Document:

EXHIBIT 10.9

                                    EXHIBIT A
                                    ---------

                         FORM OF STOCK OPTION AGREEMENT

THE  SECURITIES  REPRESENTED  BY THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH THE
UNITED  STATES  SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT
OF  1933,  AS  AMENDED (THE "1933 ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT
TERM  IS  DEFINED  IN  RULE  144  UNDER THE 1933 ACT.  THE SECURITIES MAY NOT BE
OFFERED  FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER  THE  1933  ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION  UNDER  THE  1933  ACT.

                           SIBERIAN ENERGY GROUP INC.

                             STOCK OPTION AGREEMENT

     THIS  STOCK  OPTION  AGREEMENT  (the  "Agreement") is made and entered into
effective as of the 1st day of August, 2003 by and between Siberian Energy Group
Inc.,  a  Nevada  corporation  (the  "Company"),  and  Elena  Pochapski  (the
"Optionee").

                                   WITNESSETH:

     WHEREAS, the Company agreed to issue to Optionee options to purchase shares
of the $0.001 par value restricted common stock of the Company ("Common Stock"),
said  options  to be for the number of shares, at the price per share and on the
terms  set  forth  in  this  Agree-ment;  and

     WHEREAS,  the  Optionee  desires  to  receive  the options on the terms and
conditions  set  forth  in  this  Agreement.

NOW,  THEREFORE,  the  parties  agree  as  follows:

     1.  Terms.  Terms not otherwise defined herein shall have the meaning given
         -----
to  such  terms  in  the Employment Agreement by and between the Company and the
Optionee,  dated  as  of  August  1,  2003  (the  "Employment  Agreement").

2.     Grant  of  Options; Option Prices.  During the term of the Agreement, the
       ---------------------------------
Company  agrees  to  do  the  following:

(a)  To  grant to Optionee the option to purchase under the terms and conditions
     of  the  Company  2003 Stock Option Plan (the "Plan") all or any part of an
     aggregate of 200,000 shares of the authorized and unissued $0.001 par value
     restricted common stock of the Company ("Common Stock") as of the Effective
     Date  (the  "2003  Option  Shares"),  subject  to,  and in accordance with,
     Exhibit  A  and  the  terms and conditions set forth in this Agreement (the
     "2003  Option"),  at  an  exercise  price  of  $0.07  per  share.

(b)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 20,000 shares of Common Stock as
     of  January  1, 2004 and 15,000 shares of Common Stock on the first date of
     each  month  of  the  year  ended  December 31, 2004, up to an aggregate of
     200,000  shares  (the  "2004 Option Shares"), subject to, and in accordance
     with,  the  terms  and  conditions  set  forth in this Agreement (the "2004
     Option"),  at  an  exercise  price  of  $0.10  per  share.

<PAGE>

(c)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 20,000 shares of Common Stock as
     of  January  1, 2005 and 15,000 shares of Common Stock on the first date of
     each  month  of  the  year  ended  December 31, 2005, up to an aggregate of
     200,000  shares  (the  "2005 Option Shares"), subject to, and in accordance
     with,  the  terms  and  conditions  set  forth in this Agreement (the "2005
     Option"),  at  an  exercise  price  of  $0.30  per  share.

(d)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 20,000 shares of Common Stock as
     of  January  1, 2006 and 15,000 shares of Common Stock on the first date of
     each  month  of  the  year  ended  December 31, 2006, up to an aggregate of
     200,000  shares  (the  "2006 Option Shares"), subject to, and in accordance
     with,  the  terms  and  conditions  set  forth in this Agreement (the "2006
     Option"),  at  an  exercise  price  of  $0.30  per  share.

(e)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 20,000 shares of Common Stock as
     of  January  1,  2007  and  on  January  1st  of every subsequent year (the
     "Subsequent  Option  Shares, together with the 2003 Option Shares, the 2004
     Option  Shares,  the  2005  Option  Shares  and the 2006 Option Shares, the
     "Option  Shares")  and  15,000  shares of Common Stock on the first date of
     each month of the year ended December 31, 2007 and on the first day of each
     month  of  each subsequent year ended December 31st (the "Subsequent Option
     Shares,  together  with the 2003 Option Shares, the 2004 Option Shares, the
     2005  Option  Shares and the 2006 Option Shares, the "Option Shares") up to
     an  aggregate  of  200,000  shares  per year, subject to, and in accordance
     with,  the  terms  and  conditions  set  forth  in  this  Agreement (each a
     "Subsequent  Option",  together  with the 2003 Option, the 2004 Option, the
     2005 Option, the 2006 Option and each Subsequent Option, the "Options"), at
     an  exercise  price  of  110%  of  the average closing prices for the three
     months  prior  to  each  grant  date.

     3.     Exercise Periods.  Each Option shall terminate at 5:00 p.m. (Eastern
            ----------------
standard  time)  on  the  [fourth]  anniversary of December 31st of each year in
which  the  Options  were  granted.

     4.  Exercise  Of  Options.
         ---------------------

(a)  Each  Option  shall  become  vested and exercisable on the applicable grant
     date.

(b)  Subject  to  the terms and conditions of this Agreement, each Option may be
     exercised  in whole at any time, or in part, from time to time, by delivery
     of  written  notice  to the Company, at its principal executive office. The
     notice shall state which Option(s) the Optionee is electing to exercise and
     the  number  of  Option  Shares  being exercised and shall be signed by the
     Optionee.

(c)  The  notice  of  exercise  described  in  Section  4(b)  hereof  shall  be
     accompanied  by  the  full  purchase  price  for  the  Option  Shares being
     exercised,  in  cash  or  by  check  or  (subject to the Company's consent)
     instructions  from  the  Optionee  to  the Company directing the Company to
     deliver  a  specified number of Option Shares directly to a designed broker
     or  dealer  pursuant  to  a  cashless  exercise  election  which is made in
     accordance  with  such requirements and procedures as are acceptable to the
     Company  in  its  sole  discretion  and  full  payment  of  all  applicable
     withholding  taxes  pursuant  to  Section  5  hereof.

<PAGE>

(d)  Upon  receipt  of notice of exercise and full payment for the Option Shares
     being  exercised, the Company shall take such action as may be necessary to
     affect  the  transfer to the Optionee of the number of Options Shares as to
     which  such  exercise  was  effective.

(e)  The Optionee shall not be deemed to be the holder of, or to have any of the
     rights  of  a holder with respect to any Option Shares until (i) the Option
     shall  have  been exercised pursuant to the terms of this Agreement and the
     Optionee  shall  have paid the full purchase price for the number of Option
     Shares  exercised,  (ii)  the  Company  shall have issued and delivered the
     Option  Shares  to  the  Optionee, and (iii) the Optionee's name shall have
     been  entered  as  a  stockholder  of  record  on the books of the Company,
     whereupon  the  Optionee  shall  have full ownership rights with respect to
     such  the  Option  Shares.

     5.     Withholding  Taxes.  The  Company  may  take  such steps as it deems
            ------------------
necessary  or  appropriate for the withholding of any taxes which the Company is
required  by  any  law  or  regulation  or  any  governmental authority, whether
federal, state or local, domestic or foreign, to withhold in connection with the
Option  including,  but not limited to, the withholding of all or any portion of
any  payment  owed by the Company to the Optionee or the withholding of issuance
of  Option  Shares  to  be  issued  upon  the  exercise  of  the  Option.

     6.  Securities  Laws  Requirements. No Option Shares shall be issued unless
         ------------------------------
and  until,  in the opinion of the Company, there has been full compliance with,
or an exemption from, any applicable registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), any applicable listing requirements of
any  securities  exchange  on which stock of the same class has been listed, and
any  other requirements of law or any regulatory bodies having jurisdiction over
such issuance and delivery, or applicable exemptions are available and have been
complied  with.  The Optionee shall acknowledge, represent, warrant and agree in
writing  to  the  Company  as  follows:

(a)  Optionee  is  acquiring  the Option Shares for investment purposes only and
     the  Option  Shares  that  Optionee  is  acquiring will be held by Optionee
     without sale, transfer or other disposition for an indefinite period unless
     the  transfer  of  those  securities  is  subsequently registered under the
     federal  securities  laws  or  unless  exemptions  from  registration  are
     available;

(b)  Optionee's  overall  commitment  to  investments  that  are  not  readily
     marketable  is  not disproportionate to Optionee's net worth and Optionee's
     investment  in the Option Shares will not cause such overall commitments to
     become  excessive;

(c)  Optionee's financial condition is such that Optionee is under no present or
     contemplated  future need to dispose of any portion of the Option Shares to
     satisfy  any  existing  or  contemplated undertaking, need or indebtedness;

(d)  Optionee  has sufficient knowledge and experience in business and financial
     matters to evaluate, and Optionee has evaluated, the merits and risks of an
     investment  in  the  Option  Shares;

<PAGE>

(e)  The address set forth on the signature page to this Agreement is Optionee's
     true  and  correct  residence,  and  Optionee  has  no present intention of
     becoming  a  resident  of  any  other  state  or  jurisdiction;

(f)  Optionee  confirms  that  all documents, records and books pertaining to an
     investment  in the Option and the Option Shares that have been requested by
     Optionee  have  been  made available or delivered to Optionee. Optionee has
     had  the  opportunity  to  discuss  the  acquisition of the Warrant and the
     Option  Shares  with  the  Company, and Optionee has obtained or been given
     access  to  all  information  concerning  the  Company  that  Optionee  has
     requested;

(g)  Optionee  has  had  the  opportunity  to  ask questions of, and receive the
     answers  from,  the  Company  concerning the terms of the investment in the
     Option Shares and to receive additional information necessary to verify the
     accuracy  of  the information delivered to Optionee, to the extent that the
     Company  possesses  such information or can acquire it without unreasonable
     effort  or  expense;

(h)  Optionee  understands  that  the  Options  have  not, and the Option Shares
     issuable  upon  exercise  of  the Options will not be, registered under the
     1933  Act  or  any  state  securities  laws in reliance on an exemption for
     private  offerings,  and no federal or state agency has made any finding or
     determination  as  to the fairness of this investment or any recommendation
     or  endorsement  of  the  sale  of  the  Option  Shares;

(i)  The  Option Shares that Optionee is acquiring will be solely for Optionee's
     own  account, for investment, and are not being purchased with a view to or
     for  the  resale,  distribution,  subdivision or fractionalization thereof.
     Optionee has no agreement or arrangement for any such resale, distribution,
     subdivision  or  fractionalization  thereof;

(j)  Optionee  acknowledges  and  is  aware  of  the  following:

     (i)  The  Option  Shares  constitute a speculative investment and involve a
     high  degree  of risk of loss by Optionee of Optionee's total investment in
     the  Option  Shares.

     (ii)  There  are  substantial  restrictions  on  the transferability of the
     Option Shares. The Option is not transferable except by will or the laws of
     descent  and distribution,  and any attempt to do so shall void the Option.
     The  Option  Shares  cannot  be transferred, pledged, hypothecated, sold or
     otherwise  disposed  of unless they are registered under the 1933 Act or an
     exemption  from  such  registration  is  available  and  established to the
     satisfaction  of  the  Company;  investors in the Company have no rights to
     require that the Option Shares be registered except as set forth in Section
     9  of this Agreement; there is no right of presentment of the Option Shares
     and  there  is no obligation by the Company to repurchase any of the Option
     Shares;  and,  accordingly,  Optionee  may  have  to hold the Option Shares
     indefinitely  and  it  may  not  be  possible  for  Optionee  to  liquidate
     Optionee's  investment  in  the  Company.

     (iii)  Each  certificate  issued  representing  the  Option Shares shall be
     imprinted  with  a legend that sets forth a description of the restrictions
     on  transferability  of  those  securities,  which  legend  will  read
     substantially  as  follows:

<PAGE>

     "THE  SECURITIES  REPRESENTED  BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH  THE  UNITED  STATES  SECURITIES  AND  EXCHANGE  COMMISSION  UNDER THE U.S.
SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE  "1933  ACT"), AND ARE 'RESTRICTED
SECURITIES'  AS  THAT  TERM  IS  DEFINED  IN  RULE  144 UNDER THE 1933 ACT.  THE
SECURITIES  MAY  NOT  BE  OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT
TO  AN  EXEMPTION  FROM  REGISTRATION  UNDER  THE  1933  ACT.

THE  SECURITIES  EVIDENCED  BY  THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET
FORTH IN A STOCK OPTION AGREEMENT, DATED AUGUST 1, 2003, BETWEEN THE COMPANY AND
ELENA  POCHAPSKI  AND MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS
OF SUCH STOCK OPTION AGREEMENT.  THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH
SHAREHOLDER  WHO  SO  REQUESTS  A  COPY  OF  THE  STOCK  OPTION  AGREEMENT."

(k)  The Optionee will not sell, assign, transfer, exchange, encumber, pledge or
     otherwise  dispose  of  any  of  the Option Shares acquired pursuant to the
     Options,  or grant any option or right to purchase such shares or any legal
     or  beneficial  interest  in  such  shares,  except  in accordance with the
     requirements  set  forth  below:

     (i)     Prior  to  the  consummation of the first public offering of Common
     Stock  pursuant  to  a  registration  statement  (other than on Form S-8 or
     successor  forms) filed with, and declared effective by, the Securities and
     Exchange  Commission  (an "Initial Public Offering"), Optionee may transfer
     shares  of Common Stock only if the following conditions are satisfied: (a)
     the proposed transfer must be pursuant to an exemption from registration in
     compliance  with  the  Securities  Act, and any applicable state securities
     laws,  and  the  transferring  Optionee must provide a written opinion from
     counsel  acceptable  to the Company to the effect that no such registration
     is required under the applicable securities laws; (b) the proposed transfer
     must  be  permissible  under  the  provisions of all other applicable laws,
     rules,  regulations and licenses and the transferring Optionee must satisfy
     all pre-conditions and comply with all other requirements pertaining to the
     transfer;  and (c) the Company must consent to the proposed transfer, which
     consent  will  not  be  unreasonably  withheld.

     (ii)  After an Initial Public Offering, and after any applicable restricted
     period related to the Initial Public Offering, Optionee may transfer shares
     of  Common  Stock  as follows: (a) Optionee may sell shares of Common Stock
     pursuant  to  an effective registration statement under the Securities Act,
     in  compliance  with any applicable state securities laws or blue sky laws;
     (b) Optionee may sell shares of Common Stock pursuant to, and in accordance
     with,  the  provisions of Rule 144; and (c) Optionee may transfer shares of
     Common  Stock in any transaction that satisfies the conditions discussed in
     Section  6(k)(i)  above.

<PAGE>

     The  restrictions  described  in  this  Section  6 or notice thereof may be
placed  on the certificates representing the Option Shares purchased pursuant to
the  Option, and the Company may refuse to issue the certificates or to transfer
the  shares  on  its  books  unless  it  is  satisfied that no violation of such
restrictions  will  occur.

     7.     Adjustment  By Stock Split, Stock Dividend, Etc.  If at any time the
            ------------------------------------------------
Company  increases  or  decreases the number of its outstanding shares of Common
Stock,  or changes in any way the rights and privileges of such shares, by means
of  the  payment  of a stock dividend or the making of any other distribution on
such shares payable in its Common Stock, or through a stock split or subdivision
of  shares,  or  a  consolidation  or  combination  of  shares,  or  through  a
reclassification  or  recapitalization  involving its Common Stock, the numbers,
rights and privileges of the shares of Common Stock included in the Option shall
be  increased,  decreased  or  changed in like manner as if such shares had been
issued  and  outstanding,  fully  paid  and  nonassessable,  at the time of such
occurrence,  and  the  exercise  price  shall  be  adjusted  accordingly.

     8.  Merger  Or  Consolidation. Upon the occurrence of  any of the following
         -------------------------
events,  the  Option shall automatically terminate and be of no further force or
effect whatever: (i) the merger or consolidation of the Company with one or more
other  corporations,  regardless  of which entity survives the transaction; (ii)
the  dissolution  or  liquidation  of  the  Company;  (iii) the appointment of a
receiver  for  all,  or  substantially all, of the Company's assets or business;
(iv)  the  appointment  of  a trustee for the Company after a petition has  been
filed  for  the  Company's  reorganization under applicable statutes; or (v) the
sale,  lease  or exchange of all, or substantially  all, of the Company's assets
and  business.  However,  under these circumstances and prior to consummation of
said  event,  all  optionees  will  be  granted  either  and/or (a) the right to
exercise  all  outstanding  options,  or  (b)  will be substituted by equivalent
option in such surviving corporation (or other entity) or a parent or subsidiary
of  such  surviving  corporation in case of merger or acquisition. The foregoing
adjustments  shall  be  made  by  the Board, whose determination in that respect
shall  be  final,  binding  and  conclusive.

     9.     Common  Stock  To  Be  Received Upon Exercise.  Optionee understands
            ---------------------------------------------
that (a) the Company is under no obligation to register the issuance or transfer
of  the  Option  Shares,  and  (b)  in the absence of any such registration, the
Option  Shares cannot be sold unless they are sold pursuant to an exemption from
registration  under  the 1933 Act.  Thus, the Option Shares will have to be held
indefinitely  in  the absence of registration under the Act or an exemption from
registration.

     Furthermore,  the  Optionee  fully  understands that issuance of the Option
Shares  will  not  be registered under the Act and that, because the issuance of
the  Option  Shares  will not be registered, the Option Shares will be issued in
reliance  upon  an  exemption  which is available only if Optionee acquires such
shares for investment and not with a view to distribution.  Optionee is familiar
with the phrase "acquired for investment and not with a view to distribution" as
it  relates  to  the  Act  and the special meaning given to such term in various
releases  of  the  Securities  and  Exchange  Commission.

<PAGE>

     10.     Privilege  Of Ownership.  Optionee shall not have any of the rights
             -----------------------
of  a stockholder with respect to the shares covered by the Option except to the
extent  that  one or more certificates for such shares shall be delivered to him
upon  exercise  of  the  Option.

     11.  Relationship  To  Engagement.  Nothing contained in this Agreement (i)
          ----------------------------
shall  confer  upon  the  Optionee  any  right  with  respect  to continuance of
Optionee's  engagement by, or affiliation with, or relationship to, the Company,
or  (ii) shall interfere in any way with the right of the Company at any time to
terminate  the  Optionee's  engagement  by,  position  or  affiliation  with, or
relationship  to,  the  Company.

     12.  Notices.  All  notices,  requests,  demands,  directions  and  other
          -------
communications  ("Notices")  concerning  this  Agreement shall be in writing and
shall  be  mailed  or delivered personally or sent by telecopier or facsimile to
the  applicable  party  at  the  address  of  such party set forth below in this
Section  12.  When  mailed,  each  such  Notice  shall  be  sent by first class,
certified mail, return receipt requested, enclosed in a postage prepaid wrapper,
and  shall be effective on the fifth business day after it has been deposited in
the  mail.  When  delivered personally, each such Notice shall be effective when
delivered  to the address for the respective party set forth in this Section 12,
provided  that it is delivered on a business day and further provided that it is
delivered  prior  to  5:00  p.m.,  local time of the party to whom the notice is
being  delivered,  on  that  business  day; otherwise, each such Notice shall be
effective  on  the  first  business day occurring after the Notice is delivered.
When sent by telecopier or facsimile, each such Notice shall be effective on the
day  on  which it is sent provided that it is sent on a business day and further
provided that it is sent prior to 5:00 p.m., local time of the party to whom the
Notice is being sent, on that business day; otherwise, each such Notice shall be
effective  on  the  first  business day occurring after the Notice is sent. Each
such  Notice  shall  be  addressed  to  the party to be notified as shown below:

     (a)     if to the  Company:    Siberian  Energy  Group  Inc.
                                    275  Madison  Avenue,  6th  floor
                                    New  York,  NY  10016
                                    Attn: Chairman of the Compensation Committee
                                    Facsimile:

(b)     if to the Optionee:         Elena  Pochapski
                                    At the address set forth on the signature
                                    page of this Agreement

     Either party may change its respective address for purposes of this Section
12  by  giving the other party Notice of the new address in the manner set forth
above.

     13.     General  Provisions.  This  instrument  (a)  contains  the  entire
             -------------------
agreement  between  the  parties,  (b)  may  not  be  amended nor may any rights
hereunder  be  waived  except  by  an  instrument in writing signed by the party
sought  to  be  charged with such amendment or waiver, (c) shall be construed in
accordance  with, and governed by the laws of ________, and (d) shall be binding
upon and shall inure to the benefit of the parties and their respective personal
representatives  and assigns, except as above set forth.  All pronouns contained
herein  and  any  variations  thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural as the identity of the parties hereto may
require.

<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  to be
effective  as  of  the  date  written  above.

                                           SIBERIAN  ENERGY  GROUP  INC.

                                           By:

                                           /s/ David Zaikin
                                           ------------------
                                           David  Zaikin

                                           OPTIONEE

                                           /s/ Elena Pochapski
                                           ----------------------
                                           Elena  Pochapski

                                           #309  -  1122  Don  Mills  Road
                                           -------------------------------
                                           Address

                                           Toronto,  ON  M3B  2W3
                                           ----------------------
                                           City,  State  and  Zip  Code

<PAGE>EXHIBIT 10.10

                                    EXHIBIT A
                                    ---------

                         FORM OF STOCK OPTION AGREEMENT

THE  SECURITIES  REPRESENTED  BY THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH THE
UNITED  STATES  SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT
OF  1933,  AS  AMENDED (THE "1933 ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT
TERM  IS  DEFINED  IN  RULE  144  UNDER THE 1933 ACT.  THE SECURITIES MAY NOT BE
OFFERED  FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER  THE  1933  ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION  UNDER  THE  1933  ACT.

                           SIBERIAN ENERGY GROUP INC.

                             STOCK OPTION AGREEMENT

     THIS  STOCK  OPTION  AGREEMENT  (the  "Agreement") is made and entered into
effective  as  of  the  1st  day of January, 2004 by and between Siberian Energy
Group  Inc.,  a  Nevada  corporation  (the  "Company"),  and Sergey Potapov (the
"Optionee").

                                   WITNESSETH:

     WHEREAS, the Company agreed to issue to Optionee options to purchase shares
of the $0.001 par value restricted common stock of the Company ("Common Stock"),
said  options  to be for the number of shares, at the price per share and on the
terms  set  forth  in  this  Agree-ment;  and

     WHEREAS,  the  Optionee  desires  to  receive  the options on the terms and
conditions  set  forth  in  this  Agreement.

NOW,  THEREFORE,  the  parties  agree  as  follows:

     1.  Terms.  Terms not otherwise defined herein shall have the meaning given
         -----
to  such  terms  in  the Employment Agreement by and between the Company and the
Optionee,  dated  as  of  January  1,  2003  (the  "Employment  Agreement").

     2.  Grant  of Options; Option Prices. During the term of the Agreement, the
         --------------------------------
Company  agrees  to  do  the  following:

(a)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Company 2004 Stock Option Plan (the "Plan") all or any
     part of 14,000 shares of Common Stock as of  January  1, 2004 and 14,000
     shares of the authorized and unissued $0.001 par value common stock of the
     Company ("Common Stock"),  on the first date of each  month  of  the  year
     ended  December 31, 2004, up to an aggregate of 168,000  shares (the "2004
     Option Shares"), subject to, and in accordance with,  the  terms  and
     conditions set forth in this Agreement(the "2004 Option"), at an exercise
     price  of  $0.10  per  share.

(b)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 14,000 shares of Common Stock as
     of  January  1, 2005 and 14,000 shares of Common Stock on the first date of
     each  month  of  the  year  ended  December 31, 2005, up to an aggregate of
     168,000  shares  (the  "2005 Option Shares"), subject to, and in accordance
     with,  the  terms  and  conditions  set  forth in this Agreement (the "2005
     Option"),  at  an  exercise  price  of  $0.30  per  share.

<PAGE>

(c)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 14,000 shares of Common Stock as
     of  January  1, 2006 and 14,000 shares of Common Stock on the first date of
     each  month  of  the  year  ended  December 31, 2006, up to an aggregate of
     168,000  shares  (the  "2006 Option Shares"), subject to, and in accordance
     with,  the  terms  and  conditions  set  forth in this Agreement (the "2006
     Option"),  at  an  exercise  price  of  $0.30  per  share.

(d)  To  grant to Optionee the additional option to purchase under the terms and
     conditions  of the Plan all or any part of 14,000 shares of Common Stock as
     of  January  1,  2007  and  on  January  1st  of every subsequent year (the
     "Subsequent  Option  Shares, together with the 2004 Option Shares, the 2005
     Option  Shares  and the 2006 Option Shares, the "Option Shares") and 14,000
     shares  of  Common  Stock on the first date of each month of the year ended
     December  31,  2007  and  on the first day of each month of each subsequent
     year  ended December 31st (the "Subsequent Option Shares, together with the
     2004  Option Shares, the 2005 Option Shares and the 2006 Option Shares, the
     "Option Shares") up to an aggregate of 168,000 shares per year, subject to,
     and  in  accordance  with,  the  terms  and  conditions  set  forth in this
     Agreement  (each  a "Subsequent Option", together with the 2004 Option, the
     2005 Option, the 2006 Option and each Subsequent Option, the "Options"), at
     an  exercise  price  of  110%  of  the average closing prices for the three
     months  prior  to  each  grant  date.

     3.     Exercise Periods.  Each Option shall terminate at 5:00 p.m. (Eastern
            ----------------
standard  time)  on  the  [fourth]  anniversary of December 31st of each year in
which  the  Options  were  granted.

     4.  Exercise  Of  Options.
         ---------------------

(a)  Each  Option  shall  become  vested and exercisable on the applicable grant
     date.

(b)  Subject  to  the terms and conditions of this Agreement, each Option may be
     exercised  in whole at any time, or in part, from time to time, by delivery
     of  written  notice  to the Company, at its principal executive office. The
     notice shall state which Option(s) the Optionee is electing to exercise and
     the  number  of  Option  Shares  being exercised and shall be signed by the
     Optionee
..
(c)  The  notice  of  exercise  described  in  Section  4(b)  hereof  shall  be
     accompanied  by  the  full  purchase  price  for  the  Option  Shares being
     exercised,  in  cash  or  by  check  or  (subject to the Company's consent)
     instructions  from  the  Optionee  to  the Company directing the Company to
     deliver  a  specified number of Option Shares directly to a designed broker
     or  dealer  pursuant  to  a  cashless  exercise  election  which is made in
     accordance  with  such requirements and procedures as are acceptable to the
     Company  in  its  sole  discretion  and  full  payment  of  all  applicable
     withholding  taxes  pursuant  to  Section  5  hereof.

(d)  Upon  receipt  of notice of exercise and full payment for the Option Shares
     being  exercised, the Company shall take such action as may be necessary to
     affect  the  transfer to the Optionee of the number of Options Shares as to
     which  such  exercise  was  effective.

<PAGE>

(e)  The Optionee shall not be deemed to be the holder of, or to have any of the
     rights  of  a holder with respect to any Option Shares until (i) the Option
     shall  have  been exercised pursuant to the terms of this Agreement and the
     Optionee  shall  have paid the full purchase price for the number of Option
     Shares  exercised,  (ii)  the  Company  shall have issued and delivered the
     Option  Shares  to  the  Optionee, and (iii) the Optionee's name shall have
     been  entered  as  a  stockholder  of  record  on the books of the Company,
     whereupon  the  Optionee  shall  have full ownership rights with respect to
     such  the  Option  Shares.

     5.     Withholding  Taxes.  The  Company  may  take  such steps as it deems
            ------------------
necessary  or  appropriate for the withholding of any taxes which the Company is
required  by  any  law  or  regulation  or  any  governmental authority, whether
federal, state or local, domestic or foreign, to withhold in connection with the
Option  including,  but not limited to, the withholding of all or any portion of
any  payment  owed by the Company to the Optionee or the withholding of issuance
of  Option  Shares  to  be  issued  upon  the  exercise  of  the  Option.

     6.  Securities  Laws  Requirements. No Option Shares shall be issued unless
         ------------------------------
and  until,  in the opinion of the Company, there has been full compliance with,
or an exemption from, any applicable registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), any applicable listing requirements of
any  securities  exchange  on which stock of the same class has been listed, and
any  other requirements of law or any regulatory bodies having jurisdiction over
such issuance and delivery, or applicable exemptions are available and have been
complied  with.  The Optionee shall acknowledge, represent, warrant and agree in
writing  to  the  Company  as  follows:

(a)  Optionee  is  acquiring  the Option Shares for investment purposes only and
     the  Option  Shares  that  Optionee  is  acquiring will be held by Optionee
     without sale, transfer or other disposition for an indefinite period unless
     the  transfer  of  those  securities  is  subsequently registered under the
     federal  securities  laws  or  unless  exemptions  from  registration  are
     available;

(b)  Optionee's  overall  commitment  to  investments  that  are  not  readily
     marketable  is  not disproportionate to Optionee's net worth and Optionee's
     investment  in the Option Shares will not cause such overall commitments to
     become  excessive;

(c)  Optionee's financial condition is such that Optionee is under no present or
     contemplated  future need to dispose of any portion of the Option Shares to
     satisfy  any  existing  or  contemplated undertaking, need or indebtedness;

(d)  Optionee  has sufficient knowledge and experience in business and financial
     matters to evaluate, and Optionee has evaluated, the merits and risks of an
     investment  in  the  Option  Shares;

(e)  The address set forth on the signature page to this Agreement is Optionee's
     true  and  correct  residence,  and  Optionee  has  no present intention of
     becoming  a  resident  of  any  other  state  or  jurisdiction;

(f)  Optionee  confirms  that  all documents, records and books pertaining to an
     investment  in the Option and the Option Shares that have been requested by
     Optionee  have  been  made available or delivered to Optionee. Optionee has
     had  the  opportunity  to  discuss  the  acquisition of the Warrant and the
     Option  Shares  with  the  Company, and Optionee has obtained or been given
     access  to  all  information  concerning  the  Company  that  Optionee  has
     requested;

<PAGE>

(g)  Optionee  has  had  the  opportunity  to  ask questions of, and receive the
     answers  from,  the  Company  concerning the terms of the investment in the
     Option Shares and to receive additional information necessary to verify the
     accuracy  of  the information delivered to Optionee, to the extent that the
     Company  possesses  such information or can acquire it without unreasonable
     effort  or  expense;

(h)  Optionee  understands  that  the  Options  have  not, and the Option Shares
     issuable  upon  exercise  of  the Options will not be, registered under the
     1933  Act  or  any  state  securities  laws in reliance on an exemption for
     private  offerings,  and no federal or state agency has made any finding or
     determination  as  to the fairness of this investment or any recommendation
     or  endorsement  of  the  sale  of  the  Option  Shares;

(i)  The  Option Shares that Optionee is acquiring will be solely for Optionee's
     own  account, for investment, and are not being purchased with a view to or
     for  the  resale,  distribution,  subdivision or fractionalization thereof.
     Optionee has no agreement or arrangement for any such resale, distribution,
     subdivision  or  fractionalization  thereof;

(j)  Optionee  acknowledges  and  is  aware  of  the  following:

     (i)  The  Option  Shares  constitute a speculative investment and involve a
     high  degree  of risk of loss by Optionee of Optionee's total investment in
     the  Option  Shares.

     (ii)  There  are  substantial  restrictions  on  the transferability of the
     Option Shares. The Option is not transferable except by will or the laws of
     descent  and distribution,  and any attempt to do so shall void the Option.
     The  Option  Shares  cannot  be transferred, pledged, hypothecated, sold or
     otherwise  disposed  of unless they are registered under the 1933 Act or an
     exemption  from  such  registration  is  available  and  established to the
     satisfaction  of  the  Company;  investors in the Company have no rights to
     require that the Option Shares be registered except as set forth in Section
     9  of this Agreement; there is no right of presentment of the Option Shares
     and  there  is no obligation by the Company to repurchase any of the Option
     Shares;  and,  accordingly,  Optionee  may  have  to hold the Option Shares
     indefinitely  and  it  may  not  be  possible  for  Optionee  to  liquidate
     Optionee's  investment  in  the  Company.

     (iii)  Each  certificate  issued  representing  the  Option Shares shall be
     imprinted  with  a legend that sets forth a description of the restrictions
     on  transferability  of  those  securities,  which  legend  will  read
     substantially  as  follows:

     "THE  SECURITIES  REPRESENTED  BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH  THE  UNITED  STATES  SECURITIES  AND  EXCHANGE  COMMISSION  UNDER THE U.S.
SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE  "1933  ACT"), AND ARE 'RESTRICTED
SECURITIES'  AS  THAT  TERM  IS  DEFINED  IN  RULE  144 UNDER THE 1933 ACT.  THE
SECURITIES  MAY  NOT  BE  OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT
TO  AN  EXEMPTION  FROM  REGISTRATION  UNDER  THE  1933  ACT.

<PAGE>

     THE  SECURITIES  EVIDENCED  BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
SET  FORTH  IN  A  STOCK  OPTION  AGREEMENT,  DATED JANUARY 1, 2004, BETWEEN THE
COMPANY  AND SERGEY POTAPOV AND MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE  TERMS  OF  SUCH  STOCK  OPTION  AGREEMENT. THE COMPANY WILL FURNISH WITHOUT
CHARGE  TO  EACH  SHAREHOLDER  WHO  SO  REQUESTS  A  COPY  OF  THE  STOCK OPTION
AGREEMENT."

(k)  The Optionee will not sell, assign, transfer, exchange, encumber, pledge or
     otherwise  dispose  of  any  of  the Option Shares acquired pursuant to the
     Options,  or grant any option or right to purchase such shares or any legal
     or  beneficial  interest  in  such  shares,  except  in accordance with the
     requirements  set  forth  below:

     (i)  Prior to the consummation of the first public offering of Common Stock
     pursuant  to  a registration statement (other than on Form S-8 or successor
     forms)  filed  with, and declared effective by, the Securities and Exchange
     Commission  (an "Initial Public Offering"), Optionee may transfer shares of
     Common  Stock  only  if  the  following  conditions  are satisfied: (a) the
     proposed  transfer  must  be  pursuant to an exemption from registration in
     compliance  with  the  Securities  Act, and any applicable state securities
     laws,  and  the  transferring  Optionee must provide a written opinion from
     counsel  acceptable  to the Company to the effect that no such registration
     is required under the applicable securities laws; (b) the proposed transfer
     must  be  permissible  under  the  provisions of all other applicable laws,
     rules,  regulations and licenses and the transferring Optionee must satisfy
     all pre-conditions and comply with all other requirements pertaining to the
     transfer;  and (c) the Company must consent to the proposed transfer, which
     consent  will  not  be  unreasonably  withheld.

     (ii)  After an Initial Public Offering, and after any applicable restricted
     period related to the Initial Public Offering, Optionee may transfer shares
     of  Common  Stock  as follows: (a) Optionee may sell shares of Common Stock
     pursuant  to  an effective registration statement under the Securities Act,
     in  compliance  with any applicable state securities laws or blue sky laws;
     (b) Optionee may sell shares of Common Stock pursuant to, and in accordance
     with,  the  provisions of Rule 144; and (c) Optionee may transfer shares of
     Common  Stock in any transaction that satisfies the conditions discussed in
     Section  6(k)(i)  above.

     The  restrictions  described  in  this  Section  6 or notice thereof may be
placed  on the certificates representing the Option Shares purchased pursuant to
the  Option, and the Company may refuse to issue the certificates or to transfer
the  shares  on  its  books  unless  it  is  satisfied that no violation of such
restrictions  will  occur.

     7.     Adjustment  By Stock Split, Stock Dividend, Etc.  If at any time the
            ------------------------------------------------
Company  increases  or  decreases the number of its outstanding shares of Common
Stock,  or changes in any way the rights and privileges of such shares, by means
of  the  payment  of a stock dividend or the making of any other distribution on
such shares payable in its Common Stock, or through a stock split or subdivision
of  shares,  or  a  consolidation  or  combination  of  shares,  or  through  a
reclassification  or  recapitalization  involving its Common Stock, the numbers,
rights and privileges of the shares of Common Stock included in the Option shall
be  increased,  decreased  or  changed in like manner as if such shares had been
issued  and  outstanding,  fully  paid  and  nonassessable,  at the time of such
occurrence,  and  the  exercise  price  shall  be  adjusted  accordingly.

     8.  Merger  Or  Consolidation. Upon the occurrence  of any of the following
         -------------------------
events,  the  Option shall automatically terminate and be of no further force or
effect whatever: (i) the merger or consolidation of the Company with one or more
other  corporations,  regardless  of which entity survives the transaction; (ii)
the  dissolution  or  liquidation  of  the  Company;  (iii) the appointment of a
receiver  for  all,  or  substantially all, of the Company's assets or business;
(iv)  the  appointment  of  a trustee  for the Company after a petition has been
filed  for  the  Company's  reorganization under applicable statutes; or (v) the
sale,  lease  or exchange of all, or substantially  all, of the Company's assets
and  business.  However,  under these circumstances and prior to consummation of
said  event,  all  optionees  will  be  granted  either  and/or (a) the right to
exercise  all  outstanding  options,  or  (b)  will be substituted by equivalent
option in such surviving corporation (or other entity) or a parent or subsidiary
of  such  surviving  corporation  in  case  of  merger  or  acquisition.

     The  foregoing  adjustments shall be made by the Board, whose determination
in  that  respect  shall  be  final,  binding  and  conclusive.

     9.     Common  Stock  To  Be  Received Upon Exercise.  Optionee understands
            ---------------------------------------------
that (a) the Company is under no obligation to register the issuance or transfer
of  the  Option  Shares,  and  (b)  in the absence of any such registration, the
Option  Shares cannot be sold unless they are sold pursuant to an exemption from
registration  under  the 1933 Act.  Thus, the Option Shares will have to be held
indefinitely  in  the absence of registration under the Act or an exemption from
registration.

     Furthermore,  the  Optionee  fully  understands that issuance of the Option
Shares  will  not  be registered under the Act and that, because the issuance of
the  Option  Shares  will not be registered, the Option Shares will be issued in
reliance  upon  an  exemption  which is available only if Optionee acquires such
shares for investment and not with a view to distribution.  Optionee is familiar
with the phrase "acquired for investment and not with a view to distribution" as
it  relates  to  the  Act  and the special meaning given to such term in various
releases  of  the  Securities  and  Exchange  Commission.

     10.     Privilege  Of Ownership.  Optionee shall not have any of the rights
             -----------------------
of  a stockholder with respect to the shares covered by the Option except to the
extent  that  one or more certificates for such shares shall be delivered to him
upon  exercise  of  the  Option.

     11.  Relationship  To  Engagement.  Nothing contained in this Agreement (i)
          ----------------------------
shall  confer  upon  the  Optionee  any  right  with  respect  to continuance of
Optionee's  engagement by, or affiliation with, or relationship to, the Company,
or  (ii) shall interfere in any way with the right of the Company at any time to
terminate  the  Optionee's  engagement  by,  position  or  affiliation  with, or
relationship  to,  the  Company.

<PAGE>

     12.  Notices.  All  notices,  requests,  demands,  directions  and  other
          -------
communications  ("Notices")  concerning  this  Agreement shall be in writing and
shall  be  mailed  or delivered personally or sent by telecopier or facsimile to
the  applicable  party  at  the  address  of  such party set forth below in this
Section  12.  When  mailed,  each  such  Notice  shall  be  sent by first class,
certified mail, return receipt requested, enclosed in a postage prepaid wrapper,
and  shall be effective on the fifth business day after it has been deposited in
the  mail.  When  delivered personally, each such Notice shall be effective when
delivered  to the address for the respective party set forth in this Section 12,
provided  that it is delivered on a business day and further provided that it is
delivered  prior  to  5:00  p.m.,  local time of the party to whom the notice is
being  delivered,  on  that  business  day; otherwise, each such Notice shall be
effective  on  the  first  business day occurring after the Notice is delivered.
When sent by telecopier or facsimile, each such Notice shall be effective on the
day  on  which it is sent provided that it is sent on a business day and further
provided that it is sent prior to 5:00 p.m., local time of the party to whom the
Notice is being sent, on that business day; otherwise, each such Notice shall be
effective  on  the  first  business day occurring after the Notice is sent. Each
such  Notice  shall  be  addressed  to  the party to be notified as shown below:

     (a)     if to the Company:     Siberian  Energy  Group  Inc.
                                    275  Madison  Avenue,  6th  floor
                                    New  York,  NY  10016
                                    Attn: Chairman of the Compensation Committee
                                    Facsimile:

     (b)     if to the Optionee:    Sergey  Potapov
                                    At the address set forth on the signature
                                    page of this Agreement

     Either party may change its respective address for purposes of this Section
12  by  giving the other party Notice of the new address in the manner set forth
above.

     13.     General  Provisions.  This  instrument  (a)  contains  the  entire
             -------------------
agreement  between  the  parties,  (b)  may  not  be  amended nor may any rights
hereunder  be  waived  except  by  an  instrument in writing signed by the party
sought  to  be  charged with such amendment or waiver, (c) shall be construed in
accordance  with, and governed by the laws of ________, and (d) shall be binding
upon and shall inure to the benefit of the parties and their respective personal
representatives  and assigns, except as above set forth.  All pronouns contained
herein  and  any  variations  thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural as the identity of the parties hereto may
require.

<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  to be
effective  as  of  the  date  written  above.
     SIBERIAN  ENERGY  GROUP  INC.

                                           By:
                                           /s/ David Zaikin

                                           David  Zaikin  -  Chairman
                                           --------------------------
                                           Printed  Name  and  Title

                                           OPTIONEE

                                           /s/ Sergey Potapov
                                           -----------------------
                                           Sergey  Potapov

                                           #46  -  34  Gorkova  St
                                           -----------------------
                                           Address

                                           Kurgan  city,  Russia,  640020
                                           ------------------------------
                                           City,  State  and  Zip  Code

<PAGE>

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