9. The legal addresses of the parties:

SELLER:

BUYER:

SELLER: BUYER:

signature signature

seal seal

ENCLOSURE No. 2

To Contract No. Dated

The price for Russian export blend crude oil which will be sold under the present Contract will be defined on basis of FCA terminal of the Novopolotsk refinery Republic of Belarus (INCOTERMS 1990).

The price for every metric ton of export blend crude oil will be in US Dollars.

The price for every metric net ton of crude oil delivered in October-November will be defined in the amount of 92 ( Ninety Two ) US Dollars.

The BUYER is entitled to subject to the SELLER a copy of the import declaration issued by the Customs of Republic of Belarus within 5 ( Five ) days of the date of the compiling of the receipt of transferring-receiving.

In the event of the BUYER'S failure to subject the above documents within 10 ( Ten ) days, the BUYER will pay to the SELLER the cost of the customs duty in the amount 30 ( Thirty ) ECU for 1 ( one ) metric ton of export blend crude oil as well as all other expenses incurred by the SELLER.

All other cases not stipulated as per the present Enclosure will be settled on the basis of the provisions of Contract No dated

SELLER: BUYER:

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Memorandum of understanding

BETWEEN

Belvnesheconombank, Minsk, Republic of Belarus

……………………………………………………..

hereinafter referred to as the parties.

Whereas the Parties have come together to realise the funding of oil purchase contract which will have a number of rollovers.

The total amount of this funding, prior to discounting which shall be agreed between the parties will be approximately United States Dollars 8,000,000 (Eight million).

The crude to be delivered will be agreed between BNG/PetroBel Ltd. and (Russian Exporter) and established in a contract to be signed between the parties.

The Parties have agreed as follows:

Belvnesheconombank, Minsk, Republic of Belarus is ready, willing and able to provide a guar­antee ( aval) to a Promissory Note or series of Promissory Notes with a face value of 8,000,000 USD ( Eight million US Dollars), issued by Belvnesheconombank, Minsk, Republic of Belarus to Badenia AG of Glattbrugg-Zurich, Switzerland in the event that the Parties enter into the above mentioned contract.

Belvnesheconombank, Minsk, Republic of Belarus will forward the Promissory Note(s) to Badenia AG or its home bank, UBS Zurich, which in turn will forward it to the discounting bank along with a copy of the contract.

The agreed credit period, will be no greater than 180 days and the discount rate will include the fees of Bedenia AG and the banks outside Belarus. ( See Note 1 )

Date, signatures of the Parties’ Note :

Belvnesheconombank, Minsk, Republic of Belarus

1: Commitment Fees to the bank are to be paid by client, see Procedures Badenia AG

Procedures

1) CJSC "Belneftegas", Minsk, Republic of Belarus and Seller of crude oil sign a purchase contract, the role of Badenia AG in this contract is to organise a foreign currency facility against the promissory Note (P-Note) issued by importer and avalised by a Belarusian Bank

2) Badenia AG discounts this P-Note with a western bank and pays money to the account of a supplier, who is to be defined in the above contract.

3) CJSC "Belneftegas", Minsk, Republic of Belarus and Belarusian bank sign a memorandum and send it to Badenia AG.

4) Badenia AG submits an offer to CJSC "Belneftegas", Minsk, Republic of Belarus, indicating nominal value of the P-Note and duration of the credit. This will be dependent on the volume of the credit lines available from western banks.

The information contained in the offer will include:

1) Duration of credit (Tenor); 180-270 days

2) Discounting rate (To be Agreed)

3) Date of P-Note:

5) CJSC "Belneftegas", Minsk, Republic of Belarus or Belarusian Bank are to deliver availised P-Note (see attachment), original of contract and pro-forma invoices before the agreed date of issuance of P-Note.

6) Normally it takes 3-5 banking days to deliver these documents and therefore the bank charges a commitment fee for holding the credit line for the period upto and including the final disbursement of funds.

The commitment fee, which must be paid by CJSC "Belneftegas", Minsk, Republic of Belarus is usually 1% per month of the nominal value of the P-Note. Therefore if the total number of days between the banks confirmation and the disbursement of funds is 12 days, then the importer will be paying 12 parts of 30, i.e 0.4 % of the nominal value.

7) Badenia AG submits P-Note to discounting bank on the date of issuance, stated on the P-Note.

8) Discounting Bank telexes Russian Bank to confirm:

a) Authenticity at P-Note

b) Approval of transaction

9) When the Belarusian Bank confirms authenticity by telex to the discounting bank, Badenia AG will instruct Union Banque Suisse to transfer funds to the suppliers account.

Badenia AG

GENERAL CONDITIONS OF BADENIA AG

FOR ARRANGING A CREDIT LINE

on behalf of

BELNEFTEGAS/PetroBel Ltd.

1) Beneficiary of Promissory Note to contract with Badenia AG to arrange for discounting of P Note in accordance with agreed terms and conditions. Beneficiary to pay 1% flat fee after receiving funds on account.

2) Issuer of P-Note to contract with Badenia AG to arrange discounting of P-Note on behalf of beneficiary. Issuer to agree to pay $ 1 per metric tonne of oil shipped under the tenor of the agreement and specified within the contract between the beneficiary and the issuer. This has to be a minimum of $ 60,000 to be paid as and when the L/C issued by the bank to Russian supplier is drawn upon.

3) All future financing business will be handled through Badenia AG on terms and condi­tions to be specified at the time of establishing the facility.

4) All parties enter into contractual non-circumvention and confidentiality agreements.

5) The commitment fees which will be required by the bank after credit committee approval will be paid by the issuer or the beneficiary.

6) In the event that the Belvnesheconombank does not issue the Promissory Note then the issuer/beneficiary will compensate Badenia AG with 2 % of the nominal value of such Promissory Note.