Exhibit 10.5



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


                                    GUARANTEE

THIS  GUARANTEE  is  made  by  deed  on   9th November 2005.

BY:

ZAURALNEFTEGAZ  LIMITED,  a  company  incorporated  in  England  and Wales under
-----------------------
company  number  05525360  and  whose  registered  office  is  at  c/o Gilchrist
Solicitors,  18b  Charles  Street,  London  W1J  5DU,  United  Kingdom  (the
"GUARANTOR");

IN  FAVOUR  OF:

CASPIAN  FINANCELIMITED,  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").

WHEREAS:

(A)     By  separate  loan  agreement,  dated  9th  November  2005,  between OOO
Zauralneftegaz  ("ZNG"), a Russian limited liability company and the Lender, the
Lender  has agreed to provide certain loan facilities to ZNG ("LOAN AGREEMENT");
and

(B)     The  Guarantor  has  agreed  to  guarantee the obligations of ZNG to the
Lender  under  the  Loan  Agreement  pursuant  to  the  terms of this Guarantee.

NOW  THIS  DEED  WITNESSES  and  SEG  hereby  agrees  as  follows:

1.   GUARANTEE AND INDEMNITY

The  Guarantor  irrevocably  and  unconditionally:

1.1  guarantees  to  the  Lender  punctual  performance  by  ZNG  of  all  its
     obligations under the Loan Agreement;

1.2  undertakes  with  the  Lender  that  whenever  ZNG  does not pay any amount
     when  due  under  or  in  connection with the Loan Agreement, the Guarantor
     shall  immediately  on  demand  pay  that amount as if it was the principal
     obligor; and

1.3  indemnifies  the  Lender  immediately  on  demand against any cost, loss or
     liability  suffered  by the Lender if any obligation guaranteed by it is or
     becomes  unenforceable, invalid or illegal. The amount of the cost, loss or
     liability  shall  be  equal  to the amount which the Lender would otherwise
     have been entitled to recover.

2.   CONTINUING  GUARANTEE

This guarantee is a continuing guarantee and will extend to the ultimate balance
of  sums payable by ZNG under the Loan Agreement, regardless of any intermediate
payment or discharge in whole or in part.

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3.   REINSTATEMENT

If  any  payment by ZNG or any discharge given by the Lender (whether in respect
of the obligations of ZNG or any security for those obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event:

3.1  the  liability  of  ZNG  shall  continue  as  if  the  payment,  discharge,
     avoidance or reduction had not occurred; and

3.2  the  Lender  shall  be  entitled  to  recover  the  value or amount of that
     security  or  payment  from ZNG, as if the payment, discharge, avoidance or
     reduction had not occurred.

4.   WAIVER  OF  DEFENCES

The obligations of the Guarantor under this Guarantee will not be affected by an
act, omission, matter or thing which, but for this clause, would reduce, release
or prejudice any of its obligations under this Guarantee (without limitation and
whether or not known to the Lender) including:

4.1     any  time, waiver or consent granted to, or composition with, ZNG or any
other  person;

4.2     the  release  of  ZNG  or  any  other  person  under  the  terms  of any
composition  or  arrangement  with  any  of  its  creditors  or  members;

4.3     the  taking,  variation, compromise, exchange, renewal or release of, or
refusal  or  neglect  to  perfect,  take  up  or enforce, any rights against, or
security  over  assets  of,  ZNG  or any other person or any non-presentation or
non-observance  of  any  formality  or  other  requirement  in  respect  of  any
instrument  or  any  failure  to  realise  the  full  value  of  any  security;

4.4  any  incapacity  or  lack  of  power,  authority or legal personality of or
     dissolution or change in the members or status of ZNG or any other person;

4.5  any  amendment  (however  fundamental)  or  replacement  of  the  Loan
     Agreement or any other document or security;

4.6  any  unenforceability,  illegality  or  invalidity  of  any  obligation  of
     any person under the Loan Agreement or any other document or security; or

4.7  any insolvency or similar proceedings.

5.   IMMEDIATE  RECOURSE

The Guarantor waives any right it may have of first requiring the Lender (or any
trustee  or  agent on its behalf) to proceed against or enforce any other rights
or  security or claim payment from any person before claiming from the Guarantor
under  this  Guarantee.  This  waiver  applies  irrespective  of  any law or any
provision of the Loan Agreement to the contrary.

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6.   APPROPRIATIONS

Until  all  amounts which may be or become payable by ZNG under or in connection
with  the  Loan Agreement have been irrevocably paid in full, the Lender (or any
trustee or agent on its behalf) may:

6.1  refrain  from  applying  or  enforcing  any  other  moneys,  security  or
     rights  held  or  received  by  the  Lender (or any trustee or agent on its
     behalf)  in respect of those amounts, or apply and enforce the same in such
     manner  and  order  as  it  sees  fit  (whether  against  those  amounts or
     otherwise)  and the Guarantor shall be entitled to the benefit of the same;
     and

6.2  hold  in  an  interest-bearing  suspense  account  any moneys received from
     the  Guarantor  or  on  account  of  the  Guarantor's  liability under this
     Guarantee.

7.   DEFERRAL  OF  GUARANTORS'  RIGHTS

Until  all  amounts which may be or become payable by ZNG under or in connection
with  the Loan Agreement have been irrevocably paid in full, the Guarantor shall
not  exercise any rights which it may have by reason of performance by it of its
obligations under the Guarantee:

7.1  to  be  indemnified  by  ZNG;

7.2  to  claim  any  contribution  from  any  other  guarantor  of  any of ZNG's
     obligations under the Loan Agreement; and/or

7.3  to  take  the  benefit  (in  whole  or  in  part  and  whether  by  way  of
     subrogation  or  otherwise)  of  any  rights  it  may  have  under the Loan
     Agreement  or  of  any other guarantee or security taken pursuant to, or in
     connection with, the Loan Agreement.

8.   ADDITIONAL  SECURITY

This  guarantee  is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by the Lender.

9.   NOTICES

Any notice to be given pursuant to the terms of this Agreement shall be given in
writing  to the party due to receive such notice at the address set out below or
such  other address as may have been notified to the other parties in accordance
with  this  clause.  Notice shall be delivered personally or sent by first class
pre-paid  recorded  delivery  or  registered  post  (air mail if overseas) or by
facsimile  transmission  to  the numbers and parties detailed below and shall be
deemed  to  be  given  in the case of delivery personally on delivery and in the
case  of  posting (in the absence of evidence of earlier receipt) 48 hours after
posting (six days if sent by air mail) and in the case of facsimile transmission
on  completion  of the transmission provided that the sender shall have received
printed confirmation of transmission.

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

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
--------------                    -------------              -------------------

10.     THIRD  PARTIES

No  term  of  this agreement shall be enforceable under the Contracts (Rights of
Third  Parties)  Act  1999  by  a  third  party.

11.     LAW  AND  JURISDICTION

This Guarantee shall be governed by and construed in accordance with the laws of
England.  Each  party irrevocably agrees to submit to the exclusive jurisdiction
of  the courts of England and Wales over any claim or matter arising under or in
connection  with  this  Agreement.

IN WITNESS whereof this Guarantee has been duly executed and delivered as a deed
the  day  and  year  first  above  written.



Executed as a Deed by                   Director: /s/ James Charles Pockney
Zauralneftegaz Limited                           -------------------------------
acting by two Directors/
a Director and the Secretary            Name: James Charles Pockney
                                             -----------------------------------
                                        Director/
                                        Secretary:  /s/ David Zaikin
                                                  ------------------------------
                                        Name: David Zaikin
                                             -----------------------------------

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