Exhibit 10.18
 EMPLOYMENT AGREEMENT
 THIS AGREEMENT th
 BETWEEN:
 IVANHOE ENERGY INC.
 Company
 AND:
 Ian Barnett, of 111 Hudon Drive, Toronto, Ontario, M4T 2K4
 Executive
 WHEREAS:
 A.
    
    the Company is an international oil and gas company;
 B.
    
    the Executive has extensive experience in finance and Ivanhoes HTL technology;
 C.
    
    the Company wishes to have the Executive serve as the Executive Vice President of Finance of
the Company; and
 D.
    
    the parties hereto wish to enter into this agreement to set forth the terms and conditions
applicable to the employment of the Executive in such capacity.
 NOW THEREFORE THIS AGREEMENT WITNESSES
 PART 1
DEFINITIONS AND INTERPRETATION
 Definitions
 1.1
    
    In this Agreement, the following terms shall have the meanings ascribed
thereto:
 Agreement means this agreement and all amendments made to it by written agreement
between the Company and the Executive;
 Board means the board of directors of the Company;




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Business Day means a day other than Saturday, Sunday or statutory holiday in
British Columbia;
 Change of Controlmeans an event occurring after the Commencement Date pursuant to
which:
 (a)
    
    a merger, amalgamation, arrangement, consolidation,
reorganization or transfer takes place in which securities of the Company
possessing more than 50% of the total combined voting power of the Companys
outstanding voting securities are acquired by a person or persons different
from the persons holding those voting securities immediately prior to such
event, and the composition of the Board following such event is such that the
directors of the Company prior to the transaction constitute less than 50% of
the Board membership following the event;
 (b)
    
    any person, or any combination of persons acting jointly
or in concert by virtue of an agreement, arrangement, commitment or
understanding acquires, directly or indirectly, 50% or more of the voting
rights attached to all outstanding voting securities; or
 (c)
    
    any person, or any combination of persons acting jointly
or in concert by virtue of an agreement, arrangement, commitment or
understanding acquires, directly or indirectly, the right to appoint a
majority of the directors of the Company; or
 (d)
    
    the Company sells, transfers or otherwise disposes of all
or substantially all of its assets, except that no Change of Control will be
deemed to occur if such sale or disposition is made to a subsidiary or
subsidiaries of the Company.
 Disability means a physical or mental incapacity of the Executive that has
prevented the Executive from performing the duties customarily assigned to the
Executive for one hundred and eighty (180) days, whether or not consecutive, out of
any twelve (12) consecutive months and that in the opinion of the Board is likely to
continue; and
 Interpretation
 1.2
    
    For the purposes of this Agreement, except as otherwise expressly provided:
 (a)
    
    this Agreementmeans this Agreement, including the schedules
hereto, and not any particular part, section or other portion hereof, and
includes any agreement, document or instrument entered into, made or delivered
pursuant to the terms hereof, as the same may, from time to time, be
supplemented or amended and in effect;






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(b)
    
    all references in this Agreement to a designated part,
section or other subdivision or to a schedule are references to the
designated part, section, or other subdivision of, or schedule to, this
Agreement;(c)
    
    the words hereof, herein, hereto and hereunder and
other words of similar import refer to this Agreement as a whole and not to any
particular part, section or other subdivision or schedule unless the context or
subject matter otherwise requires;(d)
    
    the division of this Agreement into parts, sections and other
portions and the insertion of headings are for convenience of reference only
and are not intended to interpret, define or limit the scope, extent or intent
of this Agreement or any provision hereof;(e)
    
    unless otherwise provided herein, all references to currency in
this Agreement are to lawful money of the United States of America and all
amounts to be calculated or paid pursuant to this Agreement are to be
calculated in lawful money of the United States of America;(f)
    
    the singular of any term includes the plural, and vice versa,
and the use of any term is generally applicable to any gender and, where
applicable, a body corporate, firm or other entity, and the word or is not
exclusive and the word including is not limiting whether or not non-limiting
language (such as without limitation or but not limited to or words of
similar import) is used with reference thereto; and(g)
    
    all references to approval, authorization, consent or
direction in this Agreement means written approval, authorization, consent or
direction.
 PART 2
EMPLOYMENT
 Employment


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Period of Active Employment
 Period of Active Employment Commencement Date
 (a)
    
    three (3) years from the Commencement Date;
 (b)
    
    the termination of the Executives employment by the Company
for cause as provided in Section 6.1 hereof;
 (c)
    
    the resignation of employment by the Executive pursuant to
Section 6.2;
 (d)
    
    the termination of this Employment Agreement pursuant to
Section 6.3;
 (e)
    
    the Disability of the Executive; or
 (f)
    
    the death of the Executive.
 PART 3
POSITION
 Capacity and Services
  Place of Employment
  Full Time and Attention
  Conflicts of Interest
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PART 4
COMPENSATION AND BENEFITS
 Compensation
 Base Salary
 Benefits
  Incentive Stock Options
 Plan
 (a)
    
    options in respect of an initial 50,000 common shares
will become exercisable as of the first (1st) anniversary of the
Commencement Date;
 (b)
    
    options in respect of an additional 50,000 common shares
will become exercisable as of the second (2nd) anniversary of the
Commencement Date; and
 (c)
    
    options in respect of the remaining 50,000 common shares
will become exercisable as of the third (3rd) anniversary of the
Commencement Date.
 th
 Vacation
 .
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Expenses Incidental to Employment
  Bonus
  Relocation Allowance
  PART 5
CONFIDENTIALITY AND NON-COMPETITION
 Non-Competition
 Business Non-Competition Period
 (a)
    
    six (6) months after the end of the Period of Active Employment; or
 (b)
    
    the date on which the Executive no longer is receiving
compensation pursuant to the terms of this Agreement.
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Other Executives
  Confidentiality
 Confidential Information
 Return of Documents
  Invalidity
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Acknowledgement
  Corporate Opportunities
  Passive Investment
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PART 6
TERMINATION AND RESIGNATION
 Termination for Cause
  (a)
    
    the Executives appropriation of corporate opportunities
for his direct or indirect benefit or his failure to disclose any material
conflict of interest;
 (b)
    
    the Executives failure to disclose material facts
concerning his business interests or employment by other than the Company;
 (c)
    
    any of the following acts or circumstances of the
Executive: fraud, illegality, breach of statute or regulation, or gross
incompetence;
 (d)
    
    the Executives breach of fiduciary duty to the Company;
 (e)
    
    the Executives material breach of this Agreement or gross
negligence in carrying out his duties under this Agreement;
 (f)
    
    the failure of or refusal by the Executive to follow the
reasonable and lawful directions of the Board or to comply with the policies,
rules and regulations of the Company (except to the extent that such policies,
rules and regulations expressly conflict with the provisions of this
Agreement);
 (g)
    
    any conduct which would materially impair or prevent the
Executive from continuing as an officer or director of the Company under
applicable corporate or securities laws, or the rules and policies of any stock
exchange or securities market upon which the Companys shares are listed from
time to time; or
 (h)
    
    the Executives plea of guilty to or conviction of an offence
punishable by imprisonment.
  Resignation by Executive
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Termination Without Cause
  Termination of Employment after Change of Control
  Benefits on Termination
  Results of Termination
  PART 7
REPRESENTATIONS AND WARRANTIES
 No Breach
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Indemnity
  Right of Termination
  Company Indemnity and Insurance
  PART 8
MISCELLANEOUS PROVISIONS
 Rights and Waivers
  Waiver
  Severability
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Notices
   
 
  
  .
 Time of Essence
  Successors and Assigns
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Amendment
  Entire Agreement
  Governing Law
  Headings
  Full Satisfaction
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Executive Acknowledgements
  (a)
    
    the Executive has had sufficient time to review this
Agreement thoroughly;
 (b)
    
    the Executive has read and understands the terms of this
Agreement and the obligations hereunder;
 (c)
    
    the Executive has been given an opportunity to obtain
independent legal advice concerning the interpretation and effect of this
Agreement; and
 (d)
    
    the Executive has received a fully executed counterpart
copy of this Agreement.
 IN WITNESS WHEREOF
 /s/ Ian BarnettWitness
    
    IAN BARNETT
 IVANHOE ENERGY INC.Per:
    
    /s/ Joseph I. GascaName: Joseph I. Gasca
Title: President and CEO
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