EXHIBIT 10.1

                   WEST GHARIB EGYPT JOINT OPERATING AGREEMENT


<PAGE>

                   INTERNATIONAL JOINT OPERATING AGREEMENT
                                WEST GHARIB AREA

         THIS AGREEMENT is made as of the Effective Date,

AMONG:

         DUBLIN  INTERNATIONAL  PETROLEUM  (EGYPT)  LIMITED,  a  body  corporate
         organized  under  the  laws of the  Republic  of  Ireland  (hereinafter
         referred to as "Dublin");

                                      -and-

         GHP  EXPLORATION  (WEST GHARIB) LTD., a body corporate  organized under
         the laws of Bermuda (hereinafter referred to as "GHP");

                                      -and-

         DRUCKER  PETROLEUM  INC., a body corporate  organized under the laws of
         the British Virgin Islands (hereinafter referred to as "Drucker").

                                   WITNESSETH:

WHEREAS,  Dublin and Tanganyika Oil Company Ltd. ("Tanganyika") entered into the
Concession   Agreement  for  Petroleum   Exploration   and   Exploitation   (the
"Concession") with the Government of the Arab Republic of Egypt and the Egyptian
General Petroleum  Corporation  ("EGPC") for the West Gharib Area, Arab Republic
of Egypt, a copy of which is attached hereto as Exhibit "B"; and

WHEREAS  Tanganyika has transferred its entire right,  title and interest in the
Concession to Dublin; and

WHEREAS  Dublin and Drucker are parties to a Farmout  Agreement  dated April 27,
1998,  pursuant  to which and  subject to the terms  thereof,  Dublin  agreed to
assign a Participating Interest to Drucker; and

WHEREAS Dublin and GHP are parties,  or successors to the parties,  to a Farmout
Agreement  dated  April 27,  1998,  pursuant  to which and  subject to the terms
thereof, Dublin agreed to assign a Participating Interest to GHP; and

WHEREAS,  the Parties desire to define their  respective  rights and obligations
with respect to their operations under the Concession.

NOW,  THEREFORE,  in  consideration of the premises and the mutual covenants and
agreements and obligations set out below and to be performed,  the Parties agree
as follows:


                                   ARTICLE I
                                   DEFINITIONS

As used in this Agreement,  the following words and terms shall have the meaning
ascribed to them below:


<PAGE>


1.1      "Accounting  Procedure" means the rules,  provisions and conditions set
         forth and contained in Exhibit "A" to this Agreement.

1.2      "AFE" means an authorization for expenditure pursuant to Article 6.6.

1.3      "Affiliate"  means a company,  partnership  or other legal entity which
         controls,  or is  controlled  by, or which is  controlled  by an entity
         which  controls a Party.  Control  means the  ownership or the right to
         cast or  cause to be  cast,  directly  or  indirectly,  of fifty  (50%)
         percent  or  more  of  the  shares  or  voting  rights  in  a  company,
         partnership or legal entity.

1.4      "Agreed Interest Rate" means interest compounded on a monthly basis, at
         the rate per annum equal to the one (1) month term, LIBOR rate for U.S.
         dollar  deposits,  as published by The Wall Street Journal or if not so
         published,  then by the  Financial  Times of London,  plus five percent
         (5%),  applicable  on the first  Business  Day prior to the due date of
         payment and thereafter on the first Business Day of each succeeding one
         (1) month term.  If the  aforesaid  rate is contrary to any  applicable
         usury law, the rate of interest to be charged shall be the maximum rate
         permitted by such applicable law.

1.5      "Agreement"  means this  agreement,  together with Exhibits "A" and "B"
         attached to this agreement and forming a part hereof.

1.6      "Appraisal   Well"  means  any  well  whose  purpose  at  the  time  of
         commencement of drilling such well is the  determination  of the extent
         or  the  volume  of  Hydrocarbon  reserves  contained  in  an  existing
         Discovery.

1.7      "Board of Directors"  means the  Board  of Directors  of  the Operating
          ------------------
          Company and "Director" means a member of the Board of Directors.

1.8      "Business Day" means  a  day  on  which the  banks  in Cairo, Egypt are
          ------------
          customarily open for business.

1.9      "Calendar  Quarter" means a period of three (3) months  commencing with
         January 1 and ending on the  following  March 31, a period of three (3)
         months  commencing  with April 1 and ending on the following June 30, a
         period of three (3)  months  commencing  with July 1 and  ending on the
         following September 30, or a period of three (3) months commencing with
         October 1 and ending on the  following  December  31  according  to the
         Gregorian Calendar.

1.10     "Calendar  Year"  means a  period  of  twelve  (12)  months  commencing
          --------------
         with January 1 and ending on the following December 31 according to the
         Gregorian Calendar.

1.11     "Cash Premium" means the  payment made pursuant to Article  7.5(B) by a
          ------------
         Non-Consenting  Party to  reinstate  its  rights to  participate  in an
         Exclusive Operation.

1.12     "Commercial Discovery" shall have the meaning set out in Article III(c)
         (i) of the Concession.

1.13     "Completion" means an operation intended to complete a well through the
         Christmas  tree as a producer  of  Hydrocarbons  in one or more  Zones,
         including,  but not  limited  to,  the  setting of  production  casing,
         perforating,  stimulating the well and production  Testing conducted in
         such  operation.  "Complete" and other  derivatives  shall be construed
         accordingly.

1.14     "Concession" means collectively the Concession Agreement authorized and
         put in full force by Law 15 of 1998 of the Arab  Republic  of Egypt and
         which agreement is attached as Exhibit "B" hereto,  and any Development
         Leases or other mineral rights which may be derived from the Concession
         Agreement  including any extension,  renewal or amendment of any of the
         foregoing.

<PAGE>


1.15     "Concession  Area" has the  meaning  ascribed to the term 'Area' in the
         Concession  as the same may be adjusted from time to time in accordance
         with the terms thereof.

1.16     "Consenting Party"  means a Party who agrees to participate  in and pay
          -----------------
          its share of the cost of an Exclusive Operation.

1.17     "Cost Oil" means that portion of the total  production of  Hydrocarbons
         which is allocated to the Parties under the Concession for the recovery
         of  Petroleum  Costs and  referred  to and  defined  as "Cost  Recovery
         Petroleum" in Article VII(a)1 of the Concession.

1.18     "Crude Oil" has the meaning given to such term in the Concession.

1.19     "Day" means a calendar day unless otherwise specifically provided.

1.20     "Deepening"  means  an  operation  whereby  a  well  is  drilled  to an
         objective  Zone below the deepest Zone in which the well was previously
         drilled,  or below the deepest  Zone  proposed in the  associated  AFE,
         whichever  is the  deeper.  "Deepen"  and  other  derivatives  shall be
         construed accordingly.

1.21 "Defaulting Party" shall have the meaning ascribed in Article 8.1.

1.22     "Development  Block"  has  the  meaning  given  to  such  term  in  the
         Concession.

1.23     "Development  Lease"  has  the  meaning  given  to  such  term  in  the
         Concession.

1.24     "Development  Period"  has the  meaning  given to such term in  Article
         III(d)(iii) of the Concession.

1.25     "Development  Plan" means the plan for the  development of Hydrocarbons
         from a Development Lease which shall include, inter alia:

A)       Details of the  proposed  work to be undertaken, personnel required and
         expenditures to be incurred, including the timing of same;

B)       An estimated date for the commencement of production;

C)       A delineation of the proposed Development Lease;  and

D)       Any other information requested by the Operating Committee.

1.26     "Development  Well"  means  any  well  drilled  for the  production  of
         Hydrocarbons in the Development Period.

1.27     "Discovery"  means the  discovery of an  accumulation  of  Hydrocarbons
         whose  existence  until that moment was unproven by  drilling,  and for
         greater certainty, shall include a Commercial Oil Well and a Commercial
         Gas Well (as those terms are defined in the Concession).

1.28     "Drucker Farmout Agreement" means the Farmout Agreement  between Dublin
          --------------------------
         and Drucker  dated  April 27,  1998  and any  amendments  and revisions
         thereto.

1.29     "Effective  Date"  means the date this  Agreement  comes into effect as
         stated in Article II.

1.30     "EGPC" means the Egyptian General Petroleum Corporation.

1.31     "Entitlement"  means a quantity  of  produced  Hydrocarbons  of which a
         Party has the right and  obligation  to take  delivery  pursuant to the
         Concession or, if applicable, an offtake agreement, which, subject to


<PAGE>

         the  terms  of the  GHP  Farmout  Agreement  and  the  Drucker  Farmout
         Agreement, shall be derived in proportion to that Party's Participating
         Interest in the  Hydrocarbons  produced after  adjustment for overlifts
         and underlifts.

1.32     "Excess  Cost  Oil"  has  the  meaning  given to "Excess Cost  Recovery
          ---------------
         Petroleum" in Article VII(a)2 of the Concession.

1.33     "Exclusive  Operations"  means those operations and activities  carried
         out by  Operator,  pursuant to this  Agreement,  the costs of which are
         chargeable to the account of less than all the Parties.

1.34     "Exclusive  Well"  means  a  well  drilled  pursuant  to  an  Exclusive
         Operation.

1.35     "Exploration  Advisory  Committee"  means  the  committee  of that name
         provided for in the Concession.

1.36     "Exploration Period" means  any and  all periods of exploration set out
         in the Concession.

1.37     "Exploration Sub-Period" means  one of the  periods for exploration set
         out in the Concession.

1.38     "Exploration  Well"  means  any  well  drilled  during  the  course  of
          -----------------
         exploration work other than an Appraisal Well or Development Well.

1.39     "Farmout  Agreements" means  the Drucker Farmout  Agreement and the GHP
         Farmout Agreement.

1.40     "Financial Year" has the meaning given to such term in the Concession.

1.41     "G & G Data" means  geological,  geophysical and  geochemical  data and
         other information that is not obtained through a wellbore.

1.42     "GHP Farmout Agreement" means the Farmout Agreement  between Dublin and
          ----------------------
         GHP dated April 27, 1998 and any amendments and revisions thereto.

1.43     "Government"  means the Government of the Arab Republic of Egypt or any
         agency thereof.

1.44     "Gross Negligence" means any act or failure to act (whether sole, joint
         or concurrent) by a Party which was intended to cause,  or which was in
         reckless disregard of or wanton  indifference to, harmful  consequences
         such Party knew,  or should have known,  such act or failure would have
         had on the safety or property of another person or entity, or which was
         in  reckless  disregard  of or  wanton  indifference  to the  rights of
         another  party or the  Government,  but shall not  include any error of
         judgement  or mistake  made by such Party in the exercise in good faith
         of any  function,  authority  or  discretion  conferred  on  the  Party
         employing such under this Agreement.

1.45     "Hydrocarbons"  means  all  substances  including  liquid  and  gaseous
         hydrocarbons which are subject to and covered by the Concession.

1.46     "Joint  Account"  means  the  accounts  and  records   established  and
         maintained  by Operator for Joint  Operations  in  accordance  with the
         provisions of this Agreement and of the Accounting Procedure.

1.47     "Joint Operations" means those operations and activities carried out by
         Operator pursuant to this Agreement,  the costs of which are chargeable
         to all Parties.

1.48     "Joint  Property"  means,  at any  point  in time  and  subject  to the
         Concession, all wells, facilities,  equipment, materials,  information,
         funds and the property held for the Joint Account.

<PAGE>


1.49     "Mandatory  Appraisal  Well"  means an  Appraisal  Well  which,  unless
         otherwise  agreed to by EGPC, is required  pursuant to the terms of the
         Concession to be drilled before notice of a Commercial Discovery may be
         given,  excepting  any such well which would  qualify as an  obligatory
         well  under  the  Minimum  Work   Obligations   for  the  then  current
         Exploration Sub-Period..

1.50     "Minimum   Work   Obligations"   means  the  work  and/or   expenditure
         obligations  during  the  Exploration   Period,  as  specified  in  the
         Concession, which must be performed or expended in order to satisfy the
         obligations contained in the Concession.

1.51     "Non-Consenting  Party" means a Party who elects not to  participate in
         an Exclusive Operation.

1.52     "Non-Operator(s)"  means the Party or Parties to this  Agreement  other
         than Operator.

1.53     "Operating  Committee"  means the committee  constituted  in accordance
         with Article V.

1.54     "Operating  Company"  means  the  company  to  be  created  to  conduct
          ------------------
         operations under the Concession after a Commercial Discovery.

1.55     "Operator"  means  a  Party  to this  Agreement  designated  as such in
         accordance with this Agreement.

1.56     "Participating  Interest"  means the undivided  percentage  interest of
         each Party in the rights and  obligations  derived from the  Concession
         and this Agreement.

1.57     "Party" means any of the entities named in the first  paragraph to this
         Agreement and any respective  successors or assigns in accordance  with
         the provisions of this Agreement.

1.58     "Petroleum  Costs"  means costs  and  expenses  incurred by the Parties
          ----------------
         and allowed by EGPC to be recovered pursuant to the Concession.

1.59     "Plugging  Back"  means a single  operation  whereby  a deeper  Zone is
         abandoned in order to attempt a Completion in a shallower  Zone.  "Plug
         Back" and other derivatives shall be construed accordingly.

1.60     "Production  Sharing Oil" means that portion of the total production of
         Hydrocarbons,  in excess of Cost Oil, which is allocated to the Parties
         under the terms of Article  VII(b) of the  Concession  and includes the
         Parties share of Excess Cost Oil contemplated in Article VII(a)2 of the
         Concession.

1.61     "Recompletion"  means an operation  whereby a Completion in one Zone is
         abandoned in order to attempt a Completion  in a different  Zone within
         the existing  wellbore.  "Recomplete"  and other  derivatives  shall be
         construed accordingly.

1.62     "Reworking"  means an  operation  conducted  in the  wellbore of a well
         after it is Completed to secure,  restore,  or improve  production in a
         Zone  which is  currently  open to  production  in the  wellbore.  Such
         operations   include,   but  are  not  limited  to,  well   stimulation
         operations,  but exclude any routine  repair or  maintenance  work,  or
         drilling,  Sidetracking,   Deepening,   Completing,   Recompleting,  or
         Plugging  Back of a well.  "Rework"  and  other  derivatives  shall  be
         construed accordingly.

1.63     "Senior  Supervisory  Personnel"  means with  respect  to a Party,  any
         individual who functions as such Party's senior resident  manager,  who
         directs all  operations  and activities of such Party in the country or
         region in which he is resident,  and any  individual  who functions for
         such Party or one of its Affiliates at a management level equivalent to
         or superior to the senior resident manager,  or any officer or director
         of such Party or one of its  Affiliates,  but excluding all managers or


<PAGE>

         supervisors who are responsible  for or in charge of  installations  or
         facilities,  onsite  drilling,  construction  or production and related
         operations, or any other field operations.

1.64     "Sidetracking" means the directional control and intentional  deviation
         of a well from vertical so as to change the bottom hole location unless
         done to  straighten  the hole or to drill around junk in the hole or to
         overcome  other   mechanical   difficulties.   "Side-track"  and  other
         derivatives shall be construed accordingly.

1.65     "Testing"  means an  operation  intended to evaluate  the capacity of a
         Zone to produce  Hydrocarbons.  "Test" and other  derivatives  shall be
         construed accordingly.

1.66     "Work Program and Budget" means a work program for Joint Operations and
         budget  therefor as described and approved in  accordance  with Article
         VI.

1.67     "Zone"  means a stratum  of earth  containing  or  thought to contain a
         common  accumulation  of  Hydrocarbons  separately  producible from any
         other common accumulation of Hydrocarbons.

                                   ARTICLE II

                             EFFECTIVE DATE AND TERM


2.1      Effective Date and Term


         This Agreement  shall have effect from the 27th Day of April,  1998 and
         shall,  subject  always to the Parties'  continuing  obligations  under
         Article XV,  continue in effect  until the  Concession  terminates  and
         thereafter until all materials, equipment and personal property used in
         connection with the Joint Operations have been removed and disposed of,
         and final settlement has been made among the Parties.

         For the avoidance of doubt, the portions of this Agreement described in
         (A), (B) and (C) below shall remain in effect until:

         A) all wells have been properly abandoned in accordance with Article X;
            and

         B) all obligations, claims, arbitrations and lawsuits have been settled
            or otherwise disposed of in  accordance with Article 4.5 and Article
            XVIII; and

         C) the time relating to the protection of  confidential information and
            proprietary technology has expired in  accordance with Article XV.

                                  ARTICLE III

                             PARTICIPATING INTERESTS

3.1      Scope

A)                The purpose of this  Agreement is to establish the  respective
                  rights  and   obligations   of  the  Parties  with  regard  to
                  operations under the Concession, including without limitation,
                  the joint exploration,  appraisal,  development and production
                  of Hydrocarbon reserves from the Concession Area.

B)                Without  limiting  the  generality  of  Article  3.1(A),   the
                  following   activities  are  outside  of  the  scope  of  this
                  Agreement and are not addressed herein:

<PAGE>


1)  Construction,  operations,  maintenance,  repair and  removal of  facilities
downstream  from the point of delivery  of the  Parties'  share of  Hydrocarbons
under the offtake agreement provided for in Article 9.2;

2) Transportation  of Hydrocarbons  beyond the point of delivery of the Parties'
shares of Hydrocarbons under the offtake agreement provided for in Article 9.2;

3) Marketing and sales of Hydrocarbons, except as expressly provided in Articles
8.7 and in Article IX;

4)  Acquisition  of  rights  to  explore  for,  appraise,   develop  or  produce
Hydrocarbons  outside of the  Concession  Area (other than as a  consequence  of
unitization with an adjoining area under the terms of the Concession); and

5)  Exploration,  appraisal,  development  or production of minerals  other than
Hydrocarbons, whether inside or outside of the Concession Area.

3.2      Participating Interests

A)       The Participating Interests of the Parties shall be as follows :


                  Dublin            -       50%
                  GHP               -       30%
                  Drucker           -       20%

B)       If a Party transfers all or part of its Participating Interest pursuant
         to  the   provisions  of  this  Agreement  and  the   Concession,   the
         Participating Interests of the Parties shall be revised accordingly.


3.3      Ownership, Obligations and Liabilities

         A)       Unless  otherwise  provided in this Agreement or either of the
                  Farmout Agreements,  all the rights and interests in and under
                  the  Concession,  all  Joint  Property  and  any  Hydrocarbons
                  produced from the Concession Area shall,  subject to the terms
                  of the  Concession and any laws and  regulations  which may be
                  applicable,  be owned by the Parties in accordance  with their
                  respective Participating Interests.

         B)       Unless  otherwise  provided in this Agreement or either of the
                  Farmout  Agreements,  the obligations of the Parties under the
                  Concession  and  all  liabilities  and  expenses  incurred  by
                  Operator in connection with Joint  Operations shall be charged
                  to the Joint  Account  and all  credits  to the Joint  Account
                  shall  be  shared  by the  Parties,  as among  themselves,  in
                  accordance with their respective Participating Interests.

         C)       Subject  to the  terms  of  this  Agreement  and  the  Farmout
                  Agreements,  each Party shall pay when due, in accordance with
                  the Accounting Procedure,  its Participating Interest share of
                  Joint Account expenses,  including cash advances and interest,
                  accrued   pursuant  to  this   Agreement  and  the  Accounting
                  Procedure  shall  govern the accrual and  satisfaction  of the
                  respective  obligations,  liabilities  and  credits  among the
                  Parties.


<PAGE>


                                   ARTICLE IV

                                    OPERATOR

4.1      Designation of Operator

         Dublin is designated  as Operator and agrees to act in accordance  with
         the terms and conditions of the Concession  and this  Agreement,  which
         terms and conditions shall also apply to any successor Operator.

4.2      Rights and Duties of Operator

         A)       Subject  to  the  terms  and  conditions  of  this  Agreement,
                  Operator shall have exclusive  charge of and shall conduct all
                  Joint Operations.  Operator may employ independent contractors
                  and/or  agents  (which may include  Affiliates of Operator) in
                  such Joint Operations.

         B)       In the conduct of Joint  Operations,  Operator  shall exercise
                  its best efforts to:

                  1)       Perform  Joint  Operations  in  accordance  with  the
                           provisions of the Concession,  this Agreement and the
                           instructions  of  the  Operating   Committee  not  in
                           conflict   with  this   Agreement   and  in  material
                           compliance with applicable laws,  rules,  regulations
                           and decrees of the Arab Republic of Egypt;

                  2)       Conduct all Joint Operations in a diligent,  safe and
                           efficient  manner in accordance with good and prudent
                           oil  field  practices  and  conservation   principles
                           generally  followed  by the  international  petroleum
                           industry under similar circumstances;

                  3)       Subject to Article 4.6 and the Accounting  Procedure,
                           neither  gain a profit  nor suffer a loss as a result
                           of  being  the  Operator  in  its  conduct  of  Joint
                           Operations,   provided  that  Operator  may  rely  on
                           Operating  Committee approval of specific  accounting
                           practices  not  in  conflict   with  the   Accounting
                           Procedure;

                  4)       Perform the duties for the  Operating  Committee  set
                           out  in  Article  V and  prepare  and  submit  to the
                           Operating  Committee  the proposed  Work Programs and
                           Budgets and AFEs as provided in Article VI;

                  5)       Acquire all licenses,  permits, consents,  approvals,
                           surface or other  rights that may be required  for or
                           in connection with the conduct of Joint Operations;

                  6)       Upon receipt of reasonable advance notice, permit the
                           representatives  of any of the Parties to have at all
                           reasonable  times and at their  own risk and  expense
                           reasonable  access to the Joint  Operations  with the
                           right to  observe  all such Joint  Operations  and to
                           inspect all Joint  Property and to conduct  financial
                           audits as provided in the Accounting Procedure;

                  7)       Maintain  the  Concession  in full force and  effect.
                           Operator   shall   promptly  pay  and  discharge  all
                           liabilities and expenses  incurred in connection with
                           Joint  Operations and use its  reasonable  efforts to
                           keep and  maintain the Joint  Property  free from all
                           liens,  charges and encumbrances arising out of Joint
                           Operations;

                  8)       Pay to the Government  for the Joint Account,  within
                           the  periods  and in  the  manner  prescribed  by the
                           Concession and all applicable  laws and  regulations,
                           all periodic  payments,  royalties,  taxes,  fees and
                           other payments  pertaining to Joint  Operations,  but
                           excluding  any taxes  measured  by the incomes of the
                           Parties;

<PAGE>


                  9)       Carry out the obligations of Contractor, as such term
                           is  defined  in the  Concession,  including,  but not
                           limited to,  preparing and  furnishing  such reports,
                           records and  information as may be required  pursuant
                           to the Concession;

                  10)      Have,  in   accordance  with  the  decisions  of  the
                           Operating  Committee,   Article  5.14,   and  Article
                           6.3(C),  the  exclusive  right  and   obligation   to
                           represent  the  Parties  in  all  dealings  with  the
                           Government  with respect to matters arising under the
                           Concession  and  Joint  Operations.  Operator   shall
                           notify the other Parties as soon as possible  of such
                           meetings.  Non-Operators  shall  have  the  right  to
                           attend such  meetings but  only  in  the  capacity of
                           observers.   Nothing  contained  in   this  Agreement
                           shall restrict  any  Party  from holding  discussions
                           with  the  Government  with  respect  to  any   issue
                           peculiar to its particular business interests arising
                           under this  Agreement,  but in such  event such Party
                           shall  promptly  advise  the  Parties,  if  possible,
                           before  and   in  any  event   promptly   after  such
                           discussions,  provided  that such Party  shall not be
                           required  to  divulge  to  the  Parties  any  matters
                           discussed to the extent the same involve  proprietary
                           information on matters not affecting the Parties; and

                  11)      Take  all  necessary  and  proper  measures  for  the
                           protection  of  life,  health,  the  environment  and
                           property  in  the  case  of an  emergency;  provided,
                           however,  that Operator shall immediately  notify the
                           Parties  of  the  details  of  such   emergency   and
                           measures.

4.3      Employees of Operator

         Subject to the Concession and this Agreement,  Operator shall determine
         the number of employees,  the selection of such employees, the hours of
         work and the  compensation  to be paid all such employees in connection
         with Joint  Operations and Exclusive  Operations  conducted by Operator
         under this Agreement. Operator shall employ only such employees, agents
         and   contractors  as  are   reasonably   necessary  to  conduct  Joint
         Operations.

4.4      Information Supplied by Operator

         A)       Operator  shall provide each  Non-Operator  with one (1) paper
                  copy of the  following  data and reports as they are currently
                  produced or compiled from the Joint Operations:

                  1)       Copies of all logs or surveys;

                  2)       Daily drilling progress reports;

                  3)       Copies of all tests and core analysis reports;

                  4)       Copies of the plugging reports;

                  5)       Copies of the final  geological and geophysical  maps
                           and reports in seismic digital format;

                  6)       Engineering studies, development schedules and annual
                           progress reports on development projects;

                  7)       Field  and  well   performance   reports,   including
                           reservoir studies and reserve estimates;

                  8)       Copies of all reports  relating  to Joint  Operations
                           furnished by Operator to the Government, except


<PAGE>

                           magnetic  tapes which shall be stored by Operator and
                           made available for  inspection  and/or copying at the
                           sole expense of the Non-Operator requesting same;

                  9)       Other  reports as  frequently  as is justified by the
                           activities   or  as   instructed   by  the  Operating
                           Committee; and

                  10)      Subject to Article 15.3, such additional  information
                           for Non-Operators as they or any of them may request,
                           provided that the requesting Party or Parties pay the
                           costs of preparation of such information and that the
                           preparation  of  such  information  will  not  unduly
                           burden   Operator's   administrative   and  technical
                           personnel.  Only  Non-Operators  who pay  such  costs
                           shall receive such additional information.

         B)       Operator  shall give  Non-Operators  access at all  reasonable
                  times to all  other  data  acquired  in the  conduct  of Joint
                  Operations.  Any  Non-Operator  may make  copies of such other
                  data at its sole expense.


4.5      Settlement of Claims and Lawsuits

         A)       Operator shall  promptly  notify  the Parties  of  any and all
                  material  claims or suits and such  other claims  and suits as
                  the  Operating  Committee  may direct which arise out of Joint
                  Operations or relate in any way to Joint Operations.  Operator
                  shall represent the Parties and defend or oppose or settle the
                  claim or suit.  Operator may in its sole discretion compromise
                  or settle any such  claim or  suit or any  related  series  of
                  claims or  suits for an amount not to exceed the equivalent of
                  one hundred thousand (U.S.$100,000) Dollars  (U.S.)  inclusive
                  of  legal  fees.   Operator   shall  obtain the  approval  and
                  direction  of the  Operating Committee on amounts in excess of
                  the above  stated  amount.  Each  Non-Operator  shall have the
                  right to be represented by its own counsel at its own  expense
                  in the  settlement,  compromise  or defense of  such claims or
                  suits.

         B)       Any  Non-Operator  shall promptly  notify the other Parties of
                  any claim made  against  such  Non-Operator  by a third  party
                  which  arises out of or which may affect the Joint  Operations
                  and such  Non-Operator  shall  defend  or  settle  the same in
                  accordance   with  any  directions   given  by  the  Operating
                  Committee. Those costs, expenses and damages incurred pursuant
                  to such defense or settlement  which are attributable to Joint
                  Operations shall be for the Joint Account.

C)                Notwithstanding  Article 4.5(A) and Article 4.5(B), each Party
                  shall  have  the  right  to  participate  in  any  such  suit,
                  prosecution,  defense or  settlement  conducted in  accordance
                  with  Article  4.5(A) and Article  4.5(B) at its sole cost and
                  expense;   provided  always  that  no  Party  may  settle  its
                  Participating  Interest  share  of  any  claim  without  first
                  satisfying  the Operating  Committee that it can do so without
                  prejudicing the interests of the Joint Operations.


4.6      Liability of Operator

         A)       Except as  set out  in this  Article  4.6,  neither  the Party
                  designated as  Operator  nor  any other Indemnitee (as defined
                  below)  shall bear  (except  as a party  to the  extent of its
                  Participating  Interest share) any damage, loss, cost, expense
                  or liability resulting from performing (or failing to perform)
                  the duties and functions  of the Operator and the  Indemnitees
                  are hereby released from  liability  to Non-Operators  for any
                  and all  damages,  losses,  costs,  expenses  and  liabilities
                  arising out of, incident to or resulting from such performance
                  or failure to perform, even though  caused in whole or in part


<PAGE>

                  by a  pre-existing  defect,  the  negligence  (sole,  joint or
                  concurrent), Gross Negligence, strict liability or other legal
                  fault of Operator (or any such Indemnitee).

         B)       Except as set  out in  this Article  4.6, the Parties shall in
                  proportion  to  their   Participating  Interests   defend  and
                  indemnify Operator and its  Affiliates,  and their  respective
                  consultants,  agents, employees,  officers  and directors (the
                  "Indemnitees"),  from any  and  all  damages,  losses,  costs,
                  expenses  (including  reasonable  legal  costs,  expenses  and
                  attorneys' fees) and liabilities  incident to claims,  demands
                  or causes of action of every  kind and character brought by or
                  on behalf of any  person or entity,  which claims,  demands or
                  causes of action  arise out of, are incident to or result from
                  Joint Operations regardless of the cause of such damage, loss,
                  injury, illness or death and even though caused in whole or in
                  part by a  pre-existing  defect, the negligence (whether sole,
                  joint  or concurrent),  Gross Negligence,  strict liability or
                  other legal fault of Operator (or any such Indemnitee).

         C)       Nothing in this  Article  4.6 shall be deemed to  relieve  the
                  Party designated as Operator from its  Participating  Interest
                  share of any damage,  loss, cost, expense or liability arising
                  out of, incident to or resulting from Joint Operations.

         D)       Notwithstanding  Articles  4.6(A)  and  4.6(B),  if any Senior
                  Supervisory  Personnel of Operator or its Affiliates engage in
                  Gross Negligence that proximately  causes the Parties to incur
                  damage,  loss, cost, expense or liability for claims,  demands
                  or causes of action  referred to in Articles 4.6(A) or 4.6(B),
                  Operator  shall  solely  be  responsible  for the  first  five
                  million ($5,000,000)  Dollars (U.S.) of such damages,  losses,
                  costs, expenses and liabilities.

         E)       Notwithstanding  the foregoing,  under no circumstances  shall
                  any  Indemnitee  (except  as a  Party  to  the  extent  of its
                  Participating  Interest)  bear any cost,  expense or liability
                  for  environmental,   consequential,  punitive  or  any  other
                  similar indirect damages or losses,  including but not limited
                  to, those  arising from  business  interruption,  reservoir or
                  formation damage,  inability to produce Hydrocarbons,  loss of
                  profits,  pollution control and environmental  amelioration or
                  rehabilitation.


4.7      Insurance Obtained by Operator

         A)       Operator  shall  procure and  maintain or cause to be procured
                  and  maintained  for the Joint  Account all  insurance  in the
                  types and amounts  required by the  Concession  and applicable
                  laws, rules and regulations.

         B)       Operator  shall  obtain  for the Joint  Account  such  further
                  insurance,  at competitive  rates, as the Operating  Committee
                  may from time to time require.

         C)       Any Party may elect not to  participate in the insurance to be
                  procured under Article 4.7(B) provided such Party:

                  1)       gives   prompt  written  notice  to  that  effect  to
                           Operator;

                  2)       does  nothing  which may  interfere  with  Operator's
                           negotiations   for  such   insurance  for  the  other
                           Parties; and

                  3)       obtains and maintains  such  insurance (in respect of
                           which  an  annual  certificate  of adequate  coverage
                           from a reputable insurance broker shall be sufficient
                           evidence)   or     other   evidence   of    financial
                           responsibility  which fully covers its  Participating
                           Interest  share of the risks that would be covered by
                           the  insurance    procured   under  Article   4.7(B),


<PAGE>

                           and which the Operating Committee may determine to be
                           acceptable.  No such  determination  of acceptability
                           shall in any way  absolve a  non-participating  Party
                           from its obligation to meet each cash call, including
                           any cash call in respect of damages and losses and/or
                           the costs of remedying the same,  in accordance  with
                           the terms of this  Agreement.  If such Party  obtains
                           other  insurance,  such  insurance  shall  contain  a
                           waiver  of  subrogation  in  favor  of all the  other
                           Parties  and the  Operator,  but only in  respect  of
                           their interests under this Agreement.

         D)       The  cost  of   insurance   in  which  all  the   Parties  are
                  participating  shall be for the Joint  Account and the cost of
                  insurance in which less than all the Parties are participating
                  shall be charged to the Parties participating in proportion to
                  their respective Participating Interests.

         E)       Operator shall, in respect of all insurance  obtained pursuant
                  to this article:

                  1)       promptly inform the  participating  Parties when such
                           insurance is  obtained and supply them with copies of
                           the relevant policies when the same are issued;

                  2)       arrange for the participating  Parties,  according to
                           their respective Participating Interests, to be named
                           as co-insurers on the relevant  policies with waivers
                           of subrogation in favor of all the Parties; and

                  3)       duly  file all  claims  and take  all  necessary  and
                           proper  steps to collect any  proceeds and credit any
                           proceeds to the  participating  Parties in proportion
                           to their respective Participating Interests.

         F)       Operator  shall use its  reasonable  efforts  to  require  all
                  contractors  performing work in respect of Joint Operations to
                  obtain and  maintain  any and all  insurance  in the types and
                  amounts required by any applicable laws, rules and regulations
                  or any decision of the  Operating  Committee and shall use its
                  reasonable efforts to require all such contractors to name the
                  Parties  as  additional  insureds  on  contractors'  insurance
                  policies  or to obtain  from  their  insurers  waivers  of all
                  rights of recourse against  Operator,  Non-Operators and their
                  insurers.


4.8      Commingling of Funds

         Operator may not commingle  with  Operator's own funds the monies which
         Operator  receives  from  or for the  Joint  Account  pursuant  to this
         Agreement.

4.9      Resignation of Operator

         Subject to Article 4.11, Operator may resign as Operator at any time by
         so  notifying  the other  Parties at least one hundred and twenty (120)
         Days prior to the effective  date of such  resignation.  Operator shall
         continue to act as such until a successor has taken over.

4.10     Removal of Operator

         A)       Subject  to Article  4.11,  Operator  shall  be  removed  upon
                  receipt of notice from any Non-Operator if:

                  1)       An  order   is  made  by  a  court  or  an  effective
                           resolution   is    passed    for   the   dissolution,
                           liquidation,   winding   up  or   reorganization   by
                           creditors of Operator;


<PAGE>


                  2)       Operator  dissolves,  liquidates  or  terminates  its
                           corporate existence;

                  3)       Operator  becomes  insolvent,  bankrupt  o r makes an
                           assignment for the benefit of creditors; or

                  4)       A receiver is  appointed  for a  substantial  part of
                           Operator's assets.

         B)       Subject  to  Article  4.11,  Operator  may be  removed  by the
                  decision  of the  Non-Operators  if Operator  has  committed a
                  material  breach of this  Agreement  and has either  failed to
                  commence  to rectify  the breach  within  thirty  (30) Days of
                  receipt of a notice from  Non-Operators  detailing the alleged
                  breach or failed  to  diligently  pursue  such  activities  to
                  completion.  Any decision of  Non-Operators  to give notice of
                  breach to Operator or to remove  Operator  under this  Article
                  4.10(B)   shall  be  made  by  the   unanimous   vote  of  all
                  Non-Operators.

         C)       If  Operator  together  with any  Affiliate  of Operator is or
                  becomes  the holder of a  Participating  Interest of less than
                  twenty  percent  (20%),  then  Operator  shall be  required to
                  promptly  notify the other  Parties.  The Operating  Committee
                  shall then vote within  thirty (30) Days of such  notification
                  on  whether  or  not a  successor  Operator  should  be  named
                  pursuant to Article 4.11.

         D)       If there is a direct or indirect change in control of Operator
                  (other than  a  transfer  of   control  to   an  Affiliate  of
                  Operator),  Operator shall be required to promptly  notify the
                  other Parties.  Upon a  Non-Operator's inquiry in respect of a
                  change of control, Operator  shall reply  within ten (10) Days
                  of receipt of such inquiry or of such change of  control.  The
                  Operating  Committee shall  vote  within  thirty  (30) Days of
                  receipt  of  such notice or reply  from Operator on whether or
                  not a successor  Operator  should  be  appointed  pursuant  to
                  Article 4.11. For purposes of this Article, control  means the
                  ownership directly or  indirectly  of fifty  percent  (50%) or
                  more of the shares or voting rights of Operator.

4.11     Appointment of Successor

         When a change of  Operator  occurs  pursuant  to Article 4.9 or Article
4.10:
         A)       The  Operating  Committee  shall meet as soon as  possible  to
                  appoint a successor  Operator pursuant to the voting procedure
                  of Article 5.9. However,  no Party may be appointed  successor
                  Operator against its will.

         B)       If the  Operator  disputes  the  commission  of or  failure to
                  rectify a material breach alleged  pursuant to Article 4.10(B)
                  and  proceedings  are initiated  pursuant to Article XVIII, no
                  successor  Operator may be appointed pending the conclusion or
                  abandonment  of such  proceedings  and during the period  such
                  proceedings  are  pending  Operator  shall  continue to act as
                  such,  subject  to the terms of  Article  8.3 with  respect to
                  Operator's breach of its payment obligations.

         C)       If an Operator  is removed,  other than in the case of Article
                  4.10(C) or Article 4.10(D), neither Operator nor any Affiliate
                  of  Operator  shall  have the right to vote for  itself on the
                  appointment  of a successor  Operator,  nor be considered as a
                  candidate for the successor Operator.

         D)       A resigning or removed  Operator shall be  compensated  out of
                  the Joint Account for its reasonable expenses directly related
                  to its  resignation or removal,  except in the case of Article
                  4.10(B).

<PAGE>


         E)       If  requested  by the  resigning  Operator  or  the  successor
                  Operator or any  Non-Operator,  the Operating  Committee shall
                  arrange  for the  taking of an  independent  inventory  of all
                  Joint Property and Hydrocarbons, and an audit of the books and
                  records of the  removed  Operator.  Such  inventory  and audit
                  shall be completed,  if possible,  no later than the effective
                  date of the change of Operator.  The  liabilities and expenses
                  of such  inventory  and audit  shall be  charged  to the Joint
                  Account.

         F)       The  resignation or removal of Operator and its replacement by
                  the successor  Operator  shall not become  effective  prior to
                  receipt of any necessary Government approvals.

         G)       Upon the effective  date of the  resignation  or removal,  the
                  successor  Operator  shall  succeed to all duties,  rights and
                  authority  prescribed for Operator.  The former Operator shall
                  transfer  to the  successor  Operator  custody  of  all  Joint
                  Property,  Hydrocarbons  in  storage or in  transit,  books of
                  account,  records and other  documents  maintained by Operator
                  pertaining to the  Concession  and to Joint  Operations.  Upon
                  delivery of the above-described  property and data, the former
                  Operator shall be released and discharged from all obligations
                  and liabilities as Operator accruing after such date.


                                   ARTICLE V

                               OPERATING COMMITTEE

5.1      Establishment of Operating Committee

         To  provide  for  the  overall   supervision  and  direction  of  Joint
         Operations,  there is  established an Operating  Committee  composed of
         representatives  of each Party holding a Participating  Interest.  Each
         Party  shall  appoint  one (1)  representative  and  one (1)  alternate
         representative to serve on the Operating Committee. Each Party shall as
         soon as  possible  and in any event  within  thirty (30) Days after the
         date of this  Agreement  give notice in writing to the other Parties of
         the name and address of its representative and alternate representative
         to serve on the Operating Committee. Each Party shall have the right to
         change its  representative  and  alternate at any time by giving proper
         notice to such effect to the other Parties.

5.2      Powers and Duties of Operating Committee

         The  Operating  Committee  shall have power and duty to  authorize  and
         supervise Joint Operations that are necessary or desirable to discharge
         the  obligations  of the Parties under the  Concession,  any applicable
         laws and regulations and to properly explore and exploit the Concession
         Area in accordance  with this Agreement and in a manner  appropriate in
         the circumstances.

5.3      Authority to Vote

         The  representative  of a  Party,  or  in  his  absence  his  alternate
         representative,  shall be  authorized  to represent and bind such Party
         with respect to any matter which is within the powers of the  Operating
         Committee and is properly brought before the Operating Committee.  Each
         such  representative  shall  have a  vote  equal  to the  Participating
         Interest  of  the  Party  such  person   represents.   Each   alternate
         representative  shall be  entitled  to attend all  Operating  Committee
         meetings but shall have no vote at such meetings  except in the absence
         of the representative for whom he is the alternate.  In addition to the
         representative and alternate representative,  each Party may also bring
         to any Operating  Committee  meetings such technical and other advisors
         as it may deem appropriate.


<PAGE>


5.4      Subcommittees

         The Operating  Committee may establish  such  subcommittees,  including
         technical   subcommittees,   as  the   Operating   Committee  may  deem
         appropriate.  The  functions  of  such  subcommittees  shall  be  in an
         advisory  capacity  or  as  otherwise  determined  unanimously  by  the
         Parties. Each subcommittee shall appoint a chairman.

5.5      Notice of Meeting

         A)       Operator  may call a meeting  of the  Operating  Committee  by
                  giving  notice to the  Parties at least  fifteen  (15) Days in
                  advance of such meeting.

         B)       Any  Non-Operator  may  request  a  meeting  of the  Operating
                  Committee by giving  proper  notice to all the other  Parties.
                  Upon receiving such request,  Operator shall call such meeting
                  for a date not  less  than  fifteen  (15)  Days nor more  than
                  twenty (20) Days after receipt of the request.

         C)       The notice periods above may only be waived with the unanimous
                  consent of all the Parties.

5.6      Contents of Meeting Notice

         A)       Each  notice  of  a  meeting  of  the  Operating  Committee as
                  provided by Operator shall contain:

                  1)       The date, time and location of the meeting; and

                  2)       An  agenda  of  the  matters  and   proposals  to  be
                           considered and/or voted upon, together with copies of
                           all  materials   relating  or  relevant   thereto  or
                           reasonably necessary for the consideration thereof.

         B)       A Party,  by notice to the other  Parties  given not less than
                  seven (7) Days prior to a meeting,  may add additional matters
                  to the agenda for a meeting.

         C)       On the request of a Party,  and with the unanimous  consent of
                  all Parties, the Operating Committee may consider at a meeting
                  a proposal not contained in such meeting agenda.


5.7      Location of Meetings

         All meetings of the Operating  Committee  shall be held in Cairo,  Arab
         Republic  of Egypt or  elsewhere  as may be  decided  by the  Operating
         Committee.

5.8      Operator's Duties for Meetings

         A)       With respect to meetings  of the Operating  Committee  and any
                  subcommittee,  Operator's  duties  shall  include,  but not be
                  limited to:

                  1) Timely preparation and distribution of the agenda;

                  2) Organization and conduct of the meeting; and

                  3) Preparation of a written record or minutes of each meeting.

         B)       Operator shal have the  right to appoint the  chairman  of the
                  Operating Committee and all subcommittees.

<PAGE>


5.9      Voting Procedure

         Except  as  otherwise   expressly  provided  in  this  Agreement,   all
         decisions,  approvals and other  actions of the Operating  Committee on
         all proposals coming before it under this Agreement shall be decided by
         the  affirmative  vote  of two  (2) or  more  Parties,  which  are  not
         Affiliates,  then having collectively at least sixty five percent (65%)
         of the Participating Interests.

5.10     Record of Votes

         The chairman of the Operating  Committee  shall appoint a secretary who
         shall make a record of each  proposal  voted on and the results of such
         voting at each Operating Committee meeting.  Each representative  shall
         sign and be provided a copy of such  record at the end of such  meeting
         and it shall be  considered  the final  record of the  decisions of the
         Operating Committee.

5.11     Minutes

         The  secretary  shall  provide each Party with a copy of the minutes of
         the Operating  Committee meeting within seven (7) Days after the end of
         the meeting.  Each Party shall have fifteen (15) Days after  receipt of
         such  minutes to give  notice of its  objections  to the minutes to the
         secretary. Any objection to the minutes shall become an agenda item for
         the next  meeting  unless  earlier  resolved.  A failure to give notice
         specifying  objection  to such  minutes  within said  fifteen  (15) Day
         period  shall be deemed to be approval of such  minutes.  In any event,
         the votes  recorded under Article 5.10 shall take  precedence  over the
         minutes described above.

5.12     Voting by Notice

         A)       In lieu of a meeting,  Operator  may submit any proposal for a
                  decision   of  the   Operating   Committee   by  giving   each
                  representative   proper  notice  describing  the  proposal  so
                  submitted.  Each Party  shall  communicate  its vote by proper
                  notice to Operator and the other Parties  within the following
                  time  periods  after  receipt  of  Operator's   notice  as  is
                  applicable thereto:

                  1)       twenty  four  (24)  hours in the  case of  operations
                           which involve the use of a drilling rig, service rig,
                           well  servicing  equipment  or  seismic  crew that is
                           standing by in the Concession Area; or

                  2)       ten (10) Days in the case of all other proposals.

         B)       Except in the case of  Article  5.12(A)(1),  any  Non-Operator
                  may, by notice  delivered to all Parties  within five (5) Days
                  of receipt of Operator's notice,  request that the proposal be
                  decided at a meeting rather than by notice.  In such an event,
                  that  proposal  shall be decided at a meeting  duly called for
                  that purpose.

         C        Except  as  provided  in  Article  X,  any  Party  failing  to
                  communicate  its vote  shall be deemed to have  voted  against
                  such proposal.


         D)       If a meeting is not  requested,  then at the expiration of the
                  appropriate  time  period,  Operator  shall  give each Party a
                  confirmation  notice stating the tabulation and results of the
                  vote.

5.13     Effect of Vote

         All  decisions  taken  by the  Operating  Committee  pursuant  to  this
         Article,  shall be  conclusive  and binding on all the Parties,  except
         that:

<PAGE>


         A)       If pursuant to this Article, a Joint Operation,  other than an
                  operation  to fulfil the Minimum  Work  Obligations,  has been
                  properly proposed to the Operating Committee and the Operating
                  Committee has not approved  such proposal in a timely  manner,
                  then any Party shall have the right for the appropriate period
                  specified below to propose, in accordance with Article VII, an
                  Exclusive Operation involving operations  essentially the same
                  as those proposed for such Joint Operation.

                  1)       For  proposals  involving  the use of a drilling  rig
                           that is standing by the Concession  Area,  such right
                           shall be exercisable for twenty-four (24) hours after
                           the time specified in Article  5.12(A)(1) has expired
                           or after receipt of Operator's  notice given pursuant
                           to Article 5.13(D), as applicable;

                  2)       For  proposals  to  develop a  Discovery,  such right
                           shall be exercisable for ten (10) Days after the date
                           the Operating Committee was required to consider such
                           proposal pursuant to Article 5.6 or Article 5.12; or

                  3)       For  all  other   proposals,   such  right  shall  be
                           exercisable  for  five (5)  Days  after  the date the
                           Operating  Committee  was  required to consider  such
                           proposal pursuant to Article 5.6 or Article 5.12.


         B)       If a Party  voted against  any proposal  which was approved by
                  the  Operating  Committee and which could be  conducted  as an
                  Exclusive  Operation pursuant to Article  VII, then such Party
                  shall have the  right  not  to  participate  in the  operation
                  contemplated  by such  approval.  Any such  Party  wishing  to
                  exercise  its  right   of  non-consent  must  give  notice  of
                  non-consent to  all other  Parties  within ten  (10)  Days (or
                  within  twenty-four (24) hours if the  drilling  rig,  service
                  rig,  well servicing  equipment or seismic  crew to be used in
                  such  operation  is   standing  by  in  the  Concession  Area)
                  following  Operating Committee approval of such proposal.  The
                  Parties that were not  entitled to give or did not give notice
                  of   non-consent  shall  be  Consenting   Parties  as  to  the
                  operation contemplated  by the Operating  Committee  approval,
                  and shall conduct such operation  as  an  Exclusive  Operation
                  under  Article  VII.  Any  Party  that  gave  notice  of  non-
                  consent shall be  a  Non-Consenting Party as to such Exclusive
                  Operation.


         C)       If the  Consenting  Parties to an  Exclusive  Operation  under
                  Article  5.13(A) or (B) concur,  then the Operating  Committee
                  may, at any time,  pursuant to this  Article,  reconsider  and
                  approve,  decide  or take  action  on any  proposal  that  the
                  Operating  Committee declined to approve earlier, or modify or
                  revoke an earlier approval, decision or action.


         D)       Once a Joint Operation for the drilling,  Deepening,  Testing,
                  Side-tracking,   Plugging  Back,   Completing,   Recompleting,
                  Reworking  or  plugging  of a  well,  has  been  approved  and
                  commenced,  such operation shall not be  discontinued  without
                  the consent of the  Operating  Committee;  provided,  however,
                  that such operation may be discontinued, if:

                  1)       an  impenetrable  substance  or  other  condition  in
                           the  hole is  encountered  which  in  the  reasonable
                           judgement of Operator causes the continuation of such
                           operation to be impractical; or

                  2)       other  circumstances  occur  which in the  reasonable
                           judgement of Operator causes the continuation of such
                           operation to be unwarranted.


                  On the  occurrence  of either  of the  above,  Operator  shall
                  promptly  notify  the  Parties  that such  operation  is being
                  discontinued  pursuant to the  foregoing,  and any Party shall
                  have the right to propose,  in accordance with Article VII, an
                  Exclusive Operation to continue such operation.


<PAGE>


5.14     Representation of Non-Operators

         A)       Each of  Dublin,  GHP and  Drucker  shall  have  the  right to
                  appoint one (1)  representative  to the  Exploration  Advisory
                  Committee.  This right is assignable by any of such Parties to
                  any  other of such  Parties,  to an  Affiliate  of any of such
                  Parties and to a third party permitted assignee.  The Operator
                  shall  be  entitled  to  appoint  a   representative   to  the
                  Exploration  Advisory Committee if a Party fails or refuses to
                  appoint its  representative  or, without  prejudice to Article
                  8.2,  if  a  Party's  Participating  Interest  is  transferred
                  pursuant to Article 8.4.

         B)       Notwithstanding  the appointment  of  a  representative to the
                  Exploration  Advisory Committee by one or more  Non-Operators,
                  and  provided  that the Operator  consults with and  considers
                  the  input  of  the  representative(s)  appointed by the  Non-
                  Operators, the Operator shall be the primary spokesman for the
                  Joint  Operators on the Exploration  Advisory  Committee.  The
                  respective   Party's  member  to  the   Exploration   Advisory
                  Committee  shall  fully  support and vote in  conformity  with
                  the decisions and instructions of the Operating Committee with
                  respect to matters  brought  before  the Exploration  Advisory
                  Committee,  notwithstanding  that such decision or instruction
                  may not  have  been  approved  unanimously  by  the  Operating
                  Committee.

                                   ARTICLE VI

                            WORK PROGRAMS AND BUDGETS

6.1      Exploration and Appraisal

         A)       Immediately  after the date of  execution  of this  Agreement,
                  Operator  shall deliver to the Parties a proposed Work Program
                  and Budget  detailing the Joint  Operations to be performed in
                  the Concession Area for the remainder of the current Financial
                  Year and the next ensuing  Financial Year. Within fifteen (15)
                  Days of such delivery,  the Operating  Committee shall meet to
                  consider  and to  endeavour  to  agree on a Work  Program  and
                  Budget.

         B)       At least sixty  (60)  Days  prior to the  applicable  deadline
                  under Article IV(c) of the Concession or  such other  deadline
                  as may be agreed to  by EGPC,  Operator  shall  deliver to the
                  Parties a proposed Work Program and Budget detailing the Joint
                  Operations to  be  performed  in the  Concession  Area for the
                  following  Financial  Year.  Within  thirty (30)  Days of such
                  delivery,  the Operating Committee  shall meet to consider and
                  to  endeavour  to  agree on  a Work  Program and Budget.  Upon
                  receipt of Operating Committee approval, such Work Program and
                  Budget  shall  be   submitted  to  the  Exploration   Advisory
                  Committee   as  required  by  the  Concession.  The  Operating
                  Committee shall further meet and consider any revisions to the
                  Work   Program  and  Budget  recommended  by  the  Exploration
                  Advisory  Committee  and  make  any such  revisions  as may be
                  agreeable  prior to submission to the EGPC.

         C)       If a  Discovery is made,  Operator shall deliver any notice of
                  Discovery  required under the Concession  and shall as soon as
                  possible or  within  such  time  period  as  directed  by  the
                  Operating   Committee,  submit   to   the   Parties  a  report
                  containing  available  details concerning  the  Discovery  and
                  Operator's  recommendation  as to whether the Discovery merits
                  appraisal.  If  the  Operating  Committee  determines that the
                  Discovery merits appraisal, Operator, within ninety (90) Days,
                  shall deliver to the  Parties  a  proposed  Work  Program  and
                  Budget for the appraisal of the Discovery. Within  thirty (30)
                  Days of such delivery,  or earlier  if  necessary  to meet any
                  applicable  deadline  under  the  Concession,   the  Operating
                  Committee  shall meet to  consider,   modify  and then  either
                  approve or reject the appraisal  Work Program  and Budget.  If
                  the  appraisal  Work  Program and  Budget  is  approved by the
                  Operating  Committee, Operator shall take such steps as may be
                  required  under  the  Concession  to  secure  approval of  the


<PAGE>


                  appraisal  Work Program and Budget by EGPC.  In the event EGPC
                  requires changes in the appraisal Work Program and Budget, the
                  matter shall be  resubmitted  to the  Operating  Committee for
                  further consideration.

         D)       In  addition  to the  requirements  of  Article  6.1(C),  if a
                  Discovery  is made and the  drilling of a Mandatory  Appraisal
                  Well or Wells is  required  under the  Concession  in order to
                  obtain a  Development  Lease in respect of the Discovery , the
                  Operating   Committee  shall  consider  the  drilling  of  the
                  Mandatory  Appraisal  Well(s).  Each of the Parties shall have
                  the right not to participate in the drilling of such Mandatory
                  Appraisal  Well in which case the  provisions  of Article  VII
                  (and Article 7.4(C) in particular) shall apply.

         E)       The Work Program and  Budget  agreed  pursuant to this Article
                  shall include the Minimum Work  Obligations,  or at least that
                  part of such  Minimum Work Obligations required  to be carried
                  out during the Financial Year in  question  under the terms of
                  the Concession. If, within the time periods prescribed in this
                  Article,  the Operating  Committee is unable to agree  on such
                  Work  Program  and  Budget,  then  the   proposal  capable  of
                  satisfying  the  Minimum Work  Obligations  for  the Financial
                  Year in  question  that  receives  the  largest  Participating
                  Interest vote (even if  less than  the  applicable  percentage
                  under  Article  5.9) shall be  deemed  adopted as  part of the
                  annual  Work  Program  and  Budget.   If  competing  proposals
                  receive  equal votes, then Operator shall choose between those
                  competing proposals.  Any portion of a Work Program and Budget
                  adopted  pursuant to this  Article,  instead  of  Article  5.9
                  shall include only such  operations for  the Joint  Account as
                  are  reasonably necessary to maintain  the Concession  in full
                  force and  effect, including such operations  as are necessary
                  to fulfill the Minimum Work Obligations required for the given
                  Financial Year.

         F)       Subject to Article 6.7,  approval of any such Work Program and
                  Budget,  which  includes an  Exploration  or  Appraisal  Well,
                  whether by drilling,  Deepening or Sidetracking, shall include
                  approval for only expenditures  necessary  for  the  drilling,
                  Deepening,  or  Sidetracking,  of  such  well,  as applicable.
                  When an  Exploration  Well or Appraisal  Well  has reached its
                  authorized  depth, all logs,  cores and other  approved  Tests
                  have been conducted and the results furnished  to the Parties,
                  Operator  shall submit  to  the  Parties  in  accordance  with
                  Article  5.12(A)(1) an election to  participate  in an attempt
                  to Complete or perform additional downhole operations for such
                  well.  Operator shall  include in such  submission  Operator's
                  recommendation  on such Completion attempt and an AFE for such
                  Completion  costs.  In  the event  that  less  than all of the
                  Parties  elect  to   participate  in   such  Completion,   the
                  Completion may proceed as an Exclusive Operation under Article
                  VII.  Any Party  that  gave notice of  non-consent  shall be a
                  Non-Consenting  Party as to such Exclusive Operation.

6.2      Development


         If, before or after the drilling of any Mandatory  Appraisal Wells, the
         Operating  Committee  determines  that a Discovery  may be a Commercial
         Discovery,  the Operator shall prepare and submit a Development Plan to
         the Operating  Committee for approval prior to providing  notice of the
         Commercial  Discovery to EGPC.  The Operating  Committee  shall meet to
         consider,  modify and either approve or reject the Development Plan. If
         the Development Plan is approved by the Operating  Committee,  Operator
         shall,   as  soon  as  possible  and  in  accordance  with  the  timing
         requirements  set  out  in  the  Concession,   provide  notice  of  the
         Commercial Discovery to EGPC.

         Within  sixty  (60)  Days  following  receipt  of  such  notice  by the
         Government  and  EGPC,  Operator  and EGPC  shall  meet to  review  all
         appropriate  data  with a  view  to  agreeing  on  the  existence  of a
         Commercial Discovery.  If EGPC or the Government require changes in the
         Development Plan, Operator shall resubmit the matter to the Operating

<PAGE>


         Committee  for review and  approval.  Upon  EGPC's  agreement  that the
         Discovery  constitutes a Commercial  Discovery under the Concession the
         Operating Company contemplated in Article VI of the Concession shall be
         formed for the purposes of conducting further operations and activities
         under the Concession.

6.3      Operating Company

         A)       Upon  formation of the Operating  Company,  as aforesaid,  the
                  Parties  shall meet to  allocate  duties and  responsibilities
                  between the Operating Company and the Operator.  To the extent
                  that the  Operator's  duties and  responsibilities  under this
                  Agreement are assumed by the Operating  Company,  the Operator
                  shall  be  released  from  any  further   responsibility   and
                  liability therefor.

         B)       Provided  there are  three (3)  Parties and no more than three
                  (3) Parties to this  Agreement, each Party that holds at least
                  a  twenty   percent  (20%)  Participating  Interest  shall  be
                  entitled to appoint one (1) Direct or to represent  Contractor
                  on the Board of Directors of the Operating Company.  In    all
                  other  cases,  each Party  shall be  entitled  to appoint  one
                  (1)  Director  to the Board of   Directors  for  each  twenty-
                  five percent (25%) Participating Interest held by such  Party.
                  Parties having a   Participating  Interest less  than  twenty-
                  five  percent (25%) shall be entitled to have a representative
                  attend  Directors'  meetings as an observer only. The Operator
                  shall be  entitled  to  appoint  representatives   to fill any
                  vacancy in the four (4)  positions  allotted to  Contractor on
                  the Board of Directors.

         C)       Notwithstanding  the formation of the Operating  Company,  the
                  Operator  shall  continue to  represent  the  interests of the
                  Parties in all matters that are not specifically  delegated to
                  the Operating Company under the Concession and, except for the
                  appointment  of   Contractor's   Directors  to  the  Board  of
                  Directors  of the  Operating  Company  as set forth in Article
                  6.3(B),   shall   continue  to  satisfy  the   obligations  of
                  Contractor under the Concession on behalf of the Non-Operators
                  in  accordance  with  the  terms  of this  Agreement.  Without
                  limiting the generality of the foregoing, Operator shall:

                  1)       Review and  provide  recommendations  to the  Parties
                           with   respect  to  proposals   and   recommendations
                           submitted  by the  Operating  Company to the Board of
                           Directors  thereof,  including,  without  limitation,
                           proposed  Work   Programs  and  Budgets,   production
                           schedules and estimated cash requirements;

                  2)       Assist  the  Operating  Company,   by  secondment  of
                           personnel  or  through  a  service  contract,  in the
                           conduct of the Operating  Company's  operations under
                           the Concession as agent for the Parties and EGPC;

                  3)       Make  reasonable   efforts  to  cause  the  Operating
                           Company  to submit  the  proposed  Work  Program  and
                           Budget to the Operating  Committee within a timeframe
                           so as to allow for a reasonable period to conduct its
                           review and obtain its approval prior to submission to
                           the Board of Directors; and

                  4)       In the  event  that the  Board of  Directors  require
                           changes to any Work Program and Budget,  resubmit the
                           matter to the Operating Committee for approval.

         D)       In  the  meetings  of  the  Board  of  Directors  and  of  the
                  shareholders   of   the   Operating   Company,  each   Party's
                  respective  member(s)  of  the Board  of  Directors  and their
                  respective  representative(s) and the Party's  representatives
                  at the shareholder  meetings  (and any proxy for them) and the
                  members of the  Operating Company  management appointed by the
                  Operator,  shall fully support and vote in conformity with the
                  decisions of  the  Operating  Committee   previously  made  in
                  accordance with the provisions of  the Agreement and any other
                  resolution   previously   taken  by  the  Parties  under  this
                  Agreement.  If a Party will not have a representative  present
                  at  a   meeting  of   either  the  Board  of  Directors or the
                  shareholders of the Operating Company, such Party shall, prior


<PAGE>


                  to such  meeting,  furnish the other Party a written proxy for
                  the  votes to be taken at such  meeting,  consistent  with the
                  vote of the Operating Committee.  If an Exclusive Operation is
                  to be conducted by the  Operating  Company,  the Parties shall
                  agree upon  procedures  regarding  decision  making within and
                  governance of the Parties'  interests in the Operating Company
                  in conducting such operations,  including without  limitation,
                  procedures  for  Board of  Directors  voting  by the  Parties,
                  confidentiality  and  allocation of the  Exclusive  Operations
                  costs and expenses within the Operating Company.

         E)       After formation of the Operating Company, certain of the Joint
                  Operations shall be carried out by Operating Company, pursuant
                  to the Concession,  as agent on behalf of the  shareholders of
                  Operating  Company,  or where necessary by Operator or through
                  duly authorized agents or independent  contractors  engaged by
                  either Operator or Operating Company.

         F)       In the  conduct  of  Joint  Operations,  Operator,  under  the
                  direction and  supervision of the Operating  Committee,  shall
                  use all reasonable  efforts to require that Operating  Company
                  shall:

                  1)       Conduct diligently all Joint Operations in accordance
                           with Operator's standards and the practices generally
                           followed  by  the  petroleum  industry  in  the  Arab
                           Republic of Egypt  under  similar  circumstances  and
                           conditions and in conformance  with good oilfield and
                           engineering  practices;  perform all Joint Operations
                           in an efficient and economic manner and in compliance
                           with  the   provisions  of  the  Concession  and  all
                           applicable laws and regulations;

                  2)       Proceed  with due  diligence to acquire for the Joint
                           Account  any  and  all  surface  rights  that  may be
                           required for or in connection with the conduct of the
                           Joint Operations;

                  3)       Keep the Joint Property free from liens,  charges and
                           encumbrances arising out of the Joint Operations;

                  4)       Pay all  costs  and  expenses  incurred  by it in the
                           Joint Operations promptly and when due and payable;

                  5)       Purchase and maintain in force any and all  insurance
                           required   by  law  and   purchase   or  provide  any
                           additional  insurance  authorized  by  the  Board  of
                           Directors; and

                  6)       Carry out each program of Joint Operations adopted by
                           the  Operating  Committee  within  the  limits of the
                           approved  Operating  Company  budget  and  shall  not
                           undertake  any Joint  Operations  not  included in an
                           approved  budget  or make any  expenditures  during a
                           budget  period  in  excess  of the  budgeted  amounts
                           approved  therefor  except  in  compliance  with  the
                           internal  rules  and  regulations  of  the  Operating
                           Company  and  subject to  approval as may be required
                           under  Articles  6.6 and 6.7 of  this  Agreement,  as
                           applicable.

6.4      Itemization of Expenditures

         A)       During the  preparation  of the  proposed  Work  Programs  and
                  Budgets  contemplated in this Article,  Operator shall consult
                  with the  Operating  Committee  regarding the contents of such
                  Work Programs and Budgets.

<PAGE>



         B)       Each Work Program and Budget and Development Plan submitted by
                  Operator  shall  contain an itemized  estimate of the costs of
                  Joint Operations and all other expenditures to be made for the
                  Joint  Account  during the Calendar Year in question and shall
                  inter alia:

                  1)       identify each work  category  in sufficient detail to
                           afford the ready  identification of the nature, scope
                           and duration of the activity in question;

                  2)       include   such   reasonable   information   regarding
                           Operator's   allocation   procedures   and  estimated
                           manpower   costs  as  the  Operating   Committee  may
                           determine; and

                  3)       comply with the requirements of the Concession.

         C)       The Work  Program and Budget  shall  designate  the portion or
                  portions  of the  Concession  Area in which  Joint  Operations
                  itemized in such Work  Program and Budget are to be  conducted
                  and shall  specify the kind and extent of such  operations  in
                  such detail as the Operating Committee may deem suitable.


6.5      Contract Awards

         A)       Operator   shall  award  each  contract  for  approved   Joint
                  Operations  tendered or placed by  Operator  on the  following
                  basis:

                  1)       For contracts  in amounts  less than  or equal to two
                           hundred  thousand ($200,000) Dollars (U.S.)  Operator
                           shall  award  the  contract  to  the  best  qualified
                           contractor  as  determined  by  cost  and  ability to
                           perform the contract without the obligation to tender
                           and without informing  or seeking the approval of the
                           Operating  Committee, exceptthat before entering into
                           contracts  with  Affiliates of the Operator, Operator
                           shall obtain the approval of the Operating Committee.
                           If requested by any Party, Operator  shall  circulate
                           to the  Parties a  copy of  the  final version of the
                           contract awarded.

                  2)       For contracts  anticipated to be in an amount greater
                           than two hundred thousand ($200,000) Dollars (U.S.)
                           Operator shall:

                           (a)      Provide the  Parties  with  a  list  of  the
                                    entities whom Operator proposes to invite to
                                    tender for the said contract;

                           (b)      Add to such  list  any  entity  whom a Party
                                    requests to be added  within  fourteen  (14)
                                    Days of receipt of such list;

                           (c)      Prepare and dispatch the tender documents to
                                    the entities on the list as aforesaid and to
                                    Non-Operators;  (d) After the  expiration of
                                    the period allowed for  tendering,  consider
                                    and   analyze   the   details  of  all  bids
                                    received;

                           (e)      Prepare and  circulate  to the Parties a bid
                                    analysis,  stating Operator's  determination
                                    as to the entity to whom the contract should
                                    be awarded,  the reasons  therefor,  and the
                                    technical,  commercial and contractual terms
                                    to be agreed upon; and

                           (f)      Upon the  request of a Party,  provide  such
                                    Party  with a copy of the final  version  of
                                    the contract.

                  3)       For  contracts  in amounts  greater than five hundred
                           thousand  ($500,000)  Dollars (U.S.),  Operator shall
                           obtain Operating Committee approval of its award
                           recommendation.

<PAGE>


         B)       Notwithstanding  the above,  Operator  shall  comply  with all
                  applicable   rules,   procedures,   decrees  and   regulations
                  regarding  tendering for and awarding of  contracts,  services
                  and  importation  of equipment,  materials and  consumables as
                  required from time to time by EGPC.  Approval of the Operating
                  Committee shall be required if Operator proposes to not comply
                  with  such  EGPC  tender  and award  rules in  respect  of any
                  contract, service or materials with a value in excess of fifty
                  thousand ($50,000) Dollars (U.S.).

         C)       Operator  undertakes to use all reasonable  efforts to require
                  Operating  Company to submit contracts to tender in compliance
                  with the  internal  rules and  regulations  of  the  Operating
                  Company and EGPC policies or practice.  Operator shall use all
                  reasonable  efforts  to  require  the   Operating  Company  to
                  competitively  tender  for  all   purchases  of  materials  or
                  equipment  and hiring of services  or  equipment  with a value
                  estimated  to exceed  fifty thousand ($50,000) Dollars (U.S.).
                  In all  purchases of  materials or  equipment  and  hiring  of
                  services or   equipment,   it  is  understood  that  Operating
                  Company  or  Operator, as the case may be, are subject  to the
                  provisions regarding use of local contractors and supplies set
                  out in  Article XXVI of the Concession.  If Operating  Company
                  estimates a  contract value will exceed five hundred  thousand
                  ($500,000) Dollars (U.S.), Operator  shall provide each  Party
                  with a list of the  proposed bidders and each Party shall have
                  the right to make suggestions  for  inclusion on such list and
                  this shall  be conveyed  to the  Operating  Company.  Upon the
                  Operating   Company's   completion  of  its   evaluation   and
                  submission  of  same to Operator, Operator  shall  notify  the
                  Operating  Committee  of  the  entity  to whom  the  Operating
                  Company  proposes to award  such  contract. Operator's  notice
                  shall  be  supported by a summary of the  Operating  Company's
                  analysis of the various   bids   received.   For  purposes  of
                  approval of any tender or contract in excess of five   hundred
                  thousand ($500,000) Dollars (U.S.), Operating  Committee shall
                  vote on the   award in  advance  of  the  vote by the Board of
                  Directors.

6.6      Authorization for Expenditure ("AFE") Procedure

         Subject to the requirements of the Operating Company,

         A)       If a commitment or expenditure  has been approved as part of a
                  Work Program and Budget, and if such commitment or expenditure
                  is  estimated  to  be  in  excess  of  one  hundred   thousand
                  ($100,000) Dollars (U.S.), or if the expenditure or commitment
                  is not included in an approved  Work Program and Budget,  then
                  prior to making such commitment or expenditure, Operator shall
                  send to each  Non-Operator  an AFE containing  Operator's best
                  estimate of the total  funds  required to carry out such work,
                  the estimated timing of expenditures,  and any other necessary
                  supportive information.

         B)       If an  AFE  covers  commitments  or  expenditures  within  the
                  monetary amounts set out in the Work Program and Budget, it is
                  for informational purposes only, unless:

                  1)       the AFE costs exceed the costs for such  operation in
                           the approved budget by more than ten percent (10%) of
                           the applicable line item amount for such operation or
                           by more than  five  percent  (5%) of the  total  Work
                           Program and Budget; or

                  2)       the AFE is technically incorrect.


                  In  the  event  that  the   circumstances  in  either  Article
                  6.6(B)(1) or (2) occur, the Operating  Committee shall vote on
                  the  AFE.  If  such  AFE is  not  approved  by  the  Operating
                  Committee, the work in question shall immediately cease.

C) Each AFE proposed by the Operator shall:

<PAGE>


                  1)       Identify the operation by specific  reference to the
                           applicable line items in the Work Program and Budget;

                  2)       Describe the work in detail;

                  3)       Contain  Operator's  best estimate of the total funds
                           required to carry out such work;

                  4)       Outline the proposed work schedule;

                  5)       Provide a timetable of expenditures, if known;  and

                  6)       Be accompanied by such other  supporting  information
                           as is necessary for an informed decision.


6.7      Overexpenditures of Work Programs and Budgets


         Subject to the requirements of the Operating Company,

         A)       For  expenditures on any line item of an approved Work Program
                  and  Budget,  Operator  shall be  entitled  to  incur  without
                  further approval of the Operating Committee an overexpenditure
                  for such line item up to ten percent  (10%) of the  authorized
                  amount for such line item;  provided that the cumulative total
                  of all  expenditures for a Calendar Year shall not exceed five
                  percent (5%) of the total Work Program and Budget in question.

         B)       At such time  that  Operator  is  certain  that the  limits of
                  Article  6.7(A) will be  exceeded,  Operator  shall  furnish a
                  supplemental  AFE for the  estimated  overexpenditures  to the
                  Operating  Committee  for its approval  and shall  provide the
                  Parties with full details of such  overexpenditures.  Operator
                  shall promptly give notice of the amounts of  overexpenditures
                  when actually incurred. Should the Operating Committee fail to
                  approve  the  supplemental  AFE,  all work in  question  shall
                  immediately cease.

                                  ARTICLE VII

                       OPERATIONS BY LESS THAN ALL PARTIES

7.1      Limitation on Applicability

         A)       No  operations   may  be  conducted  in   furtherance  of  the
                  Concession  except as Joint  Operations under Article V, or as
                  Exclusive Operations under this Article.

         B)       Operations  which are  required  to fulfil  the  Minimum  Work
                  Obligations must be proposed and conducted as Joint Operations
                  under  Article  V and  may not be  proposed  or  conducted  as
                  Exclusive  Operations  under  this  Article  VII.  Except  for
                  Exclusive   Operations   relating   to   Deepening,   Testing,
                  Completing,  Sidetracking,  Plugging  Back,  Recompletions  or
                  Reworking  of a  well  drilled  to  fulfil  the  Minimum  Work
                  Obligations or the drilling of any Mandatory  Appraisal  Well,
                  no Exclusive Operations may be proposed or conducted until the
                  Minimum  Work  Obligations  for the then  current  Exploration
                  Sub-Period are fulfilled.

         C)       No Exclusive Operation shall be conducted:

                  1)       until it has been proposed as a Joint Operation;

                  2)       which conflicts or would interfere with a Joint
                           Operation;

<PAGE>


                  3)       which relates to a Zone which the Parties have agreed
                           to appraise or develop under an approved Work Program
                           and Budget;

                  4)       which relates to a currently producing Zone or to any
                           previously   discovered  Zone  which  is  capable  of
                           producing Hydrocarbons in commercial quantities;

                  5)       which   relates   to  a  Zone   which  is  above  the
                           stratigraphic   equivalent   of  the   deepest   Zone
                           producing  or capable of  producing  Hydrocarbons  in
                           commercial quantities; and

                  6)       if a well  proposed  thereunder  is to be  drilled at
                           substantially   the  same   location,   to  the  same
                           subsurface  target  or into the  same  Zone as a well
                           included in an approved Work Program and Budget.

         D)       No Party may propose or conduct an Exclusive  Operation  under
                  this  Article   unless  and  until  such  Party  has  properly
                  exercised its right to propose an Exclusive Operation pursuant
                  to Article  5.13(A),  or is entitled  to conduct an  Exclusive
                  Operation pursuant to Article 5.13(B), Article 6.1(D), Article
                  6.1(F), Article VII or Article 10.1(C).

         E)       Subject to this Article,  any  operation  that may be proposed
                  and  conducted  as a  Joint  Operation  may  be  proposed  and
                  conducted as an Exclusive Operation.


7.2      Procedure to Propose Exclusive Operations

         A)       Subject to Article  7.1,  if any Party  proposes to conduct an
                  Exclusive  Operation,  such  Party  shall  give  notice of the
                  proposed operation to all Parties,  other than  Non-Consenting
                  Parties who have  relinquished  their rights to participate in
                  such  operation  and have no option to  reinstate  such rights
                  under  Article  7.4(D).  Such notice  shall  specify that such
                  operation is proposed as an Exclusive  Operation,  the work to
                  be performed, the location, the objectives, and estimated cost
                  of such operation.

         B)       Any Party entitled to receive such notice shall have the right
                  to  participate in the proposed  operation in accordance  with
                  the following:

                  1)       For proposals to Deepen, Test, Complete,  Side-track,
                           Plug Back,  Recomplete or Rework involving the use of
                           a drilling rig, service rig, well servicing equipment
                           that  is  standing  by in  the  Concession  Area,  or
                           proposals  to  acquire G & G Data  where the  seismic
                           crew and equipment are standing by in the  Concession
                           Area,  any such Party  wishing to exercise such right
                           must so notify Operator within twenty-four (24) hours
                           after  receipt of the notice  proposing the Exclusive
                           Operation; or

                  2)       For all other  proposals,  any such Party  wishing to
                           exercise  such right must so notify  Operator  within
                           ten (10) Days after  receipt of the notice  proposing
                           the Exclusive Operation.

         C)       Failure of a Party to whom a proposal  notice is  delivered to
                  properly  reply  within  the  period   specified  above  shall
                  constitute an election by that Party not to participate in the
                  proposed operation.

         D)       If all Parties properly  exercise their rights to participate,
                  then the  proposed  operation  shall be  conducted  as a Joint
                  Operation. The Operator shall commence such Joint Operation as
                  promptly as  practicable  and  conduct it with due  diligence,
                  provided that with respect to operations pursuant to which a

<PAGE>

                  party has given a notice under  Article  7.2(F),  the Operator
                  may  proceed  with  operations  prior  to  the  expiry  of the
                  applicable time period in this Article 7.2.

        E)        If less than all  Parties  entitled to receive  such  proposal
                  notice properly exercise their rights to participate, then:

                  1)       Immediately  after the  expiration of the  applicable
                           notice period set out in Article 7.2(B), the Operator
                           shall   notify  all  Parties  of  the  names  of  the
                           Consenting  Parties  and  the  recommendation  of the
                           proposing Party as to whether the Consenting  Parties
                           should proceed with the Exclusive Operation.

                  2)       Concurrently,  Operator  shall request the Consenting
                           Parties to specify the  Participating  Interest  each
                           Consenting  Party is willing to bear in the Exclusive
                           Operation.

                  3)       Within  twenty-four  (24) hours after receipt of such
                           notice,  each  Consenting  Party shall respond to the
                           Operator  stating  that  it  is  willing  to  bear  a
                           Participating Interest in such Exclusive Operation
                           equal to:

                           (a)      Only its Participating Interest;
                           (b)      A fraction,  the  numerator of which is such
                                    Consenting  Party's  Participating  Interest
                                    and  the   denominator   of   which  is  the
                                    aggregate of the Participating  Interests of
                                    the Consenting Parties; or
                           (c)      The total of its  Participating  Interest as
                                    contemplated  by Article  7.2(E)(3)(b)  plus
                                    all or any  part of the  difference  between
                                    one hundred  percent (100%) and the total of
                                    the  Participating  Interests  subscribed by
                                    the other Consenting Parties.

                  4)       Any  Consenting  Party  failing  to  advise  Operator
                           within the  response  period  set out above  shall be
                           deemed  to have  elected  to bear  the  Participating
                           Interest  set out in Article  7.2(E)(3)(b)  as to the
                           Exclusive Operation.

                  5)       If within the response period set out above,  the
                           Consenting  Parties  subscribe for less than one
                           hundred percent (100%) of the Participating  Interest
                           in the  Exclusive  Operation,  the Party    proposing
                           such Exclusive  Operation  shall be deemed to have
                           withdrawn its proposal for the  Exclusive  Operation,
                           unless  within  twenty-four  (24) hours of the expiry
                           of the response period set out in Article  7.2(E)(3),
                           the proposing  Party notifies the other    Consenting
                           Parties that the proposing Party shall bear the
                           unsubscribed  Participating Interest.

                  6)       If one hundred  percent  (100%)  subscription  to the
                           proposed  Exclusive  Operation is obtained,  Operator
                           shall promptly notify the Consenting Parties of their
                           Participating Interests in the Exclusive Operation.

                  7)       As  soon  as  any   Exclusive   Operation   is  fully
                           subscribed  pursuant to Article  7.2(E)(6),  Operator
                           (subject  to Article  7.8(G)),  shall  commence  such
                           Exclusive  Operation as promptly as  practicable  and
                           conduct it with due diligence in accordance with this
                           Agreement.

                  8)       If such  Exclusive  Operation has not been  commenced
                           within One Hundred  Twenty (120) Days  (excluding any
                           extension  specifically  agreed  by  all  Parties  or
                           allowed by the force  majeure  provisions  of Article
                           XVI), the right to conduct such  Exclusive  Operation
                           shall terminate. If any Party still desires to

<PAGE>


                           conduct  such  Exclusive  Operation,  written  notice
                           proposing  such  operation must be resubmitted to the
                           Parties  in  accordance  with  Article  V,  as  if no
                           proposal to conduct an Exclusive  Operation  had been
                           previously made.

         F)       In accordance with Article 6.1(F), in the event that less than
                  all of the Parties elect to  participate  in the Completion or
                  other downhole  operations referred to in Article 6.1(F), such
                  Completion or downhole  operations referred to in the election
                  notice  may  be  conducted  as  an  Exclusive  Operation.   In
                  anticipation of such possibility, and notwithstanding anything
                  to the contrary in the  provisions  of Article  5.12,  Article
                  5.13 and this Article VII:

                  1)       Should the Operator,  at the time it submits the
                           election to the Parties  pursuant to Article  6.1(F),
                           be prepared  to  undertake  such  Completion  or
                           downhole  operations  regardless  of  the election of
                           the other  Parties,  the  Operator  may,  at the same
                           time it  submits the notice under Article  5.12(A) to
                           the other Parties,  also provide a notice under
                           Article 7.2(A) to conduct such Completion or downhole
                           operations as an Exclusive Operation. In such a case,
                           the  time  periods under Article 5.12(A)  and  7.2(B)
                           shall run concurrently and,  notwithstanding  Article
                           5.13,  Operator may proceed immediately with   such
                           Completion  or other downhole  operations at the risk
                           and  expense of it and the other Parties who elect to
                           participate.

                  2)       Should a  Non-Operator,  at the time it makes its
                           election pursuant to Article  6.1(F),  be prepared to
                           undertake  such  Completion  or downhole  operations
                           regardless  of the election of the other  Parties, it
                           may  immediately notify the other  Parties of such by
                           providing  a notice under Article  7.2(A).  In such a
                           case,  the time periods  under Article  5.12(A) and
                           7.2(B)  shall run  concurrently  and upon  receipt of
                           such  notice  under  Article 7.2(A),  Operator  may
                           proceed  immediately  with such  Completion  or other
                           downhole operations  at risk and expense of the Party
                           giving  such notice and the other Parties electing to
                           participate.


                  Should less than all Parties elect to  participate,  then if a
                  Party has given a notice  under  Article  7.2(A),  it shall be
                  deemed to have  elected to bear a  Participating  Interest  in
                  such   Exclusive   Operation   in   accordance   with  Article
                  7.2(E)(3)(c).

7.3      Responsibility for Exclusive Operations

                  A)       The Consenting  Parties shall bear in accordance
                           with the  Participating  Interests  agreed under
                           Article 7.2(E) the entire cost and  liability of
                           conducting  an Exclusive  Operation and shall
                           indemnify  the  Non-Consenting  Parties  from any and
                           all costs and liabilities  incurred  incident to such
                           Exclusive Operation (including but not limited to all
                           costs,  expenses  or  liabilities  for environmental,
                           consequential, punitive or any other similar indirect
                           damages or losses arising from business interruption,
                           reservoir or formation damage, inability to produce
                           petroleum,  loss of profits,  pollution control and
                           environmental  amelioration or rehabilitation)  and
                           shall keep the  Concession Area free and clear of all
                           liens and  encumbrances  of every kind  created by or
                           arising from such Exclusive Operation.

B)                Notwithstanding  Article 7.3(A),  each Party shall continue to
                  bear  its  Participating   Interest  share  of  the  cost  and
                  liability incident to the operations in which it participated,
                  including  but not  limited to  plugging  and  abandoning  and
                  restoring the surface  location,  but only to the extent those
                  costs were not increased by the Exclusive Operation.


7.4      Consequences of Exclusive Operations

     A)  With  regard  to any  Exclusive  Operation,  other  than  an  Exclusive
     Operation  which  is  a  Mandatory   Appraisal  Well,  for  so  long  as  a
     Non-Consenting Party has the option to reinstate the rights it relinquished
     under Article 7.4(D) below, such Non-Consenting  Party shall be entitled to
     have access,  concurrently  with the  Consenting  Parties,  to all data and
     other information  relating to such Exclusive  Operation,  other than G & G
     Data obtained in an Exclusive  Operation.  For the acquisition of G&G Data,
     if a  Non-Consenting  Party desires to receive and acquire the right at any
     time to use all or part of such G & G Data, then such Non-Consenting  Party
     shall  have the  right to do so by  paying to the  Consenting  Parties  the
     amount set out in Article  7.5(A) and the Cash  Premium  set out in Article
     7.5(B)(3).  B)  With  regard  to any  Exclusive  Operation,  other  than an
     Exclusive  Operation  which is a  Mandatory  Appraisal  Well and subject to
     Articles 7.4(C) and (D) below, each Non-Consenting Party shall be deemed to
     have  relinquished to the Consenting  Parties,  and the Consenting  Parties
     shall be deemed to own, in  proportion  to their  respective  Participating
     Interests in the  Exclusive  Operation as  determined  in  accordance  with
     Article 7.2(E)(3):

1)                         All of each  such  Non-Consenting  Party's  right  to
                           participate in operations for the acquisition of, and
                           all rights to have access to, all G & G Data obtained
                           from  such   Exclusive   Operation   or  in   further
                           operations  in a  well  or  Deepened  or  Sidetracked
                           portion  of a well in which the  Exclusive  Operation
                           was conducted and in any Discovery  made or appraised
                           in the course of such Exclusive Operation; and

     2) All of each such Non-Consenting Party's right pursuant to the Concession
     to take and dispose of Hydrocarbons produced and saved:

                    (a)  From the well or Deepened or  Sidetracked  portion of a
                         well in which such  Exclusive  Operation was conducted,
                         and

                    (b)  From  any  wells  drilled  to  appraise  or  develop  a
                         Discovery  made  or  appraised  in the  course  of such
                         Exclusive Operation, and
<PAGE>

                    (c)  From the  Development  Lease  containing  the Discovery
                         arising out of such  Exclusive  Operation.  C) Where an
                         Exclusive  Operation  is the  drilling  of a  Mandatory
                         Appraisal  Well,  each  Non-Consenting  Party  in  such
                         Exclusive   Operation   shall   be   deemed   to   have
                         relinquished  to  the  Consenting   Parties,   and  the
                         Consenting Parties shall be deemed to own in proportion
                         to  their  Participating  Interest  in  such  Exclusive
                         Operation  as  determined  in  accordance  with Article
                         7.2(E)(3):

                    1)   All  of  each  such  Non-Consenting  Party's  right  to
                         participate  in further  operations in the  Development
                         Lease containing such Mandatory Appraisal Well; and

                    2)   All of each such Non-Consenting  Party's right pursuant
                         to the  Concession to take and dispose of  Hydrocarbons
                         produced   and  saved   from  the   Development   Lease
                         containing such Mandatory Appraisal Well. In such case,
                         a   Non-Consenting   Party  shall  have  no  option  to
                         reinstate such  relinquished  rights and Article 7.4(D)
                         shall not apply.

     D) With the exception of the right to reinstate set out in Article  7.4(G),
     a  Non-Consenting  Party shall have the  following  and only the  following
     options to reinstate the rights it relinquished pursuant to Article 7.4(B):

                    1)   If  the   Consenting   Parties  decide  to  appraise  a
                         Discovery made in the course of an Exclusive Operation,
                         the   Consenting   Parties   shall   submit   to   each
                         Non-Consenting  Party the approved  appraisal  program.
                         For thirty (30) Days (or forty-eight  (48) hours if the
                         drilling  rig  which  is to be used  in such  appraisal
                         program is  standing  by in the  Concession  Area) from
                         receipt of such appraisal program,  each Non-Consenting
                         Party shall have the option to reinstate  the rights it
                         relinquished   pursuant   to  Article   7.4(B)  and  to
                         participate    in   such   appraisal    program.    The
                         Non-Consenting   Party  may  exercise  such  option  by
                         notifying  Operator  within the period  specified above
                         that  such  Non-Consenting  Party  agrees  to bear  its
                         Participating   Interest   share  of  the  expense  and
                         liability of such  appraisal  program,  to pay the lump
                         sum amount as set out in Article  7.5(A) and to pay the
                         Cash Premium as set out in Article 7.5(B);

                    2)   Without  prejudice to Article 7.4(C), if the Consenting
                         Parties decide to develop a Discovery made or appraised
                         in  the  course  of  an   Exclusive   Operation,   each
                         Non-Consenting Party shall have the option, exercisable
                         for a period of sixty (60) Days from the receipt by the
                         Non-Consenting Parties of all information pertaining to
                         the Discovery, including the proposed Development Plan,
                         to  reinstate  the rights it  relinquished  pursuant to
                         Article 7.4(B) and to participate in such  development.
                         Each  Non-Consenting  Party may exercise such option by
                         notifying  the Party  proposing  to act as Operator for
                         such development within the period specified above that
                         such   Non-Consenting   Party   agrees   to  bear   its
                         Participating  Interest  share  of  the  liability  and
                         expense of such  development and such future  operating
                         and production costs, to pay the lump sum amount as set
                         out in Article  7.5(A)  and to pay the Cash  Premium as
                         set out in Article 7.5(B).

                    3)   If the  Consenting  Parties  decide  to  Deepen,  Test,
                         Complete,  Side-track,  Plug Back, Recomplete or Rework
                         an  Exclusive  Well,  other than a Mandatory  Appraisal
                         Well,  and such further  operation  was not included in
                         the original  proposal  for such  Exclusive  Well,  the
                         Consenting  Parties shall submit to the  Non-Consenting
                         Parties the approved  AFE for such  further  operation.
                         For thirty (30) Days (or forty-eight  (48) hours if the
                         drilling  rig which is to be used in such  operation is
                         standing  by in the  Concession  Area) from  receipt of
                         such AFE,  each  Non-Consenting  Party  shall  have the
                         option to reinstate the rights it relinquished pursuant
                         to Article 7.4(B) and to participate in such operation.
                         Each  Non-Consenting  Party may exercise such option by
                         notifying  the  Operator  within the  period  specified
                         above that such Non-Consenting Party agrees to bear its
                         Participating  Interest  share  of  the  liability  and
                         expense of such further operation,  to pay the lump sum
                         amount as set out in Article 7.5(A) and to pay the Cash
                         Premium as set out in Article 7.5(B).
     E) If a  Non-Consenting  Party  does not  properly  and in a timely  manner
     exercise  such option,  including  paying in a timely  manner in accordance
     with Article 7.5,  all lump sum amounts and Cash  Premiums,  if any, due to
     the Consenting Parties,  such Non-Consenting Party shall have forfeited the
     options as set out in Article  7.4(D) and the right to  participate  in the
     proposed program, plan or operation, unless such program, plan or operation
     is materially modified or expanded.

     F) A Non-Consenting Party shall become a Consenting Party with regard to an
     Exclusive  Operation at such time as the Non-Consenting  Party gives proper
     notice pursuant to Article 7.4(D);  provided that such Non-Consenting Party
     shall in no way be deemed  to be  entitled  to any lump sum  amount or Cash
     Premium  paid  incident  to such  Exclusive  Operation.  The  Participating
     Interest of such Non-Consenting  Party in such Exclusive Operation shall be
     its Participating Interest at the time the Non-Consenting Party elected not
     to  participate.  The  Consenting  Parties  who  assumed a  portion  of the
     Non-Consenting  Party's Participating  Interest in such Exclusive Operation
     shall contribute the  Participating  Interest of the  Non-Consenting  Party
     proportionately to their assumption of same. If all Parties  participate in
     the proposed  operation,  then such operation shall be conducted as a Joint
     Operation pursuant to Article V.

     G) If, after the expiry of the period in which a  Non-Consenting  Party may
     exercise its option to participate in the  development of a Discovery,  the
     Consenting  Parties  desire  to  proceed,  Operator,  or if  Operator  is a
     Non-Consenting  Party, the Party chosen by the Consenting Parties to act as
     Operator,  shall,  subject to Article 6.2 hereof, give notice to EGPC under
     Article  III(c)(iii) of the Concession that the Consenting Parties consider
     the  Discovery  to  be a  Commercial  Discovery.  Conditional  upon  EGPC's
     agreement  that such  Discovery  constitutes  a Commercial  Discovery,  the
     Parties and EGPC shall meet to determine  the extent of the area capable of
     production to be covered by a Development  Lease and shall submit such area
     to the Government for approval in accordance with Article  III(d)(i) of the
     Concession.  Upon written  concurrence  by EGPC of the  Consenting  Party's
     determination  that the Discovery is a Commercial  Discovery and Government
     approval  of the  Development  Lease,  each  Non-Consenting  Party  in such
     Discovery  shall  forfeit  its  right  to  reinstate  its  interest  in the
     applicable Development Lease and shall be deemed to have withdrawn from the
     Concession  and  this  Agreement  to the  extent  that it  relates  to such
     Development  Lease;  provided,  however,  if EGPC or the Government require
     revision or modification to the Development Plan approved by the Consenting
     Parties,  each  Non-Consenting  Party shall be notified,  provided with all
     requested revisions or modifications to the Development Plan and shall have
     ten (10) Days in which to reinstate its right as to the Development  Lease.
     In the event that such  Development  Lease  represents the only interest of
     the   Non-Consenting   Party  in  the  Concession  Area  and  as  such  the
     Non-Consenting   Party  is  deemed  to  have   withdrawn  from  the  entire
     Concession, then such Party shall also forfeit all of its shares and voting
     rights  in  the  Operating   Company  that  were  issued  pursuant  to  the
     Concession.


<PAGE>

7.5      Premium to Participate in Exclusive Operations

     A) Within  thirty  (30) Days of the  exercise of its option  under  Article
     7.4(D), or with respect to G&G Data, within thirty (30) Days of its request
     to  acquire  the  right to use all or part of such G&G Data  under  Article
     7.4(A), each such Non-Consenting  Party shall pay in immediately  available
     funds to the  Consenting  Parties  that took all or a  portion  of the cost
     obligation of the  Participating  Interest of the  Non-Consenting  Party in
     such  Exclusive  Operation  proportionately  to  their  assumption  of such
     obligation,  a lump sum amount  payable in the currency  designated by such
     Consenting   Parties.   Such  lump  sum  amount  shall  be  equal  to  such
     Non-Consenting  Party's Participating Interest share of all liabilities and
     expenses,  including  overhead,  that  were  incurred  in  every  Exclusive
     Operation relating to the G&G Data,  Discovery or well, as the case may be,
     in which the  Non-Consenting  Party  desires  to  reinstate  the  rights it
     relinquished  pursuant to Article 7.4(B), and that were not previously paid
     by such Non-Consenting Party.

     B) In addition to Article  7.5(A),  if a Cash  Premium is due,  then within
     thirty (30) Days of the  exercise  of its option  under  Article  7.4(A) or
     7.4(D) each such  Non-Consenting  Party shall pay in immediately  available
     funds,  in the currency  designated by the Consenting  Parties who took the
     risk of such Exclusive Operations, to such Consenting Parties in proportion
     to their assumption of such risk, a Cash Premium equal to the total of:

                    1)   Six  hundred  percent  (600%)  of  such  Non-Consenting
                         Party's Participating Interest share of all liabilities
                         and expenses, including overhead, that were incurred in
                         any  Exclusive  Operations  relating  to the  drilling,
                         Deepening, Testing, Completing,  Sidetracking, Plugging
                         Back,  Recompleting  and  Reworking of the  Exploration
                         Well   which   made  the   Discovery   in   which   the
                         Non-Consenting Party desires to reinstate the rights it
                         relinquished  pursuant to Article 7.4(B), and that were
                         not previously paid by such Non-Consenting Party; plus

                    2)   Four  hundred  percent  (400%)  of  the  Non-Consenting
                         Party's Participating Interest share of all liabilities
                         and expenses, including overhead, that were incurred in
                         any  Exclusive  Operations  relating  to the  drilling,
                         Deepening, Testing, Completing,  Sidetracking, Plugging
                         Back,  Recompleting  and  Reworking  of  the  Appraisal
                         Well(s) other than Mandatory  Appraisal Well(s),  which
                         delineated   the   Discovery   made  in  the  Exclusive
                         Operations in which the Non-Consenting Party desires to
                         reinstate  the  rights  it  relinquished   pursuant  to
                         Article  7.4(B),  and that were not previously  paid by
                         such Non-Consenting Party; plus

                    3)   One  hundred  percent  (100%)  of  the   Non-Consenting
                         Party's Participating Interest share of all liabilities
                         and expenses, including overhead, that were incurred by
                         the Consenting  Parties in any Exclusive  Operation for
                         the   acquisition   of  G  &  G  Data  in   which   the
                         Non-Consenting Party desires to reinstate the rights it
                         relinquished  pursuant to Article 7.4(B), and that were
                         not previously paid by such Non-Consenting Party.

7.6      Order of Preference of Operations

     A) Except as  otherwise  specifically  provided in this  Agreement,  if any
     Party  desires to propose the conduct of an  operation  that will  conflict
     with an existing proposal for an Exclusive Operation, such Party shall have
     the right  exercisable for five (5) Days, or twenty-four  (24) hours if the
     drilling rig to be used is standing by in the Concession Area, from receipt
     of the  proposal  for the  Exclusive  Operation,  to deliver to all Parties
     entitled to participate in the proposed operation such Party's  alternative
     proposal.  Such alternative proposal shall contain the information required
     under Article 7.2(A).

<PAGE>

     B) Each Party receiving such proposals shall elect by delivery of notice to
     Operator within the  appropriate  response period set out in Article 7.2(B)
     to participate in one of the competing  proposals.  Any Party not notifying
     Operator within the response period shall be deemed not to have voted.

     C) The proposal receiving the largest aggregate Participating Interest vote
     shall have priority over all other  competing  proposals.  In the case of a
     tie vote,  the  Operator  shall choose among the  proposals  receiving  the
     largest  aggregate  Participating  Interest  vote.  Operator  shall deliver
     notice  of such  result  to all  Parties  entitled  to  participate  in the
     operation  within  five  (5)  Days of the end of the  response  period,  or
     twenty-four (24) hours if the drilling rig to be used is standing by in the
     Concession Area.

     D) Each Party  shall then have two (2) Days (or  twenty-four  (24) hours if
     the  drilling  rig to be used is standing by in the  Concession  Area) from
     receipt of such notice to elect by  delivery of notice to Operator  whether
     such Party will participate in such Exclusive Operation, or will relinquish
     its interest pursuant to Article 7.4(B). Failure by a Party to deliver such
     notice within such period shall be deemed an election not to participate in
     the prevailing proposal.

     E)  Notwithstanding  the provisions of Article 7.4(B), if for reasons other
     than  the  encountering  of  granite  or  other  practically   impenetrable
     substance or any other condition in the hole rendering  further  operations
     impracticable,  a well drilled as an Exclusive Operation fails to reach the
     deepest  objective  Zone  described  in the  notice  proposing  such  well,
     Operator shall give notice of such failure to each Non-Consenting Party who
     submitted or voted for an alternative  proposal under this Article to drill
     such well to a shallower  Zone than the deepest  objective Zone proposed in
     the notice  under  which such well was  drilled.  Each such  Non-Consenting
     Party shall have the option  exercisable  for  forty-eight  (48) hours from
     receipt of such notice to participate in the initial proposed Completion of
     such well.  Each such  Non-Consenting  Party may  exercise  such  option by
     notifying the Operator that it wishes to participate in such Completion and
     by paying its share of the cost of drilling  such well,  calculated  in the
     manner provided in Article 7.8(B), to its deepest depth drilled in the Zone
     in  which  it is  Completed.  If any  such  Non-Consenting  Party  does not
     properly  elect to participate  in the first  Completion  proposed for such
     well,  the  relinquishment  provisions of Article  7.4(B) shall continue to
     apply to such Non-Consenting Party's interest.

7.7      Stand-By Costs


         When an operation has been performed, all tests have been conducted and
         the  results of such tests  furnished  to the  Parties,  stand by costs
         incurred  pending response to any Party's notice proposing an Exclusive
         Operation for Deepening, Testing,  Sidetracking,  Completing,  Plugging
         Back,  Recompleting,  Reworking or other further operation in such well
         (including the period  required under Article 7.6 to resolve  competing
         proposals)  shall be charged  and borne as part of the  operation  just
         completed.   Stand  by  costs   incurred   subsequent  to  all  Parties
         responding,  or expiration of the response  time  permitted,  whichever
         first  occurs,  shall be charged to and borne by the Parties  proposing
         the Exclusive Operation in proportion to their Participating Interests,
         regardless of whether such Exclusive Operation is actually conducted.

<PAGE>

7.8      Miscellaneous

     A) Each Exclusive  Operation shall be carried out by the Consenting Parties
     acting  as the  Operating  Committee,  subject  to the  provisions  of this
     Agreement applied mutatis mutandis to such Exclusive  Operation and subject
     to the terms and conditions of the Concession.
     B) The  computation  of  liabilities  and  expenses  incurred in  Exclusive
     Operations,   including  the  liabilities  and  expenses  of  Operator  for
     conducting such operations, shall be made in accordance with the principles
     set out in the Accounting Procedure.

     C) Operator shall maintain  separate books,  financial records and accounts
     for Exclusive Operations which shall be subject to the same rights of audit
     and examination as the Joint Account and related  records,  all as provided
     in the Accounting  Procedure.  Said rights of audit and  examination  shall
     extend to each of the  Consenting  Parties  and each of the  Non-Consenting
     Parties  so  long as the  latter  are,  or may be,  entitled  to  elect  to
     reinstate its interest in such operations.
     D)  Operator,  if it is not a  Consenting  Party  and it is  conducting  an
     Exclusive  Operation  for the  Consenting  Parties,  shall be  entitled  to
     request cash advances and shall not be required to use its own funds to pay
     any cost and  expense  and shall not be obliged  to  commence  or  continue
     Exclusive  Operations until cash advances requested have been made, and the
     Accounting  Procedure  shall apply to Operator in respect of any  Exclusive
     Operations conducted by it.

     E) Should the Parties  determine that a Discovery  constitutes a Commercial
     Discovery,  and prior to  notification  of EGPC regarding  such  Commercial
     Discovery,  should any Party  wish to drill an  additional  Appraisal  Well
     other than a Mandatory  Appraisal Well, prior to development,  then subject
     to Article 7.1(B), the Party proposing such well as an Exclusive  Operation
     shall be  entitled  to  proceed  first,  but  without  the  right to future
     reimbursement  of costs or to any premium  pursuant to Article  7.5. If, as
     the result of drilling  such well as an  Exclusive  Operation,  the Parties
     proposing to develop a Discovery decide to not develop the Discovery,  then
     each  Non-Consenting  Party who voted in favor of such development prior to
     the drilling of such appraisal  well shall pay to the Consenting  Party the
     amount such  Non-Consenting  Party would have paid had such  appraisal well
     been drilled as a Joint Operation.

     F)  In  the  case  of  any  Exclusive  Operation  for  Deepening,  Testing,
     Completing,  Sidetracking,  Plugging Back,  Recompleting or Reworking,  the
     Consenting  Parties  shall be permitted to use,  free of cost,  all casing,
     tubing  and other  equipment  in the  well,  that is not  needed  for Joint
     Operations, but the ownership of all such equipment shall remain unchanged.
     On  abandonment of a well after such  Exclusive  Operation,  the Consenting
     Parties  shall  account  for all such  equipment  to the  Parties who shall
     receive their respective Participating Interest shares, in value, less cost
     of salvage.

     G) If the Operator is a Non-Consenting  Party to an Exclusive  Operation to
     develop a Discovery,  then,  subject to obtaining any necessary  Government
     approval,  the  Operator  may resign,  but in any event shall resign on the
     request of the Consenting  Parties,  as Operator for the Development  Lease
     for such Discovery and the Consenting Parties shall select a Party to serve
     as Operator for such Development Lease.

7.9      Production Bonuses

         Production bonuses shall be charged to the Joint Account if there is no
         production of Hydrocarbons from an Exclusive Operation at the time they
         are incurred.  If there is production of  Hydrocarbons  from one (1) or
         more  Exclusive  Operations,  then any  production  bonus which becomes
         payable under the Concession shall be borne by each  Development  Lease
         in the  proportion  that its average daily  production of  Hydrocarbons
         bears to the total average daily  production of  Hydrocarbons  from the
         Concession Area during the ninety (90) Day period preceding the date on
         which the liability for the production bonus was incurred.

         The  Parties in a  Development  Lease shall bear the  production  bonus
         allocated  to  that   Development   Lease  in  accordance   with  their
         Participating  Interests  in the  Development  Lease  as of the date on
         which liability for the production bonus was incurred.


ARTICLE VIII

<PAGE>





                                     DEFAULT

8.1      Default and Notice

         Any Party that fails to pay when due its  Participating  Interest share
         of Joint  Account  expenses,  including  cash  advances  and  interest,
         incurred pursuant to this Agreement (a "Defaulting  Party") shall be in
         default under this Agreement.  Operator, or any non-defaulting Party in
         the case of the default of Operator, shall promptly give written notice
         of such default to the Defaulting Party and each of the  non-defaulting
         Parties (the "Default  Notice").  The amount not paid by the Defaulting
         Party  shall  bear  interest  from  the date  due  until  paid in full.
         Interest will be calculated using the Agreed Interest Rate.

8.2      Operating Committee Meetings and Data

         After any default has  continued for ten (10) Days from the date of the
         Default  Notice  and for as long  thereafter  as the  Defaulting  Party
         remains  in  default  on any  payment  due under  this  Agreement,  the
         Defaulting  Party shall not be entitled to attend  Operating  Committee
         meetings or to vote on any matter coming before the Operating Committee
         until all of its  defaults  have been  remedied  (including  payment of
         accrued interest).  Further, the Defaulting Party shall not be entitled
         to attend  meetings  of the  Exploration  Advisory  Committee,  nor the
         Directors'  Meetings of the  Operating  Company,  nor shall it have the
         right to vote in any  meeting  held by the  Operating  Company.  Unless
         agreed otherwise by the non-defaulting  Parties, the voting interest of
         each  non-defaulting  Party  shall  be  in  the  proportion  which  its
         Participating   Interest  bears  to  the  total  of  the  Participating
         Interests  of all the  non-defaulting  Parties.  Any matters  requiring
         unanimous  vote  of the  Parties  shall  not  require  the  vote of the
         Defaulting Party. After the said ten (10) Days and while the Defaulting
         Party remains in default as aforesaid,  the Defaulting  Party shall not
         have access to any data or  information  relating to Joint  Operations,
         and non-defaulting Parties shall be entitled to trade data without such
         Defaulting Party's consent and the Defaulting Party shall have no right
         to any data  received  on such trade  unless  and until its  default is
         remedied in full.  Notwithstanding the foregoing,  the Defaulting Party
         shall  be  deemed   to  have   approved,   and  shall   join  with  the
         non-defaulting  Parties in taking any action to maintain  and  preserve
         the Concession.

8.3      Allocation of Defaulted Accounts

     A) The Party  providing  the Default  Notice shall,  either  include in the
     Default Notice or by separate notice,  notify each non-defaulting  Party of
     the sum of money it is to pay as its  portion  (such  portion  being in the
     ratio that each non-defaulting  Party's Participating Interest bears to the
     Participating  Interests of all  non-defaulting  Parties) of such amount in
     default  (excluding  interest).  Each  non-defaulting  Party shall, if such
     default continues, pay Operator,  within five (5) Days after receipt of the
     Default Notice,  its share of the amount which the Defaulting  Party failed
     to pay. If any non-defaulting Party fails to pay its share of the amount in
     default as  aforesaid,  such  non-defaulting  Party shall  thereupon  be in
     default and shall be a Defaulting  Party subject to the  provisions of this
     Article.  The  non-defaulting  Parties  which  pay the  amount  owed by any
     Defaulting Party shall be entitled to receive their respective share of the
     principal and interest payable by such Defaulting Party pursuant to Article
     8.1.

     B) If Operator is a Defaulting Party,  then all payments  otherwise payable
     to Operator for Joint Account  costs  pursuant to this  Agreement  shall be
     made to the  notifying  Party  instead,  until  the  default  is cured or a
     successor Operator appointed. The notifying Party shall maintain such funds
     in a segregated  account  separate  from its own funds and shall apply such
     funds to third party claims due and payable from the Joint Account of which
     it has notice,  to the extent  Operator  would be  authorized  to make such
     payments under the terms of this  Agreement.  The notifying  Party shall be
     entitled  to bill or cash call the other  Parties  in  accordance  with the
     Accounting  Procedure  for proper  third party  charges that become due and
     payable  during  such  period  to  the  extent  sufficient  funds  are  not
     available.  When Operator has cured its default or a successor  Operator is
     appointed,  the notifying  Party shall turn over all remaining funds in the
     account to Operator and shall provide Operator and the other Parties with a
     detailed  accounting of the funds received and expended during this period.
     The  notifying  Party  shall  not be liable  for  damages,  losses,  costs,
     expenses  or  liabilities  arising  as a result of its  actions  under this
     Article 8.3(B) except to the extent  Operator would be liable under Article
     4.6.
<PAGE>

     C) The total of all  amounts  paid by the  non-defaulting  Parties  for the
     Defaulting  Party,  together with interest  accrued on such amounts,  shall
     constitute  a  debt  due  and  owing  by  the   Defaulting   Party  to  the
     non-defaulting Parties in proportion to such amounts paid. In addition, the
     non-defaulting  Parties may, in the manner  contemplated  by this  Article,
     satisfy such debt  (together  with interest) and may accrue an amount equal
     to the  Defaulting  Party's  Participating  Interest share of the estimated
     cost to abandon any Joint Property.

     D) A  Defaulting  Party may remedy its  default by paying to  Operator  the
     total amount due, together with interest  calculated as provided in Article
     8.1, at any time prior to transfer of its interest pursuant to Article 8.4,
     and  upon   receipt  of  such   payment   Operator   shall  remit  to  each
     non-defaulting Party its proportionate share of such amount.

     E) The  rights  granted  to  each  non-defaulting  Party  pursuant  to this
     Article,  shall be in addition  to, and not in  substitution  for any other
     rights  or  remedies  which  each  non-defaulting  Party may have at law or
     equity or pursuant to the other provisions of this Agreement.

8.4      Transfer of Interest

     A) For  thirty  (30) Days after each  failure  by the  Defaulting  Party to
     remedy its default by the thirtieth  (30th) Day  following  the  Defaulting
     Party's  receipt of the  Default  Notice,  without  prejudice  to any other
     rights of the  non-defaulting  Parties to recover the amounts  paid for the
     Defaulting  Party,  together  with  interest  accrued on such amount,  each
     non-defaulting Party shall have the option to give notice to the Defaulting
     Party requiring the Defaulting Party to transfer its Participating Interest
     to the  non-defaulting  Parties.  To that end if any of the  non-defaulting
     Parties so elect,  the Defaulting Party shall be deemed to have transferred
     and to have  empowered  the electing  non-defaulting  Parties to execute on
     said Defaulting Party's behalf any documents required to effect a transfer,
     of all of its  right,  title and  beneficial  interest  in and  under  this
     Agreement and the  Concession,  and in all wells and Joint  Property to the
     electing non-defaulting  Parties. If requested,  each Party shall execute a
     Power of Attorney in the form  prescribed by the Operating  Committee.  The
     Defaulting  Party  shall,  without  delay  following  any request  from the
     non-defaulting  Parties,  do any  and  all  acts  required  to be  done  by
     applicable  law or  regulation  in order to render  such  transfer  legally
     valid,  including,  without  limitation,  the  obtaining of all  Government
     consents and  approvals,  and shall  execute any and all documents and take
     such other  actions as may be necessary in order to effect prompt and valid
     transfer  of  the  interests   described  above,  free  of  all  liens  and
     encumbrances.  In the event all  Government  consents and approvals are not
     timely obtained, the Defaulting Party shall hold its Participating Interest
     in trust  for such  non-defaulting  Parties  who  elected  to  assume  such
     Defaulting Party's Participating Interest.
<PAGE>

     B) In the absence of an agreement among the  non-defaulting  Parties to the
     contrary,  any such transfer to the non-defaulting  Parties shall be in the
     proportion that the  non-defaulting  Parties have paid the amounts due from
     the Defaulting Party.

     C) Subject to Article  12.1(C),  on the effective date of such transfer the
     Defaulting Party shall forthwith cease to be a Party to this Agreement. The
     acceptance or non-acceptance by a non-defaulting  Party of any portion of a
     Defaulting Party's Participating Interest shall be without prejudice to any
     rights  or  remedies  such  non-defaulting  Parties  have  to  recover  the
     outstanding debts (including interest) owed by the Defaulting Party.

8.5      Continuation of Interest

         If, within thirty (30) Days after each failure by the Defaulting  Party
         to remedy  its  default  by the  thirtieth  (30th)  Day  following  the
         Defaulting  Party's receipt of the Default Notice,  the  non-defaulting
         Parties fail to elect to acquire the Defaulting  Party's  Participating
         Interest or elect not to acquire the Defaulting  Party's  Participating
         Interest,  as  provided  in  Article  8.4 and to  continue  to bear the
         Defaulting  Party's  Participating  Interest share of  liabilities  and
         expenses,  then the  non-defaulting  Parties  shall  either (a) abandon
         operations  hereunder  pursuant to Article 8.6, or (b)  accumulate  all
         such  liabilities  and expenses as a debt pursuant to Article VIII, but
         the  Defaulting  Party shall  continue to be a Party subject to Article
         8.2 and Article 8.7. If Operator  disposes of any Joint Property or any
         other credit or adjustment is made to the Joint Account, or if Operator
         sells any of the  Defaulting  Party's  Participating  Interest share of
         Hydrocarbons,  then, in respect of the Defaulting Party's Participating
         Interest share of the proceeds of such  disposal,  credit or adjustment
         or sale,  Operator  shall be entitled to retain and to set off the same
         against all amounts, together with interest accrued on such amount, due
         and owing from the Defaulting Party plus an accrued amount equal to the
         Defaulting Party's  Participating  Interest share of the estimated cost
         to abandon any Joint Property.  Any surplus remaining after setting off
         the same as aforesaid shall be paid promptly to the Defaulting Party.

8.6      Abandonment

         If, within thirty (30) Days after the failure by the  Defaulting  Party
         to remedy its  default by the  thirtieth  (30th) Day as  aforesaid,  no
         non-defaulting   Party  elects  to  acquire  the   Defaulting   Party's
         Participating  Interest  as  provided  in Article  8.4,  or to bear the
         Defaulting  Party's  Participating  Interest share of  liabilities  and
         expenses as provided in Article 8.5, then no transfer shall be made and
         Joint Operations shall be abandoned  subject to any necessary  consents
         and notices  being  given,  and each Party,  including  the  Defaulting
         Party,  shall  pay its  Participating  Interest  share of all  costs of
         abandoning and relinquishing the Concession.  If abandonment  occurs as
         aforesaid,  all  monies  paid  by the  non-defaulting  Parties  for the
         Defaulting  Party  pursuant  to Article  8.3,  together  with  interest
         accrued  on such  amount,  shall  remain  a debt  due and  owing by the
         Defaulting Party.

8.7      Sale of Hydrocarbons

         If a Party defaults after the commencement of commercial production and
         has not remedied the default by the thirtieth  (30th) Day as aforesaid,
         then,  during the  continuance of such default,  the  Defaulting  Party
         shall not be entitled to its Entitlement which shall vest in and be the
         property  of  the  non-defaulting   Parties,   and  Operator  shall  be
         authorized to sell such Hydrocarbons at the best price obtainable under
         the circumstances and, after deducting all costs,  charges and expenses
         incurred by Operator in  connection  with such sale,  pay the  proceeds
         proportionately to the  non-defaulting  Parties which proceeds shall be
         credited against all monies advanced  pursuant to Article 8.3, together
         with interest accrued thereon.  Any surplus  remaining shall be paid to
         the Defaulting  Party,  and any deficiency shall remain a debt due from
         the Defaulting Party to the non-defaulting Parties. Notwithstanding any
         such sales by Operator, the provisions of Article 8.4 shall continue to
         apply.

8.8      No Right of Set Off

         Each Party  acknowledges  and accepts that a  fundamental  principle of
         this Agreement is that each Party pays its Participating Interest share
         of  all  amounts  due  under  this  Agreement  as  and  when  required.
         Accordingly,  any Party which  becomes a  Defaulting  Party  undertakes
         that, in respect of either any exercise by the  non-defaulting  Parties
         of any rights under or the application of any of the provisions of this
         Article,  such  Party  shall not raise by way of set off or invoke as a
         defense,  whether in law or equity,  any failure to pay amounts due and
         owing under this  Agreement or any alleged or  unliquidated  claim that
         such Party may have against Operator or any Non-Operator,  whether such
         claim arises  under this  Agreement or  otherwise.  Such Party  further
         undertakes not to raise by way of defense, whether in law or in equity,
         that  the  nature  or  the  amount  of  the  remedies  granted  to  the
         non-defaulting Parties is unreasonable or excessive.
<PAGE>

                                   ARTICLE IX

                            DISPOSITION OF PRODUCTION

9.1      Right and Obligation to Take in Kind

         Except as otherwise  provided in this  Article 9 and Article 8.7,  each
         Party  shall  have the right and  obligation  to own,  take in kind and
         separately  dispose  of  its  Participating  Interest  share  of  total
         production  available to the Parties pursuant to the Concession in such
         quantities and in accordance  with such  procedures as may be set forth
         in the offtake  agreement  referred to in Article 9.2 or in the special
         arrangements  for  natural gas  referred to in Article  9.3. If EGPC is
         party to the  offtake  agreement,  then the Parties  shall  endeavor to
         obtain its agreement to the  principles set forth in this Article 9. To
         the extent that a Party  requires  separate  facilities to exercise its
         rights under this Article  9.1, the costs of such  separate  facilities
         will be borne solely by such Party.

9.2      Offtake Agreement for Crude Oil

         If Crude Oil is to be produced from the Concession,  the Operator shall
         submit an offtake  agreement  for the  Parties  consideration,  and the
         Parties  shall in good faith,  and not less than three (3) months prior
         to first delivery of Crude Oil,  negotiate and conclude the terms of an
         agreement  to  cover  the  offtake  of Crude  Oil  produced  under  the
         Concession.  EGPC may, if necessary and  practicable,  also be party to
         the offtake  agreement.  This offtake  agreement  shall,  to the extent
         consistent with the Concession, make provision for:

A)   The  delivery  point,  at which  title  and  risk of loss of  Participating
     Interest  shares of Crude Oil shall pass to the Parties  interested  (or as
     the Parties may otherwise agree);

B)   Operator's  regular  periodic  advice to the Parties of  estimates of total
     available  production for succeeding periods,  Entitlements,  and grades of
     Crude Oil for as far ahead as is necessary  for Operator and the Parties to
     plan offtake  arrangements.  Such advice shall also cover for each grade of
     Crude Oil total  available  production  and  deliveries  for the  preceding
     period, inventory and overlifts and underlifts;

C)   Nomination by the Parties to Operator of acceptance of their Entitlement of
     total  available  production for the succeeding  period.  Such  nominations
     shall in any one  period be for each  Party's  entire  Entitlement  arising
     during that period  subject to  operational  tolerances  and agreed minimum
     economic cargo sizes or as the Parties may otherwise agree;
D)   Elimination of overlifts and underlifts;

E)   If offshore  loading or a shore  terminal  for vessel  loading is involved,
     risks  regarding  acceptability  of tankers,  demurrage and (if applicable)
     availability of berths;

F)   Distribution  to the  Parties  of  Entitlements  to  ensure,  to the extent
     Parties take delivery of their Entitlements in proportion to the accrual of
     such Entitlements,  that each Party shall receive currently Entitlements of
     grades,  gravities and qualities of  Hydrocarbons  similar to  Hydrocarbons
     received by each other Party;

G)   To  the  extent  that   distribution  of  Entitlements  on  such  basis  is
     impracticable  due to availability of facilities and minimum cargo sizes, a
     method of making periodic adjustments; and

H)   The option and the right of the other Parties to sell an Entitlement  which
     a Party fails to nominate for  acceptance  pursuant to Article 9.2(C) above
     or of which a Party fails to take delivery,  in accordance  with applicable
     agreed  procedures,  provided that such failure either constitutes a breach
     of Operator's or Parties' obligations under the terms of the Concession, or
     is likely to result in the curtailment or shut-in of production. Such sales
     shall be made only to the limited extent  necessary to avoid  disruption in
     Joint  Operations.  Operator  shall give all  Parties as much  notice as is
     practicable of such  situation and that a sale option has arisen.  Any sale
     shall be of the  unnominated or undelivered  Entitlement as the case may be
     and for  reasonable  periods  of time in no event  to  exceed  twelve  (12)
     months.  The right of sale shall be  revocable at will subject to any prior
     contractual commitments. Sales to non-affiliated third parties shall be for
     the realized price f.o.b.  the delivery point.  Sales to any of the Parties
     or their  Affiliates  shall be at current market value f.o.b.  the delivery
     point.  The  Party  arranging  the  sale  shall  pay  to  the  Party  whose
     Entitlement  is  involved  the above price  after  deduction  of all costs,
     including  storage costs,  incurred in respect of such sale and a marketing
     fee of an  agreed  percentage  of the  applicable  price  less  deductions,
     reflecting  actual costs of disposal at immediate  notice.  Current  market
     value  shall  be the  value of the  Entitlement  in  international  markets
     (unless the Entitlement was required to be delivered into the  Government's
     domestic  market,  in which case it shall be the value  therein)  between a
     willing  buyer and a willing  seller  and shall be agreed  between  the two
     Parties  concerned,  or failing  agreement,  determined  by an expert to be
     appointed in accordance with procedures set forth in the offtake agreement.
     If an  offtake  agreement  has not been  entered  into by the date of first
     delivery of Crude Oil,  the Parties  shall be bound by the  principles  set
     forth in this Article 9.2 until an offtake agreement has been entered into.

9.3      Separate Agreement for Natural Gas

         The  Parties  recognize  that if natural  gas is  discovered  it may be
         necessary for the Parties to enter into a long term Gas Sales Agreement
         as contemplated in Article  III(d)(ii) of the Concession.  Failing such
         agreement, the Parties shall negotiate special arrangements,  including
         gas balancing, for the disposal of same.

9.4      EGPC Preferential Right of Purchase

         In  the  event  EGPC  exercises  its  preferential  right  to  purchase
         Hydrocarbons produced under the Concession, each Party shall contribute
         the quantity required  proportionately to its Entitlement  thereof. Or,
         if EGPC requires that Crude Oil from the  Concession be sold to or with
         EGPC under a joint marketing  arrangement or otherwise,  Operator shall
         use its best efforts to obtain the unanimous agreement of the Operating
         Committee  to the  terms  and  conditions  of any such  arrangement  or
         agreement.

9.5      Government's Right of Requisition

         In  the  event  the  Government  requisitions   Contractor's  share  of
         Hydrocarbons produced under the Concession, each Party shall contribute
         the quantity required  proportionately  to its  Participating  Interest
         share thereof.
<PAGE>

                                   ARTICLE X

                              ABANDONMENT OF WELLS

10.1     Abandonment of Wells Drilled as Joint Operations

A)                Any well which has been drilled as a Joint Operation and which
                  is proposed to be plugged and  abandoned  shall not be plugged
                  and abandoned  without the consent of all Parties,  and in the
                  event that the Operating Company has been formed,  the consent
                  of EGPC.

B)                Should  any  such  Party  fail  to  reply  within  the  period
                  prescribed  in  Article  5.12(A)(1)  or  Article   5.12(A)(2),
                  whichever  is  applicable,  after  delivery  of  notice of the
                  Operator's  proposal to plug and abandon such well, such Party
                  shall be deemed to have consented to the proposed abandonment.
                  If all the Parties consent to abandonment,  such well shall be
                  plugged  and   abandoned   in   accordance   with   applicable
                  regulations  and at the cost,  risk and expense of the Parties
                  or the Consenting Parties, as applicable.

C)                If all Parties do not agree to the  abandonment  of such well,
                  those wishing to continue  operations  shall assume  financial
                  responsibility  over  the  well  and  shall  be  deemed  to be
                  Consenting Parties conducting an Exclusive  Operation pursuant
                  to  Article  VII.  In  the  case  of  a  producing  well,  the
                  Consenting  Parties  shall be entitled  to continue  producing
                  only from the Zone open to production at the time they assumed
                  responsibility for the well.

D)                Each Non-Consenting Party shall be deemed to have relinquished
                  to the Consenting Parties in proportion to their Participating
                  Interests  all of its  interest in the  wellbore of a produced
                  well and related  equipment in accordance with Article 7.4(B),
                  insofar and only insofar as such interest  covers the right to
                  obtain  production from that wellbore in the Zone then open to
                  production.

E)                Subject to Articles 6.3 and 7.8(G), Operator shall continue to
                  operate a  produced  well for the  account  of the  Consenting
                  Parties  at  the  rates  and  charges   contemplated  by  this
                  Agreement,  plus any  additional  cost and  charges  which may
                  arise as the result of the separate  allocation of interest in
                  such well.


10.2     Abandonment of Exclusive Operations

         This Article  shall apply  mutatis  mutandis to the  abandonment  of an
         Exclusive  Well or any well in which an  Exclusive  Operation  has been
         conducted;  provided  that no well  shall be  permanently  plugged  and
         abandoned  unless  and until all  Parties  having  the right to conduct
         further  operations  in such well have been  notified  of the  proposed
         abandonment and afforded the opportunity to elect to take over the well
         in accordance with the provisions of this Article X.
<PAGE>

                                   ARTICLE XI

                       SURRENDER, EXTENSIONS AND RENEWALS

11.1     Surrender

     A)   Operator  shall  advise  the  Operating  Committee  of  any  surrender
          requirement under the Concession at least one hundred and twenty (120)
          Days in advance of the  earlier of the date for filing an  irrevocable
          notice of such surrender or the date of such  surrender.  Prior to the
          end of such period, the Operating Committee shall determine,  pursuant
          to Article V, the size and shape of the surrendered  area,  consistent
          with the  requirements of the Concession.  If a sufficient vote of the
          Operating Committee cannot be attained, then the proposal supported by
          a simple majority of the Participating  Interests shall be adopted. If
          no  proposal   attains  the  support  of  a  simple  majority  of  the
          Participating  Interests,  then the  proposal  receiving  the  largest
          aggregate  Participating  Interest vote shall be adopted. In the event
          of a tie, the Operator shall choose among the proposals  receiving the
          largest  aggregate  Participating  Interest  vote.  The Parties  shall
          execute any and all  documents  and take such other  actions as may be
          necessary to effect the surrender. Each Party renounces all claims and
          causes of action against  Operator and any other Parties on account of
          any area  surrendered in accordance with the foregoing but against its
          recommendation  if Hydrocarbons are subsequently  discovered under the
          surrendered  area. B) A surrender of all or any part of the Concession
          Area  which  is not  required  by the  Concession  shall  require  the
          unanimous consent of the Parties.


11.2     Extension of the Term

     A)   A proposal by any Party to extend the term of the  Exploration  Period
          or Development Period or any Exploration Sub-Period of the Concession,
          a proposal to enter into a new phase of the Exploration  Period, and a
          proposal to extend the term of the Concession  shall be brought before
          the Operating Committee pursuant to Article V.

     B)   Any Party shall have the right to enter into or extend the term of the
          Exploration Period or Development Period or any Exploration Sub-Period
          of the Concession or extend the term of the Concession,  regardless of
          the  level of  support  in the  Operating  Committee.  If any Party or
          Parties  take such  action,  any Party not  wishing to extend or enter
          into a new  period  shall  have a right to  withdraw,  subject  to the
          requirements of Article XIII.
<PAGE>

                                  ARTICLE XII

                         TRANSFER OF INTEREST OR RIGHTS

12.1     Obligations

     A)   Subject  always to the  requirements  of the Concession and subject to
          the terms of transfer contained in Articles VIII or XIII, the transfer
          of all or part of a Party's Participating  Interest shall be effective
          only if it satisfies the terms and conditions of this Article.

     B)   Except in the case of a Party  transferring  all of its  Participating
          Interest,  no transfer shall be made by any Party which results in the
          transferor or the transferee holding a Participating  Interest of less
          than  five  (5%)  percent  or  holding  any  interest   other  than  a
          Participating Interest in the Concession and this Agreement.

     C)   The transferring Party shall,  notwithstanding the transfer, be liable
          to the other  Parties for any  obligations,  financial  or  otherwise,
          which  have  vested,  matured or accrued  under the  provision  of the
          Concession or this Agreement prior to such transfer.  Such obligations
          shall include,  without limitation,  any proposed expenditure approved
          by the Operating  Committee prior to the transferring  Party notifying
          the other Parties of its proposed transfer.

     D)   The  transferee  shall have no rights in and under the  Concession  or
          this  Agreement  unless and until it obtains any necessary  Government
          approval  and   expressly   undertakes   in  writing  to  perform  all
          obligations of the transferor  under the Concession and this Agreement
          in respect of the  Participating  Interest being  transferred,  to the
          satisfaction of the Parties.

     E)   The  transferee  other than an  Affiliate  shall have no rights in and
          under the Concession or this Agreement unless each Party has consented
          in writing to such  transfer,  which  consent  shall be denied only if
          such transferee  fails to establish to the reasonable  satisfaction of
          each Party its  financial  and  technical  capability  to perform  its
          obligations under the Concession and this Agreement. With respect to a
          transfer to an Affiliate, the transferring Party shall provide each of
          the Parties with prior written notice of the transfer. Notwithstanding
          such transfer,  the transferring Party shall remain liable for any and
          all obligations under this Agreement unless such Affiliate establishes
          to the  reasonable  satisfaction  of  each  Party  its  financial  and
          technical  capability to perform its obligations  under the Concession
          and this Agreement.

     F)   Nothing   contained  in  this  Article  shall  prevent  a  Party  from
          mortgaging, pledging, charging or otherwise encumbering all or part of
          its interest in the  Concession  and in this Agreement for the purpose
          of security relating to a financing provided that:

                    1)   such Party  shall  remain  liable  for all  obligations
                         relating to such interest;

                    2)   the  encumbrance  shall  be  subject  to any  necessary
                         approval   of   the   Government   and   be   expressly
                         subordinated  to the rights of the other  Parties under
                         this Agreement;

                    3)   such Party shall ensure that any such mortgage, pledge,
                         charge or encumbrance  shall be expressed to be without
                         prejudice to the provisions of this Agreement; and

                    4)   such Party shall  advise the  remaining  Parties of the
                         existence  of any  financing,  subject to said  Party's
                         right to disclosure under its financing  agreements and
                         shall  provide   proof  of   compliance   with  Article
                         12.1(F)(3).

12.2     Rights

         Each  Party  shall have the right,  subject  to the  provisions  of the
         Concession   and  Article   12.1   hereof,   to  freely   transfer  its
         Participating Interest.


<PAGE>

                                  ARTICLE XIII

                            WITHDRAWAL FROM AGREEMENT

13.1     Right of Withdrawal

A)                Subject  to the  provisions  of this  Article,  any  Party may
                  withdraw  from this  Agreement  and the  Concession  by giving
                  notice to all other  Parties  stating its decision to withdraw
                  and specifying a proposed  effective date of withdrawal  which
                  shall be at  least  sixty  (60)  Days,  but not more  than one
                  hundred eighty (180) Days after the date of such notice.  Such
                  notice shall be unconditional and irrevocable when given.

B)   Notwithstanding  Article  13.1(A),  a Party  shall  not have  the  right to
     withdraw  from this  Agreement  and the  Concession  until the Minimum Work
     Obligation  for the then current  Exploration  Sub-Period  set forth in the
     Concession has been fulfilled.  However,  if the Operating Committee or any
     Party  decides  to accept  new  Minimum  Work  Obligations  by  voluntarily
     extending the current or entering into a new Exploration  Sub-Period  under
     the  Concession,  a Party that voted  against  such  decision  shall not be
     prevented from withdrawing; provided that such Party delivers notice of its
     withdrawal to all Parties  within thirty (30) Days of such vote pursuant to
     Article 11.2 and fully  satisfies its  Participating  Interest share of the
     outstanding  Minimum  Work  Obligation  for the  then  current  Exploration
     Sub-Period,  if any.

C)   Subject to Articles  13.1(A) and (B), 13.5 and 13.9,  the effective date
     of  withdrawal  for a  withdrawing  Party shall be the end of the  calendar
     month following the calendar month in which notice of withdrawal is given.

D)   Notwithstanding  anything to the contrary  contained  herein,  a Party that
     elects to  withdraw  shall not,  unless  such Party  otherwise  agrees,  be
     considered to have  withdrawn  from this  Agreement or the Concession as it
     applies to a  Development  Lease in which  such  Party has a  Participating
     Interest.
<PAGE>

13.2     Withdrawal by Some or All of the Parties

A)   Within   thirty   (30)  Days  of  receipt  of  each   withdrawing   Party's
     notification,  each of the  other  Parties  may also  give  notice  that it
     desires to withdraw  from this  Agreement  and the  Concession.  Should all
     Parties give notice of withdrawal, the Parties shall proceed to abandon the
     Concession  Area  and  terminate  the  Concession  and  this  Agreement  in
     accordance  with their  respective  terms.  If less than all of the Parties
     give such notice of withdrawal, then the withdrawing Parties shall take all
     steps to withdraw from the  Concession  and this  Agreement on the earliest
     possible  date and  execute  and  deliver  all  necessary  instruments  and
     documents  to assign their  Participating  Interest to the Parties that are
     not withdrawing,  at its sole cost and expense and without any compensation
     whatsoever, in accordance with the provisions of Article 13.6.

B)   If any  part of the  withdrawing  Party's  Participating  Interest  remains
     unclaimed  after  sixty  (60)  Days  from the date of the  first  notice of
     withdrawal,  the Parties  shall be deemed to have decided to withdraw  from
     the  Concession  and this  Agreement,  unless at least one Party  agrees to
     accept the unclaimed Participating Interest.

C)   Any Party  withdrawing  under  Article  11.2(B) or under this  Article XIII
     shall, at its option,

     1)   withdraw from the entirety of the Concession Area; or

     2)   withdraw only from all  exploration  activities  under the Concession,
          but not from any Development Lease made prior to such withdrawal.

                  A Party withdrawing  pursuant to this Article 13.2(C)(2) shall
                  retain its rights in the Joint  Property,  but only insofar as
                  they relate to any such  Development  Lease, and shall abandon
                  all other rights in the Joint Property.
<PAGE>

13.3     Rights of a Withdrawing Party

         A withdrawing  Party shall have the right to receive its Entitlement of
         Hydrocarbons produced through the effective date of its withdrawal. The
         withdrawing Party shall be entitled to receive all information to which
         such  Party is  otherwise  entitled  under  this  Agreement  until  the
         effective  date of its  withdrawal.  After giving its  notification  of
         withdrawal, a Party shall not be entitled to vote on any matters coming
         before the Operating Committee, other than matters for which such Party
         continues to have financial responsibility.

13.4     Obligations and Liabilities of a Withdrawing Party

          A)  A  withdrawing   Party  shall,   following  its   notification  of
          withdrawal,  remain  liable  only for its share of the  following:

               1)   Costs of Joint Operations, and Exclusive Operations in which
                    it has  agreed to  participate,  that were  approved  by the
                    Operating  Committee or Consenting Parties as part of a Work
                    Program and Budget or AFE prior to such Party's notification
                    of   withdrawal,   regardless  of  when  they  are  actually
                    incurred;

               2)   Any Minimum  Work  Obligations  for the current  Exploration
                    Sub-Period  or  phase  of  the   Concession,   and  for  any
                    subsequent  period or phase which has been approved pursuant
                    to  Article  11.2 and with  respect  to which such Party has
                    failed to give its  notice  of  withdrawal  within  the time
                    periods set out in Article 13.4(B);

               3)   Emergency  expenditures as described in Articles  4.2(B)(11)
                    and 13.5;

               4)   All other  obligations  and  liabilities  of the  Parties or
                    Consenting Parties,  as applicable,  with respect to acts or
                    omissions  under this  Agreement  which were incurred or are
                    attributable  to the period prior to the  effective  date of
                    such Party's withdrawal for which such Party would have been
                    liable, had it not withdrawn from this Agreement; and

               5)   In the case of a partially  withdrawing Party, any costs and
                    liabilities with respect to Development Leases from which it
                    has not withdrawn.

          The obligations and liabilities for which a withdrawing  Party remains
          liable shall  specifically  include its share of any costs of plugging
          and abandoning wells or portions of wells in which it participated (or
          was  required  to  bear a  share  of the  costs  pursuant  to  Article
          13.4(A)(1)),  to the extent such costs of plugging and  abandoning are
          payable by the Parties under the  Concession.  Any liens,  charges and
          other  encumbrances which the withdrawing Party placed on such Party's
          Participating   Interest  prior  to  its  withdrawal  shall  be  fully
          satisfied or released,  at the withdrawing  Party's expense,  prior to
          its  withdrawal.  A  Party's  withdrawal  shall  not  relieve  it from
          liability  to  the   non-withdrawing   Parties  with  respect  to  any
          obligations or liabilities attributable to the withdrawing Party under
          this  Article  XIII  merely   because  they  are  not   identified  or
          identifiable at the time of withdrawal.
<PAGE>

               B)   Notwithstanding  the foregoing,  a Party shall not be liable
                    for any operations or  expenditures  it voted against (other
                    than  operations  and  expenditures   described  in  Article
                    13.4(A)(2) or  13.4(A)(3)) if it sends  notification  of its
                    withdrawal within five (5) Days (or within  twenty-four (24)
                    hours if the  drilling  rig to be used in such  operation is
                    standing  by  on  the  Concession  Area)  of  the  Operating
                    Committee  vote  approving  such  operation or  expenditure.
                    Likewise,  a Party voting against voluntarily  entering into
                    or  extending  of  an  Exploration  Sub-Period,  Exploration
                    Period or Development  Period or any phase of the Concession
                    or voluntarily  extending the Concession shall not be liable
                    for  the  Minimum  Work  Obligations   associated  therewith
                    provided that it sends notification of its withdrawal within
                    the  earlier of thirty  (30) Days of such vote  pursuant  to
                    Article  11.2 or five (5) Days  prior to the last  date upon
                    which the Parties  must give notice to EGPC  pursuant to the
                    Concession  in order to enter  such  period or  obtain  such
                    extension.

13.5 Emergency

A Party's  notification of withdrawal shall not become effective if prior to the
proposed effective date of withdrawal a well goes out of control or a fire, blow
out,  sabotage or other emergency  occurs.  The notification of withdrawal shall
become effective only after the emergency has been contained and the withdrawing
Party has paid, or has provided,  security  satisfactory  to the Parties for its
Participating Interest share of the costs of such emergency.

13.6 Assignment

A  withdrawing  Party  shall  assign its  Participating  Interest to each of the
non-withdrawing Parties which shall be allocated to them in the proportion which
each of their  Participating  Interests  (prior to the withdrawal)  bears to the
total Participating  Interests of all the non-withdrawing  Parties (prior to the
withdrawal),  unless the non-withdrawing  Parties agree otherwise.  The expenses
associated with the withdrawal and assignments shall be borne by the withdrawing
Party.

13.7 Approvals

A withdrawing  Party shall  promptly join in such actions as may be necessary or
desirable to obtain any  Government  approvals  required in connection  with the
withdrawal  and  assignments,  and any  penalties  or  expenses  incurred by the
Parties in connection  with such  withdrawal  shall be borne by the  withdrawing
Party.

13.8   Abandonment   Security

A withdrawing Party shall provide Security  satisfactory to the other Parties to
satisfy any such obligations or liabilities which were approved or accrued prior
to notice of withdrawal,  but which become due after its withdrawal,  including,
without  limitation,   Security  to  cover  the  costs  of  an  abandonment,  if
applicable;  provided  that  the  withdrawing  Party  was  participating  or was
obligated to participate in the operations  which gave rise to such  obligations
or liabilities.  "Security" means a standby letter of credit issued by a bank or
an on demand bond issued by a  corporation,  such bank or  corporation  having a
credit rating  indicating it has sufficient  worth to pay its obligations in all
reasonably  foreseeable  circumstances.

13.9  Withdrawal or  Abandonment by all Parties

In the event all Parties decide to withdraw or are required to do so pursuant to
this  Article,  the  Parties  agree  that  they  shall be bound by the terms and
conditions  of this  Agreement  for so long as may be  necessary  to wind up the
affairs of the  Parties  with the  Government,  to satisfy any  requirements  of
applicable law or to facilitate the sale, disposition or abandonment of property
or interests held by the Joint Account.
<PAGE>


                                  ARTICLE XIV
                         RELATIONSHIP OF PARTIES AND TAX

14.1     Relationship of Parties

         The rights,  duties,  obligations  and liabilities of the Parties under
         this Agreement shall be individual,  not joint or collective. It is not
         the  intention  of the Parties to create,  nor shall this  Agreement be
         deemed or  construed  to create a mining  or other  partnership,  joint
         venture, association or trust, or as authorizing any Party to act as an
         agent,  servant  or  employee  for any  other  Party  for  any  purpose
         whatsoever  except as explicitly set forth in this Agreement.  In their
         relations with each other under this  Agreement,  the Parties shall not
         be  considered   fiduciaries  except  as  expressly  provided  in  this
         Agreement.

14.2     Tax

         Operator  shall  provide  each  Party,  in a timely  manner and at such
         Party's  sole  expense,  with such  information  with  respect to Joint
         Operations as such Party may reasonably  request for preparation of its
         tax returns or responding to any audit or other tax proceeding.
<PAGE>

                                   ARTICLE XV

                CONFIDENTIAL INFORMATION - PROPRIETARY TECHNOLOGY

15.1     Confidential Information

A) Subject to the  provisions  of the  Concession,  the  Parties  agree that all
information  and data  acquired  or  obtained  by any Party in  respect of Joint
Operations shall be considered  confidential and shall be kept  confidential and
not be disclosed  during the term of the  Concession and for a period of two (2)
years after  expiration of the Concession to any person or entity not a Party to
this Agreement, except:

               1)   To  an   Affiliate,   provided  such   Affiliate   maintains
                    confidentiality as provided in this Article;

               2)   To a  governmental  agency or other entity when  required by
                    the Concession;

               3)   To the extent  such data and  information  is required to be
                    furnished  in  compliance   with  any  applicable   laws  or
                    regulations, or pursuant to any legal proceedings or because
                    of any order of any court binding upon a Party;

               4)   Subject  to  Article  15.1(B),  to  potential   contractors,
                    contractors, consultants and attorneys employed by any Party
                    where disclosure of such data or information is essential to
                    such contractor's, consultant's or attorney's work;

               5)   Subject  to  Article  15.1(B),  to a bona  fide  prospective
                    transferee of a Party's Participating Interest (including an
                    entity  with whom a Party or its  Affiliates  is  conducting
                    bona   fide   negotiations   directed   toward   a   merger,
                    consolidation  or  the  sale  of a  majority  of  its  or an
                    Affiliate's shares);

               6)   Subject to  Article  15.1(B),  to a bank or other  financial
                    institution to the extent  appropriate to a Party  arranging
                    for funding for its obligations under this Agreement;

               7)   To the extent such data and  information  must be  disclosed
                    pursuant to any rules or  requirements  of any government or
                    stock exchange having  jurisdiction  over such Party, or its
                    Affiliates;  provided  that if any Party desires to disclose
                    information  in an annual or  periodic  report to its or its
                    Affiliates'   shareholders   and  to  the  public  and  such
                    disclosure  is  not  required   pursuant  to  any  rules  or
                    requirements of any government or stock exchange,  then such
                    Party shall comply with Article 20.2;

               8)   To its  respective  employees  for  the  purposes  of  Joint
                    Operations,   subject   to  each  Party   taking   customary
                    precautions  to  ensure  such data and  information  is kept
                    confidential; and

               9)   Where any data or information  which,  through no fault of a
                    Party, becomes a part of the public domain.

B) Disclosure as pursuant to Article 15.1(A)(4),  (5), and (6) shall not be made
unless  prior to such  disclosure  the  disclosing  Party has obtained a written
undertaking  from the recipient party to keep the data and information  strictly
confidential and not to use or disclose the data and information  except for the
express purpose for which disclosure is to be made.
<PAGE>

15.2     Continuing Obligations

         Any Party ceasing to own a  Participating  Interest  during the term of
         this Agreement  shall  nonetheless  remain bound by the  obligations of
         confidentiality  and any disputes shall be resolved in accordance  with
         Article XVIII.

15.3     Proprietary Technology

         Nothing in this Agreement shall require a Party to divulge  proprietary
         technology  to the  other  Parties;  provided  that  where  the cost of
         development  of  proprietary  technology  has been charged to the Joint
         Account, such proprietary  technology shall be disclosed to all Parties
         bearing  a portion  of such  cost and may be used by such  Party or its
         Affiliates in other operations.

15.4     Trades

         Notwithstanding the foregoing provisions of this Article, Operator may,
         with prior  approval of the Operating  Committee,  make well trades and
         data trades for the benefit of the Parties,  with any data, the cost of
         which  has  been  charged  to the  Joint  Account,  so  obtained  to be
         furnished to all Parties. Operator shall obtain an undertaking from the
         third  party  receiving  such  information  to  keep  such  information
         confidential.
<PAGE>

                                  ARTICLE XVI

                                 FORCE MAJEURE

16.1     Obligations

         If as a result of Force Majeure any Party is rendered unable, wholly or
         in part, to carry out its obligations under this Agreement,  other than
         the obligation to pay any amounts due or to furnish security,  then the
         obligations  of the  Party  giving  such  notice,  so far as and to the
         extent that the obligations  are affected by such Force Majeure,  shall
         be suspended during the continuance of any inability so caused, but for
         no longer  period.  The Party  claiming  Force Majeure shall notify the
         other Parties of the Force Majeure  situation  within a reasonable time
         after the  occurrence of the facts relied on and shall keep all Parties
         informed  of all  significant  developments.  Such  notice  shall  give
         reasonably  full  particulars of said Force Majeure,  and also estimate
         the period of time which said Party will probably require to remedy the
         Force Majeure. The affected Party shall use all reasonable diligence to
         remove or overcome the Force  Majeure  situation as quickly as possible
         in an economic  manner,  but shall not be obligated to settle any labor
         dispute except on terms acceptable to it and all such disputes shall be
         handled within the sole discretion of the affected Party.

16.2     Definition of Force Majeure

         For the  purposes of this  Agreement,  "Force  Majeure"  shall have the
         meaning as set forth in Article XXIII(b) of the Concession.
<PAGE>


                                  ARTICLE XVII

                                    NOTICES

17.1     Notices


         Except as otherwise  specifically  provided,  all notices authorized or
         required  between  the  Parties  by  any  of  the  provisions  of  this
         Agreement,  shall be in writing,  in English and delivered in person or
         by registered mail or by courier service or by any electronic  means of
         transmitting  written  communications  which provides  confirmation  of
         complete  transmission,  and  addressed to such  Parties as  designated
         below.  The  originating  notice  given  under  any  provision  of this
         Agreement shall be deemed  delivered only when received by the Party to
         whom such  notice is  directed,  and the time for such Party to deliver
         any notice in response to such  originating  notice  shall run from the
         date the originating  notice is received.  The second or any responsive
         notice shall be deemed delivered when received. "Received" for purposes
         of this Article with respect to written  notice  delivered  pursuant to
         this Agreement shall be actual delivery of the notice to the address of
         the Party to be notified  specified in  accordance  with this  Article.
         Each  Party  shall  have the right to change  its  address  at any time
         and/or designate that copies of all such notices be directed to another
         person at another  address,  by giving  written  notice  thereof to all
         other Parties.

         In the case of a notice to Dublin at:

         Dublin International Petroleum (Egypt) Limited
         #52 Youssif Abbass Street
         Nasr City, Cairo

         Telephone:        (202) 405-0002
         Facsimile:        (202) 405-0003

         With a copy to:

         Tanganyika Oil Company Ltd.
         802 - 1015 - 4th Street S.W.
         Calgary, Alberta, Canada
         T2R 1J4
         Telephone:  (403) 234-8199
         Facsimile:  (403) 234-8140

         In the case of a notice to GHP at:

         GHP Exploration (West Gharib) Ltd.
         1900 W. Loop South, Suite 900
         Houston, Texas
         U.S.A   .77027
         Attention:        Mr. Barry Lasker
         Telephone:        (713) 626-9373
         Facsimile:        (713) 626-9374

         In the case of notice to Drucker:

         Drucker Petroleum Inc.
         #830, 789 West Pender Street
         Vancouver, British Columbia
         V6C 1H2

         Telephone:        (604) 689-4407
         Facsimile:        (604) 689-7654

<PAGE>

                                 ARTICLE XVIII

                      APPLICABLE LAW AND DISPUTE RESOLUTION

18.1     Applicable Law

         This Agreement shall be governed by, construed, interpreted and applied
         in accordance with the laws of Alberta, Canada, excluding any choice of
         law  rules  which  would  refer  the  matter  to the  laws  of  another
         jurisdiction.

18.2     Dispute Resolution

A) Any  dispute,  controversy  or claim  arising  out of or in relation to or in
connection  with  this  Agreement  or the  operations  carried  out  under  this
Agreement,  including  without  limitation  any  dispute as to the  construction
validity,  interpretation,  enforceability or breach of this Agreement, shall be
exclusively and finally settled by arbitration,  and any Party may submit such a
dispute, controversy or claim to arbitration.

B) The arbitration  shall be heard and determined by three (3) arbitrators.  All
decisions and awards by the arbitration tribunal shall be made by majority vote.

C) Unless otherwise expressly agreed in writing by the Parties to the
arbitration proceedings:

               1)   The  arbitration  proceedings  shall  be  held  in  Calgary,
                    Alberta;


               2)   The  arbitration  proceedings  shall  be  conducted  in  the
                    English language and the arbitrators  shall be fluent in the
                    English language;

               3)   The  arbitrators  shall be and  remain at all  times  wholly
                    independent and impartial;

               4)   The arbitration proceedings shall be conducted in accordance
                    with the  UNCITRAL  Model  Law on  International  Commercial
                    Arbitration, in effect upon commencement of arbitration;

               5)   Any  procedural  issues not  determined  under the  arbitral
                    rules  selected  pursuant  to  Article  18.2(C)(4)  shall be
                    determined  by the law of the  place of  arbitration,  other
                    than  those  laws  which  would  refer the matter to another
                    jurisdiction;

               6)   The costs of the arbitration  proceedings  (including  legal
                    fees and costs) shall be borne in the manner  determined  by
                    the arbitrators;

               7)   The  decision of the majority of the  arbitrators,  shall be
                    reduced to writing;  final and binding  without the right of
                    appeal;  the sole and exclusive remedy regarding any claims,
                    counterclaims,   issues  or  accountings  presented  to  the
                    arbitrator;  made and promptly paid in U.S.  dollars free of
                    any deduction or setoff (except if the Party is a Defaulting
                    Party under  Article VIII) and any costs or fees incident to
                    enforcing the award,  shall to the maximum extent  permitted
                    by  law,  be  charged   against  the  Party  resisting  such
                    enforcement;

               8)   Consequential,  punitive or other similar  damages shall not
                    be allowed;

               9)   The award shall include interest from the date of any breach
                    or  violation  of  this  Agreement,  as  determined  by  the
                    arbitral award, and from the date of the award until paid in
                    full, at the Agreed Interest Rate; and

               10)  Judgement  upon the award may be entered in any court having
                    jurisdiction  over the  person or the  assets of the  Party.
                    Application  may also be made to such  court for a  judicial
                    acceptance of the award and an order of enforcement,  as the
                    case may be.
<PAGE>


                                   ARTICLE XIX

                       ALLOCATION OF COST RECOVERY RIGHTS

19.1     Allocation of Total Production

         For the purposes of recovery of Petroleum  Costs, the total quantity of
         Hydrocarbons  which are produced and saved from all Development  Leases
         in a Calendar  Quarter and to which the Parties are entitled  under the
         Concession shall be designated as either Cost Oil or Production Sharing
         Oil.

19.2     Allocation of Cost Oil

         Subject to each of the Farmout  Agreements  and Article 19.4,  Cost Oil
         shall  be  allocated  in  accordance   with  the  Parties'   respective
         Participating  Interests.  The  allocation  of  Cost  Oil  shall  be as
         required to recover, in the sequence incurred,  all Petroleum Costs and
         which are recoverable in such Calendar Quarter.

19.3     Allocation of Production Sharing Oil

         Production  Sharing  Oil  shall  be  allocated  among  the  Parties  in
         proportion to their respective Participating Interests.

19.4     Exclusive Operations and Extensions of the Exploration Period

         Prior to the  extension  of the term of the  Exploration  Period or and
         Exploration  Sub-Period by less than all Parties or, where practicable,
         prior to the  conduct of an  Exclusive  Operation  (or if not,  as soon
         thereafter as is practicable), the Parties shall meet to determine:

A) the allocation of Cost Oil and Production Sharing Oil between and Development
Leases in which the Parties have different Participating Interests;

B) the  allocation  of Cost Oil and  Production  Sharing Oil between the Parties
where Petroleum  Costs have been incurred but do not relate to Joint  Operations
resulting in the creation of a Development Lease but which become recoverable as
a  result  of  production  from  another  Development  Lease  elsewhere  in  the
Concession  Area,  provided  always  that  Petroleum  Costs  in  relation  to  a
Development Lease shall be recovered first;

C)  without   prejudice  to  Article  7.9,  the  manner  in  which  the  bonuses
contemplated in Article IX of the Concession will be discharged; and

D) such other matters as the Parties may agree.


<PAGE>

                                   ARTICLE XX

                               GENERAL PROVISIONS

20.1     Warranties as to no Payments, Gifts and Loans

         Each of the Parties  warrants  that neither it nor its  affiliates  has
         made or will make, with respect to the matters  provided for hereunder,
         any offer,  payment,  promise to pay or authorization of the payment of
         any money, or any offer,  gift, promise to give or authorization of the
         giving of anything of value, directly or indirectly,  to or for the use
         or benefit of any official or employee of the  Government or EGPC or to
         or for  the  use  or  benefit  of any  political  party,  official,  or
         candidate for the purpose of influencing an official act or decision of
         that  person;  inducing  that  person  to do or  omit  to do any act in
         violation of his or her lawful duty; or inducing that person to use his
         or her influence with the Government or EGPC to affect or influence any
         Government or EGPC decision;  unless such offer, payment, gift, promise
         or  authorization  is authorized by the written laws or  regulations of
         the Arab Republic of Egypt.  Each of the Parties further  warrants that
         neither  it nor its  affiliates  has made or will make any such  offer,
         payment, gift, promise or authorization to or for the use or benefit of
         any other  person if the Party knows,  has a firm  belief,  or is aware
         that there is a high  probability  that the other person would use such
         offer, payment,  gift, promise or authorization for any of the purposes
         described in the preceding  sentence.  The foregoing  warranties do not
         apply  to  any  facilitating  or  expediting   payment  to  secure  the
         performance of routine  Government  action.  Routine Government action,
         for  purposes of this  Article  20.1,  shall not  include,  among other
         things, Government action regarding the terms, award or continuation of
         the Concession.  Each Party shall respond  promptly,  and in reasonable
         detail,  to any notice from any other Party or its auditors  pertaining
         to the above  stated  warranty  and  representation  and shall  furnish
         documentary  support for such  response  upon  request  from such other
         Party.

20.2     Conflicts of Interest

A) Each Party  undertakes  that it shall avoid any conflict of interest  between
its own interests  (including the interests of Affiliates)  and the interests of
the  other  Parties  in  dealing  with   suppliers,   customers  and  all  other
organizations or individuals doing or seeking to do business with the Parties in
connection with activities contemplated under this Agreement.

B) The provisions of the preceding paragraph shall not apply to:

               1)   A Party's  performance which is in accordance with the local
                    preference laws or policies of the Government; or

               2)   A  Party's  acquisition  of  products  or  services  from an
                    Affiliate,  or the sale  thereof  to an  Affiliate,  made in
                    accordance  with  rules and  procedures  established  by the
                    Operating Committee.

20.3     Public Announcements

A) Operator shall be responsible  for the  preparation and release of all public
announcements and statements  regarding this Agreement and the Joint Operations;
provided  that,  no public  announcement  or  statement  shall be issued or made
unless prior to its release all the Parties have been  furnished  with a copy of
such  statement or  announcement  and two (2) or more Parties  holding more than
fifty percent (50%) of the Participating Interests have approved the same. Where
a public  announcement or statement  becomes  necessary or desirable  because of
danger  to or loss of life,  damage  to  property  or  pollution  as a result of
activities  arising  under this  Agreement,  Operator is authorized to issue and
make such announcement or statement  without prior approval of the Parties,  but
shall  promptly  furnish all the  Parties  with a copy of such  announcement  or
statement.

B) If a Party  wishes  to issue or make any  public  announcement  or  statement
regarding  this  Agreement  or the Joint  Operations,  it shall not do so unless
prior to its release,  such Party  furnishes all the Parties with a copy of such
announcement or statement, and obtains the approval of the Parties holding fifty
percent  (50%)  or  more  of  the   Participating   Interests;   provided  that,
notwithstanding  any  failure  to  obtain  such  approval,  no  Party  shall  be
prohibited  from issuing or making any such public  announcement or statement if
it is necessary to do so in order to comply with the applicable  laws,  rules or
regulations  of any  government,  legal  proceedings  or stock  exchange  having
jurisdiction over such Party as set forth in Articles 15.1(A)(3) and (7).

<PAGE>

20.4     Successors and Assigns

         Subject to the  limitations on transfer  contained in Article XII, this
         Agreement  shall  inure  to the  benefit  of and be  binding  upon  the
         successors and assigns of the Parties.

20.5     Waiver

         No waiver by any Party of any one or more  defaults by another Party in
         the  performance of this  Agreement  shall operate or be construed as a
         waiver of any future default or defaults by the same Party,  whether of
         a like or of a different  character.  Except as  expressly  provided in
         this  Agreement  no Party shall be deemed to have  waived,  released or
         modified any of its rights under this  Agreement  unless such Party has
         expressly  stated,  in writing,  that it does waive,  release or modify
         such right.

20.6     Severance of Invalid Provisions

         If and for so long as any provision of this  Agreement  shall be deemed
         to be judged invalid for any reason  whatsoever,  such invalidity shall
         not affect the  validity or  operation  of any other  provision of this
         Agreement  except only so far as shall be  necessary  to give effect to
         the  construction of such  invalidity,  and any such invalid  provision
         shall be deemed  severed  from this  Agreement  without  affecting  the
         validity of the balance of this Agreement.

20.7     Modifications

         Except as is provided in Article 20.6,  there shall be no  modification
         of this Agreement except by written consent of all Parties.

20.8     Headings

         The topical  headings used in this Agreement are for  convenience  only
         and shall not be construed as having any substantive significance or as
         indicating that all of the provisions of this Agreement relating to any
         topic are to be bound in any particular Article.

20.9     Singular and Plural

         Reference to the  singular  includes a reference to the plural and vice
         versa.

20.10    Gender

         Reference to any gender includes a reference to all other genders.

20.11    Counterpart Execution

         This Agreement may be executed in any number of  counterparts  and each
         such  counterpart  shall  be  deemed  an  original  Agreement  for  all
         purposes; provided no Party shall be bound to this Agreement unless and
         until  all  Parties  have  executed  a  counterpart.  For  purposes  of
         assembling all counterparts  into one document,  Operator is authorized
         to detach the signature page from one or more  counterparts  and, after
         signature thereof by the respective Party, attach each signed signature
         page to a counterpart.

20.12    Entirety and Conflict

         This  Agreement  constitutes  the entire  agreement  of the Parties and
         supersedes all prior  understandings  and  negotiations of the Parties,
         with the  exception  of  Article  2 of the GHP  Farmout  Agreement  and
         Article 2 of the Drucker Farmout Agreement.  In the event of a conflict
         between Article 2 of the GHP Farmout  Agreement and this Agreement,  as
         between  GHP and  Dublin,  the terms of  Article  2 of the GHP  Farmout
         Agreement shall govern to the extent of the conflict. In the event of a
         conflict  between Article 2 of the Drucker  Farmout  Agreement and this
         Agreement, as between Drucker and Dublin, the terms of Article 2 of the
         Drucker Farmout Agreement shall govern to the extent of the conflict.

<PAGE>

IN  WITNESS  of their  agreement  each  Party  has  caused  its duly  authorized
representative  to  sign  this  instrument  on the  date  indicated  below  such
representative's signature.


                                  DUBLIN INTERNATIONAL PETROLEUM (EGYPT) LIMITED


                                    By:      -----------------------------------
                                    Title:   ___________________________________
                                    Date:    ___________________________________



                                 GHP EXPLORATION (WEST GHARIB) LTD.


                                    By:      -----------------------------------
                                    Title:   ___________________________________
                                    Date:    ___________________________________


                                  DRUCKER PETROLEUM INC.


                                    By:      ___________________________________
                                             -----------------------------------
                                    Title:   ___________________________________
                                    Date:    ___________________________________




<PAGE>



3


                                TABLE OF CONTENTS


ARTICLE I DEFINITIONS..........................................................1


ARTICLE II EFFECTIVE DATE AND TERM.............................................7


ARTICLE III PARTICIPATING INTERESTS............................................8


ARTICLE IV OPERATOR...........................................................10


ARTICLE V OPERATING COMMITTEE.................................................17


ARTICLE VI WORK PROGRAMS AND BUDGETS..........................................21


ARTICLE VII OPERATIONS BY LESS THAN ALL PARTIES...............................28


ARTICLE VIII DEFAULT..........................................................38


ARTICLE IX DISPOSITION OF PRODUCTION..........................................42


ARTICLE X ABANDONMENT OF WELLS................................................44


ARTICLE XI SURRENDER, EXTENSIONS AND RENEWALS.................................45


ARTICLE XII TRANSFER OF INTEREST OR RIGHTS....................................46


ARTICLE XIII WITHDRAWAL FROM AGREEMENT........................................48


ARTICLE XIV RELATIONSHIP OF PARTIES AND TAX...................................51


ARTICLE XV CONFIDENTIAL INFORMATION - PROPRIETARY TECHNOLOGY..................52


ARTICLE XVI FORCE MAJEURE.....................................................54


ARTICLE XVII NOTICES..........................................................55


ARTICLE XVIII APPLICABLE LAW AND DISPUTE RESOLUTION...........................57


ARTICLE XIX ALLOCATION OF COST RECOVERY RIGHTS................................59


ARTICLE XX GENERAL PROVISIONS.................................................60


<PAGE>



                     INTERNATIONAL JOINT OPERATING AGREEMENT






Between :


                 DUBLIN INTERNATIONAL PETROLEUM (EGYPT) LIMITED



                                      -and-




                       GHP EXPLORATION (WEST GHARIB) LTD.



                                      -and-



                             DRUCKER PETROLEUM INC.




                                West Gharib Area

                             Arab Republic of Egypt