Document:

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                                                                    EXHIBIT 10.4

                                ADDENDUM No. 2 TO
                    OPERATING SERVICES AGREEMENT MONAGAS SUR

PDVSA Petroleo S.A., formerly PDVSA Petroleo y Gas S.A., a the SUBSIDIARY of
Petroleos de Venezuela, S.A., organized and domiciled in Caracas, originally
registered with the Second Commercial Registry of the Judicial Circuit of the
Federal District and State of Miranda on November 16, 1978, under No. 26, Volume
127-A Second, the Articles of Incorporation-Bylaws of which have undergone
various modifications, the most recent one being that changing its corporate
name to PDVSA Petroleo, S.A., as evidenced by the document recorded with the
abovementioned Commercial Registry on May 9, 2001, under No. 23, Volume 81-A
Second, published in commercial newspaper El Informe Empresarial, No. 8244 dated
May 11, 2001, hereinafter referred to as the THE SUBSIDIARY, represented herein
by Mr. Carlos Machado, Venezuelan, of legal age, of this domicile, bearer of
Identity Card No. [ ], duly authorized by the THE SUBSIDIARY's Board of
Directors, as party of the first part, and, as party of the second part BENTON
VINCCLER, C.A., a company domiciled in Caracas, registered with the Commercial
Registry of the Judicial Circuit of the Federal District and State of Miranda on
June 29, 1993, under No. 13, Volume 146-A-Second, (hereinafter referred to as
the "the CONTRACTOR"), represented by its President, Mr. Peter Hill, British, of
legal age, here in transit, bearer of Passport No. ______, duly authorized as
evidenced by the Special Shareholders' Meeting of September 5, 2002.

WHEREAS, the CONTRACTOR has a project to supply Natural Gas from the
exploitation of the Proven Gas Reservoirs in the Uracoa and Bombal Fields
belonging to the Monagas Sur Unit;

WHEREAS, as of this date, the parties have jointly set forth the conditions that
will govern the delivery, through the Macapaima Valve Station of the
Anaco-Puerto Ordaz Gas Pipeline, of the Natural Gas produced in the
aforementioned Fields;

CONSEQUENTLY, the Parties have agreed to enter into, as in fact it is entered
into hereby, this Addendum (the "Addendum") to the Operating Services Agreement
entered into between the SUBSIDIARY and the CONTRACTOR on July 31st, 1992 (the
"Agreement") to be governed by the following provisions:

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General

All clauses, terms and definitions contained in the Agreement shall remain in
full force and effect, except for the additions and modifications detailed
below:

1.- THE DEFINITION CONTAINED IN CLAUSE C8 IS MODIFIED AS FOLLOWS:

C8 Commercial Production: Shall mean the Crude Oil and the Natural Gas produced
and transferred to the SUBSIDIARY, respectively, at the Delivery Points, in a
regular manner, in quantities commercially adequate, by the CONTRACTOR, and in
accordance with the Work Program and as approved by the SUBSIDIARY. The
SUBSIDIARY shall not arbitrarily object the decision of the CONTRACTOR to
initiate the Commercial Production.

2.- THREE NEW DEFINITIONS ARE ADDED NUMBERED, C27, C28 AND C29, WHICH READ AS
FOLLOWS:

C27 Gas Area: Means the Natural Gas area, comprised of the Uracoa and Bombal
fields described and delineated respectively as set forth in Appendices A and B
of the Agreement, where the investments related to the production of Natural Gas
under this Agreement shall be made. Any proposal related to Natural Gas
production in areas of exploitation that are not included in the Gas Area, must
be submitted by the CONTRACTOR to the consideration and approval of the
SUBSIDIARY and will be subject to another negotiation to be jointly agreed upon
between the SUBSIDIARY and the CONTRACTOR. This negotiation, however, will not
guarantee any agreement with respect to these areas.

C28 Total Stipend for Delivery of Gas (ETG): Means the amount to be paid by the
SUBSIDIARY to the CONTRACTOR, which is the amount of One Dollar of the United
States of America with Three Cents of a Dollar per standard thousand cubic feet
of gas delivered (US$1.03/MCF); delivered at the Natural Gas Transfer Point.

C29 Natural Gas Transfer Point: shall mean the transfer point to the SUBSIDIARY
of the custody and risk of loss of the Natural Gas produced from the Gas Area,
as defined in Appendix "I" to the Addendum.

3.- A NEW CLAUSE F10 IS HEREBY ADDED AS FOLLOWS:
F10 The SUBSIDIARY will reimburse the CONTRACTOR, by way of the Total

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Stipend for Delivery of Gas (ETG), the Capital Investments defined as Capital
Cost related to the production of Natural Gas in accordance with Clause G22 of
this Addendum. It is understood, however, that the maximum amount of
reimbursement that the CONTRACTOR will receive for these investments will be
Forty-Six Million Dollars of the United States of America (US$46,000,000).

4.- PARAGRAPH G11.B IS HEREBY MODIFIED AS FOLLOWS:

G11 Subject to the terms and conditions herein contained:

    b) Custody and maintain in good and orderly condition in accordance with
       practices accepted by the oil industry all Oil produced in the Area of
       the Agreement and all Natural Gas produced in the Gas Area, and any other
       property, plant or equipment of the SUBSIDIARY within the Area of the
       Agreement or the Gas Area.

5.- CLAUSES G17 AND G21 ARE HEREBY MODIFIED AS FOLLOWS:

G17 Will ensure that (i) all production of Crude Oil transferred to the
SUBSIDIARY is of the quality specified in Appendix "A" of the Agreement, and in
volumes which are adequate for their receipt in the SUBSIDIARY's facilities, and
(ii) that all Natural Gas transferred to THE SUBSIDIARY is of the quality
specified in Appendix I of this Addendum. It is understood that during the test
period, the Crude Oil transferred to the SUBSIDIARY that does not comply with
the quality specifications may be received by the SUBSIDIARY and the costs
associated with its treatment in order to bring it to the specifications of the
Agreement shall be borne by the CONTRACTOR and deducted from future credits.

It is understood that the SUBSIDIARY shall have, at its sole discretion, the
right to receive Natural Gas which does not comply with the quality
specifications contained in Appendix I of this Addendum ("Off-Spec Gas"). If the
SUBSIDIARY decides to receive such Off-Spec Gas from the CONTRACTOR, it shall be
obliged to pay the ETG as provided for in the Agreement; and the costs
associated with its treatment in order to bring it to the specifications of the
Addendum shall be borne by the CONTRACTOR and deducted from future credits.

Subject to the provisions of Section K of the Agreement, the CONTRACTOR will be
liable for damages and/or losses in the facilities, materials and equipment
owned by the

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SUBSIDIARY, as well as for damages to third parties, for delivery of Off-Spec
Gas. These damages and/or losses will be defined in the Operating and Accounting
Procedures.

G21 Shall have the right, during the term of this Agreement, to receive
Operation and Capital fees based on the production of Oil, and an ETG, based on
the production of Natural Gas, as set forth in Parts I and S of the Agreement.

6.- A NEW CLAUSE IS ADDED, NUMBERED G22, AS FOLLOWS:

G22 The CONTRACTOR undertakes to drill and perform well workover in the Gas
Area, and to build, operate and maintain the facilities and infrastructure
required to supply a volume of Natural Gas to the SUBSIDIARY, until expiration
of the Agreement, of up to a volume of one hundred ninety-eight billion cubic
feet (198 BCF) from the Gas Area. The Capital and Non-capital Costs related to
the production of Natural Gas in the Gas Area shall be for the CONTRACTOR's
account and risk. Any additional Capital Cost in excess of the value mentioned
in Clause F10 will also be for the CONTRACTOR's exclusive account and risk, and
will not cause any modifications to the ETG described in this Addendum. The
Capital Costs related to production of Natural Gas will not be part of the
Capital Costs of the development of Crude Oil and will not bear interest in
favor of the CONTRACTOR.

The CONTRACTOR will submit to the SUBSIDIARY in July of each year, and separate
from the development of Crude Oil, the schedule of investments foreseen for the
following year in connection with the production of Natural Gas, for its
consideration.

The Capital Costs related to the production of Natural Gas, accounted for in the
Gas Area, up to the end of the preceding quarter, shall be reimbursed to the
CONTRACTOR, through the ETG up to a maximum of forty (40) quarterly installments
or in the remaining number of quarterly installments over the remaining life of
the Agreement.

7.- CLAUSES H1 AND H10 ARE HEREBY MODIFIED TO READ AS FOLLOWS:

H1 Shall have the property of all Oil and Natural Gas produced and shall be
responsible for the payment of all royalties and taxes related to such
production of Oil and of the royalties derived from the production of Natural
Gas.

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H10 The SUBSIDIARY agrees to receive the full volume of Natural Gas produced
daily by the CONTRACTOR and delivered at the Natural Gas Transfer Point subject
only to relevant pipeline capacity. At the Natural Gas Transfer Point risk of
loss of the Natural Gas shall pass to THE SUBSIDIARY, except for the Natural Gas
volume that passes the Transfer Point which is Off Spec. and it is necessary to
dispose of this volume in accordance with the regulations set forth by the
Ministry of Energy and Mines.

If the CONTRACTOR is capable of delivering to the SUBSIDIARY over the life of
this Agreement a volume of Natural Gas higher than One Hundred and Ninety Eight
Billion Cubic Feet (198 BCF), the SUBSIDIARY will have the exclusive discretion
to receive such additional volume of Natural Gas or not. If the SUBSIDIARY
agrees to receive a volume of Natural Gas higher than One Hundred and Ninety
Eight Billion Cubic Feet (198 BCF) over the life of the Agreement, the Parties
will negotiate in good faith the operating and financial conditions related to
such surplus.

8.- CLAUSES I1 IS HEREBY MODIFIED AS FOLLOWS:

I1 The CONTRACTOR shall receive all of its compensation on a quarterly basis and
based on the volume of Oil and Natural Gas transferred to the SUBSIDIARY in the
Oil and Natural Gas Transfer Points, respectively, from and including the Date
of Commercial Production of Oil and the date on which deliveries of Natural Gas
commence, respectively, as established and redefined in and by Part "S".

9.- A NEW SUBPARAGRAPH "I" IS ADDED TO CLAUSE S5, WHICH READS AS FOLLOWS:

i) Gas pipelines, gas collection systems, gas separation and treatment
facilities, gas measuring stations, gas wells, costs for the development of
sites and access routes and any materials and equipment related to the
production of Natural Gas, up to a maximum of Forty-Six million Dollars of the
United States of America (US$46,000,000).

10.- THREE CLAUSES NUMBERS S16, S17 AND S18, ARE ADDED, WHICH READ AS FOLLOWS:

S16 Natural Gas Production: Regarding the development, supply and delivery of
Natural Gas from the Gas Area, the CONTRACTOR agrees that the date of first
delivery of Natural Gas to the SUBSIDIARY at the Natural Gas Transfer Point set
forth in Appendix I of this Addendum, and at any other point mutually agreed by
the Parties, will be the date of commencement for the calculation and payment of
the ETG.

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S17 The CONTRACTOR shall receive quarterly the ETG multiplied by the volume of
Natural Gas transferred to the SUBSIDIARY during the previous quarter in
accordance with Section J2.

The ETG payable to the CONTRACTOR includes the remuneration of its operational
costs and the reimbursement of its Capital Costs related to the production of
Natural Gas, provided that the total reimbursement of Capital Costs per quarter
shall not exceed the amount equivalent to eighty percent (80%) of the ETG for
such quarter. In no event, however, will the ETG be less than One Dollar of the
United States of America with Three Cents of a Dollar per each Thousand Cubic
Feet of Natural Gas (US$ 1.03/TCF).

S18 The Parties acknowledge that jointly with the production of Natural Gas, the
CONTRACTOR will produce an additional amount of Crude Oil from the Gas Area
("Incremental Crude Oil"). The CONTRACTOR shall spend the necessary amounts,
including costs of financing and overhead, in order to accomplish the continuous
commercial development of the Incremental Crude Oil. The Parties hereby agree
that the CONTRACTOR's remuneration with respect to the production of Incremental
Crude Oil shall consist of Operational Fee only which shall be calculated and
governed by the same terms and conditions provided for in Parts I, J and S of
the Agreement, with the sole exception that the amount of Nine Dollars of the
United States of America (US$ 9.00) shall be substituted by the amount of Seven
Dollars of the United States of America (US$ 7.00), per Barrel and shall not be
subject to quarterly adjustments. The parties further agree that the Incremental
Crude Oil shall be the amount of Four Million Five Hundred Thousand (4,500,000)
Barrels from all future Crude Oil production.

The Parties agree that the volume of Incremental Crude Oil shall be remunerated
to the CONTRACTOR in accordance with the Operating and Accounting Procedures to
be defined jointly by the parties within one hundred twenty (120) days after
this Addendum is signed.

11.- A NEW APPENDIX I ATTACHED HERETO IS ADDED TO THE AGREEMENT CONTAINING THE
DEFINITION AND DESCRIPTION OF THE NATURAL GAS TRANSFER POINT AND THE NATURAL GAS
QUALITY SPECIFICATIONS.

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12.- CLAUSE R5 IS HEREBY MODIFIED TO READ AS FOLLOWS:

R5 If the operations are delayed, restricted or prevented due to Force Majeure,
then, the period to carry out the affected obligations, the term of this
Agreement and all rights and obligations thereto will be extended for a period
equal to the period affected by Force Majeure, up to a maximum of five (5)
years.

In the event of suspension of the Natural Gas production due to Force Majeure,
the production of Incremental crude Oil shall also be suspended.

13. This Addendum will become effective as of the date it is signed, and is made
an integral part of the Agreement for all legal and contractual effects. The
provisions of the Agreement that are not affected by this Addendum will remain
in full force and effect for all legal and contractual purposes.

14. All the terms in capital letters contained in this Addendum shall have the
same meaning ascribed to them in the Agreement, except if otherwise expressly
provided for in this Addendum.

15. Operational procedures (including for the metering of the Natural Gas at the
Natural Gas Transfer Point) and all corresponding accounting procedures must be
agreed upon between the parties within the one hundred twenty (120) days after
the execution hereof

Two (2) copies having a same tenor and effect are made in Caracas, on the 19th
day of September, 2002.

THE SUBSIDIARY                             THE CONTRACTOR
Name:    Carlos Machado                    Name:    Peter J. Hill
Title:   Production Managing Director      Title:   Principal Director
         PDVSA PETROLEO, S.A.              BENTON-VINCCLER C.A.

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                                   APPENDIX I
                               UNIDAD MONAGAS SUR
                              URACOA/BOMBAL FIELDS

                                    CONTENTS

I.1.- NATURAL GAS TRANSFER POINT

I.2.- NATURAL GAS QUALITY SPECIFICATIONS

I.3.- ANNUAL PREDICTION OF AVERAGE PRODUCTION OF NATURAL GAS IN THE GAS AREA

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                                   APPENDIX I
                               UNIDAD MONAGAS SUR
                              URACOA/BOMBAL FIELDS

I.1.- NATURAL GAS TRANSFER POINT

The point of transfer of the custody and risk of loss of the Natural Gas shall
be the Macapaima Station of the Anaco-Puerto Ordaz gas pipeline. Coordinates
(N922,867.49 E 516,883.41).

I.2.- NATURAL GAS QUALITY SPECIFICATIONS:

Natural Gas Quality Specifications

Uracoa - Bombal

o  Maximum Content of CO2:                   8.0% molar

o  Maximum Content of Water Vapor            7.0   lbs/MMCFN

o  Maximum Pressure for delivery:            900   lppcm

o  Normal Operating Range:                   650-850 lppcm

o  Maximum Content of H2S:                   12    ppmv

o  Specific Gravity:                         0.72

o  Maximum Calorific Power:                  1060  BTU/PC

o  Maximum C5+                               0.25% molar

o  Maximum GPM                               0.60  Gal/MPCS

The quality of the Natural Gas that is to be transferred shall be according to
the above specifications, which may be modified by the Parties by mutual
agreement, if the operating and market conditions so require.

I.3- ANNUAL PREDICTION OF AVERAGE PRODUCTION OF NATURAL GAS IN THE GAS AREA

<Table>
<Caption>
YEAR                    2003     2004     2005     2006     2007     2008     2009     2010     2011
<S>                     <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
GAS (MCFD)               33       60       67       70       70       70       61       30        7
</Table><PAGE>

                                                                    EXHIBIT 10.5

BANK LOAN AGREEMENT BETWEEN

BANCO MERCANTIL, C.A. AND BENTON-VINCCLER, C.A.

EXECUTED OCTOBER 1, 2002

BANCO MERCANTIL, C.A. (BANCO UNIVERSAL), domiciled in Caracas, originally
registered with the Commercial Registry kept by the former Commercial Court of
the Federal District, on April 3, 1925, under No. 123, the Articles of
Incorporation of which were amended and merged into one single text as evidenced
by the entry made in the First Commercial Registry of the Judicial Circuit of
the Capital District and State of Miranda on March 4, 2002, under No. 77, Volume
32-A First, referred to as the "BANK", represented in this proceeding by its
Attorney-in-fact TRINA REYES OLIVARES, Venezuelan, of legal age, an attorney,
domiciled in the city of Caracas, bearer of Identity Card NO. [    ], her
capacity being evidenced by a power of attorney registered with the Subaltern
Office of the First Public Registry Circuit of Baruta Municipality, State of
Miranda, on September 11, 2000, under No. 18, Volume 4, Third Protocol,
sufficiently authorized to execute this document, as party of the first part;
and, as party of the second part, BENTON-VINCCLER, C.A., a corporation domiciled
in Caracas, originally registered with the Second Commercial Registry of the
Judicial Circuit of the Federal District and State of Miranda, on June 29, 1993,
under No. 13, Volume 146-A Second, referred to as the "BORROWER", represented
herein by CHRISTOPHER P. DELK, a United States citizen, of legal age, domiciled
in Caracas, bearer of Identity Card NO. [    ] and LUIS R. GAMBOA, Venezuelan,
of legal age, domiciled in Caracas, bearer of Identity Card No. [    ],
sufficiently authorized by the Special Shareholders' Meeting of their principal,
held on September 5, 2002, the minutes of which were registered with the Second
Commercial Registry of the Judicial Circuit of

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                                       2

the Capital District and State of Miranda, on September 16, 2002, under No. 27,
Volume 143, have agreed to enter into this agreement to be governed by the
following clauses: FIRST: The BANK grants hereby the BORROWER an interest
bearing loan of FIFTEEN MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS
(US$15,500,000.00). SECOND: The BORROWER agrees to use the monies received as an
interest bearing loan for the construction of a gas pipeline and related
facilities from Uracoa to Macapaima located in the State of Monagas, Bolivarian
Republic of Venezuela. THIRD: The BORROWER agrees to return the monies received
as a loan within a term of FOUR (4) years including one year grace period for
the principal, as of the date of authentication of this document, by paying
TWELVE (12) equal and consecutive quarterly installments, evidencing only the
principal amount owed, of ONE MILLION TWO HUNDRED NINETY-ONE THOUSAND SIX
HUNDRED SIXTY-SIX UNITED STATES DOLLARS AND SIXTY-SEVEN CENTS (US$1,291,666.67)
each, the first of which must be paid on January 2, 2004 and the remaining
installments on the following dates: April 1, 2004; July 1, 2004; October 1,
2004; January 3, 2005; April 1, 2005; July 1, 2005; October 3, 2005; January 2,
2006; April 3, 2006; July 3, 2006 and October 2, 2006. FOURTH: The monies
received as an interest bearing loan will bear conventional interest on the
outstanding balance, under the variable rate system equivalent to LIBOR plus SIX
(6) PERCENTAGE POINTS, which will be revised, fixed and adjusted on the last
business day of each calendar quarter or the date of payment of the quarterly
installments containing the principal owed and is payable at the end of each
month. For the purpose of this document, LIBOR, THE "LONDON INTERBANK OFFERED
RATE", is understood to be the arithmetical average of the interest rates
offered in the interbank market in London, England, by the principal Banks of
that city, for three (3) month term deposits, determined at 11:00 a.m., London
time, as published by REUTERS. On the dates and opportunities of each adjustment
or variation,

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                                       3

the interest rate will be automatically varied or adjusted accordingly and
applied as provided for in this document without requiring a special act, advice
or notice to the BORROWER, which undertakes to obtain information from the BANK
about the interest rate applicable to the obligations assumed through this
document. The BORROWER agrees to pay the BANK the amount of the obligations
contracted herein, as well as the interest and any other related expense, in
United States dollars, exclusive of any other currency. As of the date this
document was written, that is October 1, 2002, the LIBOR rate is one point eight
zero six two five percent (1.80625%) PER ANNUM. FIFTH: If the BORROWER becomes
delinquent, the applicable variable interest rate will be that resulting from
adding THREE (3) PERCENTAGE POINTS to the interest rate in force during the
default period, calculated as indicated above. SIXTH: The BORROWER expressly and
irrevocably authorizes the BANK to charge or debit any account or deposit it
maintains with that Banking Institution or the BORROWER's account with
COMMERCEBANK, N.A., identified as No. [    ], all matured amounts owed in
relation to the granting of this INTEREST BEARING LOAN, extinguishing BORROWER's
payment obligation for the amounts due up to the amount charged or debited by
the BANK either from the BANK or from the COMMERCEBANK, N.A., without it being
understood that these charges give rise to novation of its obligations. SEVENTH:
The BORROWER may make special repayments of the principal due, and the total
prepayment of the entire INTEREST BEARING LOAN referred to herein, only at the
times when quarterly principal installments must be paid and provided it gives
notice thereof to the BANK at least THIRTY (30) consecutive days in advance of
the date on which such repayment or total prepayment referred to above is to be
made. EIGHTH: The BANK may consider any and all of the obligations which have
been assumed by the BORROWER by virtue of this document due and, therefore,
payment in full shall be forthwith due and payable in any of the following
events: 1) Failure to pay when due any

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                                       4

one (1) of the principal installments or any one (1) of the interest
installments which BORROWER must pay provided that BORROWER and the GUARANTOR,
identified below, is given notice of the failure to pay by the BANK and is
allowed to have THREE (3) Business Days upon receipt of the notice to remedy the
default by making payment of the amount due to the BANK; 2) If the BORROWER
assigns or delegates the rights or obligations assumed under this agreement to
any individual or legal entity; 3) If the BORROWER assigns or delegates to any
individual or legal entity, except the assignment or delegation to an Affiliate
("Affiliate" means a subsidiary of Benton Vinccler, C.A. or any other company in
which Harvest Natural Resources Inc. holds at least 51% of the capital stock and
administrative control of the company), the Unidad Monagas Sur Operating
Services Agreement (for Uracoa, Bombal, Tucupita), entered into between Lagoven,
S.A., a Subsidiary of Petroleos de Venezuela (currently PDVSA), Benton Oil and
Gas Company (CURRENTLY Harvest Natural Resources Inc.) and Venezolana de
Inversiones y Construcciones Clerico, C.A. (VINCCLER, C.A.), on July 31, 1992 or
any addendum to this operating services agreement of the Monagas Sur Unit
(Uracoa, Bombal Tucupita) or the credit rights derived from said Agreement; 4)
If the BORROWER fails to deliver annual Financial Statements to the BANK during
the term of the credit facility within FOUR (4) MONTHS of the end of each fiscal
year, duly certified by a firm of Independent Auditors approved by the BANK (the
BANK hereby approves the BORROWER's current audit firm Espineira, Sheldon y
Asociados - member of Price-Waterhouse-Coopers) or its monthly Balance Sheets
within thirty (30) days after they have been requested; 5) If the BORROWER
revokes the instructions given to PDVSA EXPLORACION Y PRODUCCION, C.A.,
evidenced by a document authenticated before the Seventh Notary Public of Chacao
Municipality, State of Miranda, Caracas Metropolitan District, on October 11,
2000, under No. 35, Volume 48 of the Books of Authentication kept by that Notary
Public, such payments arising from

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                                       5

the Agreement mentioned in subparagraph 3 of this same clause shall be deposited
only in the account that the BORROWER maintains with COMMERCEBANK, N.A., account
number NO. [    ]; 6) If the BORROWER uses the monies received as an interest
bearing loan for purposes other than those established in this document; 7) If
there is a judicial declaration of moratorium, bankruptcy or the judicial
liquidation of the BORROWER'S assets or if ; 8) If precautionary or executive
measures prohibiting the sale or encumbrance, attachment, seizure or other type
of measure are declared on the assets owned by the BORROWER and such measures
are not stayed within a period of THIRTY (30) consecutive days after the date
the decision to adopt these measures was issued; 9) If substantial changes are
made to the current shareholding structure of the BORROWER that results in
HARVEST NATURAL RESOURCES, INC. having less THAN FIFTY-ONE PERCENT (51%) of the
capital stock and administrative control of the BORROWER; 10) If the BORROWER
declares cash dividends to be distributed among its shareholders while there is
a principal installment or interest payment due and not paid under this
document. Also, the BANK must be notified of any payment of dividends in cash
fifteen (15) consecutive days in advance of the date of payment; 11) If during
the term of this interest bearing loan, the BORROWER incurs a patent default on
monetary obligations assumed vis-a-vis any third party or any other type of
obligation that results in the accelerated maturity of the obligations set forth
in the contracts governing its relationships with such parties; 12) If at any
time during the term of this interest bearing loan, it is proven that the
BORROWER does not maintain appropriate insurance for the facilities where it
operates or carries out its day-to-day commercial activities, according to the
demands of the individual or company that owns such facilities; 13) If during
the term of this INTEREST BEARING LOAN, the BORROWER suspends the production
(extraction) of oil and gas for a term of more than thirty (30) consecutive
days; 14) If the GUARANTOR, identified below, incurs any of the events of

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                                       6

default set forth in the indenture dated November 3, 1997 signed with First
Trust of New York, National Association, Trustee. Also, if the GUARANTOR" and
the BORROWER" do not provide to the "BANK" ninety (90) days after the fiscal
year end a brief certification issued by the principal executive of Finances or
Accounting confirming that the "GUARANTOR" has complied with the conditions and
covenants of Indenture, and also if the GUARANTOR does not deliver to the BANK,
as soon as possible within a period of not more than ten (10) days of the date
on which the GUARANTOR is made aware of the occurrence of an event of default or
of a default, a certification explaining the details of the event of default or
default and the actions the GUARANTOR proposes for this purpose. On the other
hand, if the GUARANTOR should prepay all the financing referred to in such
indenture dated November 3, 1997, the BORROWER undertakes to renegotiate with
the BANK the terms and conditions that will govern this interest bearing loan
from then on. If the BORROWER and the BANK fail to reach an agreement on this
matter within a maximum term of THIRTY (30) CONSECUTIVE DAYS after the
occurrence of such event, the INTEREST BEARING LOAN shall be deemed due and
payable and therefore the BANK may demand full and immediate payment of all
monies owed by virtue of this agreement; and 15) Default on any of the
conditions mentioned above, the BORROWER will have a maximum term of 30 days to
correct or request a waiver for the default of those conditions. After this term
expires all of the obligations assumed by the BORROWER with the BANK will become
due and payable; and 16) Default on any other obligations assume by the BORROWER
herein. NINTH: The BORROWER agrees to pay the BANK a annual flat commission of
ZERO POINT TWO FIVE PERCENT (0.25%) for the administration of this interest
bearing loan, the first of which is payable on the date of execution of this
interest bearing loan and annually thereafter calculated on the outstanding
principal balance at the time of payment of the respective administration
commission. TENTH: The BANK will send all account

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                                       7

statements, as well as any other type of correspondence or notice regarding this
agreement by mail or by any other written means to the address of the BORROWER:
at Centro Comercial Fiorca, Piso 2, Oficina 32-2, Avenida Libertador, Maturin,
Estado Monagas. The BORROWER undertakes to give written notice or any other type
of notice to the BANK agreed to by the BANK and the BORROWER, of any change of
address that the BORROWER may have in the future. Notices or communications will
be considered duly made FIVE (5) CONSECUTIVE DAYS after the BANK sends the
notice or communication to the BORROWER'S address as registered with the BANK.
If the notice, communication, account statement or any other kind of
correspondence is sent by fax or e-mail, this period will be reduced to ONE (1)
DAY. The BORROWER expressly releases the BANK from any liability, directly or
indirectly, derived from any notice or communication sent to an address that is
not the current address, when this is due to failure to notify in a timely
manner a change of address referred to in this clause. In any event, the
BORROWER undertakes to examine each statement or communication that the BANK
sends, and to send written notice to the BANK of any disagreement or objection,
within FIVE (5) days of the periods indicated above, except if otherwise
provided for by Law. The BORROWER expressly accepts that failure to notify its
disagreement or objection, within such periods, implies acceptance by the
BORROWER of the contents of the pertinent statement, notice or communication.
All communications or notices that the BORROWER must send to the BANK may be
sent by certified mail with acknowledgement of receipt, telex or fax, and be
sent to the following address: Final Avenida Andres Bello cruce con Avenida El
Lago, Edificio Mercantil No. 1, San Bernardino, Caracas. ELEVENTH: The BORROWER
expressly declares that this interest bearing loan is guaranteed by its parent
company, HARVEST NATURAL RESOURCES, INC. referred to herein as the "GUARANTOR",
for up to FIFTEEN MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS

<PAGE>

                                       8

(US$15,500,000.00) or its equivalent in local currency, thus in Bolivars.
TWELFTH: To the sole effect of compliance with Article 95 of the Law of the
Central Bank of Venezuela, the amount of Fifteen Million Five Hundred Thousand
United States Dollars is equivalent to the amount of 22,839,250,000 Bolivars.
For all purposes of this agreement, the city of Caracas is elected as special
and exclusive domicile, and the parties declare their willingness to be subject
to the jurisdiction of its courts.

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