Exhibit 10.7



                                  AGREEMENT FOR
                    THE PLEDGE OF THE PARTICIPATORY INTEREST
                                       IN
                               OOO ZAURALNEFTEGAZ





                            DATED 9th November, 2005



                                     BETWEEN


                             CASPIAN FINANCE LIMITED

                                       AND


                             ZAURALNEFTEGAZ LIMITED









<PAGE>

             AGREEMENT FOR THE PLEDGE OF THE PARTICIPATORY INTEREST

9th November 2005

[London]

ZAURALNEFTEGAZ  LIMITED,  a  company  incorporated  in  England  and Wales under
company  number  5525360  and  whose registered office is at 18b Charles Street,
London  W1J  5DU, United Kingdom (hereinafter referred to as the "PLEDGOR"), and


CASPIAN  FINANCE  LIMITED,  a  company  incorporated  in England and Wales under
company  number 05530897 and whose registered office is at 3rd Floor, Millennium
Bridge  House,  2  Lambeth  Hill,  London  EC4V 4AJ, United Kingdom (hereinafter
referred  to  as  the  "PLEDGEE"),



the  Pledgor  and the Pledgee may hereinafter be collectively referred to as the
"Parties",  or  individually  as  a  "Party"

                                  R E C I T A L
                                  -------------

WHEREAS  pursuant  to  the  Loan Agreement the Pledgee has agreed to make a loan
facility  in the amount of up to 6,859,395 (Six Million Eight Hundred Fifty-Nine
Thousand  Three  Hundred Ninety-Five) US Dollars as the Commitment, available to
and  for  the  benefit  of  the  Company;

WHEREAS  as  of  the  date  hereof,  the  Pledgor  is  the  lawful  owner of the
Participatory  Interest,  as  these  terms  are  defined  in  Article  1  below;

WHEREAS pursuant to a Guarantee of even date herewith (the "GUARANTEE") given by
the  Pledgor  to  the Pledgee, the Pledgor has agreed to guarantee the Company's
obligations  to  the  Pledgee  under  the  Loan  Agreement;  and

WHEREAS  The  Pledgor  has  agreed  to  enter  into this Agreement to secure its
obligations  to  the  Pledgee  under  the  Guarantee.

NOW  THEREFORE  the  Parties  have  entered into this Agreement on the terms and
conditions  that  follow.

ARTICLE  1.  DEFINITIONS  AND  INTERPRETATIONS

1.1  Wherever  used  in  this  Agreement,  unless otherwise defined, capitalized
terms  used  herein  shall  have  the  meanings  assigned  to  them  in the Loan
Agreement.

1.2  In  this  Agreement:

"AGREEMENT"  shall  mean  this  Agreement  for  the  pledge of the Participatory
Interest  and  all  amendments  and  annexes  hereto which form an integral part
hereof;

"APPLICABLE  LAW"  shall mean the current legislation of the Russian Federation,
including  without  limitation ordinances and statutes enacted pursuant thereto,
as  well as any and all applicable laws of the subject states and municipalities
of  the  Russian  Federation;

"BUSINESS  DAY" shall mean any day except Saturdays, Sundays and state or public
holidays  of  the  Russian  Federation  and  the  United  Kingdom;

<PAGE>

"COMPANY"  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, 640000, Kurgan
Oblast,  Russian  Federation;

"DOLLARS"  or  "USD"  shall  mean  the  lawful  currency of the United States of
America;

"ENCUMBRANCE"  shall  mean  any pledge, agreement or arrangement for security of
any  kind  or rights of third parties in relation to the Participatory Interest,
except  for  the  Pledge  hereunder;

"EVENT  OF DEFAULT" shall mean any event of default in regard of the Obligations
under  the  Loan  Agreement;

"LOAN  AGREEMENT" shall mean the Loan Agreement entered into between the Pledgor
and  the  Company  of  even date herewith for the amount of up to 6,859,395 (Six
Million  Eight Hundred Fifty-Nine Thousand Three Hundred Ninety-Five) US Dollars
for  a  term  period  and  at  an  interest  rate  set  forth  therein;

"OBLIGATIONS" means any type of indebtedness or other obligations of the Pledgor
and/or  the  Company  vis-a-vis  the Pledgee arising out of and/or in connection
with  the Loan Agreement, the Guarantee and this Agreement, as more specifically
described  in  this  Agreement;

"PARTICIPATORY  INTEREST"  shall  mean  the  100%  participatory interest in the
charter  capital  of the Company with its nominal value of 10,000 Russian rubles
owned  by  the  Pledgor;

"PLEDGE"  means  the  pledge  of  the  Participatory  Interest  on the terms and
conditions  set  forth  in  this  Agreement;

"RUBLES"  OR "RUR" shall mean the lawful currency of the Russian Federation; and

"SECURITY  PERIOD"  shall mean the period commencing from the date of entry into
force of this Agreement and terminating on the date when all the Obligations are
fully  and  unconditionally  discharged  to  the  satisfaction of the Pledgee in
accordance  with  the  provisions  of  this  Agreement  and  the Loan Agreement.

ARTICLE  2.  CREATION  OF  PLEDGE  AND  RIGHT  OF  PLEDGE

2.1.  The Pledgor hereby transfers the Participatory Interest into the Pledge in
favour  of  the  Pledgee  in  order to secure the timely, full and unconditional
discharge  of  the  Obligations.

2.2  The  Pledge of the Participatory Interest; applies to (i) the Participatory
Interest;  (ii)  any  proceeds,  dividends,  distributions or income (including,
profit)  deriving  from  the Participatory Interest; and (iii) any compensation,
whether  monetary or in-kind, deriving from the Participatory Interest, received
due  to  the  liquidation  or  reorganization  of  the Company, or for any other
reason,  and  likewise any compensation received as the result of any alienation
of the Participatory Interest, regardless of whether such alienation conforms to
this  Agreement.

2.3.  The  Pledgee  shall have the right of pledge of the Participatory Interest
from  the  execution  of  this  Agreement.

2.4.  The Pledge of the Participatory Interest under this Agreement shall remain
in  full  force  until  the  expiration  of  the  Security  Period.

<PAGE>

ARTICLE  3. THE NATURE, AMOUNT AND TERM OF THE OBLIGATIONS SECURED BY THE PLEDGE

3.1   The  Pledge  created pursuant to this Agreement shall secure the discharge
by  the  Pledgor  of  the  following  Obligations:

(a)  discharge  in  full  of  the  Pledgor's obligations under the Guarantee (as
     the  same may be amended and supplemented from time to time) which includes
     the  guarantee  of  the Company's obligations to the Pledgee under the Loan
     Agreement,  including  (i)  repayment  in  full  of the principal amount of
     6,859,395  (Six  Million  Eight  Hundred  Fifty-Nine Thousand Three Hundred
     Ninety-Five)  US  Dollars;  (ii) payment of the interest accrued thereon in
     the  amount  specified  in the Loan Agreement; and (iii) other amounts that
     may  become due and payable, including without limitation, further advances
     made  thereunder,  arrangement,  refusal,  early  repayment and other fees,
     amounts owing to the Lender pursuant to the Loan Agreement;

(b)  discharge  in  full  of  all  obligations  and  liabilities  owed  by  the
     Pledgor  to  the  Pledgee  that  may arise under or in connection with this
     Agreement in accordance with the Applicable Law; and

(c)  payment  of  any  expenses  (including  without limitation attorney's fees,
     taxes (including any and all transfer taxes), stamp duties) incurred by the
     Pledgee  or  any  person  appointed by the Pledgee in exercising any of the
     Pledgee's rights hereunder and under the Loan Agreement.

3.2.  The  Obligations  must be fulfilled in the manner, within the terms and in
the  amount  set  out  in  the  Guarantee  and  the  Loan  Agreement.

ARTICLE  4.  PLEDGED  PROPERTY,  POSSESSION  AND  USE  OF  THE PLEDGED PROPERTY.

4.1  The pledged property hereunder is the Participatory Interest, as defined in
Article  1  above.

4.2  Except  in  the  event  that  a  levy  of  execution  is sought against the
Participatory Interest, the Participatory Interest shall remain in the Pledgor's
possession  and  use.

4.3  The  voting  right  as  provided  by  Applicable  Law  in  regard  to  the
Participatory  Interest  shall  be  exercised  by  the  Pledgor.

4.4  For  so  long as no Event of Default has occurred the Pledgee will hold all
dividends, interest and other income deriving from and received by it in respect
of  the  Participatory Interest for the account of the Pledgor and will pay such
dividends, interest and other income to the Pledgor on request by the Pledgor.


ARTICLE  5.  VALUATION  AND  LOCATION  OF  PLEDGED  PROPERTY

5.1  In  order  to  comply  with  the requirements of article 339 of the Russian
Federation  Civil Code, the value of the Participatory Interest is valued by the
Parties  in  the  amount of 7,705,079 (Seven Million Seven Hundred Five Thousand
Seventy-Nine)  US  Dollars which is the equivalent of an amount in Rubles at the
Central  Bank  of  Russia  exchange rate as of the date when a public auction is
held. The Loan and other amounts payable under the Loan Agreement must be repaid
to  the Lender in arrears and in any event be repaid not later than 14th October
2011.

5.2.  The  Parties  hereby  acknowledge  that (a) the value of the Participatory
Interest  may  vary  over  time; (b) the Participatory Interest should secure in
full the performance of the Obligations; and (c) in the event of the performance
being  levied against the Participatory Interest in accordance with the terms of
this  Agreement,  the Pledgee shall be entitled to recover the full value of the
Obligations  and will not be restricted to the stated value of the Participatory
Interest  given  in  Article  5.1  above.

5.3.  In  order  to  comply  with the requirements of article 339 of the Russian
Federation Civil Code, the Participatory Interest is held by the Pledgee and the
Participatory  Interest  is  located  in  the  Russian  Federation.

<PAGE>

ARTICLE  6.  REGISTRATION  OF  THE  PLEDGE

6.1.  On  the  date  of execution of this Agreement the Pledgor shall record the
Pledge  created  under  this Agreement in the register of pledges of the Pledgor
and shall provide a certified extract of such entry to the Pledgee.  The Pledgor
shall  maintain  the  register of pledges during the entire Security Period, and
shall  be  obliged to provide immediate access of the Pledgee to the original of
the  register  of  pledges  for  its  examination  by  the  Pledgee.

ARTICLE  7.  COVENANTS  OF  THE  PLEDGOR

7.1  For  the  duration  of  the  Security Period, the Pledgor hereby covenants:

(a)  to  retain  the  Participatory  Interest  and  title  of  ownership  to the
     Participatory Interest unencumbered, except for Encumbrances established by
     the Pledge;

(b)  to  protect  the  Participatory  Interest from the claims of third parties;

(c)  to  notify  the  Pledgee  of  the  submission  by  any  third  party of any
     claim  of  ownership  or other rights to the Participatory Interest, of any
     claim to withdraw, arrest or seize the Participatory Interest, of any claim
     of  any  Encumbrance over the Participatory Interest, or of any other claim
     the  satisfaction  of  which may give rise to a diminution of the value of,
     deterioration  or  on  loss  of  the Pledgor's title to or control over the
     Participatory Interest; and

(d)  to  exercise  the  rights  and  obligations  as  the  -ompany's  sole
     participant  in such a way that will not lead the Company to bankruptcy and
     (or) liquidation.

7.2  For  the  duration  of  the  Security Period, the Pledgor covenants that it
shall  not,  without  the  prior  written  consent  of  the  Pledgee:

(a)  create  or  permit  to  exist  any  subsequent  Encumbrance  over  the
     Participatory Interest, including subsequent pledge; and

(b)  sell,  assign,  transfer,  or  otherwise  dispose  in any manner all or any
     part  of  the Participatory Interest or enter into any agreement to sell or
     otherwise transfer such Participatory Interest or rights thereto, including
     voting rights, or enter into any agreement granting a right to purchase the
     Participatory Interest.

7.3.  Prior  to  the entry into force of this Agreement the Pledgor shall obtain
all  approvals  and  authorisations  required  by  the  Applicable  Law  and the
foundation  documents  of  the  Pledgor  for  the  conclusion  of the Agreement.

ARTICLE  8.  LEVY  OF  EXECUTION  OVER  THE  PLEDGED  PROPERTY

8.1  Upon the occurrence of any Event of Default, the Pledgee shall be entitled,
without  recourse to court, to levy execution over the Participatory Interest by
written  notification  to the Pledgor pursuant to Article 13 below of its breach
of the Obligations or any other obligation secured by the Pledge and provided by
this  Agreement  and  the  Applicable  Law which gives rise to the right to levy
execution  over  the  pledged  property  (a  "GROUND  FOR  LEVY  OF EXECUTION").

8.2  Notwithstanding  the  provision of Article 8.1 above, if the Ground for the
Levy  of  Execution  is  triggered,  the  Pledgee shall be entitled, at its full
discretion  and at any time to initiate legal or arbitration proceedings for the
purposes  of  levying  execution  over  the  pledged  Participatory  Interest.

<PAGE>

8.3  In  the  event  of  the  levy  of  execution over the pledged Participatory
Interest without recourse to  court, the Pledgee shall hold a public auction for
the  sale of the pledged Participatory Interest in accordance with the procedure
set  forth  in  Exhibit  3  /b hereto, and such auction may be held, at the full
discretion  of  the  Pledgee,  either  with  or  without recourse to court.  The
Pledgor  shall  render  any  support  and  assistance to the Pledgee if a public
auction  is  held.

8.4  In  the  event  execution  is  levied  against  the  pledged  Participatory
Interest,  the  proceeds  of any such sale at a public auction shall be applied,
subject  to  the  Applicable  Law,  in  the  following  order  of  priority:

(a)  for  payment  of  all  expenses  incurred  by  the  Pledgee;

(b)  for  the  discharge  of  the  Obligations  (less  the  expenses incurred by
     the Pledgee); and

(c)  for  payment  of  the  surplus  (if  any)  to  the  Pledgor or other person
     entitled to it pursuant to the Applicable Law.

8.5  The Obligations shall be deemed discharged by payment of the funds received
from  the  sale of the pledged Participatory Interest from and upon crediting of
the  full  amount  of  the Obligations to the account of the Pledgee or a person
appointed  by  the  Pledgee  for  that  purpose.

ARTICLE  9.  WARRANTIES  AND  REPRESENTATIONS

9.1  The  Pledgor  represents  and  warrants  to  the  Pledgee  that:

(a)  the  Pledgor  is  a  legal  entity  duly  incorporated,  registered  and
     lawfully existing under the laws of the United Kingdom;

(b)  the  Pledgor  and  the  representatives  acting  on  its  behalf  have  the
     requisite  corporate and other powers and authority to execute, deliver and
     perform  this  Agreement,  in  which regard all the necessary corporate and
     other  actions  of  the Pledgor have been taken to authorize the execution,
     delivery  and  performance  of this Agreement. All consents, registrations,
     and  authorizations  required  for the validity of this Agreement have been
     obtained and are in full force and effect, and this Agreement constitutes a
     legal,  valid and binding obligation of the Pledgor enforceable against the
     Pledgor in accordance with its terms;

(c)  the  conclusion  and  performance  of  this  Agreement:  (i)  do  not
     contradict the Applicable Law; (ii) do not contradict the provisions of any
     agreement  or other document to which the Pledgor is a party or by which it
     or  any  of  its  property is bound; (iii) do not contradict or violate any
     provision of the Pledgor's foundation documents;

(d)  The  Pledgor  is  the  sole  full-scope  lawful  owner  of  pledged
     Participatory Interest, which was not assigned, transferred, or pledged, or
     otherwise  encumbered  by  the  Pledgor  in  favour  of  anybody except the
     Pledgee,  and  the  Pledge over the Participatory Interest hereunder is the
     sole existing Encumbrance thereon;

(e)  the  Participatory  Interest  in  pledge  may be pledged in accordance with
     Applicable Law;

(f)  all  information  provided  to  the  Pledgee in connection with the present
     Agreement is true, accurate, and complete;

(g)  the  Pledgor  is  not  a  party  to  any  judicial  or  other  proceedings
     against  the  pledged  Participatory Interest and, as far as the Pledgor is
     aware, there are no such proceedings threatened against it; and

(h)  no  consent  of  any  individual  or  entity and no authorization, approval
     or  other  action by, and no notice to or registration with, any government
     or  other  authority  is  required  for (i) the grant by the Pledgor of the
     Pledge or for the execution, delivery or performance of the Agreement; (ii)
     for  the  maintenance  of  the  Pledge;  and  (iii) for the exercise by the
     Pledgee  of  its rights and remedies (save as may be required under Russian
     law  in  order to transfer the Participatory Interest through recourse to a
     Ground for Levy of Execution hereunder).

<PAGE>

9.2  The  representations and warranties set forth in Article 9.1 above shall be
effective  upon and after entry into force of the Agreement shall remain in full
effect,  until  all  Obligations  have  been  fulfilled  in  their  entirety.

ARTICLE  10.  SEVERABILITY

10.1  If,  as the result of a change in the Applicable Law or its interpretation
by  competent  bodies, individual provisions of this Agreement become illegal or
invalid, this shall not signify the illegality or invalidity of other provisions
hereof  and  the  Parties  shall  amend  this  Agreement  accordingly.

ARTICLE  11.  AMENDMENTS

All amendments and supplements to this Agreement shall be valid only if executed
in  writing  and  signed  by  authorized  representatives  of  the  Parties.

ARTICLE  12.  ASSIGNMENT

The  Pledgee  shall have the right to assign all its rights under this Agreement
to  a  third  party  together with the assignment to the same third party of its
rights  under  the  Loan Agreement and the claims therefrom against the Pledgor.

ARTICLE  13.  NOTIFICATIONS

13.1  All  notifications  hereunder  shall be made in writing and transmitted by
fax  or  delivered  by  courier.  Any  communication,  demand, inquiry, or other
information shall be considered transmitted or delivered upon its receipt by the
addressee  or,  in the case of transmission by fax, upon receipt of an automatic
confirmation  of  receipt.

13.2  Any  communication,  demand, inquiry, or other information relating to the
Agreement  shall  be  delivered  to  the  following  addresses  or to such other
addresses  as  the  Parties  may  designate  by  notice:

TO  THE  PLEDGOR:

Attn:  Company  Secretary
Fax:  +44  (0)  20  7667  6471

TO  THE  PLEDGEE:


Attn:  Joel  McDonald
Fax:  +44  (0)  20  7429  6001

ARTICLE  14.  APPLICABLE  LAW  AND  DISPUTE  RESOLUTION

14.1  This  Agreement  shall be governed by and construed in accordance with the
Applicable Law without giving effect to the conflict of laws rules.

<PAGE>

14.2 Any dispute, controversy or claim arising out of or in connection with this
Agreement,  including those in regard to its performance, breach, termination or
invalidity, shall be resolved by way of negotiations.

14.3  In  case  such  dispute,  controversy  or claim are not resolved by way of
negotiations  within  30  days  from the day of notification of one Party by the
other  Party,  such  dispute,  controversy  or  claim  shall  be referred to the
Arbitration Court of Moscow city in accordance with the Arbitral Procedural Code
of the Russian Federation. The place of arbitration shall be Moscow, Russia, and
the Russian language shall be used throughout the arbitral proceedings.

ARTICLE  15.  ENTRY  INTO  FORCE  AND  TERMINATION

This  Agreement  shall  enter  into force upon its execution and shall remain in
force  until  full  discharge  of  the  Obligations  as  defined  hereunder.

IN  WITNESS  WHEREOF,  the  Parties hereto, acting through their duly authorized
representatives, have this Agreement signed in two (2) originals both in English
and  Russian  (one  (1)  original  for  each  Party), as of the date first above
written.  In  the  event  of  any  discrepancies between the English and Russian
texts,  the  English  version  shall  prevail.


PLEDGOR                                  PLEDGEE

/s/ David Zaikin                        /s/ James Charles Pockney
-----------------------------------     -----------------------------------
SIGNATURE                               SIGNATURE

David Zaikin                            James Charles Pockney
-----------------------------------     -----------------------------------
NAME                                    NAME

Director                                Director
-----------------------------------     -----------------------------------
TITLE                                   TITLE

<PAGE>

                                  EXHIBIT1(A).
                                  ------------

            PROCEDURE FOR RECOVERY AGAINST THE PARTICIPATORY INTEREST

1.1. Pursuant  to  Article  8.3.  of  the  Agreement, the Participatory Interest
     or  any  of its part may be sold by the Pledgee's choice at public auction,
     in  one  or  several  sales,  to  be organized by the Pledgee in the manner
     prescribed  by  Applicable  Law,  (i) with an opening bid price of seventy-
     five percent (75%) of the value indicated in Article 5.1. of the Agreement,
     at  the  first  public  auction;  and (ii) fifty percent (50%) of the value
     indicated in Article 5.1. of the Agreement, at the second public auction.

1.2. The  Pledgee  shall  be  entitled  to  take any of the following actions at
     its own discretion, either on its own or with the consent and participation
     of the Pledgor:

     1.2.1. (a) set the date, time and place of the public auction;

            (b) establish the procedure for conducting the public auction;

            (c) take  all  actions  necessary  to  conduct  the public auction,
                including  but not limited  to advertising as the Pledgee deems
                appropriate;

            (d) verify the  results of  the  public auctions and report them to
                the Pledgor and other interested parties;

            (e) engage  an  agent  to  assist  the  Pledgee in  exercising  the
                powers listed in items (a) through (d) above;

            (f) hire professional consultants, including appraisers, lawyers and
                accountants in connection with conducting the public auctions
                or exercising other rights of the Pledgee; and

            (g) incur  and pay  costs  and  expenses  to  hold auctions, as well
                as  the  costs and expenses incurred by the Pledgee's agents and
                consultants hired in accordance with items (e) and (f) above, as
                well as  notary,  registration,  and  other  costs  and expenses
                associated  with the  transfer of ownership of the Participatory
                Interest to a buyer or to the Pledgee.

1.2.2. The  Pledgee  shall  not  be  entitled  to  open  bidding  to  sell  the
     Participatory  Interest  at a price lower than the starting price indicated
     in Article 1.1 of this Exhibit.

1.2.3. All  costs  and  expenses  of  the  Pledgee (including but not limited to
     all  costs  and expenses incurred in connection with the Pledge, the public
     auctions  and  transfer  of  ownership right to the Participatory Interest,
     shall be included in the amount of the Obligations.

1.2.4. All  proceeds  from  the  sale  of  the  Participatory  Interest shall be
     applied towards discharge of the Obligations.

1.2.5. The  Pledgee  shall  be  entitled,  acting  independently  as the Pledgee
     on  behalf  of  the  Pledgor,  to  transfer  to  any  buyer lawful right of
     ownership  to the Participatory Interest, free and clear of any proprietary
     or  other  rights  of  the Pledgee or the Pledgor and to verify any buyer's
     payment  of  the  purchase  price,  for  which  purpose the signature of an
     officer of the Pledgee shall suffice.

<PAGE>

1.2.6. In  the  event  that  the  fixed  minimum  opening  bid is not met at the
     first  public  auction,  or non-receipt by the Pledgee of the full purchase
     price  for  the  Participatory  Interest  within  three  (3)  Business Days
     following  the date of the first public auction, the Pledgee shall have the
     right to:

     (i)  purchase  the  Participatory  Interest  or  its part for a price equal
          to  the opening bid price and set-off its claims secured by the Pledge
          against the purchase price; and/or

     (ii) Organize  a  second  public  auction  for  the remaining Participatory
          Interest.

1.2.7. In  the  event  that  the  fixed  minimum  opening  bid is not met at the
     second  public  auction, or non-receipt by the Pledgee of the full purchase
     price  for  the  Participatory  Interest  within  three  (3)  Business Days
     following the date of the second public auction, the Pledgee shall have the
     right  to retain the Participatory Interest with its valuation equal to the
     opening bid price set for the second public auction, less a discount of 10%
     (ten  percent)  and  set-off  its claims secured by the Pledge against such
     price.

1.2.8. Transfer  of  the  Participatory  Interest  into  possession of the buyer
     and  (or) the Pledgee shall be reflected in the foundation documents of the
     Company  by way of amending the charter and the foundation documents of the
     Company, if so required in accordance with the Applicable Law.





PLEDGOR                                  PLEDGEE

/s/ David Zaikin                        /s/ James Charles Pockney
-----------------------------------     -----------------------------------
SIGNATURE                               SIGNATURE

David Zaikin                            James Charles Pockney
-----------------------------------     -----------------------------------
NAME                                    NAME

Director                                Director
-----------------------------------     -----------------------------------
TITLE                                   TITLE

<PAGE>