Exhibit 10.6



Agreed terms document under the joint venture shareholders' agreement dated 14
October 2005 among Baltic Petroleum (E&P) Limited, Siberian Energy Group Inc.
and Zauralneftegaz Limited






                            DATED 9th November 2005








                           (1)  ZAURALNEFTEGAZ LIMITED

                                  in favour of

                          (2)  CASPIAN FINANCE LIMITED








                                    DEBENTURE






                              COVINGTON & BURLING

               REGISTERED FOREIGN LAWYERS AND SOLICITORS - LONDON
                                LONDON WC2R 1BH

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                                TABLE OF CONTENTS

1.     DEFINITIONS AND INTERPRETATION                                          2

2.     COVENANT TO PAY                                                         5

3.     GRANT OF SECURITY                                                       5

4.     COLLECTING RECEIVABLES                                                  8

5.     NEGATIVE PLEDGE AND OTHER RESTRICTIONS                                  8

6.     FURTHER ASSURANCE                                                       9

7.     CONTINUING SECURITY                                                     9

8.     INSURANCE                                                               9

9.     PROPERTY OBLIGATIONS                                                    9

10.     LEASES, POSSESSION, CONSOLIDATION OF MORTGAGES                        10

11.     POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS                      10

12.     APPOINTMENT OF A RECEIVER OR AN ADMINISTRATOR                         10

13.     POWER OF ATTORNEY                                                     14

14.     COSTS, CHARGES AND LIABILITIES                                        14

15.     SET-OFF                                                               15

16.     FOREIGN CURRENCIES                                                    15

17.     TRANSFER AND DISCLOSURE                                               15

18.     FORBEARANCE AND SEVERANCE                                             15

19.     COMMUNICATIONS                                                        16

20.     LAW AND JURISDICTION                                                  16

21.     CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999                          17

22.     COUNTERPARTS AND COMMENCEMENT                                         17

<PAGE>

THIS  DEBENTURE  is  dated   9th November 2005

BETWEEN:

(1)  ZAURALNEFTEGAZ  LIMITED,  a  company  incorporated  in  England  and  Wales
     under  company  number  5525360  and  whose  registered  office  is  at c/o
     Gilchrist  Solicitors,  18b  Charles Street, London W1J 5DU, United Kingdom
     (the "CHARGOR"); and

(2)  CASPIAN  FINANCE  LIMITED,  a  company  incorporated  in  England and Wales
     under  company number 5530897 and whose registered office is at c/o Salans,
     Millennium  Bridge  House,  2 Lambeth Hill, London EC4V 2AJ, United Kingdom
     (the "LENDER").

BACKGROUND

(A)  Pursuant  to  a  loan  agreement  of  even  date  herewith  (the  "LOAN
     AGREEMENT") made between the Lender and the Borrower, the Lender has agreed
     to make a loan facility available to and for the benefit of the Borrower.

(B)  Pursuant  to  a  Guarantee  of  even  date herewith (the "GUARANTEE") given
     by  the  Chargor  to  the  Lender,  the Chargor has agreed to guarantee the
     Borrower's obligations to the Lender under the Loan Agreement.

(C)  The  Chargor  has  agreed  to  enter  into  this  deed  to  secure  its
     obligations to the Lender under the Guarantee.

1.   DEFINITIONS  AND  INTERPRETATION

1.1  In this deed, unless the context otherwise requires:

     "ASSETS"  means  all  of  the  Chargor's  undertaking,  property,  assets,
     rights  and  revenues,  whatever  and  wherever  in  the world, present and
     future, and includes each or any of them;

     "BORROWER"  means  OOO  Zauralneftegaz,  a  limited  liability  company
     incorporated  under the laws of the Russian Federation under the main state
     registration  number  (ORGN)  1024500513950,  located  at  27 Lenin Street,
     Kurgan, 64000, Kurgan Oblast, Russian Federation;

     "BORROWER  INTERESTS"  means  all  of  the following: (i) the 100 per cent.
     participatory  interest of the Chargor in the Borrower with a nominal value
     of  10,000  Russian  rubles  that the Chargor now has or holds or hereafter
     has,  holds, acquires, possesses or becomes entitled to, including, without
     limitation,  those  limited  liability  company  interests  as specified in
     Schedule  2  in  more  detail;  (ii) all Certificates; (iii) all agreements
     entered  into  in  substitution or replacement for or in addition to any of
     the  foregoing,  and  any  agreement  representing  or  evidencing  such
     participatory  interests;  and  (iv)  all  book-entries  and  entitlements
     relating to any of the foregoing;

     "BUSINESS  DAY"  means  a  day  which is not a Saturday or Sunday or a bank
     or public holiday in England and Wales;

<PAGE>

     "CERTIFICATES"   means   all   certificates   and  instruments  evidencing,
     documenting or representing the Borrower Interests, if any;

     "DEFAULT  RATE"  means  the  2%  per  annum above the cost to the Lender as
     certified  by  the  Lender  of  funding  the  relevant amount on the London
     Interbank  Market  for  such period or consecutive periods as the Lender in
     its sole discretion may select;

     "ENFORCEMENT EVENT" means any event set out in clause 12.1;

     "FINANCE  DOCUMENTS"  means  the  Loan  Agreement, the Guarantee, the Joint
     Venture  Agreement,  this  deed  and  all agreements, instruments and other
     documents delivered under any of the foregoing or  in connection therewith;

     "FLOATING  CHARGE  ASSETS"  means  those  of  the Chargor's Assets that are
     for  the  time  being  comprised  in  the floating charge created by clause
     3.1(c), but only insofar as concerns that floating charge;

     "GROUP"  means  the  Chargor  and  each  company  which  is  now  or in the
     future  a  subsidiary  undertaking  of  the Chargor or the Chargor's parent
     undertaking (as defined by section 258 of the Companies Act 1985);

     "GUARANTEE"  means  the  guarantee  of  even  date  herewith  given  by the
     Chargor  to  the  Lender in respect of the Borrower's obligations under the
     Loan Agreement;

     "INTELLECTUAL  PROPERTY"   means   all  patents   (including  supplementary
     protection certificates), utility models, registered and unregistered trade
     marks (including service marks), rights in passing off, copyright, database
     rights,  registered  and  unregistered  rights  in  designs  (including  in
     relation  to  semi conductor products) and in each case, any extensions and
     renewals of, and any applications for, these rights;

     "INTELLECTUAL  PROPERTY  RIGHTS"   means   the   Chargor's   Intellectual
     Property  and  all  other  intellectual  property  rights and other rights,
     causes of action, interests and assets comprised in clause 3.1(b)(vi);

     "JOINT  VENTURE  AGREEMENT"   means   the   joint   venture   shareholders'
     agreement dated October 2005 among Baltic Petroleum (E&P) Limited, Siberian
     Energy Group Inc. and the Chargor;

     "LAND"  includes  freehold  and  leasehold,  and  any  other estate in land
     and  (outside  England  and  Wales) immovable property and in each case all
     buildings  and  structures  upon  and all things affixed to Land (including
     trade and tenant's fixtures);

     "LOAN  AGREEMENT"  means  the  loan  agreement  of  even  date  herewith
     entered into between the Borrower and the Lender;

     "PERMITTED  SECURITY"   any   lien  arising   in  the  ordinary  course  of
     trading,  any  retention  of  title rights in favour of a supplier or other
     third  party  arising in the ordinary course of business, any rights of set
     off  arising  in the ordinary course of business and any security interests
     over  any  assets  acquired after the date hereof in the ordinary course of
     business  where such security interest existed over such asset prior to its
     acquisition  by  the  Chargor  and  was not created in contemplation of the
     acquisition  of that asset by the Chargor;

     "RECEIVABLES"  means,  all  sums  of  money  receivable  by the Chargor now
     or  in the future consisting of or payable under or derived from any Assets
     referred;

<PAGE>

     "RECEIVER"  means  every  person  the  Lender may appoint as a receiver and
     manager under clause 12, including any substituted receiver and manager;

     "RELATED  RIGHTS"  means,  in  relation  to   any  Securities,  all  assets
     deriving from such Securities including all allotments, accretions, rights,
     dividends,  interest  or  other  property  whether  of  a capital or income
     nature,  accruing,  offered,  issued  or  deriving  at  any  time by way of
     dividend,  bonus, preference, redemption, exchange, purchase, substitution,
     conversion,  consolidation,  subdivision,  preference,  option or otherwise
     attributable  to any Securities or incidental to any such Securities or any
     Related Rights previously described;

     "SECURED  LIABILITIES"   means  all   monies  obligations  and  liabilities
     whatsoever whether for principal interest or otherwise in whatever currency
     which  may now or at any time in the future be due owing or incurred by the
     Chargor  to the Lender under or in connection with the Finance Documents or
     otherwise,  whether  actual  or  contingent and whether alone, severally or
     jointly  as  principal, guarantor, surety or otherwise and in whatever name
     or style and whether on any current or other account or in any other manner
     whatsoever; and

     "SECURITIES"   means  all  shares,  stocks,  debentures,  debenture  stock,
     bonds,  warrants,  options,  coupons or other securities and investments of
     any  kind  whatsoever owned by the Chargor, including, for the avoidance of
     doubts, the Borrower Interests, (including rights to subscribe for, convert
     into  or  otherwise  acquire the same) whether marketable or otherwise, and
     all  other interests (including loan capital) now or in the future owned by
     the  Chargor  from  time to time in any company, firm, consortium or entity
     wherever situate.

1.2  References  to  clauses  and  schedules  are  to  the clauses and schedules
     to this deed.

1.3  Clause  headings  are  inserted  for  ease of reference only and are not to
     affect the interpretation of this deed.

1.4  Except  to  the  extent  the  context  otherwise  requires any reference in
     this  document  to  "THIS  DEED"  and  any other document referred to in it
     includes any document expressed to be supplemental to or collateral with or
     which  is  entered  into pursuant to or in accordance herewith or therewith
     and  shall  be  deemed  to  include  any  instruments  amending,  varying,
     supplementing,  novating  or replacing the terms of any such documents from
     time to time.

1.5  References  to  a  person  are  to  be  construed  to include corporations,
     firms,  companies,  partnerships,  individuals,  associations,  states  and
     administrative  and  governmental  and  other  entities  whether  or  not a
     separate legal entity.

1.6  References  to  any  person  are  to  be construed to include references to
     that  person's  successors,  transferees  and  assigns  whether  direct  or
     indirect.

1.7  References  to  any  statutory  provision  are  to  be  construed  as
     references  to that statutory provision as amended supplemented, re-enacted
     or  replaced  from  time  to time (whether before or after the date of this
     deed)  and  are  to  include  any orders, regulations, instruments or other
     subordinated  legislation  made  under  or  deriving  validity  from  that
     statutory provision.

<PAGE>

1.8  The  words  "OTHER"  and  "OTHERWISE"  are  not  to  be  construed  ejusdem
     generis with any foregoing words where a wider construction is possible.

1.9  The  words  "INCLUDING"  and  "IN  PARTICULAR" are to be construed as being
     by way of illustration or emphasis only and are not to be construed as, nor
     shall they take effect as, limiting the generality of any foregoing words.

1.10 In  construing  this  deed  general  words  introduced  by the word "OTHER"
     shall  not  be  given a restrictive meaning by reason of the fact that they
     are  preceded  by  words  indicating a particular class of acts, matters or
     things and general words shall not be given a restrictive meaning by reason
     of  the  fact  that they are followed by particular examples intended to be
     embraced by the general words.

1.11 The  perpetuity  period  applicable  to  the trusts created by this deed is
     80 years.

2.   COVENANT  TO  PAY

2.1  The  Chargor  hereby  unconditionally  and  irrevocably, as primary obligor
     and  not merely as surety, covenants with the Lender that it will on demand
     pay and/or discharge the Secured Liabilities when due to the Lender.

2.2  The  Chargor  shall  pay  interest  to  the  date  of  payment or discharge
     (notwithstanding  any  demand or any judgment obtained by the Lender or the
     liquation  or  administration  of  or  any  arrangement or composition with
     creditors  by  the  Chargor)  at  the  rate  or  rates applicable under the
     agreements  or  arrangements  giving  rise  to  the relevant obligations or
     liabilities or, if no such rate or rates are specified, at the Default Rate
     upon  such  days  and  upon  such terms as the Lender may from time to time
     determine.  Such  interest shall be compounded in the event of it not being
     punctually  paid  in  accordance  with the usual practice of the Lender but
     without  prejudice  to  the  right of the Lender or require payment of such
     interest.

2.3  All  sums  payable  by  the  Chargor  under this deed shall be paid without
     any  set-off,  counterclaim,  withholding  or  deduction  whatsoever unless
     required  by law in which event the Chargor will simultaneously with making
     the  relevant  payment  under  this  deed pay to the Lender such additional
     amount as will result in the receipt by the Lender of the full amount which
     would  otherwise  have  been receivable and will supply the Lender promptly
     with  evidence satisfactory to the Lender that the Chargor has accounted to
     the relevant authority for the sum withheld or deducted.

3.   GRANT  OF  SECURITY

3.1  By  executing  this  deed  the  Chargor  charges  to  the  Lender with full
     title  guarantee  and as a continuing security for the payment, performance
     and  discharge  of  all  the Secured Liabilities the following assets, both
     present  and  future, from time to time to the extent owned by it or to the
     extent in which it has an interest:

     (a)  by  way  of  first  equitable  mortgage, all of its Securities and, if
          and  to the extent not effectively assigned by clause 3.2, all Related
          Rights relating to all its Securities;

<PAGE>

     (b)  by way of fixed charge:

          (i)  all  Land  which  is  now,  or  in  the  future  becomes,  the
               property of the Chargor;

          (ii) all  plant  and  machinery  now  or in the future attached to any
               Land;

          (iii) all  rental  and  other  income  and  all debts and claims which
               are  due or owing to the Chargor now or in the future under or in
               connection with any lease, agreement or licence relating to Land;

          (iv) all  insurance  and  assurance  contracts  and policies now or in
               the future held by or otherwise benefiting the Chargor:

               (a)  which  relate  to  Assets  themselves  subject  to  a  fixed
                    charge in favour of the Lender; or

               (b)  which  are  now  or  in  the future deposited by the Chargor
                    with the Lender; together with all such rights and interests
                    as  the  Chargor  may  have  in these contracts and policies
                    (including  the  benefit of all claims arising and all money
                    payable under them);

          (v)  all  the  goodwill  of  the  Chargor  and  uncalled share capital
               for the time being;

          (vi) all  Intellectual  Property  Rights  present  and  future,
               including  any  Intellectual Property to which the Chargor is not
               absolutely  entitled  or to which the Chargor is jointly entitled
               together with others;

          (vii) the  benefit  of  all  agreements  and  licences  now  or in the
               future entered into or enjoyed by the Chargor relating to the use
               or  exploitation  of any Intellectual Property in any part of the
               world;

          (viii) all  trade  secrets,  confidential  information  and  know  how
               owned  or enjoyed by the Chargor now or in the future in any part
               of the world;

          (ix) all  of  its  rights  (including  against  third  parties)  and
               benefits  in  and  to the Receivables, to the extent that they do
               not fall within any other paragraph of this clause 3.1;

          (x)  all  other  debts  now  or  in  the  future  owing to the Chargor
               save  for  those  arising on fluctuating accounts with associates
               (as defined in section 53(3) of the Companies Act 1989);

          (xi) the  benefit  of  all  instruments,  guarantees, charges, pledges
               and other rights now or in the future available to the Chargor as
               security in respect of any Asset itself subject to a fixed charge
               in favour of the Lender;

<PAGE>

     (c)  by  way  of  floating  charge  all  Assets  which  are not effectively
          charged  by  the fixed charges detailed above, but so that the Chargor
          shall not without the Lender's prior written consent:

          (i)  take  any  step  referred  to  in  clause 5.1 with respect to any
               of the Floating Charge Assets; or

          (ii) sell,  transfer,  part  with  or  dispose  of any of the Floating
               Charge  Assets  except  by  way of sale in the ordinary course of
               business.

3.2  The  Chargor  with  full  title  guarantee and as a continuing security for
     the  payment,  performance  and discharge of the Secured Liabilities hereby
     assigns  absolutely  (in  each  case  to  the  fullest  extent  capable  of
     assignment)  by way of security to the Lender all of its present and future
     rights,  title  and  interest  in and to (to the extent that the Chargor is
     interested  therein)  the  Related  Rights (including any rights, title and
     interest that relate to the Borrower Interests) and all monies which at any
     time  may  be or become payable to it pursuant to the terms of any contract
     or  licence  and the proceeds of any claims, awards and judgments which may
     at any time be receivable or received by it pursuant thereto.

3.3  The  Lender  may  at  any  time  crystallise any floating charge created in
     clause  3.1(c)  into  a  fixed  charge, or subsequently reconvert it into a
     floating  charge,  by  notice in writing given at any time by the Lender to
     the Chargor in relation to any or all Floating Charge Assets, as the Lender
     may specify in the notice.

3.4  Subject to the rights of any prior mortgagee, the Chargor must:

     (a)  deposit  with  the  Lender  for  retention  by it, all title deeds and
          documents  relating to all Assets charged by way of fixed charge under
          clause 3.1,  including  insurance  and  assurance  policies;  and

     (b)  execute  and  deliver  to  the  Lender such documents and transfers as
          the  Lender  may  require  at  any  time  to  constitute or perfect an
          equitable  or  legal  charge or a pledge (at the option of the Lender)
          over  the  Securities, including uncertificated Securities, within any
          clearing,  transfer, settlement and/or depositary system, and give any
          instructions  and  take  any actions the Lender may require to achieve
          this.

3.5  Unless  and  until  this  deed  becomes  enforceable:

     (a)  the  Chargor  may  continue  to  exercise  all voting and other rights
          attaching  to Securities as long as it remains their registered owner;
          and

     (b)  if  Securities  are  registered  in  the name of the Lender's nominee,
          all  voting and other rights attached to them will be exercised by the
          nominee  in  accordance  with the instructions that the Chargor issues
          from  time  to  time. In the absence of instructions, the nominee will
          refrain from exercising any of these rights.

<PAGE>

3.6  Any  mortgage,  fixed  charge  or  other  fixed  security which the Chargor
     creates in favour of the Lender will have priority over the floating charge
     created by clause 3.1(c) unless the Lender states otherwise on or after its
     creation.

3.7  Any  debentures,  mortgages  or  charges  (fixed  or  floating)  which  the
     Chargor  creates in the future (except those in favour of the Lender) shall
     be expressed to be subject to this deed and shall rank in order of priority
     behind the charges created by this deed.

4.   COLLECTING  RECEIVABLES

4.1  The  Chargor  must  collect  and  realise  all  its  Receivables  in  the
     ordinary  course of business and immediately on receipt pay all money which
     it  receives in respect of them into its Lender account with the Lender, or
     into any other account designated by the Lender, in each case on such terms
     as  the  Lender may direct. Pending that payment, the Chargor will hold all
     money  so  received upon trust for the Lender. The Chargor may, without the
     prior  written  consent  of  the  Lender, charge, factor, discount, assign,
     postpone,  subordinate  or waive its rights in respect of any Receivable in
     favour of any other person or purport to do so.

4.2  If  a  credit  balance  on  any account held by the Chargor with the Lender
     includes  proceeds  of  Receivables credited or transferred to that account
     the Lender shall have an absolute discretion whether to permit or refuse to
     permit  the  Chargor  to  utilise  or  withdraw that credit balance and the
     Lender  may  in its sole discretion at any time transfer all or any part of
     that  credit  balance  to  any  other  account held by the Chargor with the
     Lender or to an account in the Lender's own name.

4.3  If  the  Lender  releases,  waives  or  postpones  its rights in respect of
     any Receivables for the purpose of enabling the Chargor to factor, discount
     or  otherwise  sell  them  to  the  Lender or to a third party, the charges
     created  by  this  deed will in all other respects remain in full force and
     effect.  In  particular,  all amounts due to the Chargor from the Lender or
     the third party and any Receivables re-assigned or due to be re-assigned to
     the Chargor will be subject to the relevant fixed charge detailed in clause
     3.1(b) subject only to any defences or rights of retention or set-off which
     the Lender or the third party may have against the Chargor.

5.   NEGATIVE  PLEDGE  AND  OTHER  RESTRICTIONS

The  Chargor  may  not,  except  with  the  prior written consent of the Lender:

5.1  create  or  attempt  to  create  any fixed or floating security of any kind
     or  any trust over any of its Assets, or permit any lien (other than a lien
     arising by operation of law in the ordinary course of business and save for
     Permitted Security) to arise or subsist over any of its Assets, in any such
     case  ranking  in  priority  to  or  pari  passu  with the security created
     hereunder; or

5.2  sell,  assign,  lease,  license  or  sub-license, or grant any interest in,
     its  Intellectual  Property  Rights,  or  purport  to  do  so, or part with
     possession or ownership of them, or allow any third party access to them or
     the right to use any copy of them.

<PAGE>

6.   FURTHER  ASSURANCE

The Chargor shall if so demanded by the Lender in writing execute and deliver to
the  Lender at the cost of the Chargor, any document that the Lender may require
further  to secure the payment of the Secured Liabilities, or to create, enhance
or  perfect any fixed security, intended to be created by this deed, over any of
the Assets, or to give full effect to this deed, or to vest title, in accordance
with  this  deed,  to any of the Assets in the Lender or the Lender's nominee or
any  purchaser.

7.   CONTINUING  SECURITY

This  deed  will remain a continuing security in favour of the Lender regardless
of  any  settlement of account or any other matter whatever and shall be without
prejudice  and  in  addition  to every other right, remedy or security which the
Lender  may  have  now  or in the future in respect of any of the Assets for the
payment  of  any  Secured  Liabilities.

8.   INSURANCE

8.1  The  Chargor  shall  insure  all  of  its  insurable  Assets,  and  shall
     procure  that  each  of  its  subsidiaries  shall  insure  its undertaking,
     property,  assets,  rights  and  revenues,  with  an  insurance  office  or
     underwriter  acceptable to the Lender, in such manner and to such extent as
     is reasonable and customary for a business engaged in the same or a similar
     business  to  that carried on by the Chargor or the relevant subsidiary and
     in the same or similar localities or as the Lender may reasonably require.

8.2  The  Chargor  must,  and  shall  procure  that  each  of  its  subsidiaries
     shall,  punctually  make all premium and other payments necessary to effect
     or maintain these insurances and produce receipts for these payments on the
     Lender's  request.  If,  at any time the Chargor or any of its subsidiaries
     fails  to  have  the  required  insurance  cover in place or to produce any
     receipt  on  request  or to deposit any policy with the Lender under clause
     3.4  or  on  request, the Lender may take out or renew any insurance in any
     sum and on any terms as the Lender may think appropriate.

9.   PROPERTY  OBLIGATIONS

The  Chargor  must  at  all  times:

9.1  keep  all  buildings  and  all  fixtures,  charged  under this deed in good
     repair  and  condition provided that in relation to any buildings which are
     held  under a lease the Chargor shall be under any greater obligation under
     this clause than shall be imposed on it under such lease; and

9.2  keep  all  plant  and  machinery  and  other  tangible  moveable  property
     charged  under  this  deed in good and serviceable condition (fair wear and
     tear excepted and allowing for replacement and redundancy) provided that in
     relation  to any such plant, machinery and other tangible moveable property
     which  is  leased,  subject  to  a  hire-purchase  agreement or rented, the
     Chargor  shall be under any greater obligation under this clause than shall
     be  imposed  on  it  under  any  relevant leasing, hire-purchase, rental or
     similar agreement.

<PAGE>

10.  LEASES,  POSSESSION,  CONSOLIDATION  OF  MORTGAGES

10.1 The  Chargor  may  not  without  the  prior  written  consent of the Lender
     exercise any power of leasing, or accepting surrenders of leases of, any of
     its  Land,  or  (unless  obliged to do so by law) extend, renew or vary any
     lease or tenancy agreement or give any licence to assign or underlet.

10.2 The  Chargor  may  not  part  with  possession  (otherwise  than  on  the
     determination  of  any lease, tenancy or licence granted to the Chargor) of
     any  of  its  Land  or share the occupation of it with any other person, or
     agree to do so, without the prior written consent of the Lender.

10.3 Section  93  of  the  Law  of Property Act 1925, dealing with consolidation
     of mortgages, will not apply to this deed.

11.  POWERS  OF  SALE,  LEASING  AND  ACCEPTING  SURRENDERS

11.1 Section  103  of  the  Law  of  Property  Act  1925  will not apply to this
     deed,  but  the  statutory  power  of  sale  (as  between  the Lender and a
     purchaser  from  the  Lender)  will arise on and be exercisable at any time
     after  the  execution  of  this deed. However, the Lender will not exercise
     this  power  of  sale  until this deed has become enforceable in accordance
     with  clause  12.1. This provision will not affect any purchaser or require
     him to ask whether it has become enforceable.

11.2 The  Lender's  statutory  powers  of  sale,  leasing  and  accepting
     surrenders  are  extended  to  allow the Lender (whether in the name of the
     Chargor  or  in  the  name of the Lender) to grant a lease or leases of any
     Land vested in the Chargor or in which the Chargor has an interest with any
     rights  relating  to other Land and containing any covenants on the part of
     the Chargor and any terms and conditions that the Lender may think fit.

11.3 The  Lender's  statutory  power  of  sale  is  extended to allow the Lender
     to sever any fixtures from Land and sell them separately.

11.4 All  powers  of  a  Receiver  under  this  deed  may  be  exercised  by the
     Lender  to the full extent permitted by law after it has become enforceable
     in  accordance  with  clause  12.1,  whether  as attorney of the Chargor or
     otherwise,  and  whether  or  not  a  Receiver  or  administrator  has been
     appointed.

12.  APPOINTMENT  OF  A  RECEIVER  OR  AN  ADMINISTRATOR

12.1 The  following  events  shall  constitute  Enforcement  Events:

     (a)  the  occurrence  of  an  Event  of  Default  (as  defined  in the Loan
          Agreement)  which  is  continuing  and  which has not been remedied or
          waived in accordance with the terms of the Loan Agreement;

     (b)  if  the  Chargor  fails  to  pay  any  sums payable by it from time to
          time  to  the Lender on the due date therefore or fails to comply with
          any  term,  condition, covenant or other provisions of this deed or of
          any  facility  from  the  Lender  or  any  related  security  document
          including but not exclusive to the Finance Documents or to perform any

<PAGE>

          of  its  obligations  or  liabilities  to  the  Lender  or  if  any
          representation or warranty from time to time made to the Lender by the
          Chargor is or becomes incorrect or misleading in a material respect;

     (c)  if  an  encumbrancer  takes  possession  of  or a trustee, receiver or
          similar  officer  is  appointed  in  respect of all or any part of the
          business  or  assets of the Chargor or a distress execution attachment
          or  other legal process is levied or enforced upon or sued out against
          all  or  any  substantial  part  of  such assets and is not discharged
          within 10 days;

     (d)  if  the  Chargor  is  deemed  unable  to  pay  its  debts or commences
          negotiations  with any one or more of its creditors with a view to the
          general  readjustment  or  rescheduling of its indebtedness or makes a
          general  assignment  for  the  benefit  of  or  a composition with its
          creditors;

     (e)  if  the  Chargor  takes  any  corporate  action  or  other  steps  are
          taken or legal proceedings are started for its winding-up, dissolution
          or  reorganisation (otherwise than for the purposes of an amalgamation
          or  reconstruction  whilst  solvent  on  terms  previously approved in
          writing  by  the  Lender)  or  for  the  appointment  of  a  receiver,
          administrator,  administrative receiver, trustee or similar officer of
          it or of all or a material part of its revenues and assets;

     (f)  if  the  Chargor  suspends  or  threatens  to  suspend  a  substantial
          part  of its business operations (otherwise than for the purposes of a
          reconstruction or amalgamation on terms previously approved in writing
          by  the  Lender)  or any governmental authority permits or procures or
          threatens  to  permit  or  procure  any  reorganisation,  transfer  or
          expropriation  (whether with or without compensation) of a substantial
          part of the business or assets of the Chargor;

     (g)  if  any  guarantee,  indemnity  or  other  security  for  any  of  the
          Secured  Liabilities fails or ceases in any respect to have full force
          and  effect or to be continuing or is terminated or disputed or in the
          opinion  of  the  Lender is in jeopardy invalid or unenforceable or if
          this  deed or the security created by or is disputed or in the opinion
          of the Lender is in jeopardy;

     (h)  if  at  any  time  it  is  or  becomes  unlawful  for  the  Chargor to
          perform  or comply with any or all of its obligations under this deed,
          the  Finance  Documents  or any of such obligations of the Chargor are
          not or cease to be legal, valid, binding and enforceable; or

     (i)  if  in  the  opinion  of  the  Lender a material adverse change occurs
          in  thefinancial  condition,  results of operations or business of the
          Chargor.

12.2 Paragraph  14  of  Schedule  B1  to  the Insolvency Act 1986 shall apply to
     this  deed.  If  any Enforcement Event shall occur and be continuing, or if
     requested  by  the  Chargor,  the  Lender may appoint by writing insofar as
     permitted by law, any person or persons to be a receiver and manager of all
     or  any  of the Assets or an administrator or administrators of the Chargor
     and this deed shall in any of such events become immediately enforceable.

12.3 Where  the  Lender  appoints  more  than  one  person  as  Receiver  or
     administrator,  they  shall  have power to act separately unless the Lender
     specifies to the contrary in the appointment.

12.4 The Lender may from to time determine the remuneration of the Receiver.

12.5 Once  a  Receiver  is  appointed,  the  Lender  will  not be precluded from
     making any subsequent appointment of a Receiver over any Assets, whether or
     not any Receiver previously appointed continues to act.

12.6 The  Receiver  will  be  the  agent  of  the  Chargor  which will be solely
     liable  for  his  acts,  defaults  and  remuneration  unless  it  goes into
     liquidation,  after  which  he  shall  act  as principal and not become the
     Lender's agent.

12.7 The  Receiver  will  be  entitled  to  exercise  all  the powers set out in
     Schedules  1  and  2  to  the Insolvency Act 1986. In addition, but without
     limiting  these  powers (and without prejudice to the Lender's own powers),
     the Receiver will have power with or without the concurrence of others:

     (a)  to  sell,  let,  lease  or  grant  licences  of,  or vary the terms or
          terminate  or  accept  surrenders of leases, tenancies or licences of,
          all or any of the Assets, or grant options over them, on any terms the
          Receiver  thinks  fit  in  his  absolute  discretion;  and any sale or
          disposition  may be for cash, payable in a lump sum or by instalments,
          or other valuable consideration;

     (b)  to sever any fixtures from Land and/or sell them separately;

     (c)  to  promote a company to purchase all or any Assets or any interest in
          them;

     (d)  to  make  and  effect  all  repairs,  renewals and improvements to the
          Assets  and  effect,  renew  or  increase  insurances on the terms and
          against the risks that he thinks fit;

     (e)  to  exercise  all  voting  and  other  rights  attaching to Securities
          and investments generally;

     (f)  to  redeem  any  prior  encumbrance  and  settle and pass the accounts
          of  the  encumbrancer  so that all accounts so settled and passed will
          (except  for  any  manifest  error)  be  conclusive and binding on the
          Chargor and the money so paid will be deemed to be an expense properly
          incurred by the Receiver;

     (g)  to  pay  all  proper  charges  as  may  be  incurred by the Lender for
          time  spent  by  the  Lender's  employees  and  agents in dealing with
          matters raised by the Receiver or relating to the receivership; and

     (h)  to  do  all  other  acts  and  things which he may consider incidental
          or  conducive  to  any  of  the  above  matters  or  powers  or to the
          preservation, improvement or realisation of the Assets.

<PAGE>

12.8 Neither  the  Lender  nor  the  Receiver  will  be  liable  to  account  as
     mortgagee in possession or otherwise for any money not actually received by
     the Lender or the Receiver.

12.9 Subject  to  section  45  of  the  Insolvency  Act  1986, the Lender may at
     any time remove a Receiver from all or any of the Assets of which he is the
     Receiver.

12.10 If  at  any  time  after  the security constituted by this deed has become
     enforceable, the following provisions shall apply in relation to any of the
     Assets  situated  in  the  Russian  Federation, including, for avoidance of
     doubt, the Borrower Interests (the "RUSSIAN ASSETS"):

     (a)  The  Lender  may  (but  will  not be obliged to) levy execution on the
          Russian  Assets without any requirement to initiate any court or other
          proceedings or to obtain any court or other order or judgment, and may
          exercise  its  rights and powers under this deed cumulatively with all
          rights and powers permitted by applicable law and/or by this deed.

     (b)  The  Lender  may  (but  will  not be obliged to) levy execution on the
          Russian Assets and in such case the Lender shall give a notice to such
          party indicating that it has elected to effect the sale of the Russian
          Assets and shall be entitled:

          (iii) to  sell  all  or  any  part  of  the Russian Assets pursuant to
               the  procedures  set  forth  in Schedule 1 or in any other manner
               permitted by applicable law;

          (iv) to  bring  or  defend  claims  before  any  authority,  submit to
               arbitration,  conduct  negotiations  and  terminate, withdraw and
               settle  any  suits,  claims,  disputes and other matters, whether
               before  any  authority, arbitrator or otherwise in respect of all
               or any of the Russian Assets in the Chargor's name or otherwise;

          (v)  to  collect,  recover  or  compromise  and  to  give  a  good
               discharge for any monies payable to the Chargor in respect of all
               or any portion of the Russian Assets;

          (vi) to  require  an  assignment  or  other  effective transfer by the
               Chargor  of  its  rights  to  all  or  any portion of the Russian
               Assets; and

          (vii) to  the  extent  necessary  to  enforce the rights of the Lender
               under  this deed, give all consents, waivers and ratifications in
               respect of the Russian Assets, do all acts and things and execute
               all  documents  which  the Chargor could itself do in relation to
               any of the Russian Assets.

     (c)  The  Chargor  hereby  agrees  that  the  Lender (or any trustee, agent
          or  other  person  acting  on its behalf) shall be entitled to proceed
          against  or  enforce any other rights or security or claim for payment
          from any person before proceeding to enforce its rights hereunder.

<PAGE>

12.11 Notwithstanding  anything  in  this  deed  to  the contrary, if the Lender
     elects, in its sole discretion, not to levy execution on the Russian Assets
     as  provided  for  above, then the Chargor hereby agrees and covenants with
     the  Lender  that,  upon the request of the Lender, the Chargor shall enter
     into  an  agreement  or  agreements,  including  in the form of a novation,
     set-off,  assignment  or accord and satisfaction agreement, with the Lender
     or  any  person designated by the Lender for the purpose of transferring or
     otherwise disposing of the Russian Assets (or a specified portion thereof),
     and  any  such agreement shall be in form and substance satisfactory to the
     Lender,  provided  that, for the purpose of such arrangements, the value of
     the Russian Assets shall be equal to the starting price determined pursuant
     to  the  procedure set forth in Schedule 1 (unless the parties hereto agree
     in writing otherwise).

12.12 The  Chargor  agrees  that  it  shall  create  and  maintain  a  corporate
     pledge  book  as  required  by  the Russian Federation Federal Law # 2872-I
     (1992)  within  10  days from the date hereof and issue an extract from the
     said corporate pledge book certifying that the Borrower Interests have been
     pledged  in  favour  of  the  Lender  and  forthwith on demand produce such
     certificates during the validity hereof.

13.  POWER  OF  ATTORNEY

The Chargor, by way of security, irrevocably appoints the Lender (whether or not
a  Receiver  or administrator has been appointed) and any Receiver separately as
its attorney (with full power to appoint substitutes and to delegate) with power
in  the  name or on behalf of the Chargor and as the act and deed of the Chargor
or  otherwise  to  execute  and  deliver  and  otherwise  perfect any agreement,
assurance,  deed,  instrument  or  document, and to perform any act which may be
required  of the Chargor or may be deemed by the attorney necessary or desirable
for  any  purpose  of  this deed, or, following this deed, to create, enhance or
perfect  any  fixed  security  over  any  of  the Assets or, following this deed
becoming enforceable in accordance with clause 12.2, to convey or transfer legal
ownership  of  any  Assets.

14.   COSTS,  CHARGES  AND  LIABILITIES

14.1 The  Chargor  will  be  responsible  for all costs, charges and liabilities
     (including  all  professional  fees  and  disbursements and Value Added Tax
     and/or  any  similar tax) and all other sums paid or incurred by the Lender
     and/or  any  Receiver under or in connection with this deed. The Lender may
     recover  them  from the Chargor on a full indemnity basis as a debt payable
     on demand and debit them without notice to any accounts held by the Chargor
     with the Lender. They will attract interest and be charged on the Assets.

14.2 The  costs  which  may  be  recovered from the Chargor by the Lender and/or
     any Receiver under this deed include without limitation:

     (a)  all  costs  incurred  by  the  Lender  in  preparing and administering
          this deed or perfecting the security created by it;

     (b)  all  costs  (whether  or  not  allowable  on  a taxation by the Court)
          of  all  proceedings  to enforce this deed or to recover or attempt to
          recover any of the Secured Liabilities;

<PAGE>

     (c)  all  money  spent  and  all  costs  arising out of the exercise of any
          power, right or discretion conferred by this deed; and

     (d)  all  costs  and  losses  arising  from  any  default by the Chargor in
          the  payment  when  due  of  any  of  the  Secured  Liabilities or the
          performance of the obligations of the Chargor under this deed.

15.  SET-OFF

At  any time after the security under this deed shall have become enforceable in
accordance  with  clause  12.2, the Lender may apply all or any of that money in
satisfaction  of all or part of the Secured Liabilities as the Lender may select
(whether  presently  payable or not) and may also use that money to purchase any
other  currency  required  for  this  purpose.

16.  FOREIGN  CURRENCIES

If  under  any  applicable  law or regulation or pursuant to a judgment or order
being  made  or registered against the Chargor or the liquidation of the Chargor
or  without  limitation  for any other reason any payment under or in connection
with  this  deed  is  made  or falls to be satisfied in a currency (the "PAYMENT
CURRENCY")  other than the currency in which such payment is expressed to be due
under  or  in connection with this deed (the "CONTRACTUAL CURRENCY") then to the
extent  that  the  amount  of  such payment actually received by the Lender when
converted  into  the contractual currency at the rate of exchange falls short of
the  amount  due under or in connection with this deed the Chargor as a separate
and  independent obligation shall indemnify and hold harmless the Lender against
the  amount  of  such  shortfall.   For  the  purposes  of  this clause "RATE OF
EXCHANGE"  means  the  rate  at which the Lender is able on or about the date of
such  payment  to  purchase,  in  accordance  with  its  normal  practice,  the
contractual  currency with the payment currency and shall take into account (and
the  Chargor  shall  be  liable  for)  any  premium  and other costs of exchange
including  any  taxes  or  duties  incurred  by  reason  of  any  such exchange.

17.  TRANSFER  AND  DISCLOSURE

17.1 The  Lender  may  at  any  time  transfer  all  or  any  part of its rights
     under  this  deed  and  the  Secured Liabilities to any person or otherwise
     grant an interest in them to any person.

17.2 The  Lender  may  also  at  any  time  disclose  any  information about the
     Chargor, this deed and the Secured Liabilities to:

     (a)  any company associated with Lender;

     (b)  any  prospective  or  actual  transferee  or  grantee  referred  to in
          clause 17.1; and

     (c)  any  other  person  considered  by  the  Lender to be concerned in the
          relevant or prospective transaction.

18.   FORBEARANCE  AND  SEVERANCE

18.1 No  delay  or  omission  on  the  part  of  the  Lender  in  exercising any
     right, power or privilege under this deed will impair it or be construed as

<PAGE>

     a  waiver  of  it.  A  single  or  partial  exercise of any right, power or
     privilege  will  not  in  any  circumstances  preclude any other or further
     exercise of it or the exercise of any other right, power or privilege.

18.2 If  any  provision  of  this  deed  is or becomes invalid or unenforceable,
     the remainder of it shall not be affected and each provision shall be valid
     and enforceable to the fullest extent permitted by law.

19.  COMMUNICATIONS

19.1 Every  notice  demand  or  other  communication under this deed shall be in
     writing  and  may  be delivered personally or by letter, telex or facsimile
     transmission  despatched  by the Lender to the Chargor to its address or to
     the numbers specified below:

The Lender
----------
Caspian Finance Limited          Attn:               Fax:
c/o Salans
Millennium Bridge House          Joel McDonald       +44 (0) 20 7429 6001
2 Lambeth Hill
London EC4V 2AJ
United Kingdom
-----------------------          --------------      --------------------

TheChargor
----------

Zauralneftegaz Limited           Attn:               Fax:
c/o Gilchrist Solicitors
18b Charles Street               Company Secretary   +44 (0) 20 7667 6471
London W1J 5DU
United Kingdom
------------------------         -----------------   --------------------

19.2 Every  notice,  demand  or  other  communication  shall  be  deemed to have
     been  received (if sent by post) twenty-four hours after being posted first
     class  postage  prepaid (if posted from and to an address within the United
     Kingdom)  or  5  working  days  after  being posted prepaid airmail and (if
     delivered  personally  or  despatched  by  telex  subject  to receiving the
     correct  telex  answerback  or  by  facsimile  transmission) at the time of
     delivery  or  despatch  if  during  normal  business  hours in the place of
     intended  receipt  on  a  working  day in the place of intended receipt and
     otherwise  at  the opening of business in that place on the next succeeding
     such working day.

20.  LAW  AND  JURISDICTION

20.1 This  deed  is  governed  by  and  shall  be  construed  in accordance with
     English law.

20.2 The  Chargor  irrevocably  agrees  for  the exclusive benefit of the Lender
     that  the  courts  of England shall have exclusive jurisdiction to hear and
     determine any suit action or proceeding and to settle any dispute which may
     arise  out  of  or  in  connection  with  this  deed  and for such purposes
     irrevocably submits to the jurisdiction of such courts.

<PAGE>

20.3 Nothing  contained  in  this  clause  shall  limit  the right of the Lender
     to  take  proceedings  against  the Chargor in any other court of competent
     jurisdiction  nor  shall  the taking of any such proceedings in one or more
     jurisdictions  preclude the taking of proceedings in any other jurisdiction
     whether concurrently or not (unless precluded by applicable law).

20.4 The  Chargor  irrevocably  waives  any  objection  which it may have now or
     in  the  future to the courts of England being nominated for the purpose of
     this  clause  on  the  ground of venue or otherwise and agrees not to claim
     that any such court is not a convenient or appropriate forum.

21.  CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

21.1 Except  as  expressly  provided  in  this  deed,  the parties do not intend
     that  any term of this deed shall be enforceable by virtue of the Contracts
     (Rights  of Third Parties) Act 1999 or otherwise by any person who is not a
     party.

21.2 The  parties  may  rescind,  vary,  waive,  restore,  assign,  novate  or
     otherwise  dispose  of all or any of their respective rights or obligations
     under this deed without the consent of any person who is not a party.

22.  COUNTERPARTS  AND  COMMENCEMENT

22.1 This  deed  may  be  executed  in  any  number  of  counterparts  and  by
     different  parties  to  it  in  separate  counterparts,  each of which when
     executed  and  delivered  shall  be an original. All such counterparts will
     together constitute one and the same instrument.

22.2 This  deed  shall  come  into  effect on the date inserted by the Lender on
     the  front  page  and  shall be binding on all those that have executed and
     delivered  it,  notwithstanding  that  any  one or more companies that were
     intended to execute it may not do so or may not be effectually bound.

IN  WITNESS  WHEREOF, the Chargor has executed and delivered this debenture as a
deed  the  day  and  year  first  before written and, before such delivery, this
debenture  has  been  signed  on  behalf  of  the  Lender.

<PAGE>

       SCHEDULE 1 - PROCEDURES FOR LEVY OF EXECUTION OF THE RUSSIAN ASSETS

1.   The  Lender  may  (as  specified  in clause 12.10 of this deed) sell all or
     any  part  of the Russian Assets at public auctions organised by the Lender
     or  by  an  organisation  that specializes in coordinating such auctions (a
     "SPECIALISED ORGANISATION") in accordance with applicable law. In the event
     that  all of the Russian Assets are not sold at the first such auction, the
     Lender  may in its sole discretion enter into an agreement with the Chargor
     to acquire the Russian Assets or initiate a second auction.

2.   The  Lender  or  the  Specialised  Organisation, upon prior approval of the
     Lender, shall be entitled (in such manner as the Lender may in its absolute
     discretion see fit, subject to applicable law):

     (a)  to determine the date, time and place of each public auction;

     (b)  to  establish  the  procedure  for  the  holding  of  each  public
          auction;

     (c)  to  make  all  arrangements  for  the  holding of each public auction,
          including,  without limitation, such arrangements as the Lender or the
          Specialised  Organisation  consider appropriate for advertising with a
          view to obtaining the best price reasonably achievable for the Russian
          Assets;

     (d)  to  approve  the  results  of  the  public  auction(s)  and notify the
          Chargor and any other interested persons of the same;

     (e)  to  appoint  a  pledge  manager  to  assist  the  Lender in exercising
          the  powers  contained  in (a) to (d) above and delegate its powers to
          such pledge manager;

     (f)  to  engage  professional  advisers,  including  valuers,  lawyers  and
          accountants  in connection with the auction(s) and the exercise of the
          Lender's rights; and

     (g)  to  incur  and  pay  the  costs and expenses of holding the auction(s)
          and  of  its  advisers engaged pursuant to (e) and (f) above, together
          with  notarisation,  registration  and  other  costs  and  expenses in
          relation to the transfer of the Russian Assets to the purchaser or the
          Lender.

3.   For  the  purpose  of  compliance  with Article 350(3) of the Civil Code of
     the Russian Federation, the Chargor and Lender shall promptly, following an
     appropriate  Lender's request to the Chargor, agree on a starting price for
     the  first  and  any subsequent public auction which shall be determined on
     the basis of prevailing market conditions. In the event the Chargor and the
     Lender  fail  to  reach  an  agreement  with respect to such starting price
     within  a  reasonable time, the Lender shall determine a starting price for
     the  first  and  any  subsequent  public auction based on prevailing market
     conditions.

4.   The  Lender  or  the  Specialised  Organisation may sell the Russian Assets
     at  either  public auction for less than the price specified in paragraph 8
     below.  The  Lender or the Specialised Organisation shall not be obliged to
     delay either auction in order to receive a better price.

<PAGE>

5.   The  Lender  or  the  Specialised  Organisation  shall  be  entitled in its
     own  name  as a representative for and on behalf of the Chargor to transfer
     the  Russian  Assets  to  any  purchaser  free  and clear of all rights and
     interests of the Lender and the Chargor, and to give valid discharge to any
     purchaser for payment of the purchase price, and the minutes of the results
     of  the public auction signed by the Lender or the Specialised Organisation
     shall  suffice  for  such  purposes.  Such  purchaser  shall be entitled to
     register  its  title to the Russian Assets with all relevant authorities by
     evidencing  to  the  authorities this deed together with the minutes of the
     results  of  the  public  auction  signed  by the Lender or the Specialised
     Organisation  stating  that  such  purchaser  has  become  the owner of the
     Russian  Assets.  The Chargor shall ensure that the title of such purchaser
     to the Russian Assets is duly documented.

6.   The  Lender  may  in  its  sole  discretion  either  (i)  enter  into  an
     agreement  with the Chargor to acquire the Russian Assets; or (ii) initiate
     a second auction if the Lender or the Specialised Organisation (each in its
     absolute discretion) consider the first public auction to have failed.

7.   If  the  Lender  or  the  Specialised  Organisation (each in their absolute
     discretion)  consider  the second public auction to have failed, the Lender
     or  the  Specialised  Organisation  shall  be  entitled,  by  notice to the
     Chargor, to declare the public auction to have failed, and the Lender shall
     assume  ownership  of  the  Russian  Assets and upon service of that notice
     shall  have  good  title to the Russian Assets free and clear of all rights
     and  interests of the Chargor without any additional agreements. The Lender
     shall  be  entitled  to  register  its title to the Russian Assets with all
     relevant  authorities  by  evidencing to the authorities this Deed together
     with  the minutes of the results of the public auction signed by the Lender
     or  the  Specialised  Organisation  stating  that  the first and the second
     public auction have failed and that the Lender has assumed ownership of the
     Russian  Assets.  The  Chargor shall use its reasonable endeavour to ensure
     that the title of the Lender to the Russian Assets is duly documented.

8.   The  Parties  agree  that,  as  of  the date hereof, the estimated value of
     the  Russian  Assets  is  equal  to  the  Russian  Ruble  equivalent  of
     US$7,705,079.

<PAGE>

                                 SCHEDULE 2 - BORROWER INTERESTS

                  ISSUING                                            PERCENTAGE
                  COMPANY        ISSUE DATE       NOMINAL VALUE       OWNERSHIP

                    OOO         10 November          10,000              100%
               Zauralneftegaz      2001
           (a Russian limited
            liability company)










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EXECUTED as a DEED by
ZAURALNEFTEGAZ LIMITED.                /s/ James Charles Pockney
acting by a Director and               ---------------------------------
a Director/Secretary                   Director

                                       /s/ David Zaikin
                                       ---------------------------------
                                       Director/Secretary

SIGNED for and behalf of
CASPIAN FINANCE LIMITED                /s/ James Mark Colin Gilchrist
                                       ---------------------------------

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