SUBORDINATION AGREEMENT

     This SUBORDINATION AGREEMENT (this "Agreement") is entered into on the
28th day of January 2000 among Chaparral Resources, Inc. ("Borrower"),
Shell Capital Services Limited (the "Facility Agent"), and Cord Capital,
LLC ("Junior Entity").

                                 RECITALS:

     WHEREAS, the Borrower and the Facility Agent are, inter alia, parties
to the Loan Agreement (as defined herein); and

     WHEREAS, as a condition to funding under the Loan Agreement, the
Borrower, the Facility Agent and the Junior Entity must enter into this
Agreement.

                                AGREEMENT:

     NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of covenants herein contained,
the parties agree as follows:

1.   Definitions and Interpretation.

     (a)  "Loan Agreement" means the loan agreement dated 1 November 1999
     between Borrower, Central Asian Petroleum (Guernsey) Limited, Closed
     Type JSC Karakudukmunay and Central Asian Petroleum, Inc., as Co-
     Obligors, Shell Capital Limited, Shell Capital Services Limited and
     the Lenders (as defined in the Loan Agreement).

     "Preferred Obligations" means all obligations of the Borrower, the Co-
     Obligors, or any of them, to any of the Finance Parties whether now
     existing or arising in the future and whether fixed, prospective or
     contingent under or in respect of any of the Finance Documents whether
     for principal outstanding, interest, fees, costs, expenses,
     indemnities or otherwise.

     "Junior Obligations" means all obligations of the Junior Entity to the
     Borrower (including, without limitation, in respect of the CRI Bridge
     Notes and the CRI Existing Notes) whether now existing or arising in
     the future and whether fixed, prospective or contingent, whether for
     principal outstanding, interest, fees, costs, expenses, indemnities or
     otherwise.

     (b)  Capitalized terms used and not defined herein are used with the
     meaning assigned to such term in the Loan Agreement.

     (c)  Any reference in this Agreement to:

          (i)    a statute shall be construed as a reference to such
                 statute as from time to time amended or re-enacted;

          (ii)   a person includes its permitted successors and assigns;

          (iii)  a Finance Document or any other agreement or document
                 shall be construed as a reference to that Finance
                 Document or, as the case may be, such other agreement or
                 document, as the same may have been, or may from time to
                 time be, amended, novated or supplemented; and

          (iv)   the singular includes the plural and vice versa.

2.   The payment of the Junior Obligations is expressly made subordinate
     and subject in right of payment and in liquidation to the prior
     payment in full of the Preferred Obligations.

3.   Until the date of irrevocable final repayment, in full, of the
     Preferred Obligations and termination of all commitments in respect
     thereof, the Borrower undertakes not to pay or repay and the Junior
     Entity undertakes not to claim, recover, retain or receive (or seek to
     claim, recover, retain or receive) any amount whatsoever in relation
     to any Junior Obligation (including, without limitation, any recovery,
     payment or repayment arising out of any claim under a guarantee) or to
     any interest or other amount payable by the Borrower in respect
     thereof, or to any other indebtedness of the Borrower to any Junior
     Entity.

4.   If:

     (i)  there is any distribution of all or any part of the assets of the
     Borrower including, without limitation, by reason of the liquidation,
     dissolution or other insolvency proceeding, or assignment for the
     benefit of creditors; or

     (ii) the Borrower goes into liquidation or becomes subject to any
     insolvency or rehabilitation proceeding, administration, or voluntary
     arrangement,

     then until the date of final irrevocable repayment in full of the
     Preferred Obligations any payment or distribution of any kind or
     character and all and any rights in respect thereof payable or
     deliverable to the Junior Entity with respect to the Junior
     Obligations or any part thereof by the liquidator, administrator,
     administrative receiver or receiver (or the equivalent thereof) of the
     Borrower will forthwith be paid or delivered to the Facility Agent for
     application to the Preferred Obligations in accordance with the terms
     of the Finance Documents.

5.   Following the occurrence of any Event of Default, the Junior Entity
     will irrevocably authorise and empower the Facility Agent to demand,
     sue and prove for, collect and receive every payment or distribution
     referred to in Section 4 and give good discharge therefor and to file
     claims and take such other proceedings, in the Facility Agent's name,
     the name of the Junior Entity or otherwise, as the Facility Agent may
     deem necessary or advisable for the enforcement of the payment of
     debts in accordance with the priority set out in Section 2.

6.   The Junior Entity will, at all times, following the occurrence of any
     Event of Default, and for so long as such Event of Default is
     continuing, execute or procure the execution of and deliver to the
     Facility Agent such proxies, powers of attorney, assignments or other
     instruments as may be requested by it in order to enable the Facility
     Agent to vote and/or enforce any and all claims upon or with respect
     to the Junior Obligations or any part thereof and to collect and
     receive any and all payments or distributions which may be payable or
     deliverable to the Facility Agent at any time upon or with respect to
     the Junior Obligations or any part thereof.

7.   A liquidator or other insolvency representative of the Borrower or the
     Junior Entity will be authorised, to the maximum extent permitted by
     applicable law, to apply any assets or moneys it receives in
     accordance with the order of priority referred to in Section 2.

8.   If any amounts are received by the Junior Entity or any person acting
     on its behalf with respect to the Junior Obligations or any part
     thereof whether in cash or in kind or by way of set-off, combination
     of accounts or otherwise, the Junior Entity (or person acting on its
     behalf as aforesaid) agrees that an amount equal to the amount so
     received by the relevant Junior Entity shall be held on trust for the
     Facility Agent and shall forthwith be paid to the Facility Agent for
     application to the Preferred Obligations in accordance with the terms
     of the Finance Documents and that any failure to make such payment
     shall be a breach of its obligations under this Agreement.

9.   (a)  Unless otherwise agreed by the Facility Agent, the Junior Entity
     will waive, and undertake that it will not seek to obtain payment of
     any Junior Obligation, in whole or in part, by exercising any right of
     set-off it may have with respect to any Junior Obligation, whether
     created by contract, statute or otherwise.

     (b)  Until the date of irrevocable final repayment, in full, of the
     Preferred Obligations and termination of all commitments in respect
     thereof the Facility Agent may (subject to the provisions of the
     Finance Documents), unless and until such moneys or distributions in
     the aggregate are sufficient to bring about the irrevocable final
     repayment, in full, of the Preferred Obligations (if applied to
     repayment of the Preferred Obligations), (i) apply any moneys or
     property received under this Agreement from the Borrower, the Junior
     Entity or any other person against the Preferred Obligations in such
     order as it thinks fit; and (ii) hold in a suspense account any moneys
     or distributions received under this Agreement.

10.  The Junior Entity will not be entitled without the consent of the
     Facility Agent to accelerate any Junior Obligation (or any portion
     thereof).  The Facility Agent shall have complete discretion as to the
     granting of such consent.

11.  The Junior Entity will not under any circumstances, prior to the
     irrevocable final repayment, in full, of the Preferred Obligations, be
     subrogated to any of the rights of the Finance Parties or any security
     arising under the Finance Documents.

12.  This Agreement and the subordination provisions contained herein will
     terminate on the date of irrevocable final repayment, in full, of the
     Preferred Obligations, and termination of all commitments in respect
     thereof.

13.  Unless otherwise agreed by the Facility Agent, the Junior Entity
     undertakes not to commence, or join with any other creditor or
     creditors of the Borrower in commencing, any bankruptcy, insolvency or
     rehabilitation proceeding, administration or other voluntary
     arrangement against or in respect of the Borrower prior to irrevocable
     final repayment, in full, of the Preferred Obligations.

14.  This Agreement constitutes the entire agreement between the parties
     and supersedes all prior oral or written agreements, understandings,
     representations, warranties and course of conduct and dealings between
     the parties on the subject matter hereof.

15.  Time is of the essence of each party's obligations under this
     Agreement but no failure to exercise, nor any delay in exercising, on
     the part of the Facility Agent, any right or remedy under this
     Agreement shall operate as a waiver thereof, nor shall any single or
     partial exercise of any right or remedy prevent any further or other
     exercise thereof or the exercise of any other right or remedy.  The
     rights and remedies contained in this Agreement are cumulative and not
     exclusive of any rights or remedies provided by law.

16.  If, at any time, any provision of this Agreement is or becomes
     illegal, invalid or unenforceable in any respect under the law of any
     jurisdiction, neither the legality, validity or enforceability of the
     remaining provisions of this Agreement under the law of that
     jurisdiction nor the legality, validity or enforceability of that or
     any other provision of this Agreement under the law of any other
     jurisdiction shall in any way be affected or impaired thereby unless
     the effect of the foregoing would be substantially to alter the rights
     and obligations of the parties originally agreed.

17.  This Agreement shall bind the parties and each of their respective
     successors and assignees.

18.  Neither the Borrower nor the Junior Entity will assign or otherwise
     transfer any of its rights or obligations under this Agreement.  The
     Facility Agent is permitted to transfer its rights and/or obligations
     under this Agreement.

19.  (a)  All notices or other communications to Borrower or the Facility
     Agent shall be given in writing addressed to the relevant party at its
     address specified in Clause 29.2 of the Loan Agreement.  All notices
     or other communications to the Junior Entity shall be given in writing
     at its address set forth in the signature page of this Agreement. A
     written notice includes a notice by facsimile transmission

     (b)  Any such notice shall be deemed to be given:

          (i)    if by personal delivery or letter, when delivered; and

          (iii)  if by facsimile, when the answerback is received.

     (c)  However, a notice given in accordance with the above but received
     on a non-working day or after business hours in the place of receipt
     shall only be deemed to be given on the next working day in that
     place.

20.  Each communication and document made or delivered by one party to
     another pursuant to this Agreement shall be in the English language or
     accompanied by a translation into English certified (by an officer of
     the person making or delivering the same) as being a true and accurate
     translation thereof.

21.  This Agreement may not be amended except by an instrument in writing
     signed by each of the parties.

22.  This Agreement shall be governed by English law.

23.  (a)  For the exclusive benefit of the Facility Agent, each of the
     Borrower and the Junior Entity irrevocably agrees that the courts of
     England are to have jurisdiction to settle any disputes which may
     arise out of or in connection with this Agreement and that accordingly
     any suit, action or proceedings (together in this Section 23 referred
     to as "proceedings") arising out of or in connection with this
     Agreement may be brought in such courts, subject to the option
     referred to in Section 26.

     (b)  Each of the Borrower and the Junior Entity irrevocably waives and
     agrees not to raise any objection which it may have now or hereafter
     to the laying of the venue of any proceedings in any such court as is
     referred to in this Section 23 and any claim that any such proceedings
     have been brought in an inconvenient or inappropriate forum and
     further irrevocably agrees that a judgement in any proceedings brought
     in the English courts shall be conclusive and binding upon each
     Borrower and the Junior Entity and may be enforced in the courts of
     any other jurisdiction.

     (c)  Nothing contained in this Section 23 shall limit the right of the
     Facility Agent to take proceedings against the Borrower or the Junior
     Entity in any other court of competent jurisdiction, nor shall the
     taking of proceedings in one or more jurisdictions preclude the taking
     of proceedings in any other jurisdiction, whether concurrently or not.

24.  To the extent that the Borrower or the Junior Entity may now or
     hereafter be entitled, in any jurisdiction in which proceedings may at
     any time be commenced with respect to this Agreement, to claim for
     itself or any of its undertaking, properties, assets or revenues
     present or future any immunity (sovereign or otherwise) from suit,
     jurisdiction of any court, attachment prior to judgement, attachment
     in aid of execution of a judgement, execution of a judgement or from
     set-off, banker's lien, counterclaim or any other legal process or
     remedy with respect to its obligations under this Agreement and to the
     extent that in any such jurisdiction there may be attributed to the
     Borrower or the Junior Entity any such immunity (whether or not
     claimed), each of the Borrower and the Junior Entity hereby to the
     fullest extent permitted by applicable law irrevocably agrees not to
     claim, and hereby to the fullest extent permitted by applicable law
     waives, any such immunity.

25.  Each of the Borrower and the Junior Entity consents generally in
     respect of any proceedings to the giving of any relief or the issue of
     any process in connection with such proceedings including the making,
     enforcement or execution against any property whatsoever (irrespective
     of its use or intended use) of any order or judgement which may be
     made or given in such proceedings.

26.  If any dispute arises in relation to this Agreement, including any
     questions as to existence, validity or termination, such dispute
     shall, at the option only of the Facility Agent, be referred to and
     finally resolved by arbitration under the rules of the London Court of
     International Arbitration which are applicable at the time of
     reference to the arbitration and are deemed to be incorporated by
     reference into this Section 26.  Such arbitration shall take place in
     London, England and shall be conducted by three arbitrators, one of
     whom shall be nominated by the Borrower, one by the Facility Agent and
     the third to be agreed between the two arbitrators so nominated and in
     default he shall be nominated by the President of the London Court of
     International Arbitration.  The language in which such arbitration
     shall be conducted shall be English.  Any award rendered shall be
     final and binding on the parties thereto and may be entered into any
     court having jurisdiction or application may be made to such court for
     an order of enforcement as the case may require.  No party may appeal
     to any court from any award or decision of the arbitral tribunal and,
     in particular, but without limitation, no applications may be made
     under section 45 of the Arbitration Act 1996 and no appeal may be made
     under section 69 of that Act.

27.  This Agreement may be executed in one or more counterparts, each of
     which will be deemed to be an original copy of this Agreement and all
     of which, when taken together, will be deemed to constitute one and
     the same agreement.



     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

                              CHAPARRAL RESOURCES, INC.

                              By:  /S/ MICHAEL B. YOUNG
                                   ----------------------------
                              Name:  Michael B. Young
                              Title: Treasurer

                              SHELL CAPITAL SERVICES LIMITED

                              By:  /S/ MARK L.G. TURNER
                                   ----------------------------
                              Name:  Mark L.G. Turner
                              Title:  Attorney-in-Fact

                              CORD CAPITAL, LLC

                              By:  /S/ C. CORD
                                   ----------------------------
                              Name:  Charles E. Cord
                              Title:  President

                              Address:  136 El Camino
                                        Beverly Hills, CA  90212

                              Telephone: 310-278-2626
                              Facsimile: 310-859-9344