EXPLORATION WORK PROGRAMME - AGREEMENT ON THE EXPLORATION, DEVELOPMENT AND PRODUCTION SHARING F

For the purposes of exploring the oil and gas potential within the Contract Area Contractor shall carry out a programme of work as described in Article 4 in accordance with the following guidelines:

(i) Shoot, process and interpret three dimensional seismic which may for operational reasons upon SOCAR's approval be shot partially outside the Contract Area; and

(ii) Carry out an upper section site investigation survey to ensure a safe and environmentally sound base for drilling; and

(iii) Drill in the Contract Area two (2) exploration (поисковых) wells to ascertain the presence of oil and gas in the prospective horizons. During the Exploration Period one (1) well shall be drilled to a depth of fifty (50) metres below the base of the Kalinskaya Suite or to a depth of six thousand five hundred (6500) metres subsea, whichever occurs first. If in Contractor's opinion the target depth can not be met due to operational and safety concerns Contractor shall only be obliged to drill to a maximum depth of six hundred (6000) metres subsea subject to SOCAR's approval which shall not be unreasonably withheld. The other well shall be drilled to a depth of fifty (50) metres below the base of the Pereryv Suite or to a depth of five thousand eight hundred (5800) metres subsea, whichever occurs first.

(iv) During the Additional Exploration Period, Contractor shall drill one (1) well to a depth of fifty (50) metres below the base of the Pereryv Suite or to a depth of six thousand (6000) metres subsea, whichever occurs first.

(v) Exploratory wells drilled as set out in (iii) and (iv) shall have the objective of further defining the areal extent, downdip limits and reservoir properties of any Petroleum found within the Contract Area. Drilling of such wells shall be accomplished with conventional core acquisition techniques according to international Petroleum industry standards.

(vi) To evaluate the wells an appropriate logging and testing programme may include but not be limited to the following:

(a) at the conductor casing point, gamma ray and neutron log (from approximately conductor setting point to seafloor);

(b) at the surface casing point, gamma ray log, induction logs, sonic log, density and neutron logs, sidewall cores as appropriate (from approximately surface casing point to conductor casing shoe through the Surakhanskaya, Akchagyl and Apsheron Suites);

(c) at the intermediate casing point, gamma ray log, induction logs, sonic log, density and neutron logs, microlaterolog, dipmeter, caliper (profiler), sidewall cores and formation tests as appropriate (from approximately intermediate casing setting point to surface casing shoe through the upper Balakhanskaya and Sabunchinskaya Suites);

(d) at the final casing point, gamma ray log, induction logs, sonic log, density and neutron logs, microlaterolog, dipmeter, caliper (profiler), sidewall cores and formation tests as appropriate (from approximately liner casing point to the intermediate casing shoe through the Balakhanskaya Suite);

(e) at total drilled depth, gamma ray log, induction logs, sonic log, density and neutron logs, microlaterolog, dipmeter, caliper (profiler), sidewall cores and formation tests as appropriate (from approximately production casing point to the linear casing shoe through the Pereryv and lower Balakhanskaya Suites) as well as a vertical seismic profile log (VSP) taken at intervals between total depth to seafloor;

(f) drill stem tests (DST's) of major productive horizons as appropriate.

(vii) Contractor shall have the right, but not the obligation, to sidetrack any exploration wells, drill to greater depths or drill additional exploration wells within the Contract Area for the purposes of obtaining additional geological information.

(viii) All reporting and records pertaining to exploration drilling and evaluation shall be submitted according to Article 7 of this Agreement.

(FIRST ) ADDENDUM

Agreement on the Exploration, Development and Production Sharing for the Shah Deniz Prospective Area in the Azerbaijan Sector of the Caspian Sea

relating to the formation of SOCAR Commercial Affiliate

between

The State Oil Company of the Azerbaijan Republic and

BP Exploration (Azerbaijan) Limited, Elf Petroleum Azerbaijan B.V.,

LUKoil International Ltd,

Oil Industries Engineering and Construction, Statoil Azerbaiajan A.S.,

Turkish Petroleum Overseas Company Limited

This Addendum is made and entered even date with the Agreement on the Exploration, Development and Production Sharing for the Shah Deniz Prospective Area in the Azerbaijan Sector of the Caspian Sea (hereinafter called “EDPSA”) between:

THE STATE OIL COMPANY OF THE AZERBAIJAN REPUBLIC (hereinafter called SOCAR) a Government body on the one hand and

BP EXPLORATION (AZERBAIJAN) LIMITED, a company incorporated in England, ELF PETROLEUM AZERBAIJAN B.V., a company incorporated in the Netherlands, LUKOIL INTERNATIONAL LIMITED, a company registered in the Republic of Ireland, OIL INDUSTRIES ENGINEERING and CONSTRUCTION, a company incorporated in the Islamic Republic of Iran, STATOIL AZERBAIJAN A.S., a company incorporated in Norway and TURKISH PETROLEUM OVERSEAS COMPANY LIMITED, a company incorporated on the Island of Jersey (hereinafter called “the Contractor Parties”) on the other hand.

The entities named above may sometime be referred to individually as “Party” and collectively as “Parties”.

WHEREAS:

1. SOCAR has informed Contractor Parties that SOCAR Commercial Affiliate (hereinafter called

”SCA”) has not yet been formed; and

2. SOCAR is willing and fully empowered to assume and be bound by all obligations and liabilities of SCA under the EDPSA pursuant to the resolutions of the Board of SOCAR dated a certified extract of which is attached hereto as Exhibit 1; and

3. SOCAR and Contractor Parties have agreed that Contractor Parties shall rely upon SOCAR to act on behalf of SCA pending the formation of the SCA and SCA’s written ratification of the EDPSA as hereinafter appears.

NOW THEREFORE, in consideration of Contractor Parties entering into the EDPSA of even date herewith the Parties hereby agree as follows:

1. The Parties agree that SOCAR shall be responsible for all obligations of SCA under the EDPSA and shall act on behalf of SCA, until such time as: (i) SCA has been duly organised and is validly existing in accordance with the law of its country of incorporation and with its charter; (ii) SCA has ratified its participation in the EDPSA and this Addendum through a resolution of its Board of Directors; (iii) SCA has ratified all actions taken by SOCAR on behalf of SCA and all actions taken by Contractor Parties pursuant to Paragraph 2 herein; and (iv) SCA delivers to the Contractor Parties all documents evidencing (i), (ii) and (iii) above. The parties may place reliance on the actions of SOCAR taken on behalf of SCA and all action taken by Contractor Parties pursuant to Paragraph 2 herein as if taken by SCA itself until such time as the event and actions required in (i), (ii) and (iii) and (iv) above have occurred.

2. The parties agree that pending organization of SCA and pending the occurrence of all the events and actions (including but not limited to the authorization and ratification of the EDPSA and this Addendum by SCA) required in Paragraph 1 above, the Contractor Parties shall be entitled to enter into any agreement which is necessary or expedient for the performance of the EDPSA (such as, but not limited to the joint operating agreement or any agreement for the purchase of services and goods). SCA shall be bound by any agreement entered into by the Contractor Parties prior to the events and actions required in Paragraph 1 above and shall ratify all such actions taken by the Contractor Parties promptly after it is duly organised and is validly existing and shall in writing agree to observe and perform all the terms and conditions of any such joint operating agreement.

3. SOCAR hereby undertakes that: (i) SCA shall be duly organised and validly existing as soon as possible after the execution of this Addendum; (ii) SOCAR shall ensure that SCA authorises and ratifies its participation in the EDPSA and this Addendum through a resolution of its Board of Directors promptly after it is duly organised and is validly existing; (iii) SOCAR shall ensure that SCA ratifies all actions taken by SOCAR on behalf of SCA and all actions taken by the Contractor Parties pursuant to Paragraph 2 herein promptly after it is duly organised and validly existing; and (iv) SOCAR shall ensure that SCA delivers to the Parties all documents evidencing (i), (ii) and (iii) promptly after it is duly organised and validly existing.

4. The Parties agree that the condition precedent set forth in Article 25.1 (a)(i) of the EDPSA requiring authorisation by the Board of Directors of each of the parties to the EDPSA to enter into the EDPSA has been satisfied in relation to SCA by the issuance of the resolution of the Board of SOCAR dated attached hereto as Exhibit 1.

5. SOCAR hereby undertakes to cause SCA to deliver to each of the Contractor Parties SCA’s Ultimate Parent Company Guarantee promptly after SCA is formed and validly existing and this undertaking is hereby agreed to satisfy the condition precedent set forth in Article 25.1 (a) (ii) of the EDPSA.

6. This Addendum modifies and/or amends the relevant terms and conditions of the EDSA as set forth herein and shall be considered for all purposes a part of the EDPSA and shall accordingly be given the full force of law in the Azerbaijan Republic as provided in Article 25.1 of the EDPSA.

7. Any disputes arising out of or in connection with this Addendum shall be resolved as set forth in Article 23.3 of the EDPSA and the law governing this Addendum shall be as set forth in Article 23.1 of the EDPSA.

IN WITNESS WHEREOF the Parties have executed this Addendum as of the 4 day of June 1996 by their duly authorised representatives.

For and on behalf of the

State Oil Company of the Azerbaijan Republic