Exhibit  10.22




                                 OIL EXPLORATION
                                       AND
                              EXPLOITATION CONTRACT


                              DEEP OFFSHORE BLOCK 4


                                     BETWEEN

                         THE GOVERNMENT OF THE REPUBLIC
                                    OF BENIN

                                     AND THE

                         ADDAX PETROLEUM - ABACAN BENIN

                                   CONSORTIUM


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

                                                      PAGE
<S>       <C>                                         <C>

PREAMBLE                                               1

I         DEFINITIONS                                  2

II        OBJECT OF THE CONTRACT                       9

III       TERM                                        10

IV        OWNERSHIP OF ASSETS, DATA AND
          HYDROCARBONS                                13

V         RELINQUISHMENTS                             15

VI        MINIMUM WORK OBLIGATIONS                    16

VII       TECHNICAL COMMITTEE                         18

VIII      COMPLETION OF  OPERATIONS, WORK
          PROGRAM, BUDGETS, REPORTS AND CONTROL       20

IX        DECLARATION OF COMMERCIAL DISCOVERY
          AND DESIGNATION OF THE DEVELOPMENT AREA     24

X         SOLE RISK OPERATIONS                        28

XI        ANNUAL DEVELOPMENT AND PRODUCTION
          PROGRAMS                                    30

XII       GOVERNMENT PARTICIPATION                    31

XIII      COST RECOVERY AND PRODUCTION SHARING        33

XIV       REQUIREMENTS OF DOMESTIC  CONSUMPTION       35

XV        TAX SYSTEM                                  37

                                       -i-
<PAGE>
XVI       MEASUREMENT, DISPOSAL, EVALUATION AND SALE
          OF HYDROCARBONS                             39

XVII      NATURAL GAS                                 41

XVIII     DAMAGES, ENVIRONMENTAL PROTECTION
          AND SAFETY                                  44

XIX       PROVISIONS REGARDING EXCHANGE               48

XX        EMPLOYMENT AND TRAINING                     49

XXI       ACCOUNTING                                  50

XXII      CONFIDENTIAL NATURE OF THE DATA             51

XXIII     ASSIGNMENT OF RIGHTS                        53

XXIV      FORCE MAJEURE                               54

XXV       ARBITRATION AND EXPERT EVALUATION           55

XXVI      TERMINATION                                 57

XXVII     BANK GUARANTEE                              59

XXVIII    NOTIFICATION                                60

XXIX      APPLICABLE LEGISLATION AND                  61
          STABILIZATION

XXX       INFRASTRUCTURE                              62

XXXI      GUARANTEE OF PARENT COMPANIES               63

XXXII     FINAL PROVISIONS                            64
</TABLE>

                                      -ii-
<PAGE>
                                   APPENDICES


APPENDIX A:  COORDINATES OF THE CONTRACT AREA

APPENDIX B:  MAP OF THE CONTRACT AREA

APPENDIX C:  BANK GUARANTEE

APPENDIX D:  ACCOUNTING

APPENDIX E:  ABANDONMENT PROCEDURES

                                      -iii-
<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 texts 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  exploration,  exploitation,  stocking,  transport  and  marketing of
Hydrocarbons  in  the territory and in the territorial waters of the Republic of
Benin  and  on  the  continental shelf 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  said  Code,  the  State may undertake any
Petroleum  Operations either solely, or in association with private capital; and
may  as  well assign to itself or to any department or public company with legal
status,  the  exploration  and  exploitation  permits,  the  concessions  and
provisional  exploitation  permits.

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

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

Further  to  the  above,  the Government of the Republic of Benin has decided to
enter  into  the  present  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,  for the purpose of
exploration and exploitation of Hydrocarbons in accordance with the articles and
provisions  specified  in  the  present  Contract.

IN  WITNESS  WHEREOF:

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


                                      -1-
<PAGE>
                                    ARTICLE 1

                                   DEFINITIONS

The  terms  appearing  hereinafter  in the Contract shall be defined as follows,
unless  specifically  indicated  otherwise, or unless the Parties mutually agree
otherwise.  The  definitions  shall include  the singular  and the plural forms.


1.1          "Affiliate"  or  "AFFILIATED  COMPANY" means a company or any other
entity  which  controls 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 itself controls the Contractor.  Control means
direct  or  indirect  ownership  of more than fifty percent (50 %) of the shares
making  up the capital of the controlled Company, thereby granting  the majority
of  the  voting  rights  in  the  controlled Company to the controlling 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 date of
signature  .

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  any  of  the  appendixes,  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 means an article
of  the  Code.

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

1.8          "AVAILABLE  CRUDE"  means  the  quantity remaining after the losses
relating  to  the  Petroleum  Operations  and  the  Government Royalty have been
subtracted  from  the Total Crude Production in the contract area in  accordance
with  Article  13.4  hereinafter.

1.9          "COST-OIL"  means  the volume of Crude dedicated to the recovery of
Petroleum  Costs.

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


                                      -2-
<PAGE>
1.11          "BUDGET"  means the financial estimate of all petroleum activities
contained  in  an  Annual  Work  Program.

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 texts, in
particular  Ordinance  No.  73-34  of  April  13, 1973 concerning  the petroleum
taxes, and Decree No. 73-130 of April 13, 1973 concerning the application of the
Petroleum  Code.

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

1.14          "CONTRACT" means the present document as originally drawn up, duly
signed  including  its  Appendixes  as  well  as any additions or any amendments
agreed  by  the  Parties  at  a  later  date.

1.15          "PRODUCTION  COSTS"  means  the  costs and expenses resulting from
carrying  out  the  Production  Operations  excluding  new  investments  having
occurred  during  that  phase.

1.16          "PETROLEUM  COSTS"  means  all  the  costs and expenses related to
Petroleum  Operations  as 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          "DATE  OF START-UP 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 the present Contract is
signed  by  the  authorized  representatives  of  both  Parties.

1.21          "DISCOVERY"  means  uncovering  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  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.


                                      -3-
<PAGE>
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  in  the  Contract  Area.

1.26          "EXPATRIATE  EMPLOYEE" means an employee of the Contractor or of a
subcontractor  who  has  been  recruited  for  that purpose  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  Crude  Oil.

1.30          "NATURAL GAS" or "GAS" means the Hydrocarbons in the gaseous state
under normal atmospheric pressure and temperature, including but not limited to,
the  wet  gas, the dry gas, the wellhead gas and any other gaseous hydrocarbons,
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 produced
at  the  same time as the Crude Oil or which exists jointly with 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
superposed  vertically  in  the  Contract  Area,  having  a  commercial  value
established in accordance with the Good Operating Practices of the Oil Industry.

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

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

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

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


                                      -4-
<PAGE>
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  evaluating the extent and the volume of these accumulations,
the  Reservoirs  characteristics  and their probable behavior during production.
The  Exploration  Operations  include  geological,  geophysical  and geochemical
surveys,  analyses and studies, the drilling, deepening, abandonment or workover
of  the  wells and their evaluations as well as any operations relating thereto.

1.39          "DEVELOPMENT  OPERATIONS" means any operations performed according
to  the General Development Program for the purpose of producing the Hydrocarbon
accumulations  in  the  subsurface  of  the Development Areas.  These Operations
include:

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

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

-     The pipe laying inside or outside the Contract Area towards the storage or
delivery  points,  the  building  of  these  Crude Oil storage facilities or Gas
processing  facilities  and  all  ancillary operations that are not specifically
indicated  herein  but which are necessary for the development and production of
these  Hydrocarbon  reserves and for the delivery of Crude Oil and/or of the Gas
to  the  Delivery  Point, in accordance with the Good Operating 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  to  a  Benin  refinery  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 export of these Hydrocarbons as well as the maintenance
and  abandonment  of  all  the  necessary  facilities.

1.42          "PARTIES"  means  the  Government  and  the  Contractor.


                                      -5-
<PAGE>
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,
separation  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  schedule.

1.47          "TOTAL  CRUDE  PRODUCTION"  means  the quantity of Crude extracted
from  the Contract Area after extraction of the water, of 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  Field   or  a Gas Field agreed to between the Parties.

1.50          "EVALUATION  WELL"  means  a well, other than an exploration well,
drilled  in  order to evaluate the commercial viability of a geologic trap where
hydrocarbons  have  been  discovered.

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

1.52          "DEVELOPMENT  WELL"  means  a  well  drilled  in  order to produce
Hydrocarbons  from a Reservoir which has been evaluated and tested, to maintain,
increase  or  accelerate  the production, including the production and injection
wells.

1.53          "CONTRACT  AREA"  means  all  the  geographic  area defined by the
perimeter  for  which the coordinates appear in Appendix "A" and which are drawn
on  the map appearing in Appendix "B", with the exception of any part  which the
Contractor  has,  from  time to time, abandoned or relinquished according to the
Contract.

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

1.55          "RESERVOIR"  means  the subsurface rock containing hydrocarbons in
its  pores  and  having  a common pressure system in its volume.  This rock body
must  be  capable  of  producing  hydrocarbons  in  measurable  quantities.


                                      -6-
<PAGE>
1.56          "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
accumulations,  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  an  economic  point  of  view  the continuation of drilling
activities  using  modern drilling technology normally used in the international
oil  industry.

1.57          "SUBCONTRACTOR" means any physical person or legal entity hired by
the  Contractor  to  provide  services  related  to  the  Contract.

1.58          "LIBOR  RATE"  means  the  interest rate at closing for the dollar
deposits  for  a  period  of  six  (6)  months on the London interbank market as
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.

1.59          "CONTRACT  INTEREST  RATE"  is  "LIBOR  RATE"  plus  one  percent.

1.60          "OIL PRODUCTION TAX" means the Royalty as defined in the Code, and
equals  12.5%  of  the  Total  Crude  Production.

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

1.62          "THIRD  PARTIES SALES" means the sales of Hydrocarbons produced in
the  Contract  Area  and  fulfilling  the  following  conditions:

     (A)  The agreed price shall be the sole consideration for the sale;

     (B)  The sale conditions  shall not depend on 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 derived product;

     (D)  These  sales  agreement  must not  include a  processing,  exchange or
          barter agreement.

1.63  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 plan 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.


                                      -7-
<PAGE>
     b)   THE "BLOCK 4 AREA" OR "BLOCK 4" is defined  by the area  delimited  by
          the points  MFON for which the  geographic  coordinates  and a map are
          shown in  Appendix B, the 200 metres  water  depth being the  northern
          boundary,  the border  between  Benin and  Nigeria  being the  Eastern
          boundary,  the 3000 metres water depth being the southern boundary and
          the border with Togo being the western boundary of said Block 4.


                                      -8-
<PAGE>
                                   ARTICLE II

                             OBJECT OF THE CONTRACT


2.1          By  the  present  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 all the Petroleum Operations
in  accordance  with the present Contract and  with the Good Operating Practices
of  the  Oil  Industry.

2.3          Once  a  General  Development  Program  regarding  a  Hydrocarbon
Discovery  has  been approved  in accordance with the terms of the Contract, the
Contractor  shall  have  full  rights  to  carry  Development  and  Production
Operations and  to enjoy the financial benefits resulting from these activities,
provided  that  its  obligations  under  the  Contract  and  the  Code have been
fulfilled.

2.4          The  Contractor  shall  provide all technical, financial, human and
economic  resources  required  for  the  Petroleum  Operations.  Subject  to the
possible  proportional  participation of the State,  all costs and disbursements
incurred  for  the  Petroleum  Operations  shall  be  the responsibility and the
exclusive charge of the Contractor.  Furthermore, the Contractor is 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  his  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.


                                      -9-
<PAGE>
                                   ARTICLE III

                                      TERM


3.1          The  Contract  shall  be  in  effect  starting from the date of its
signature and shall end on the date fixed hereinafter, subject to the provisions
of  Article  XXVI  relating  to  its  termination.

3.2          The period covered by the Contract is divided into two periods:  an
exploration  period  and  an  exploitation  period.

3.3          The exploration period shall be for an initial period of three (03)
years,  with  two  (2)  possible  extension  periods  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,
expenditures  and other substantial obligations relating to the preceding phase.

3.4          Provided  it  has  fulfilled  all  the requirements 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.

3.5          Subject  to  the provisions relating to termination and or 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.

3.6          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  abandonment,  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  abandonment  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.

3.7          If  at  the  date  of  expiration of the exploration period or of a
special  extension  period,  the  Contractor  is  in  the  process  of:

-      preparing  a first report of discovery  or a report detailing a Discovery
according   to  article  9.2


                                      -10-
<PAGE>
-     to execute an evaluation program in accordance with a schedule of activity
according  to  the  article  9.3,  the  Minister  will  eventually  grant to the
Contractor a special extension so that he can take to term the evaluation of the
Discovery  and  submit a  detailed evaluation report. This special extension may
not  exceed  3  months  unless  Parties  decide  otherwise.

3.8          If  , at the date of  expiration of the exploration period, or of a
special  extension  period,  the Contractor submitted to the Minister a detailed
evaluation report justifying the commercial viability of the Discovery according
to  article  9.3,  the  exploration  period  or  if  the case arises the special
extension  period  ends  according  to  the  date of approval  of the Minister's
report  according  to  article  9.5  of  the  Contract.

     If  at  the  date  of  expiration  of  the  exploration period or a special
prolongation  period,  the  Minister  rejects  the  report  of  the  Contractor
indicating  that there is no viability of the Discovery and submits the question
to  an Expert according to article 9.5 of the Contract, the  exploration period,
if  the  case  arises,  the  special prolongation period will be extended until:

     i)   the arrival date of the expert's  decision  confirming  the opinion of
          the Contractor

     ii)  Thirty (30) days after the  decision of the expert  where the decision
          states that the Discovery is commercially viable.

3.9          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 this effect, the
Minister  may  ask the Contractor to carry out additional studies or works which
would  reasonably  appear  necessary  for the good evaluation of the Natural Gas
Discovery.

3.10          In  the  event  of  a  Commercial  Hydrocarbon  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  Article  IX.  The  duration  of  the  exploitation permit during which the
Contractor  shall  be  authorized  to  assume  the production of each of the Oil
Fields  and  Gas Fields 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.

Subject  to  Government  approval,  during  the  period  of  the  Contract,  the
Contractor  may relinquish one or several Development Areas which are the object
of  an  exploitation  permit.

3.11          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.


                                      -11-
<PAGE>
3.12          At  the  expiration of the last exploitation permit granted to the
Contractor,  the  rights  and  obligations  defined  in  the  present  Contract
concerning  exploitation  shall  be  null  and  void.

3.13          For  the  purpose  of  granting  an  exploitation  permit,  the
Contractor  shall  provide  to  the  Government  an  exact  delimitation  of the
perimeter  in  such  a  manner  that  it  includes  all the presumed area of the
discovered  Field.

3.14          If,  during  subsequent  work,  it  appears  that the field has an
extension  greater  than  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 to cover the
whole  of  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 the 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 for such rights.


                                      -12-
<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 licenses, permits, surface rights, easements, rights
of  free  access  and exit from the Contract Area, 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 conduct 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 by the Contractor 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
of any charges, 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
including any obligations regarding   abandonment and environmental restoration,
with  regard  to  said  properties  in  the  event  that  field operations would
continue.  During  the  period of validity 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 and of intellectual property belonging to subcontractors or to Affiliates
and  intellectual  property  belonging  to  third parties shall remain with said
Subcontractors,  Affiliates  or  third  parties.

4.1.4     During  the period of the Contract, the Contractor shall be authorized
to  use  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 revenues from the sale of 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.


                                      -13-
<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,  cores,  tapes,  maps,
interpretations,  reports  and  any  other  support or information obtained as a
result  of 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.

4.3     OWNERSHIP  OF  HYDROCARBONS

     All  the  Hydrocarbons contained in the Reservoirs of the subsurface 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.


                                      -14-
<PAGE>
                                    ARTICLE V

                         RELINQUISHMENTS OF SURFACE AREA

5.1          At  the  end of the first extension phase of the exploration period
or  its extension and provided the Contractor has discharged all its obligations
corresponding  to  this  phase,  if  the  latter  decides  to  continue with the
Exploration  Operations  in the Contract Area according to article 3.4, it shall
relinquish  thirty percent (30%) of the remaining Contract Area, after deduction
of  any  Development  Area.

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
connected  together and must be of an appropriate geometrical form  which allows
the performance of  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
apexes  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
assumed  to  have  transferred  all  of  the  Contract  Area.

5.5          After two months following each relinquishment, the Contractor must
report  to  the Minister the surface areas to be returned and forward to him all
related  documents and files as well as the facilities , with the possibility of
making  copies of the documents and files subject to confidentiality conditions.


                                      -15-
<PAGE>
                                   ARTICLE VI

                                 WORK OBLIGATIONS

6.1          The  Contractor  must  commence  the Petroleum Operations as of the
Effective  Date  of  the  present  Contract.

     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 of three (3)
years,  the  Contractor  shall  undertake  to  do  the  following  tasks:

     -    Acquisition of 3000 km of 2D seismic lines.

     -    Reprocessing of 600 km of seismic lines(optional).

     -    Propose a drilling program to the Government.

6.3          During  the  first extension phase of two (2) years, the Contractor
must  at  least  perform  the  following:

     -    Acquire  fifteen  hundred  (1500) km of  seismic  or their 3D  seismic
          equivalent;

     -    Drilling of a well to a depth of 3500m TVD (true vertical depth)

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

     -    Acquisition of 1000 km of 2D seismic lines .

     -    Drilling of a well at a depth of 3500m TVD (True vertical depth)

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

     (a)  A geologic formation of lower Cretaceous age:

     (b)  The basement;

     (c)  Three thousand five hundred (3500) m TVD (True Vertical Depth)

     (d)  a depth below 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  Operating
          Practices of the Oil Industry.


                                      -16-
<PAGE>
     (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  tasks  which  exceed  the  minimum work obligations relating to this
phase,  the  excess shall be deducted from the work obligations of the following
phase.

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


                                      -17-
<PAGE>
                                   ARTICLE VII

                               TECHNICAL COMMITTEE

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

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
JTC  shall  have  the  main  following  objectives:

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

     -    To review and to decide 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 implementation,

          (iii) important modifications to the work programs,

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

          (v)  any other matters submitted by the Parties.

     On all the matters reviewed the JTC shall make and forward  recommendations
     to the Parties.

7.3          The  JTC  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  JTC  as  experts  or  substitute  members.

7.4          The  JTC shall hold an ordinary meeting at least once every six (6)
months  or  when the members decide to do so  by mutual agreement.  The Chairman
of  the JTC 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 JTC shall be composed of four
(4)  members  including  two  (2)  for  each  Party.


                                      -18-
<PAGE>
7.6          The JCT shall submit the result of its meetings to the Parties.  In
the  event  of  disagreement  between the Parties, they will react in accordance
with  the  provisions  of  the  present  Contract.


                                      -19-
<PAGE>
                                  ARTICLE VIII

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

8.1     COMPLETION  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 Operating Practices of the Oil
Industry,  taking  into  account  the  local  conditions  and  other  particular
conditions  in  the  Contract  Area.

8.1.3     The  Contractor must notify in advance the Minister of all substantial
and  planned  Petroleum  Operations  such  as,  for  example,  the geological or
geophysical  surveys  and  the  start-up  of  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 to
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  work  program  as  stipulated  in  the  present  Contract.


                                      -20-
<PAGE>
8.2.2     In  the  event that 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
documents  mentioned  above  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 budget, an Expert shall be called upon
to settle the question 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 existing
conditions,  or  any  other  valid  reason.

8.3     REPORTS

8.3.1     Within  the  framework  of  the present 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
          eventually  on  magnetic  support,   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,
               plugging or abandonment of the wells;

          ii)  The formations penetrated 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 value 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, cores and samples, and other
geological  and  geophysical  information  obtained by the Contractor during the
Petroleum  Operations  belong to the Government, and shall be forwarded to it as
soon as they have been obtained or prepared, the Contractor  having the right to
make  copies  of  said  documents  and  files,  subject to the observance of the
confidentiality  provisions.

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

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


                                      -21-
<PAGE>
     b)   Keep the original data for a period required for Petroleum Operations,
          with  the  Government  approval,   provided  that  said  data  can  be
          reproduced and that copies thereof have been provided to the Minister.

     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 major
developments  occurring  in  the Petroleum Operations and shall provide him with
all  available  information,  data,  reports,  evaluations  and  interpretations
relating  to  the  Petroleum  Operations.  Furthermore,  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 tasks
          described have been executed;

     c)   Prepare  and forward to the  Government  a  quarterly  report,  within
          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 tasks  described
          have been executed;

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

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

8.4.1     The  duties  of  THE DIRECTION OF ENERGY (DEN) shall be in particular:

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

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

     -    to  ensure   that  the   Contractor   implements   a  true  policy  of
          technological  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 in
particular:


                                      -22-
<PAGE>
     -    to guarantee the financial  settlements between the Contractor and the
          State;

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

     -    to ensure that the cost accounting of the expenditures and the keeping
          of the  records  and  of  the  performance  reports  of the  Petroleum
          Operations  are  undertaken  according  to the  present  Contract  and
          according to the generally accepted  accounting  principles of the oil
          industry.


                                      -23-
<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  it  to  the  Minister and the
provisions  of  the  present  Article  shall  then apply.  In the event of a Gas
Discovery,  the  provisions  of  the  relevant Article shall apply if there is a
conflict or a difference with the present Article with regard to this Discovery.

9.2          After the Discovery of Hydrocarbons and as soon as it 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 in accordance with 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  to  the Minister a detailed evaluation
report  demonstrating the commercial viability of the proposed Development Area.
The  present  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 areas, thicknesses and depths of the producing zones;

     -    An estimate of the initial and recoverable  oil and gas reserves,  the
          characteristics  of the recovery,  the expected recovery rate for each
          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  content,  the sediment and water
          content and the shrinkage characteristics of the product;

     -    The economic forecasts and the expected cash flows.

9.4          The  Contractor must declare in the report whether 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 the present
Contract.


                                      -24-
<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  in writing his
approval  to  the  Contractor,  and the date of approval by the Minister is  the
"Date  of  Commercial  Discovery".  At the time of notification of said approval
the  Minister  grants to the Contractor the Exploitation Permit required for the
exploitation  of  said  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  as quickly as possible the
exploitation  permit  to  the  Contractor  if  it  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  questions  the basis of the technical or financial
analysis  of  the  Contractor  leading  to  its evaluation of the non commercial
nature  of the Discovery, or if for any other reason he deems that the Discovery
could be developed economically by the Contractor in accordance with the clauses
and  provisions  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  in accordance with the provisions of the Contract and the
date of that declaration shall become the Date of Commercial Discovery, or waive
its  rights concerning 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 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 locations;

          (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.


                                      -25-
<PAGE>
     (d)  the  estimated  forecasts  of Crude  Oil and  Natural  Gas  production
          volumes from the Oil or Gas Fields, and the estimated  commercial life
          of said deposits;

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

     (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 sound geological, engineering and financial principles
and according to the Good Operating Practices of the Oil Industry.  Furthermore,
it  must be conceived with a view to ensure the optimum recovery of Hydrocarbons
in  the  Development  Area  and  to  prevent  their  waste.

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 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  the event of
disagreement  and  submission  to an expert, the exploitation period of 25 years
shall  not  include  the  period  of  arbitration  (including procedural period)


                                      -26-
<PAGE>
9.10          During  the  course  of the Development and Production Operations,
the  Contractor  may  suggest  additions or revisions to the General Development
Program.  It  shall  then  submit  them to the Minister for review and approval,
using  the procedures of article 9.9. If within the ninety (90) days that follow
the  submission  date  of  the  additions and modifications the Minister and the
Contractor  do  not  agree  on  said  additions and modifications, the matter or
matters which are the subject of disagreement must be submitted mutadis mutandis
to  an  expert  according  to  the  procedure  specified  in article 9.9 and the
exploitation  period  of  twenty-five  (25) years will not include the length of
this  procedure.

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.


                                      -27-
<PAGE>
                                    ARTICLE X

                              SOLE  RISK OPERATIONS

10.1          If  during  the  exploration  period,  the Minister wishes to test
additional  reservoirs  at  the  final depth agreed upon, or deepen the well and
test  deeper  reservoirs  than  this  final depth, the Government shall have the
right, subject to the provisions of  Article 10.4, to request the Contractor, by
notification,  to test certain additional reservoirs or to continue the drilling
and test new reservoirs, at the sole risk of the Government and on behalf of the
Government,  until  the Government's objectives have been reached as long as the
request  of  the  Government  does  not  delay,  hinder  or  interfere  with the
exploration  and  evaluation activities of the Contractor.  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  exclusive  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 drilling plan  indicating the drilling
details  as  well  as  the  financing  plan  of  said  operation  which  will be
pre-financed.

10.3          If  the operations described under Articles 9.3, 10.1 or 10.2 lead
to  a  Discovery  or  to  a  Commercial Discovery, the Government 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 corresponding 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 the present 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 stand by
costs,  if any, incurred by the Minister 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 stand by costs.

10.4          The  conditions  for  the  completion  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,  and must
          not delay,  hinder or interfere with the  Contractors  exploration and
          evaluation activities;


                                      -28-
<PAGE>
     (b)  The  deepening of a well under the sole risk  operations  may not take
          place if the well has  already  penetrated  one or  several  producing
          reservoirs;

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

     (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 completion on his behalf of said
          sole risk operations under identical conditions to those acceptable by
          the 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 as
          long as this party respects the clause of confidentiality  towards the
          reports,  data and information  held or prepared by the Contractor and
          received by this third party as per the present  article or  according
          to article IX and in accordance with article XXII.


                                      -29-
<PAGE>
                                   ARTICLE XI

                             ANNUAL DEVELOPMENT AND
                               PRODUCTION PROGRAMS

11.1          The  Contractor  shall  be  required  to carry  the Production and
Development  Operations  in  all  the  Development  Areas in accordance with the
General  Development  Programs  and according to Good Operating 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
Operations  and  Production  Operations must have as objective the efficient and
economical  exploitation  of  all  the  Development  Areas according to the Good
Operating  Practices  of  the Oil Industry.  The Minister shall approve the Work
Programs  and  the  budgets  prepared  and  submitted  in  accordance  with  the
provisions  of  the  present  Contract.

     Within thirty (30) days following the date of receipt of a Work Program and
a  budget,  the  Minister  shall  approve them as proposed or shall suggest that
amendments  be  made; if no approval notice or suggestion of amendments has been
received  within  this  thirty (30) days period, the Work Program and the budget
shall  be  deemed  to  be  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  attempt  to reach an agreement on the
amendments  suggested.  If  the Minister and the Contractor cannot  agree on 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  to
settle  the matter in accordance with the provisions relating to arbitration and
expert evaluation.  The twenty-five (25) year exploitation period, or eventually
the  additional  period  of  ten  (10)  years  shall  not include the time spent
referring  the  matter  to  the  expert  (including the time of the procedure ).

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
prevailing  conditions,  or  any  other  valid  reason.


                                      -30-
<PAGE>
                                   ARTICLE XII

                            GOVERNMENT PARTICIPATION

12.1          The  Government  shall  have  the  option  to  acquire  a  maximum
participation  of  fifteen (15)% of the rights and obligations of the Contractor
relating  to  a  discovery  when  the  combined  daily  production  of  all  the
discoveries  of  the  Contract  Area  reach for the first time a level of 50,000
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 50,000 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
share  requested.  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  from  then  on  pay its share of the Petroleum Costs, in
proportion  to  its  participation,  when  said  costs have been incurred 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  at  no  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 Article 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.


                                      -31-
<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 Article 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.


                                      -32-
<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  procedures  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  the  present  Contract.

13.2          The  Petroleum  Costs,  within  the  limits  authorized  by  the
provisions  of  Appendix "D", shall be recovered from up to seventy-five percent
(75%) of the Available Crude, on a yearly basis for oil and eighty percent (80%)
for  condensate.  The  cost  recovery  shall  occur  as  follows:

     (a)  The recovery of the operating  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 Contract
          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;

     (e)  Investments  shall be  recovered  including  an  increased  markup  of
          fifteen percent (15%);

     (f)  However when total  production  will have  reached its Economic  Limit
          such as defined in Article 13.7 hereinunder, the Parties shall consult
          to take a decision by  consensus.  This meeting will take place within
          thirty  (30) days from the date at which the written  notification  by
          the Contractor was received by the Minister.

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

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 and uses 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 percent) for condensate.  The remaining quantity
of  the  crude  shall  be  referred  to  as  "Available  Crude".


                                      -33-
<PAGE>
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  XII,  according  to  the following progressive scale:

A)     OIL

AVERAGE  DAILY  PRODUCTION          GOVERNMENT  SHARE          CONTRACTOR  SHARE
--------------------------          -----------------          -----------------
     (BARRELS/DAY)
     -------------

0  to  100,000                              50%                      50%
Over  100,000                               55%                      45%

B)     CONDENSATE

AVERAGE  DAILY  PRODUCTION          GOVERNMENT  SHARE          CONTRACTOR  SHARE
--------------------------          -----------------          -----------------
     (BARRELS/DAY)
     -------------

0  to  100,000                              45%                      55%
Over  100,000                               50%                      50%

13.6          The  parties  agree  that  if  the  Economic  Limit of a petroleum
reservoir will be reached (ie. if the petroleum costs incurred by the Contractor
exceed  the  cashflow  resulting  from  the sale of the production in a way that
would cause production from the reservoir to stop prematurely), the parties will
discuss the details needed to make the appropriate changes to the Contract, more
specifically the recuperation of costs and the sharing of production in order to
prolong  the  life  of  the  field.


                                      -34-
<PAGE>
                                   ARTICLE XIV

                                 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  the  obligation  to  sell,  at  a specified Delivery Point, a quantity of
Hydrocarbons  either  Crude  or  refined  products,  or gas equivalent as agreed
between  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 Crude 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  has not paid his 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  from 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  domestic  market  sales  must be increased, the
Contractor  must  sell the additional quantities required in accordance with the
above  Articles  and  conditions  until the  Force Majeure has been resolved and
until  the  contribution intended to proportionally cover the requirement of the
domestic  market  has  been  reestablished.  This additional obligation does not
include  the  volumes  of  production  which  have been the subject of an export
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  hereinabove, and taking into
account  the  price  of  Natural  Gas  determined in accordance with the present
Contract.


                                      -35-
<PAGE>
14.5          All  payments  made  regarding  the  sale  of  the  Contractor's
Hydrocarbon  to the Government in accordance with the provisions of this Article
must  be  denominated  in  dollars and made 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

                                   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  Tax at the rate of three point
twelve  percent  (3.12%)  of  the  FOB  value.

15.3          It is understood that in application of Article 15.2, the Minister
shall  take  from the Profit-Oil share to which the Government is entitled under
Article  13.5  an  amount  corresponding  to  the  Income Tax and the Export Tax
mentioned  in  the  Petroleum  Code.  It  shall  pay said tax to the institution
designated for this purpose on behalf of the Contractor and shall have delivered
to  the  Contractor  the related receipts.  The same applies for the Export Tax.
In  this  case,  the  Profit Oil share to which the Contractor is entitled under
Article 13.5 shall be considered free of tax.  In other words, the Contractor is
free  of all fiscal obligations, which are by definition, included in the Profit
Oil  share of the Government as well as the Royalty on Petroleum Production also
collected  by  the  Government.

15.4          The  Contractor  and  its  subcontractors shall be exempt from the
duties  and  taxes on the equipment, exploitation material and machines 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 tax.


                                      -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  move.  They  may  also  import  one vehicle per household  as
temporary  import.

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  negatively  affect the overall  economic
          benefits and other advantages that the Government will derive from the
          Petroleum Operations; and

     (b)  The only reason for  proposing  such  modification  shall be either 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 the present 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

                        MEASUREMENT, 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 Operating Practices of the
Oil  Industry.  The  Contractor  must  keep full and accurate records of all the
measurements  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.

     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
measurement,  the  Parties shall consult each other for the purpose of examining
the  appropriate measures to be taken.  In the event of disagreement, the matter
may  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  participate.

16.2          Under  the  present  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  independent  third  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 mentioned in this Article shall
occur  within  a  period  not  exceeding  thirty  (30) days after the end of the
Quarter  concerned.

16.3          Within the framework of the present 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  well  developed  in  Benin,  the  Minister must assist the
Contractor  inasmuch  as possible  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, is 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 of, 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
forecast  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, starting from a production rate mutually agreed
upon  to optimize the recovery of Hydrocarbons in the Development Area according
to  the  Good  Operating  Practices  of  the  Oil  Industry.  Each  Quarter, the
Contractor shall make reasonable efforts to produce the quantity of Hydrocarbons
which it estimated .  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 Operating
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 not less favorable than
those  under  which  the gas in question could 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 favorable for the two Parties, they shall meet to
determine  the  conditions  thereof.

17.2     ASSOCIATED  NATURAL  GAS

17.2.1          If a Crude Oil Discovery occurs that the Contractor considers to
be  commercially  viable  under the present 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 to commercially
produce  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  may advise the Contractor that 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:


                                      -41-
<PAGE>
(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.

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

17.2.5          If  the  Contractor  decides  not  to participate, it shall then
deliver  to  the  Minister,  or to the public Beninese company designated by the
Minister for this purpose, to a Delivery Point designated as "Exit door", and at
its  expense,  all  the quantities of surplus Associated Gas produced, the costs
associated  will  be  considered  to  be  recoverable  Petroleum  Costs.

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
the present Contract.  If the Contractor deems that the Discovery is worth being
evaluated,  it  must prepare an evaluation, including a reserve estimate, of the
production  potential, the development costs and the production costs as well as
of  the  economic  viability.  In  that report, the Contractor must also declare
whether  the Discovery is commercially viable.  If the Contractor deems that the
Discovery of Non-Associated Gas does not warrant 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 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 final users of said market. Similarly, the
Contractor  is  at  liberty to evaluate the viability of Gas export.  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 export, the
Contractor shall then be  free to develop the Gas Field provided that it submits
to  the  Minister  a  General Development Program.  If the Contractor begins the
Development  Operations  for  export,  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  export, the right granted to the
Contractor  for  exportation  under  the  present Article shall remain in effect
during  the  entire  period  of  the  Contract unless the two Parties change the
procedures  by  mutual  agreement.

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

17.3.6          Following  the  Minister approval, the Contractor shall have the
right to build facilities for the separation of gas for the purpose of producing
liquid  gas  and  condensate  with  due  regards  to  the safety and environment
protection  standards,


                                      -43-
<PAGE>
                                  ARTICLE XVIII

                        DAMAGES, ENVIRONMENTAL PROTECTION
                                   AND SAFETY

18.1          The  Contractor  shall be responsible for all damages and injuries
that may be caused to individuals or to the State as a result of its operations.
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 deaths, accidents or damages caused by its
activities, including those carried out under the Contract, or non-compliance by
the  Contractor  of  the  laws  and  regulations in force in Benin.  The present
Contract  shall  not  have  any  effect  on  claims 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  environmental  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 its effects according to 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          In  accordance  with  the  Code, the Contractor is responsible for
damages  caused  to  third  parties  as  a  result of  environmental  pollution.

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

     (a)  the condition of the environment  and the level of pollution  existing
          in the Contract Area and in the neighboring 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  twofold:

     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 to
eliminate  or  minimize, among other things,  the wastes mentioned below as well
as  the  way  to  neutralize  them:

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

     (b)  Polluted underground reservoirs;

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

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

18.7          During  the  design  and building of its facilities the Contractor
must  endeavor to  minimize the environmental pollution and  must at least adopt
the  following  procedures  on the drilling sites and the exploitation equipment
sites:

     (a)  Drainage/recovery  system of spills of Crude Oil 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  spill 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  springs or the animal or plant life in any other
manner,  the  Contractor  must  take immediately all steps according to the Good
Operating Practices of the Oil Industry in order to control the pollution, clean
any  spill  of  Crude  Oil  or  of any other product, or repair as completely 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 spill 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 the present
Contract.

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


                                      -45-
<PAGE>
18.12          At  the  end  of  the Contract, outside the abandonment case, the
Contractor  must take  measures according to the Good Operating Practices of the
Oil  Industry  to  restore  the  environment  and  the sites where the Petroleum
Operations have been performed to their original condition 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
environment  restoration  activities  once  the  Petroleum  Operations have been
completed,  indicating  the  manner  in  which  the corresponding costs shall be
financed,  preferably  through  the  opening  of a special bank account for that
purpose.  Each  payment  by  the  Contractor  to  the  special  account  will be
recovered  as  Cost Oil. 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  Operating Practices of the Oil Industry to carry  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, environmental
protection,  health  and  safety.  The  Contractor  must refrain from any action
endangering  the  health  or  the  safety  of  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  in  advance.

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

18.16          The  Contractor shall clear and remove all platforms installed in
the  Contract  area  .according  to  the abandonment procedures described in the
Appendix.

18.17          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  navigation.

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

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

18.20          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.


                                      -46-
<PAGE>
                                   ARTICLE XIX

                          PROVISIONS REGARDING EXCHANGE


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,
          reimbursements 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,  foreign  subcontractors for
          the  acquisition of equipment and supplies of services  related to the
          Petroleum Operations;

     (d)  receive,  transfer and keep abroad and freely dispose of all the funds
          including   but  not  limited  to,  all  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 or 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.


                                      -47-
<PAGE>
                                   ARTICLE XX

                             EMPLOYMENT AND TRAINING


20.1     EMPLOYMENT

     In  compliance with the labor Legislation in Benin, the Contractor shall be
free  to  hire  the  personnel  and  the  subcontractors required to perform 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 perform 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 maintain 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 entire period of
validity  of  the  Contract.

     To  that  end,  within  three  (3)  months  following the Effective Date, a
training  program  relating  to  the Exploration period for a yearly amount of a
minimum  of  fifty  thousand  US  dollars  (US$50,000)  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 a yearly
amount  of  at  least  one  hundred  thousand  US  dollars  (US$100,000).


                                      -48-
<PAGE>
                                   ARTICLE XXI

                                   ACCOUNTING


21.1          The  Contractor  must keep its accounting as well as any financial
information,  books and records 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  notifying 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 audit 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 audit
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 audit and the expert evaluation
notwithstanding  the  above  provisions.


                                      -49-
<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 that 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 to communicate
them,  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  Article  shall  not  prevent  the Minister from communicating certain
information to any government entity and to any trustworthy person interested in
securing  an  exploration  and  exploitation  right  of  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  potential.  The confidentiality provisions 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 relinquishment of a surface area or expiration of
the  present  Contract,  shall  be  treated  by  the  Contractor  as  strictly
confidential  for a period of five (5) years from the date on which said surface
area  ceased  to  form an integral part of the Contract Area or from the date of
expiration  of  the  present  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.


                                      -50-
<PAGE>
22.6          Any  press publication initiated by the Contractor and relating to
the results of  operations conducted under the present 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  the  present  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  grounds  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  the  present  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  the  present  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 the present
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,  Force  Majeure  shall  include,  but  not  be  limited  to the
instances  listed  below:  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 confirm
          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  is  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, but not limited to, 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  Center  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 jurisdictional
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  includes,  with  regard to the Government, only those
accounts,  income  and property related to the Hydrocarbon field in the Contract
Area.


                                      -54-
<PAGE>
25.2          EXPERT  EVALUATION

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 it 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 Center 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  replacement  expert.  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  Center  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 can 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 the present Contract. By joint decision of the Parties, the matters
submitted  to the decision of an expert may be subject to a final and definitive
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
the  present Contract, the Minister may terminate the Contract if the Contractor
does  not  rectify  said  non  compliance.

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 error,
resulting from a deliberate negligence, has issued false declarations in writing
when  he  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 respect the minimum work obligations;

     b)   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 its object.

                                      -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  shall refer the matter to an arbitration procedure or to
decision  by  an expert within thirty (30) days following the date of receipt of
the  termination notice from the Minister.  This recourse shall not  suspend 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  Operating  Practices  of  the  Oil  Industry.

26.9          Termination  of the Contract shall occur notwithstanding any other
right  which  may  have  been  established  in  favor  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 the present 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
complete  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 complete 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  amount  due  in  accordance with the bank guarantee mentioned
above  shall  be  progressively reduced  as the minimum work obligations for the
year concerned are completed.  For the purpose of this reduction, the Contractor
may,  at any time, submit for the Minister's approval a declaration establishing
the level of completion 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
Operating  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  letter 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  Postal  Box:  1412
     Cotonou  (Republic  of  Benin)
     Fax  (229)  31.35.46  Telex:  5237  MINERH

     THE  CONTRACTOR
     ADDAX  PETROLEUM  BENIN  LIMITED
     c/o  Addax  Management  Services  SA
     9,  rue  du  Valais
     CH  1202  Geneva  Switzerland
     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          The  present  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 in the field
of  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 in the Code or in the regulations in force in
Benin,  concerning  the  dispute  regarding  the  contract or related to it, 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.


                                      -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 fees
for  the use of such infrastructures in accordance with the regulations in force
in  Benin  and  article 30.1.  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
                                FINAL PROVISIONS


32.1          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.

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

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

32.4          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 the present
Contract  and  each  Party,  or  both  Parties  together,  may  freely exercise,
implicitly  or  explicitly,  any  rights  granted  to  them  hereunder.

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

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

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

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

32.9          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 as
required.

32.10     The  present  Contract  has  been  signed  in  two  (2)  originals.


                                      -63-
<PAGE>
MADE  IN  COTONOU,  THE  1ST  DAY  OF  FEBRUARY,  1997
FOR  THE  GOVERNMENT  OF                            FOR  THE  CONTRACTOR
THE  REPUBLIC  OF  BENIN


/s/  Mr.  Emmanuael  Golou                          /s/ Mr. Marc Lorenceau
Minister of Mines, Energy and Hydraulics            President of Addax
                                                    Petroleum
                                                    Benin  Limited

                                                    /s/ Mr. Jean Claude Gandur
                                                    President of the Addax and
                                                    Oryx  Group

                                                    /s/ Mr. Wade Cherwayko
                                                    President of Abacan Resource
                                                    Limited (Benin)


                                      -64-
<PAGE>
                                  APPENDIX "A"
                                  ------------

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

                         TOTAL AREA OF BLOCK 4: 9953 Km3


1-M)     6  05'  00"     North          1  40'  00"          East
2-F)     6  05'  00"                    2  44'  12"
3-O)     5  28'  21"                    2  49'  04"
4-N)     5  28'  21"                    1  49'  04"


                                      -65-
<PAGE>
                                  APPENDIX "B"
                                  ------------

                                  MAP OF BENIN


                                      -66-
<PAGE>
                                  APPENDIX "C"
                                  ------------

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


                                      -67-
<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.


                                      -68-
<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


                                      -69-
<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.

     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.


                                      -70-
<PAGE>
     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

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.


                                      -71-
<PAGE>
     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.

     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.


                                      -72-
<PAGE>
     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

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%


                                      -73-
<PAGE>
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:

     (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.


                                      -74-
<PAGE>
     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.

     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.


                                      -75-
<PAGE>
     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.

1-E)        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:

     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.


                                      -76-
<PAGE>
     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.

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.


                                      -77-
<PAGE>
     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.

     p)   Of costs and  expenses  of goods or  services  exceeding  the price of
          similar  goodsor  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.


                                      -78-
<PAGE>
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;

     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.

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.


                                      -79-
<PAGE>
     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.

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.

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.


                                      -80-
<PAGE>
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.

     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.

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.


                                      -81-
<PAGE>
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.


                                      -82-
<PAGE>
                        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.


                                      -83-
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