  of the Contract and has thus given rise to a reason for termination,
he must notify the Contractor in writing by formal notice so that the latter may
rectify  the  situation  within  sixty  (60)  days  following the receipt of the
notice,  if  the  situation  can  be  rectified.  If,  within  this  period, the
Contractor  has  not  rectified  the  situation,  the  Minister  may declare the
Contract  terminated  and  claim  any  damages  deriving  from  said  failure.

26.3     During  the  exploitation  period,  the  Contractor  may  terminate the
Contract, by written notification to the Minister at least sixty (60) days prior
to  the  date of termination, provided that the Contractor has fulfilled all its
contractual  and  tax  obligations,  as  well  as its obligations related to the
corresponding  annual  Work  Program.

26.4     The  Contract shall be automatically terminated by the Minister through
notice  to  the  Contractor  when  the  latter  has  committed  a gross mistake,
resulting from a deliberate negligence, has issued false declarations in writing
when  the  Contractor  should  have known that they were false, has assigned any
interest  whatsoever  to  a  third  party  without complying with the provisions
relating  to the assignment of rights or when it has been declared bankrupt by a
competent  court.

26.5     The  Contract  may  be automatically terminated by the Minister through
written  notification  to the Contractor in the following cases if  within sixty
(60) days following the date of receipt of a notification the Contractor has not
taken  the  corrective  measures:

     a) when the Contractor does not abide by the minimum work obligations;

     b) when it does not complete an evaluation or a work program;

     c) when it does not execute the provisions of an  arbitration  award or the
decision of an expert.

26.6     If  the  Contract  has been terminated in accordance with this Article,
the Contractor shall have the right to withdraw and export all the goods used by
it,  for  which the property title has not been transferred, in part or in full,
provided  it  settles all its debts toward the Government.  The Contractor shall
lose  any  other right under the Contract.  It shall not be released from any of
the  obligations  contracted  before  the effective date of termination, whether
they  are  the  result  of  said  termination  or  the  object  thereof.

                                       56
<PAGE>
26.7     If  the  Contractor  challenges  any  of  the  events mentioned in this
Article  or maintains that one of these events has occurred but it has rectified
same,  the  Contractor  may  refer the matter to an arbitration procedure within
thirty  (30)  days  following the date of receipt of the termination notice from
the  Minister.  The  recourse  shall  not  be  suspensive  of  the  termination.

26.8     Before  leaving the Contract Area following termination, the Contractor
must  ensure  that  all  wells are left in good condition in accordance with the
Good  Practices  of  the  Oil  Industry.

26.9     Termination of the Contract shall occur notwithstanding any other right
which  may  have  been established in favour of the Parties, under the Contract,
before  said  termination.

                                       57
<PAGE>

                                  ARTICLE XXVII

                                 BANK GUARANTEE

27.1     In order to ensure the good performance of the minimum work obligations
provided  in  this  Contract, the Contractor must submit within ninety (90) days
following  the  Effective Date, an irrevocable bank guarantee in accordance with
the  sample  in Appendix C for an amount that is sufficient to finalize the work
obligations  during  the  initial  phase  of  the  exploration  period.  Within
forty-five  (45)  days  before  the  beginning  of  each extension phases of the
exploration  period  of  the Contract, the Contractor must submit an irrevocable
bank guarantee for an amount that is sufficient to finalize the work obligations
for  the  phase  considered.

Non-submission of the bank guarantee within the period required shall constitute
a  failure  to  the  provisions  of  the Contract and shall lead de facto to its
termination  by  the  Minister  in  accordance  with  the provisions relating to
termination.

27.2     The sum due in accordance with the bank guarantee mentioned above shall
be  progressively  reduced  as soon as the minimum work obligations for the year
concerned  have  been  finalized.  For  the  purpose  of  this  reduction,  the
Contractor  may,  at  any time, submit for the Minister's approval a declaration
establishing  the  level  of performance of the work obligations.  This approval
shall  take  place  within  reasonable  periods.

27.3     In  order  to  render  the  above  mentioned  reduction  effective, the
Minister  must notify its approval to the bank issuing the bank guarantee within
a  period  of  thirty  (30)  days  from  the date of receipt of the Contractor's
request.

27.4     If  the  Contractor  considers  that  the Minister's approval mentioned
above  has  been unduly delayed or if the Minister deems that the Contractor has
not  satisfactorily  executed  a  minimum  work obligation according to the Good
Practices  of  the Oil Industry, any of the Parties may submit the matter to the
decision  of  an  expert.

27.5     The  guarantees  to  be  submitted by the Contractor under this Article
must  be approved by the Minister.  The Contractor shall forward to the Minister
the  original  guarantees  to  enable  him  to  review  and  keep  them.

                                       58
<PAGE>
                                 ARTICLE XXVIII

                                  NOTIFICATION

28.1     In  order  to  be  considered  valid, any communication or notification
relating  to  the  Contract  must  be  submitted on a working day or received by
registered  letter,  cable,  telex  or  fax  to  the addressees at the following
addresses:

THE  GOVERNMENT:

represented  by

THE  MINISTER  OF  MINES,  ENERGY  AND  HYDRAULICS

04  Boite  Postale:  1412

Cotonou  (R  publique  du  B  nin)

Fax  (229)  31.35.46  T  lex:  5237  MINERH



THE  CONTRACTOR

ADDAX  PETROLEUM  BENIN  LIMITED

c/o  Addax  Management  Services  SA

9,  rue  du  Valais

CH  1202  Gen  ve  Suisse

Fax:  00  41  22  741  50  20

     and

ABACAN  RESOURCE  (BENIN)  LTD.

c/o  Abacan  Resource  Corp.

1750  -  800  5th  Avenue  SW

Calgary,  Alberta  T2P  3T6  Canada

Fax:  001  403  269  3944

28.2     The  Parties  shall have the right to change address for the purpose of
notification  and  communication by notifying same in writing to the other Party
at  least  five  (5)  days  before  the  date  of  actual  change.


                                       59
<PAGE>
                                  ARTICLE XXIX

                      APPLICABLE LEGISLATION, STABILIZATION

                                AND COMPENSATION


29.1     This  Contract shall be governed and interpreted in accordance with the
laws  and  regulations  in  force  in  the  Republic  of  Benin.

29.2     If  the  laws or regulations of Benin in force on the date of signature
and applicable for the execution or the interpretation of the Contract or to the
economic  rights  of  the  Parties are amended so as to substantially modify the
economic  equilibrium existing between the Parties on the date of signature, the
latter must meet to discuss any additional agreement which, by mutual agreement,
would reestablish said equilibrium.  Any additional agreement jointly adopted by
the  Parties  must  take into account the most probable technical and commercial
parameters  in  case  of future development of the Hydrocarbons.  If the parties
cannot  agree  on  the  parameters  to be used for these calculations, or on the
additional  agreements which would reestablish the economic equilibrium existing
on  the  date  of  signature,  the  dispute or disputes must be submitted to the
decision  of  an  expert.

If  no  appropriate  rules exist concerning the dispute, the contract or related
thereto  in  the  Code  or in the regulations in force in Benin, the customs and
practices of the international oil industry and the principles of law applicable
in  this  regard  in  the  oil  countries  shall  be  used.

29.3     The  parties  agree  that the Government will assume the responsibility
for  the consequences of contractual commitments, legal and financial concerning
third  parties,  as  well  as  all  suits  and  damages  until  the  end  of the
Transitional  Period.  The  Contractor will be held harmless from any operations
and  activities  on  Seme  or  Block  1  which  took place before the end of the
Transitional  Period.


                                       60
<PAGE>
                                   ARTICLE XXX

                                 INFRASTRUCTURE

30.1     The  Government shall facilitate to the Contractor, for the performance
of  the  Petroleum  Operations,  the  use  of any roads, storage tanks and other
structures  for  storage  and  processing,  piers and other loading and shipment
structures,  railway  lines,  pipelines and other transportation infrastructures
existing  in  Benin  and  which  are  not  exclusively used for other activities
including  other  petroleum  activities.

30.2     The  Contractor  shall pay passage rights and other reasonable dues for
the  use  of such infrastructures in accordance with the regulations in force in
Benin.  The  costs  incurred  within  this  framework  shall  be  considered  as
Petroleum Costs and may be recovered by the Contractor but must not exceed those
paid  by  the public in general or by other parties in the same situation as the
Contractor.


                                       61
<PAGE>
                                  ARTICLE XXXI

                          GUARANTEE OF PARENT COMPANIES

31.     The  Contractor  undertakes  to  produce  on  the  Effective Date of the
Contract  a letter from the parent companies guaranteeing the performance of the
ADDAX  PETROLEUM-ABACAN  Benin  Consortium  with  regard  to all the obligations
described  or  mentioned  in  the  Contract.


                                       62
<PAGE>
                                  ARTICLE XXXII

                               TRANSITIONAL PERIOD

The  Transitional  Period  is  a  period  for the transfer of powers between the
Government  and  the  Contractor.

The  Parties  agree  that  the  Transitional  Period  is  required to enable the
accounting  and  technical  audits,  in particular, for the certification of the
facilities.

This  Transitional  Period  shall  be for a maximum of three (3) months from the
date  of  signature  of  the  Contract.

During  the  Transitional  Period,  the following obligations shall be observed:

32.1     JOINT  OBLIGATIONS

32.1.1     The  Parties undertake to evaluate the assets of the Seme Oil Project
(PPS) and to proceed if necessary with their distribution between the Government
and  the  Contractor,  and  to  the  sharing  of  responsibilities.

32.1.2     The  Parties  also undertake to discuss the geological, technical and
financial  position  of  the  Seme  Field  in  order  to  determine the economic
conditions  thereof,  and  their  impact  on  the  operations  in  Block  1.

32.2     GOVERNMENT  OBLIGATIONS  AND  RIGHTS

32.2.1     The  Government shall retain the full ownership of the facilities and
is  the  owner  of  all  the  oil  production.

32.2     After the Transitional Period, a percentage of the oil production shall
be  allocated  to  the  Contractor  to  cover the Petroleum Costs incurred by it
before  the  end  of  the  transfer of powers in accordance with the contractual
provisions  relating  to  production  sharing  in  Seme.

32.3     CONTRACTOR'S  OBLIGATIONS

32.3.1     The  Contractor  undertakes,  after  carrying  out  the  geological,
geophysical,  reservoir  engineering and production technology studies to submit
to  the  government  an  Action Program to produce the H6 and H6.5 reservoirs or
other reservoirs in Block 1.  This program may cover the reprocessing of seismic
lines,  the  drilling  of  new wells as well as the well workovers, temporary or
final  shutdown.

33.3.2      The  Contractor  undertakes  to submit to the Government a report on
the  condition  of  the facilities together with a program for their remediation
and  their  management  on  their  temporary  or final shutdown.  In the case of
remediation  he  undertakes to make the investments to the Good Practices of the
Oil Industry, and taking into account the future production of Seme and Block 1.


                                       63
<PAGE>
                                 ARTICLE XXXIII

                                FINAL PROVISIONS

33.1     If on one or several occasions, the Minister or the Contractor omits to
invoke  or  to emphasize the execution of one of the provisions of the Contract,
the  latter  must not be interpreted as a renunciation to the future application
of  the  provision  or  of  the  right  in  question.

33.2     All matters which are not expressly provided for in this Contract shall
be governed by the Code and other laws and regulations of the Republic of Benin.

33.3     If  a  provision  of the Contract is declared null or non-invocable for
any reason whatsoever, this does not imply that the Contract or any other of its
provisions  may  be  declared  null  or non-invocable, except if the Contract or
these  other  provisions  are  affected  by  this  nullity.

33.4     The  Contract  may  not  be amended without the unequivocal and written
consent  of the Parties, but the Minister may, however, extend the period during
which  the  Contractor  must fulfill any obligation under this Contract and each
Party,  or both Parties together, may freely exercise, implicitly or explicitly,
any  rights  granted  to  them  hereunder.

33.5     The  purpose  of the headings used in the Contract is to facilitate its
reading  and  cannot  be  interpreted  as  having  a  special  meaning.

33.6     Any  reference to the singular shall include the plural and vice versa.

33.7     Any reference to the masculine gender shall include the feminine gender
and  vice  versa.

33.8     The  Contract  shall  constitute  the full agreement of the Parties and
shall  replace  any  agreements  and  negotiation  results conducted between the
Parties  before  the  date  of  signature.

33.9     Once the Contract has been signed by the Parties, it shall be published
in  the  Official  Gazette  of the Republic of Benin and anywhere else required.

33.10     This  Contract  has  been  signed  in  two  (2)  originals.


                                       64
<PAGE>
MADE  IN  COTONOU,  THE  01/02  1997



                                                      FOR  THE  CONTRACTOR

FOR  THE  GOVERNMENT

OF  THE  REPUBLIC  OF  BENIN


MR.  EMMANUEL  GOLOU                                  MR.  MARC  LORENCEAU
--------------------                                  --------------------
MINISTER  OF  MINES,  ENERGY  AND  HYDRAULICS         PRESIDENT  OF  ADDAX
                                                      PETROLEUM BENIN AND BY

                                                      ORDER


                                                      MR.  JEAN  CLAUDE  GANDUR
                                                      -------------------------
                                                      PRESIDENT  OF  THE  ADDAX
                                                      AND  ORYX  GROUP


                                                      MR.  WADE  CHERWAYCO
                                                      --------------------
                                                      PRESIDENT  OF  ABACAN
                                                      RESOURCE  LIMITED  (BENIN)


                                       65
<PAGE>
                                  APPENDIX "A"
                                  ------------

                           COORDINATE REGION CONTRACT
                           --------------------------

                        TOTAL AREA OF BLOCK 1: 551,3 Km2

1)    EXPLOITATION  PERMIT    (62Km2)
      --------------------

1-B)  6  16'  28"  North      2  43'  00"  East
2-C)  6  16'  28"             2  39'  55"
3-D)  6  11'  43"             2  39'  55"
4-E)  6  11'  43"             2  43'  30"



2)    EXPLORATION  PERMIT     (489,3  km2)
      -------------------

1-1)_ 6  22'  20"  North      2  42'  30"  East
2-F)  6  05'  00"             2  44'  12"
3-G)  6  05'  00"             2  34'  00"
4-H   6  21'  23"             2  34'  00"


                                       66
<PAGE>
                                  APPENDIX "B"
                                  ------------

                                  MAP OF BENIN


                                       67
<PAGE>
                                  APPENDIX "C"
                                  ------------

                             FORM OF BANK GUARANTEE
                             ----------------------


                                       68
<PAGE>
                                  APPENDIX "D"
                                  ------------


                       ACCOUNTING AND FINANCIAL PROCEDURES
                       -----------------------------------

     The  present  Appendix  is  attached  and  is  made part of the Contract of
exploration  and  exploitation.

Dated

_________________________________________

Between  THE  GOVERNMENT  OF  THE  REPUBLIC  OF  BENIN


and  THE  SYNDICATE  ADDAX  PETROLEUM  -  ABACAN  BENIN  S.A.


                                       69
<PAGE>
TABLE  OF  CONTENTS
-------------------

PAGES

CHAPTER  1:      General  arrangements
CHAPTER  2:      Classifications,  Distribution  of  costs  and expenditures
CHAPTER  3:      Method  of  recuperation  of  Contractor's  costs
CHAPTER  4:      Inventory  and  evaluation  of  assets
CHAPTER  5:      Report  of  activities  during  the  Period  of exploration
CHAPTER  6:      Production  Report
CHAPTER  7:      Report  on  the  value  of  the  Production
CHAPTER  8:      Report  on  recoverable  costs
CHAPTER  9:      Statement  of  expense  and  receipts
CHAPTER  10:     Yearly  report
CHAPTER  11:     Yearly  budget
CHAPTER  12:     Forecasts  and  long  term  plans
CHAPTER  13:     Procedures  of  accounting  and  financial  revisions
CHAPTER  14:     Disagreement  with  the  Contract


                                       70
<PAGE>
CHAPTER  1:          GENERAL  ARRANGEMENTS

The present Appendix has for a main objective, to establish rules and accounting
procedures  allowing  the  determination  of  investments,  expenses,  costs  of
exploitation  and  receipts  of  the  Contractor.

1.1          DEFINITIONS

Terms  used  in  the present Appendix have the same meaning as terms used in the
Contract.

1.2          REPORTS  THAT  THE  CONTRACTOR  SHALL  PRESENT:

     a) Within the thirty (30) days that follow the Date of  commencement of the
Contract,  the Contractor  will submit for the  Minister's  approval the general
lines of one project of accounting procedures, of operational registries.  These
procedures  should be compliant to norms in Benin and  compatible  with those of
the International Oil industry. Within the sixty (60) days following the receipt
of the above  documents,  the  Minister  will  either have to approve or ask for
their  revision.  Within  ninety (90) days after the  Minister's  approval,  the
Contractor,  on the basis of the  recommendations  that are made will revise the
manuals and the accounting  procedures  which will be in force during the length
of the Contract.

     b) The reports  relating to the Oil Operations  that the Contractor  should
regularly produce are those that are stipulated in the Contract,  In the present
Appendix  and those  that might  make the  object of an  agreement  subsequently
between Parties or that could be required by the Beninese legislation.

1.3     ACCOUNTING  SYSTEM

     The  Oil  operations  accounting  system  is  prepared  by  the  Contractor
according to the terms  of the Contract and of the National Accounting Plan. The
whole  cost  (CCE)  method  of  Capitalization  will  be  used.

1.4     LANGUAGES  AND  UNITS  OF  AMOUNT  TO  BE  USED:

     a) Amounts  will be held in the local  currency of Benin.  Metric units and
Barrels will be measures concerned by the present Appendix.  The language of use
will be French.

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     b) Rules of  accounting  and  financial  procedures  are  directed  so that
neither the Minister nor the Contractor  undergo exchange gains or losses at the
expense of either Party.  However, if an exchange gain or a loss is produced, it
would be credited or debited to accounts foreseen by this Contract.

     i)  Receipts  and  expenses in Francs CFA or in  American  dollars  will be
converted on the basis of the average between the exchange rate for the sale and
the exchange rate for the purchase of  currencies in question,  as published the
last day of the previous month by the  specialized  magazines of the BCEAO or of
the IMF.

     ii) If an increase or reduction - isolated or  cumulative -, of ten percent
(10%) or more occurs in the  exchange  rate  between the CFA Francs and American
Dollars,  during the course of any one month,  the exchange rate to use would be
the following:

     (1) For the period  from the first day of the month until the day when such
increase or  reduction  occurs for the first time,  the average of the  official
exchange rate for the purchase and the sale between the American  Dollar and the
CFA franc as published the last day of the previous month;

     (2) For the  period  going  from the day when this  increase  or  reduction
occurs for the first time until the end of the Month,  the mean of the  official
exchange rate for the purchase and the sale between the American  Dollar and the
CFA Franc  published  the day when such an  increase  or  reduction  would  take
-place.

1.5          PAYMENTS

     a) All payments between Parties,  except if stated otherwise,  will be made
according  to the  Contract  and by the  intermediary  of a bank  that  will  be
designated by each of the Parties.

     b) All the moneys  due by one of the  Parties,  in virtue of the  Contract,
during any one Month,  will be subjected  at the time of the payment,  for every
day  of the  Month  following  their  deadline,  to a  daily  compound  interest
corresponding to the rate of the Contract + 1

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CHAPTER  2:          COST  AND  EXPENDITURES

     All  expenses  concerning  the  Oil  Operations  will  be  classified,  and
distributed  as  follows:

2.1     Costs of exploration including all direct costs and indirect charges for
the  oil  exploration  in  the  Contract  Area, before obtaining the exploration
Permit,  notably:

     a)  The  geophysical  studies,  geochemical,  paleontological,  geological,
topographic and seismic studies and their respective interpretations.

     b) The drilling and the coring of  Exploration  Wells and  Appraisal  Wells
under the condition that these are not transformed into Development wells.

     c) The  manpower,  and the material  used for the  drilling of  Exploration
Wells mentioned below including services there pertaining.

     d) Facilities used exclusively for this goal including access roads.

     e) The service costs relative to operations as described in the Section 2.4
of the present Chapter and agreed upon between the Minister and the Contractor.

     f)  The   administrative  and  general  expenses  relative  to  Exploration
Operations  as  described  in the Section 2.5 of this  Chapter,  and agreed upon
between the Minister and the Contractor.

     g)  All  other  contractual  costs  engaged  before  the  beginning  of the
commercial production and that would not have been foreign in Section 2.2.

2.2     Investments for Production development including all expenses during the
Operations  of  Development  and  Production,  notably:

     a) The drilling of Production  Wells from a reservoir  already  discovered,
whether these wells are dry or in production.

     b) The completion of wells for the purpose of production.

     c) The intangible costs of drilling such as the manpower,  the consumables,
and the services  relative to the  drilling  and the  deepening of wells for the
purpose of production.

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     d) Costs of development facilities such as pipelines,  flexables,  units of
production and treatment,  wellhead and bottom hole equipment of wells,  systems
for  improved  recovery,  drilling  platforms,  facilities  for the  storage  of
hydrocarbons,   terminals  and  jetties  for  exportation,   harbors  and  their
equipments and access roads for production activities.

     e) Studies of engineering and design of installations for the field.

     f) The  service  costs  relative to  Production  Operations,  described  in
Section  2.4 of this  Chapter and as agreed upon  between the  Minister  and the
Contractor.

     g) The  administrative  and general  expenses  relative  to the  operations
described  in Section 2.5 of the present  Chapter and as agreed upon between the
Minister and the Contractor.

     h) All other  Developmental  expenses  incurred before the beginning of the
commercial production.

2.3     Operating costs including the expenses undertaken for the functioning of
the  Field, after the beginning of commercial production. These include notably:

     Costs  of  electric  energy  supplies  to  power  the  Wells.

     Expenses  of  upkeep  and  repair  of  machines, equipments and facilities.

     Costs  of  treatment,  transport  and storage of the Raw Oil or of the Gas.

     Costs  of  the  production  --  production  control  laboratory.

     Cost  of  transportation  on  the ground, by sea and by air of personal and
equipment.

     Costs  related  to  safety,  to  the  security  and  the  surveillance.

     Costs  of  Well  reconditioning.

     Costs  of  insurance  and  certification

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2.4     Costs  of  services  representing  the  direct,  or indirect expenses of
support  services  to  the  Oil  Operations  notably warehouses, jetties, ships,
vehicles,  rolling  motorized transports, aerial transports, safety stations and
fire  stations,  shops,  water and sewers facilities, electric plants, lodgings,
recreational  and  communal  facilities  as  well  as  the  furniture, tools and
facilities  used for these activities.  Costs for one Calendar Year will include
the  totality  of  the costs committed in the said year for the rental, purchase
and/or the building of such facilities as well as the committed yearly costs for
their  operation  and  upkeep. The totality of service costs will be distributed
regularly,  as  stipulated  above.

2.5     Administrative  and  general  expenses  abroad  including:

     a) all  administrative  and general expenses of the head office and offices
including personnel costs.

     b) expenses of services provided by the head office outside of Benin.

     The  totality  of  administrative  and  general  expenses,  distributed  as
stipulated above, will be defined every month of the Calendar Year by a Oil Cost
percentage  accumulated  during  said  Calendar  Year according to the following
scale:

of  0  to  10,000,000  of  dollars         -     3%

subsequent  10,000,000  dollars            -     2%

in  excess  of  20,000,000  dollars        -     1%

CHAPTER  3:          METHOD  OF  RECUPERATION  OF  THE  CONTRACTOR  COSTS

     By virtue of the arrangements of the Contract, the Contractor shall take to
his  account  all costs and expenses concerning the Oil Operations. They will be
recoverable  by  the  Contractor  according  to  arrangements  following:

3.1     Recoverable  costs  without  approval  of  the  Minister  to  operations
previously  programmed  by the Contractor and approved by the Minister according
to  arrangements  of  the  Contract.

     They  include: costs of exploration, costs of development, operating costs,
costs of services and the general administrative expenses described respectively
in  sections  2.1;  2.2;  2.3;  2.4  and  2.5  hereinabove.

a)          WITH  REGARD  TO  PERSONNEL

     The  costs  of  the  Contractor's  employees affected to Benin and directly
employed  in  conducting  Oil  Operations of temporary ' or permanent nature are
taken  in  consideration  under  the  following  conditions:

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     (i)  the total cost of salaries and wages.

     (ii) the reasonable  costs  incurred by the Contractor for sickness  leave,
          disability benefits,  living and lodging allowances,  travel,  bonuses
          and other generally  applicable  benefits to the salaries and wages as
          direct costs in the framework of the present Appendix,  as well as the
          proportional costs relating to the benefits in employee favor such as,
          among   others,   life   insurance  and   sickness-insurance,   union,
          hospitalization, retirement, bonus and other similar benefits.

     (iii)expenses or contributions  made regarding  charges imposed by a public
          organism in favor of said employees.

     (iv) expenses  for  the  transportation  of  employees,  of  equipment,  of
          materials and of the necessary elements for the realization of the Oil
          Operations.

     (v)  costs incurred by the Contractor for the relocation of employees to or
          from the Region of the Contract or in its  neighborhood,  whether they
          are affected in a permanent or temporary manner to the Oil operations.

     When  an  employee  is affected to other activities, other than that of the
Oil  Operations,  costs  of  relocation  must  be imputed according to solid and
generally  accepted  accounting  principles  .

     The  costs  of  relocation  of  employees and their family, the move of the
personal  effects and of the domestic articles of employees and their family and
all  other  expenses  according  to  practices  of  the  oil  industry.

     Costs  of  relocation  from the Region of the Contract or its neighborhood,
toward  another foreign place are not recoverable unless the foreign site is the
usual  place  of  residence  of  the  employees.

b)          WITH  REGARD  TO  OFFICES,  EQUIPMENTS  AND  VARIOUS  FACILITIES:

     i)   Costs  caused  by the  utilization  of  offices,  dependences,  camps,
          storage  depot,  lodgings and other  facilities  of the  Contractor in
          Benin and serving directly to the Oil Operations.  If these facilities
          serve to other operations than the Oil Operations,  and that it is not
          possible  to  define  expenses  as  direct  expenses  tied  to the Oil
          operations for which the service has been given, costs must be imputed
          to facilities to which the service has been given, in a systematic and
          reasonable manner.

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     ii)  Costs caused by the acquisition,  the rental,  the  installation,  the
          exploitation,   the   repair  and  the   maintenance   of  systems  of
          communications,  including the radio and VHF facilities  used directly
          for operations.

c)          WITH  REGARD  TO  PROVISION  OF  SERVICES

     i)   Costs and expenses incurred  regarding  Consultants used for technical
          services  and  those of all  other  nature  directly  bound to the Oil
          operations   including,   among  others,   laboratory  analyses,   the
          industrial drawings,  the geophysical and geological  interpretations,
          the  engineering  and the  processing of data,  obtained from external
          sources.

     ii)  The costs invoiced for services provided by Affiliated  companies must
          be  competitive  with  services of the same quality  provided by third
          parties.

d)        WITH  REGARD  TO  THE  MATERIAL  AND  EQUIPMENTS  OF  THE CONTRACTOR

     For the assessment of the material and equipment provided by the Contractor
from  its  own inventory or one of its Affiliated members, the values -"All," B"
or  "C"  must be taken in consideration, according to the case, being understood
that  any  value  exceeding  the  just  price  of  the  market  in  Benin is not
recognized:

     -    Material and new Equipments (Category "A")

     The  material  and  the  new  equipments  are  valued  at  the price of the
corresponding commercial invoice increased by the supplementary costs of import,
if  the  case  arises,  and  of the other costs generally admitted by accounting
techniques  and  practices.

     -     Material  and used equipments (Category "B" and "C") . Are considered
in the "B" category the material and facilities that are not new but that can be
used  without  having  to be refurbished; this material and these facilities are
valued  to  seventy-five  percent  (75%)  of  the  price of the new material and
equipments.

     Are considered in the "C" category facilities and the material which can be
used  for  their  initial  function  after  an  appropriate  refurbishing. These
equipments  and  materials are valued at fifty percent (50%) of the price of new
equipments  and  materials.

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1-2)_      With  regard  to  the  acquisition  of  goods  and  equipments

     i)   The cost of  acquisition  of goods and  equipments  from third parties
          must include expenses of custom agents,  of transport,  of loading and
          unloading  and  procedures  of purchase,  export or import  duties and
          expenses caused by obtaining  licenses as well as losses of equipments
          and goods in transit if these are not  covered  by an  insurance.  The
          accumulation  of excess stocks must be reduced to the minimum,  taking
          into  account  the  localization  of sources of  provisioning  and the
          necessary time for the delivery of goods and  equipments  from distant
          locations.

     ii)  All  material  bought  by  the  Contractor  in the  conducting  of Oil
          Operations will be inspected by the Government  diligence before their
          use according to the regulations in force.

     iii) The Contractor not  guaranteeing  the material beyond the guarantee of
          the supplier or the manufacturer,  any sums received by the Contractor
          from  the  suppliers,  manufacturers  or of their  representatives  in
          compensation for deficient  materials or equipments will be written to
          the credit of the Contractor  under the terms of the Contract and will
          be deducted from recoverable costs.

f)          WITH  REGARD  TO  INSURANCE  COSTS

     This  means costs incurred by the Contractor or by an Affiliated Company to
subscribe to an ins ice policy in the framework of the, Operations and this on a
competitive  basis.

g)          WITH  REGARD  TO  TRAINING  COSTS

     This  means  expenses  incurred  by  the Contractor for the training of its
employees  and  for  all  other  necessary  training  according to the Contract.

h)          RENTAL  COSTS  ACCORDING  TO  ARTICLE  4  OF  THE  CONTRACT

3.2     RECOVERABLE  COSTS  UNDER  RESERVE  OF  THE  MINISTER'S  APPROVAL

     These  are:

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     a)  Research  and  development  costs  for  new  equipment,  materials  and
techniques intended for exploration, development and the production of Oil which
are not included in the work program approved by the Minister.

     b) Of costs and expenses not mentioned in the present Appendix and that are
incurred during the Petroleum Operations .

     c) Of interest charges incurred on loans received by the Contractor for the
financing  of the  Petroleum  Operations.  All  interest  rates  conform  to the
international financial market and agreed upon by both Parties are recoverable.

     d) Rents, Charges and other taxes:

Rents, excluding the residences of the Contractor, taxes, contributions, duties,
subscriptions and all other taxes and charges levied by the State concerning the
Petroleum  Operations  and  paid  directly  or  indirectly  by  the  Contractor,
according  to  the  clauses  of  the  Contract.

     e) Of costs and losses  incurred  as a  consequence  of events that are not
foreseen by insurance as defined in the Contract, except in the case where costs
and  losses  would  be the  exclusive  result  of a  mistake  or an act of gross
carelessness  by  the  Contractor  or  an  Affiliated  Company  or  one  of  its
subcontractors.

     f) Of legal costs and expenses relative to the Petroleum Operations.


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3.3     NON  RECOVERABLE  COSTS

These  are:

     a) Fines, supplements and adjustments for delay in the payment of duties or
taxes  prevailing in the country or adjustments  for incorrect  payment of these
taxes  provided that such a delay or incorrect  payment is  attributable  to the
Contractor.

     b) Of import  duties of goods and  equipment  not proving  necessary to the
Petroleum Operations, and for housing of non necessary personnel.

     c) Of all costs and  expenses  incurred  before  the  starting  date of the
Contract.

     d) Of expenses pertaining to interests on credit for receivable.

     e) Expenses made due to non fulfillment of the Contract obligations.

     f) Of expenses pertaining to Petroleum  Operations which are badly executed
as a  result  of a  major  technical  error  by  the  Contractor  or  any of its
subcontractors.

     g) Of costs and expenses of all banking guarantee tied to the Contract.

     h) Of grants in general.

     i) Of advertisement expenses.

     j) The costs of inventory taking in case of the Contractor  rights transfer
according to the Contract.

     k) The  commercialization  costs of the Crude or its  transport  beyond the
Delivery point.

     l) The costs of appraisals and arbitrations described in the Contract.

     m) Of the additional sum of 300% tied to Operations in Sole risks.

     n) Of Commissions paid by the Contractor to intermediaries.

     o) Of costs and expenses without accounting receipts.

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     p) Of costs  and  expenses  of goods or  services  exceeding  the  price of
similar  goods or  services  in the area of West  Africa at the  moment of their
acquisition if circumstances didn't justify such costs and expense surplus.

CHAPTER  4:          INVENTORIES  AND  ASSESSMENT  OF  ASSETS

4.1     The  Contractor  must  hold  the licences of real estate possessions and
other assets used in the Petroleum Operations according to the normal accounting
practices  of  the  country  and  the  International  Oil  industry.

4.2     At reasonable intervals, but at least once per year pertaining to mobile
assets  and  at  least every three (3) years for the case of real estate assets,
the Contractor will make an inventory of the goods concerned by the Contract. At
least thirty (30) days in advance, the Contractor will communicate in writing to
the  Minister  its  intention  to  make the said inventory; the Minister will be
represented  during  the  realization  of  this  inventory.  The Contractor will
clearly  express  the
principles  used  for  the  valuation  of  stocks.

4.3     The Minister can ask the Contractor for information on its assets at any
time  he  judges  necessary.

CHAPTER  5:          REPORT  OF  ACTIVITIES  DURING  THE  EXPLORATION  PERIOD

5.1     During  the  exploration  period,  the Contractor will prepare for every
trimester,  a  report  of  activities  which  includes:

the list with a detailed description of activities achieved during the aforesaid
trimester.  This  report  will  be  based on plans, maps, cross sections and all
other  data  indicating the level of completion of the work being performed. the
costs  relative  to  the  different  activities  mentioned  above.

5.2     The  activity  report  will  be  submitted  to the Minister for approval
within  a  time  limit  of  thirty  (30)  days  after  the  end of the trimester
considered.

CHAPTER  6:          PRODUCTION  REPORT

6.1     Once  the  commercial  production  begins  in  the  Contract  Area,  the
Contractor  shall  prepare  for  every  Trimester  a  production report for each
exploitation  zone  which  will  include  the  following  data;

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     a) The quantity of Crude oil produced and stored during the Trimester.

     b) The  quantity  of Crude Oil used for  Petroleum  Operations  during  the
Trimester.

     c) The quantity of Crude Available at the end of the Trimester concerned .

     d) Parameters and performances of the reservoir; recordings of the logs and
well tests and their interpretations; analyses of the fluids produced.

6.2     The  production  report  for  every  Trimester  will be submitted to the
Minister  for  approval  within  the  thirty  (30) days following the end of the
Trimester  considered.


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CHAPTER  7:          REPORT  ON  THE  VALUE  OF  THE  PRODUCTION

7.1     The  Contractor  shall  prepare a report on the precise determination of
the  market  value of the Crude produced and stored after losses relative to the
Petroleum  Operations  during  each  Trimester.  This  report  will  contain the
following  data:

     a) The quantities sold and prices received by the Contractor as a result of
its sales of Crude to third parties during the Trimester considered.

     b) Information  obtained by the  Contractor  concerning the prices of Crude
produced  by the main  producers  and  exporting  countries  including  contract
prices,  discounts  and  bonuses,  as well as the  prices  received  on the spot
markets.

7.2     The  report  on  the  value  of the production, will be presented to the
Minister  for  approval  within  the  thirty  (30) days following the Trimester.

CHAPTER  8:          RECOVERABLE  COSTS  REPORT

8.1     The  Contractor  should  prepare, for every Quarter, a report concerning
the  recoverable  costs, a report which will contain the following information,:

     a) The recoverable  Petroleum  Costs,  carried over if necessary,  from the
previous Quarter.

     b) The recoverable Petroleum Costs of the Quarter considered.

     c) The total  amount of the  recoverable  Petroleum  Costs for the  Quarter
considered described in the paragraphs above.

     d) The  quantity  and the total  value of the Crude Oil  calculated  by the
Contractor for the Cost Oil during the Quarter.

     e) The Petroleum Costs recovered during the Quarter considered .

     f) The cumulative  amount of Petroleum Costs recovered until the end of the
Quarter considered.

     g) The amount of recoverable  Petroleum Costs which must be reported to the
next Quarter.

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8.2     The  report  of the recoverable costs for each Quarter will be submitted
to  the  Minister for approval within thirty (30) days following the end of each
Quarter.

8.3     In  spite  of the obligation that it has to keep accounts in Francs CFA,
the  Contractor will keep a separate account in US Dollars for the determination
of  the  Cost  Oil.


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CHAPTER  9:          STATEMENTS  OF  EXPENSES  AND  REVENUES

9.1     The Contractor should prepare for every Quarter, a statement of expenses
and revenues made in the framework of the Contract. This statement will make the
distinction  between  Exploration  Costs,  investment  expenses, development and
exploitation  expenses,  and  Operating  Costs,  and  it  will identify the main
categories  of  expenses  corresponding  to  these.  It  will  show  notably:

     a) Real expenses and revenues for the Quarter considered.

     b) Cumulative expenses and revenues for the budget of the year considered.

     c) The latest forecast of cumulative expenses till the end of the year.

     d)  Discrepancies  between the estimated  budget and realizations and their
explanation.

9.2     The  statement  of  expenses  and  revenues  for  every  Quarter will be
submitted to the Minister for approval within thirty (30) days following the end
of  the  Quarter  considered.

CHAPTER  10:          YEARLY  REPORT

     The Contractor should prepare a yearly report that will be the synthesis of
informations relating to the production, to costs recovery of costs, to revenues
and  expenses. Said report will be based on the real volumes of Oil produced and
of  the  incurred  expenses.  From this report, any necessary adjustment will be
done  to  payments  made  to  the  Parties according to the Contract. The yearly
report for each Civil Year will be submitted to the Minister for approval within
sixty  (60)  days  after  the  end  of  said  Year.

CHAPTER  11:          YEARLY  BUDGET

11.1     The  Contractor  shall  prepare  a  yearly  Budget  that  will make the
distinction  between  Exploration Costs, Development and Exploitation Investment
and  Operating  Costs  to  outline  the  following:

     a) Forecast of expenses and revenues for the  budgetary  year  according to
the Contract.

     b) Cumulative expenses and revenues to the end of said budgetary Year.

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     c) Program showing the most important categories of expenses of development
and exploitation investment for said budgetary Year.

     d) For a budgetary  item and provided that he respects the General  program
of the approved tasks,  the Contractor is allowed to commit overrun  expenses to
the limit of ten percent (10%) of said item and said expenses must be justified.
If this limit is exceeded,  the Contractor will take all necessary  arrangements
to inform the Minister and to justify all overrun of expenses within thirty (30)
days following its execution.


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11.2     The yearly Budget will be presented to the Minister within a time limit
of  ninety  (90) days before the beginning of the year considered except for the
first Year of the Contract where the aforesaid Budget will be submitted within a
time  limit  of thirty (30) days after the Date of Commencement of the Contract.

CHAPTER  12:          FORECASTS  AND  LONGTERM  PLANS

     The Contractor should prepare and should submit to the Minister the two (2)
following  long  term  plans:

12.1          PROGRAM  OF  EXPLORATION

     During  phases  of  Exploration,  the  Contractor will prepare a Program of
Exploration for every phase starting from the Commencement Date of the Contract,
program  that  will  contain  the  following  information:

     a) Evaluations of Exploration  Costs showing expenses for each of the Years
of the program.

     b) Seismic operation details for each Year.

     c) Details of drilling activities programmed for each Year.

     d) Details of the utilization and requirements for  infrastructure for each
Year.

     The  program of exploration will be reviewed each Year. The Contractor will
prepare and will submit to the Minister, the first program of exploration within
the  sixty (60) days following the Commencement Date of the Contract. It will do
thus  each  Year, within a time limit of forty-five (45) days, before the end of
the  Civil  Year.

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12.2          DEVELOPMENT  FORECASTS

     The  Contractor shall prepare triennial Development forecasts beginning the
first  day of January after the date of the first program of assessment has been
approved  by  the  Minister.  The Contractor will prepare and will submit to the
Minister  development  forecasts  reviewed  at  least  forty-five thus (45) days
before  each  civil  Year,  as  long  as  required  by the Contract or by common
agreement  between  Parties.

12.3          CHANGES  IN  PROGRAMS  AND  FORECASTS

     The  Minister  and  the  Contractor  agree  that details of the Exploration
Program  and  Forecasts  of  Development  may  require  changes  due to changing
circumstances  and results acquired. In this spirit, a revision of said programs
and  forecasts  may  be  done  annually.

CHAPTER  13:     PROCEDURES  FOR  ACCOUNTING  &  FINANCIAL  REVISIONS

     The  terms  of  accounting  and  financial  procedures  may  be  amended by
agreement  of  both Parties. Amendments will be made in writing and will specify
the  date  to  which  they  will  come  into  effect.

CHAPTER  14          DISAGREEMENT  WITH  THE  CONTRACT

     In the case of a difference between terms of the present Appendix and those
of  the  Contract,  those  of  the  Contract  will  prevail.

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                        Appendix "E"Abandonment Procedure

The  following procedure of dismantling of the offshore facilities indicates the
steps  to be implemented for the removal of the steel structures in water depths
from  85  to  150  feet  (  26m  to  46m).

I.MOBILIZATION
--------------

     1. Obtain all approvals and authorizations pertaining to the abandonment of
the facilities, and dump the structures into a deep water site.

     2. Plug and abandon each well.  Cut the guide  tubular of each well 15 feet
under the mud line.

     3. Evacuate all hydrocarbons out of the tanks and reservoirs,  and clean up
with water all surface pipes, evacuation flowlines and pipelines.

II.  DISMANTLING
----------------

     1. Unhook and remove the mobile equipments and facilities.

     2. Cut the feet and displace the bridge of the structure.

     3. Cut the feet under the mudline and displace the jacket of the structure.

     4. Drive back the jacket to an approved water depth.

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