Association Contract - Empresa Colombiana de Petroleos (ECOPETROL) and Harken de Colombia Ltd.


EMPRESA COLOMBIANA
DE PETROLEOS
ECOPETROL                                          "CAJARO" ASSOCIATION CONTRACT

                              ASSOCIATION CONTRACT

ASSOCIATE      :   HARKEN DE COLOMBIA LIMITED
SECTOR         :   CAJARO
EFFECTIVE DATE :   February 18, 2002
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The contracting parties, as such: on one Part, the Empresa Colombiana de
Petroleos hereinafter referred to as ECOPETROL, an industrial and commercial
State-owned enterprise authorized by law 165 of 1948, actually ruled by its
by-laws, reformed by Decrees 1209 of June 15, 1994 and 2933 of December 10,
1997, with head office in Bogota, D.C., represented by ALBERTO CALDERON ZULETA,
of legal age, bearer of citizenship card No. 19'248.238 issued in Bogota, based
in Bogota, D.C., who states: 1. That in his capacity as President of ECOPETROL,
acts in representation of this Company, and 2. That for the execution of this
contract he has been authorized by the Board of Directors of ECOPETROL, as
witnessed in Minutes No. 2264 of December 14, 2001, and on the other hand HARKEN
DE COLOMBIA LIMITED, company organized pursuant to the laws of the Caiman
Islands, with a branch established in Colombia and with head offices in Bogota,
D.C., pursuant to Public Deed No. 406 of February 19, 1993, executed in Notary
Eleven (11) of Bogota, represented by GABRIEL GUSTAVO CANO VELASQUEZ, of legal
age, Colombian citizen, bearer of citizenship card number 8'265.559, who
declares: 1. That in his capacity as the Main Legal Representative he acts as
the representative HARKEN DE COLOMBIA LIMITED, 2. That to execute this contract
he is fully authorized as per the Certificate of Incorporation and Legal
Representation issued by the Chamber of commerce of Bogota, D.C., and 3. That
THE ASSOCIATE assures to have the financial capacity, technical competence and
the professional abilities necessary to execute the activities to which this
contract refers to.

Under the above conditions, ECOPETROL and THE ASSOCIATE declare that they have
entered into the contract contained in the following Clauses:

                         CHAPTER I - GENERAL PROVISIONS

CLAUSE 1 - OBJECT OF THIS CONTRACT

1.1       The object of this contract is the exploration of the Contract Area
          and the exploitation of such nationally owned hydrocarbons that may be
          found therein, described in Annex A that is part of this contract.

1.2       Pursuant to Article 1o. of Decree 2310 of 1974, the exploration and
          exploitation of nationally owned hydrocarbons are entrusted to
          ECOPETROL, company that may, directly or under contracts with Private
          Parties, carry out such activities. Based on such provision mentioned,
          ECOPETROL has agreed with THE ASSOCIATE to explore the Contract Area
          and to exploit such Hydrocarbons as may be found therein, under the
          terms and conditions set

 
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          forth in herein, in Annex "A", Annex "B" (Operating Agreement) and
          Annex "C" (Lineaments for the Preparation of the Development Plan)
          that make part of this contract.

1.3       Without prejudice of the provisions hereunder, it is understood that
          THE ASSOCIATE shall have the same rights and obligations in respect to
          the Hydrocarbons produced in the contract area and to its share of the
          same as are assigned under the Colombian Laws to anyone exploiting
          nationally owned Hydrocarbons in this country.

1.4       ECOPETROL and THE ASSOCIATE agree to carry out the exploration and
          exploitation operations within the terms of this contract in the
          Contract Area, that they shall share between themselves the costs and
          risks thereof in the proportion and under the terms set forth in this
          contract and that the Hydrocarbons produced shall belong to each Party
          pursuant to the proportions set forth in this contract.

CLAUSE 2 - APPLICATION OF THE CONTRACT

This contract applies to the Contract Area, identified, and the boundaries of
which are described in Clause 3 and Annex A of this contract, or to such portion
thereof, when areas have been restituted pursuant to this contract.

CLAUSE 3 -CONTRACT AREA

The area Contract comprises thirty four thousand one hundred and ninety five
(34.195) hectares with seven thousand fifty eight (7.058) square meters and is
located within the municipal jurisdiction of Mani in the department of Casanare.
The cartographic information was taken from the Political Map of Colombia,
digital file of the I.G.A.C., on scale 1:1'500.000.

This area is described on Annex "A" that is part of this contract.

Paragraph 1. - Whenever a person files a claim pretending to be the owner of the
property of the subsurface Hydrocarbons in the Contract Area, ECOPETROL shall
handle the case and assume the obligations required.

Paragraph 2.- In the case in which part of the Contract Area extends over the
areas that are or that have been reserved and declared to be within a system of
National Parks, THE ASSOCIATE is obliged to obey the conditions ruled by the
corresponding authorities, without it being considered that this contract has
been modified and without there being a right to make any claim against
ECOPETROL, pursuant to that agreed on in Clause 30 (numeral 30.2) of this
contract.

CLAUSE 4 - DEFINITIONS

For the purpose of this contract, the terms mentioned hereinafter, shall have
the following meaning:

4.1       Contract Area: Is the land described in Clause 3 hereinabove, and
          described in Annex "A" of this contract.

 
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4.2       Field: Such portion of the Contract Area in which there are one or
          more structures and/or stratigraphic traps totally or partially
          overlaid, with one or more productive Reservoirs or that the capacity
          to produce Hydrocarbons in commercial amounts has been verified. Such
          reservoirs may be found vertically and/or laterally separated by
          geological barriers or impervious stratums, or both.

4.3       Commercial Field: Is the field accepted by ECOPETROL able to produce
          Hydrocarbons in economically exploitable quantity and quality, in one
          or more of the Production Objectives defined by ECOPETROL at the time
          of acceptance of the commerciality, without prejudice that during the
          exploitation phase other Production Objectives may be found.

4.4       Gas Field : Is such that based on the information supplied by THE
          ASSOCIATE, is classified by ECOPETROL as a Non Associated Natural Gas
          Producer (or free natural gas) in the definition of its commerciality
          .

4.5       Executive Committee: Is the body established within thirty (30) days
          following the acceptance of the first Commercial Field, to supervise,
          control and approve all the operations and actions that are carried
          out during the term of the contract.

4.6       Direct Exploration Costs: Are the monetary expenses reasonably
          incurred in by THE ASSOCIATE through the acquisition of seismic and
          the drilling of Exploratory Wells, as well as for the locations,
          termination, equipment and testing of such wells. The Direct
          Exploration Costs do not include administrative or technical support
          from the head office or central offices of the Company.

4.7       Joint Account: Are the records to be kept by means of books of
          accounts pursuant to the Colombian laws, for crediting or debiting the
          Parties for their share in the Joint Account of each Commercial Field.

4.8       Budget Execution: Are the resources actually committed and/or spent in
          each of the programs and projects approved for a given calendar year.

4.9       Structure: It is the geometrical form with geological closing
          (anticlinal, synclinal, etc.) that present the formations in which
          fluid accumulations are found.

4.10      Effective Date: It is the day in which the sixty (60) calendar day
          period expires, as from the date of this contract is signed, as of
          which all the terms agreed upon therein shall be counted,
          independently from the date of approval of the contract by the
          Ministry of Mines and Energy.

4.11      Cash Flow: It is constituted by the movement of monies (income and
          disbursements) to be made by the Joint Account in order to meet the
          different obligations Contracted by the Operator for the normal
          progress of the operations.

4.12      Associate Natural Gas: Mixture of light Hydrocarbons in a gaseous
          state or in solution in the Reservoir and that is produced jointly
          with liquid hydrocarbons.

4.13      Non Associated Natural Gas (Production of): Are those Hydrocarbons
          produced in a gaseous state on surface and reported to standard
          conditions, with average values

 
                                                                               4

          (pondered by production), of initial relation Gas/Oil greater than
          15.000 standard cubic feet of gas per barrel of liquid Hydrocarbon and
          one molar composition of heptane plus (C7 +) less than 4.0%.

4.14      Direct Expenses: Are all expenditures payable by the Joint Account for
          payments of personnel directly engaged in the Company, purchase of
          materials and supplies, contracting of services with third parties and
          other general expenses required by the Joint Operation in the normal
          performance of its activities.

4.15      Indirect Expenses: Are those expenditures payable by the Joint Account
          for technical and/or administrative support, which the operator with
          his own organization, gives to the joint operation.

4.16      Commercial Interest Rate: When referring to pesos, it shall be the
          current interest rate at the time of the delay; in dealing with
          dollars of the United States of America, it shall be the prime rate
          fixed by the LIBOR (London Interbank Borrowing Offered Rate), three
          (3) months for dollar deposits, increased by four percentage points
          (LIBOR +4%).

4.17      Interest in the Operation: Is the share in the obligations and rights
          acquired by each party in the exploration and exploitation of the
          Contract Area.

4.18      Development Investment: The sums of money invested in goods and
          equipment capitalized assets for the joint operations in a Commercial
          Field upon acceptance of the existence by the parties.

4.19      Hydrocarbons: All organic compounds constituted mainly by the natural
          mixture of carbon and hydrogen as well those substances that accompany
          them or that are derived from them with the exception of helium and
          strange gases.

4.20      Gaseous Hydrocarbons: All Hydrocarbons produced in a gaseous state in
          surface and reported to standard conditions (1. absolute pressure
          atmosphere and a temperature of 60(0)F.)

4.21      Liquid Hydrocarbons: Crude and condensed oil and those produced in
          such state as a result of the gas treatment when required, reported to
          standard conditions.

4.22      Production Objectives: Are the reservoirs located in the commercial
          field discovered and tested as commercial producers.

4.23      Joint Operation: The activities and work performed or in the process
          of being performed, on behalf of the parties and on their own account.

4.24      Operator: The person designated by the parties to directly carry out,
          on their behalf, and without representing them, the operations
          necessary to explore and exploit the Hydrocarbons found in the
          Contract Area.

4.25      Parties: On the Effective Date, ECOPETROL and THE ASSOCIATE.
          Subsequently and at any time, ECOPETROL on the one hand, and THE
          ASSOCIATE and/or its assignees on the other.

 
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4.26      Exploration Period: The time available to THE ASSOCIATE for complying
          with the obligations set forth in Clause 5 of this contract, which
          shall not exceed six (6) years as from the Effective Date, except in
          the cases contemplated in Clauses 5 (numeral 5.4), 9 (numeral 9.3) and
          34.

4.27      Exploitation Period: The time elapsing from the end of the exploration
          period, or that of retention when necessary, to the end of this
          contract.

4.28      Retention Period: The time required by THE ASSOCIATE and granted by
          ECOPETROL to being the exploitation period of each gas field
          discovered in the Contract Area, that due to its particular conditions
          is not able to be developed in a short term, requiring an additional
          term for the execution of feasibility studies, of construction of
          infrastructure and/or marketing development.

4.29      Development Plan: Is the guide document to perform technical,
          efficient and economical exploitation operations of each field and
          shall contain, among other aspects, the development strategy, the
          environmental considerations, the activities to be developed, the
          Production forecasts for short and medium term, an estimate of the
          investment and expenses for the following five years and specifically,
          a description of the projects, the operations program and the Budget
          for the remaining of the present year or of the following year, as is
          the case. The lineaments for this development plan are described in
          Annex "C" that is part of this contract.

4.30      Exploration Well: Any well designated as such by THE ASSOCIATE to be
          drilled or deepened on its behalf, in the Contract Area in search of
          new reservoirs or to verify the extension of a reservoir or to
          determine the stratigraphy of an area. For the fulfillment of the
          obligations contemplated in Clause 5 of this contract, the
          corresponding drilling well shall be previously classified between
          ECOPETROL and THE ASSOCIATE.

4.31      Discovery Well: Is that exploration well in which the existence of one
          or more reservoirs is discovered or confirmed and that may require
          subsequent evaluation to determine whether such reservoir or
          reservoirs may be commercially exploited.

4.32      Exploitation Well (or of Development): Any well previously scheduled
          as such by the Executive Committee for the production of Hydrocarbons
          discovered in the objectives of production in the area of each
          commercial field.

4.33      Budget: The basic planning instrument whereby the resources are
          allocated for specific projects to be applied within a calendar year
          or part of a year, in order to achieve the goals and objectives
          proposed by THE ASSOCIATE or by the Operator.

4.34      Extensive Production Tests: The operations performed in one or more
          producing Exploration Wells, to evaluate the production and behavior
          conditions of the reservoir with temporary production installations.

4.35      Reimbursement: Is the payment of fifty percent (50%) of the Direct
          Exploration Costs incurred in by THE ASSOCIATE.

 
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4.36      Exploration Operations. The operations performed by THE ASSOCIATE as
          related to the search and discovery of Hydrocarbons within the
          Contract Area.

4.37      Reservoir: All rocks under the surface where Hydrocarbons in their
          porous space are accumulated, under production or that has the
          capacity to produce Hydrocarbons and that behaves as an independent
          unit as far as its petrophysical and fluid properties and that has a
          common pressure system throughout its entire extension.

                            CHAPTER II - EXPLORATION

CLAUSE 5 - TERMS AND CONDITIONS

5.1       THE ASSOCIATE is committed to carry out the exploration operations
          pursuant to the regulations and modern practices commonly accepted and
          in use by the international oil industry and to fulfill the legal and
          regulatory provisions in force. The exploration period shall be
          divided in three (3) phases, the first with a duration of twelve (12)
          months, the second phase with a duration of twelve (12) months and the
          third phase with a duration of twelve (12) months. The first phase
          begins on the Effective Date and the following on the calendar day
          immediately following the conclusion of the previous phase.

          During the exploration period, THE ASSOCIATE is obliged to carry out,
          as a minimum, the following exploration operations: during the first
          phase, THE ASSOCIATE must carry out the drilling of one (1)
          Exploration Well until reaching the formations that can produce
          Hydrocarbons in the Contract Area. With this well, the exploratory
          obligation corresponding to the fifth year of the exploration period
          of the Bocachico Association Contract is fulfilled.

          At the end of the first phase, THE ASSOCIATE shall have the option to
          resign from the Association Contract, provided having previously
          complied with the exploratory commitments agreed on for the present
          phase.

          During the second phase, THE ASSOCIATE must carry out the drilling of
          one (1) exploration well until reaching the formations that may
          produce Hydrocarbons in the Contract Area.

          At the end of the second phase, THE ASSOCIATE shall have the option to
          resign from the Association Contract provided having previously
          fulfilled the exploratory commitments agreed on for the present phase.

          During the third phase, THE ASSOCIATE shall drill one (1) Exploratory
          Well to depth so as to reach the formations capable of producing
          Hydrocarbons in the Contract Area.

          At the expiration of the exploration period, the contract shall end if
          the extension thereof has not been requested and authorized pursuant
          to Numeral 5.2 of this Clause, or if a field has not been discovered.

 
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5.2       If THE ASSOCIATE has satisfactorily complied with the obligations
          stipulated in Clause 5.1, ECOPETROL, at the request of THE ASSOCIATE,
          shall annually extend the exploration period, up to three (3)
          additional years, for such purpose, THE ASSOCIATE must inform its
          intention to continue with the exploration in the Contract block with
          an anticipation not lower than ninety (90) days of the date of
          termination of the Exploration Period, accompanying such request with
          the proposal of the Exploration Operations Program to be performed
          during each extension period. Within ninety (90) days following the
          date of receipt of the request of THE ASSOCIATE in ECOPETROL, the
          PARTIES shall be able to agree on the Exploration Operations Programs
          to be performed during such extensions. If no agreement is reached,
          THE ASSOCIATE is obliged to carry out as a minimum, Exploration
          Operations in the Contract Area, consisting in the drilling of one (1)
          Exploration Well per year. At the end of each of the extensions, which
          duration is one year, THE ASSOCIATE, shall have the option to resign
          from the Association Contract having previously fulfilled the
          exploratory commitment agreed on for each of them.

5.3       At its judgment, and at its own cost and risk, THE ASSOCIATE may
          perform additional Exploration Operations to those agreed on for the
          Phase or Stage of the Exploration Period under development. However,
          if THE ASSOCIATE wishes to have such additional Exploration Work
          accredited to the fulfillment of the exploratory commitments of the
          following phase or stage of the Exploration Period, it must request
          ECOPETROL to issue the corresponding approval. If the request is
          accepted by ECOPETROL, it shall determine the form and amount in which
          the transfer of the mentioned commitments is to be made.

5.4       If at the end of the six (6) year Exploration Period, THE ASSOCIATE
          has drilled one or several Discovery Wells that show the possible
          existence of a Commercial Field, previous written request by THE
          ASSOCIATE, ECOPETROL may authorize the extension of the Exploration
          Period for the time necessary, that shall not exceed two (2) years, so
          that THE ASSOCIATE may have the opportunity to prove the existence of
          such Commercial Field. To bring into effect that herein set forth,
          before finishing the Exploration Period and simultaneously with the
          request, THE ASSOCIATE must provide ECOPETROL with the maps and other
          descriptions of the area considered as capable of producing
          Hydrocarbons, the Exploration Operations program and other operations
          that THE ASSOCIATE plans to carry out and the budget to carry out such
          work at its own cost and risk, to determine the extension of the
          Reservoir or Reservoirs discovered and to show the existence of a
          Commercial Field, without prejudice of that established in Clause 8.
          To give application to the partial restituted of the areas during this
          extension of the Exploration Period, THE ASSOCIATE shall retain the
          area that is the largest between fifty percent (50%) of the Contract
          Area and the area it considers capable of producing Hydrocarbons plus
          its zone of reserve of two and a half (2.5) kilometers wide around the
          previous one, within the limits of the Contract Area. If the
          operations program proposed adjusts to the international standards and
          has the object to show the commerciality of the discovered Reservoirs
          within the term established, ECOPETROL shall issue its authorization
          for the execution of this program.

5.5       During the life of this contract and observing that established in
          Clause 7 of the same, THE ASSOCIATE may carry out the Exploration
          Operations in the areas it keeps pursuant to Clause 8 and THE
          ASSOCIATE shall be the only one responsible for the risks and costs of
          these activities, and, therefore, it shall have the complete and
          exclusive control of such activities without the maximum duration of
          the contract being modified for such cause.

 
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CLAUSE 6 - SUPPLY OF INFORMATION DURING THE EXPLORATION

6.1       ECOPETROL shall supply THE ASSOCIATE, whenever the latter may so
          request, with any information in its possession within the Contract
          Area. The costs of reproduction and supply of such information shall
          be charged to THE ASSOCIATE.

6.2       During the Exploration Period, THE ASSOCIATE shall give ECOPETROL, as
          it is obtained and pursuant to ECOPETROL' s manual on information
          supply, all the geological and geophysical information, cores,
          magnetic tapes edited, processed seismic sections and all the
          information on the field supporting it, magnetic and gravimetric
          profiles, all in reproducible originals, copies of the geophysical
          reports, reproducible originals of all well logs drilled by THE
          ASOCIATE, including a final composite graph for each well and copies
          of the final drilling report that includes the analyses of core
          samples, the results of production tests and any other information
          related to the drilling, survey or interpretation of any nature done
          by THE ASSOCIATE for the Contract Area without any type of
          limitations. ECOPETROL is entitled to, at any time and by the
          procedures it considers appropriate, to witness all the operations and
          verify all information previously mentioned.

6.3       The Parties agree that all geological, geophysical and engineering
          information obtained from the Contract Area in force during the
          development of this contract is confidential during the three (3)
          years following the date of acquisition or up to the termination of
          the contract, whatever happens first. The information made known is,
          but is not limited to seismic information, of potential methods, of
          remote sensors and geochemical, with its corresponding supports,
          surface and subsurface cartography, well reports, electric logs,
          formation tests, biostratigraphic, petrophysical and fluid analyses,
          and production background. Regardless of the confidentiality herein
          established, the Parties agree that in each case they may interchange
          with companies that are or not associated with ECOPETROL. It is
          understood that that agreed to herein shall take place without
          prejudice of the obligation to supply the Ministry of Mines and Energy
          with all information requested by it pursuant to the legal and
          Reglementary provisions in force. Nevertheless, it is understood and
          thus agreed, that the Parties may at their own discretion supply the
          information required by their affiliates, consultants, contractors,
          financial entities and that are required by the competent authorities
          with jurisdiction on the Parties or their affiliates, or by
          regulations of any stock markets in which the stocks of the Parties or
          corporations related are registered.

6.4       Within the ninety (90) days following the date of termination of the
          drilling operations of each Exploration Well, THE ASSOCIATE shall
          inform ECOPETROL in writing of the condition of the corresponding
          well, its classification as to the results obtained (dry or discovery)
          and the type of fluids produced, if it is the case.

CLAUSE 7 - BUDGET AND EXPLORATION PROGRAMS

Observing that established in this contract, THE ASSOCIATE is obliged to prepare
the programs, the chronogram of activities to be developed and the Budget to be
executed in a short term (the following calendar year) and the vision for the
following two (2) years with an estimated Budget, to carry out the exploration
in the Contract Area. Such vision, programs, chronograms and Budgets

 
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shall be presented for the first time to ECOPETROL, within the sixty (60) days
following the date of the signing of this contract, and subsequently, December
fifteen (15) of each year, the latest.

Every semester THE ASSOCIATE shall present a technical and financial report to
ECOPETROL, including the different exploratory activities performed, and the
perspectives of the area based on the information obtained, the Budget assigned
and the exploration costs incurred in up to the time of the presentation of the
report, commenting in each case the causes that originated the main deviations
presented. Upon request by ECOPETROL, THE ASSOCIATE shall supply the necessary
explanations to the report, in meetings programmed for such purposed. The
information presented by THE ASSOCIATE in the reports and the explanations to
which the present Clause refers to, shall in any case be understood as accepted
by ECOPETROL. The financial information shall be subject to auditing by of
ECOPETROL pursuant to that established in Clause 22 of Annex "B" (Operating
Agreement) of this contract.

CLAUSE 8 - RESTITUTION OF AREAS

8.1       Upon termination of the First Phase of three years of the Exploration
          Period or of such extensions thereof obtained by THE ASSOCIATE
          pursuant to Clause 5 (numeral 5.2), if a Commercial Field has been
          discovered and accepted by ECOPETROL in the Contract Area, said area
          shall be reduced to fifty percent (50%); two (2) years later the area
          shall be reduced to an extension equal to fifty percent (50%) of the
          remaining Contract Area and two (2) years later such area shall be
          reduced to the area of the Commercial Field or Fields under production
          or development plus one reserve zone of two and a half (2.5)
          kilometers wide surrounding each Commercial Field, and this shall be
          the only part of the Contract Area that shall be subject to the terms
          of this contract. Within the areas retained by THE ASSOCIATE pursuant
          to the present numeral, the Commercial Fields discovered shall be
          included.

8.2       Notwithstanding the obligation to relinquish the areas referred to in
          Clause 8 (numeral 8.1), THE ASSOCIATE is not obliged to return the
          Commercial Fields that are under development or production, or in a
          Retention Period, including the reserve zones of two and a half (2.5)
          kilometers wide that surround such areas, except in the case in which
          by motives attributable to THE ASSOCIATE, the development or
          production operations are suspended continuously for more than one
          year without just cause, case in which such Commercial Fields shall be
          restituted to ECOPETROL, terminating the contract for said areas or
          part of the area. These stipulations are also applicable to the fields
          exploited under the modality of Sole Risk.

          Paragraph: To show just cause, THE ASSOCIATE must present to ECOPETROL
          the reasons and fundaments of the same for its acceptance.

8.3       Retention Period: If THE ASSOCIATE has achieved the discovery of a Gas
          Field and presents a request for commerciality for such Field pursuant
          to that established in Clause 9 numeral 9.1, simultaneously with such
          application it may request ECOPETROL to issue a Retention Period,
          fully justifying the reasons to obtain such period.

 
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8.3.1     The Retention Period must be requested by THE ASSOCIATE and granted by
          ECOPETROL previous to the date in which the last restitution of areas
          to which numeral 8.1 of this clause refers to. In the case in which
          the Retention Period is granted, it is understood that the term set
          forth in Clause 9 (numeral 9.1) for ECOPETROL to speak out with
          respect to the acceptance or not of the existence of the Commercial
          Gas Field shall be postponed for the same term of the Retention
          Period.

8.3.2     The Retention Period may not exceed four (4) years. If the term
          initially granted as a Retention Period is insufficient, ECOPETROL,
          previous written and duly justified request by THE ASSOCIATE, may
          extend the Retention Period for an additional term, without having the
          sum of the initial retention period and its extensions exceed four (4)
          years. The Retention Period applies exclusively to the Gas Field area
          that ECOPETROL determines as capable of producing Hydrocarbons,
          including the reserve zone of two and a half (2.5) kilometers wide
          surrounding such area.

                           CHAPTER III - EXPLOITATION

CLAUSE 9- TERMS AND CONDITIONS

9.1       To initiate the Joint Operation hereunder, it is considered that the
          exploitation operations start on the date the Parties accept the
          existence of the first Commercial Field or upon compliance with the
          provisions of Clause 9 (numeral 9.5). The existence of a Commercial
          Field shall be determined by the drilling, by THE ASSOCIATE, within
          the proposed Commercial field of a number of Exploration Wells
          sufficiently to reasonably define the area and commerciality of the
          field capable of producing Hydrocarbons. If after evaluating the
          results obtained from the Discovery Wells, THE ASSOCIATE considers
          that it has discovered a possible Commercial Field, it must inform
          ECOPETROL in writing, supplying all the surveys on which this
          conclusion and the corresponding Development Plan are based on.
          ECOPETROL within the term of ninety (90) days as of the date in which
          THE ASSOCIATE turns in all the back-up information and makes a
          technical presentation to ECOPETROL, must accept or object the
          existence of the Commercial Field. ECOPETROL may request any
          additional information considered necessary within thirty (30) days
          following the date of submission of the first back-up information.

9.2       Should ECOPETROL accept the existence of the Commercial Field, it
          shall, in this sense, notify THE ASSOCIATE within the term established
          in Clause 9 (numeral 9.1) specifying the area and the Production
          Objectives in the Commercial Field, and shall start to participate,
          under the terms of this contract, in the exploitation of the
          Commercial Field discovered by THE ASSOCIATE.

9.2.1     ECOPETROL shall reimburse THE ASSOCIATE for fifty percent (50%) of the
          Direct Exploration Costs carried out by THE ASSOCIATE on its own
          account and risk within the Contract Area previous to the date of
          acceptance of the commerciality by ECOPETROL of each new Commercial
          Field discovered, pursuant to numeral 9.1 of the present Clause and
          that have not been previously charged to an other Field.

9.2.2     The amount of such costs shall be determined in dollars of the United
          States of America, taking as a reference the date in which THE
          ASSOCIATE made such disbursements;

 
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          therefore, the costs incurred in Colombian pesos shall be liquidated
          at the market exchange rate in effect on such date, certified by the
          Superintendencia Bancaria or by the corresponding entity.

          Paragraph: Once the amount of the Direct Exploration Costs to be
          reimbursed in dollars of the United States of America is defined, this
          value shall be updated on a monthly basis pursuant to the average
          consumer index price of the industrialized countries, as of the date
          of its disbursement, to constant dollars on the date in which
          ECOPETROL begins the Reimbursement in the manner described on the
          Operating Agreement (Annex B) of this contract. The balances to be
          reimbursed shall be equally updated up to the date in which ECOPETROL
          fully reimburses its participation in the corresponding Commercial
          Field.

9.2.3     The Reimbursement of the Direct Exploration Costs, pursuant to that
          established on Clause 9 (numerals 9.2.1) shall be made by ECOPETROL to
          THE ASSOCIATE, as of the moment in which the Field is put in
          production by the Operator, with the amount in dollars equivalent to
          fifty percent (50%) of its direct participation in the total
          production of the respective field, after deducting the corresponding
          percentage from the royalties.

          Paragraph: If concerning a Commercial Gas Field, such reimbursement
          shall be made by ECOPETROL to THE ASSOCIATE, as of the moment in which
          the Field is put under production by the Operator, with the amount in
          dollars equivalent to one hundred percent (100%) of its direct
          participation in the total production of such Field, after deducting
          the corresponding percentage from the royalties.

9.3       If with the information supplied ECOPETROL cannot accept the existence
          of a Commercial Field to which Clause 9 (numeral 9.1) refers to, it
          may advise THE ASSOCIATE about the presentation and execution of a
          program for additional operations to demonstrate the existence of a
          commercial field, operations that will be carried out at the risk and
          cost of THE ASSOCIATE that may not require a term longer than two (2)
          years for its execution, and if it is the case, the Exploration Period
          for the Contract Area shall be extended automatically for a term equal
          to that already agreed on between the Parties, as necessary to execute
          the additional work in this Clause, but without prejudice of that
          stated with relation to the reduction of areas in Clause 8 (numeral
          8.1). THE ASSOCIATE may present and execute a work program that meets
          the objective required or submit for expert analysis the requirement
          of additional information, pursuant to Clause 28 of this contract. In
          the event that the definition of the expert analysis is favorable to
          ECOPETROL, THE ASSOCIATE must fulfill the requirements and once again
          submit the studies of commerciality and the revised Development Plan
          to ECOPETROL for its consideration. In the event that the definition
          of the expert analysis is favorable to THE ASSOCIATE, it is understood
          that ECOPETROL has the necessary information and as a consequence, the
          term of ninety (90) days to which clause 9.1 refers to, to accept or
          to object the existence of a Commercial Field shall begin on the date
          in which ECOPETROL receives the report from the experts.

9.4       If, after the completion of the additional work or the disagreement
          solved by the expert analysis to which the previous numeral refers to,
          ECOPETROL accepts the existence of the Commercial Field to which
          Clause 9 (numeral 9.1) refers to, it will start to participate in the
          development operations of the field above mentioned in the terms
          established in this contract and shall reimburse THE ASSOCIATE as set
          forth in Clause 9 (numerals 9.2.2 and

 
                                                                              12

          9.2.3) for fifty percent (50%) of the cost of the additional work
          requested and referred to in Clause 9 (numeral 9.3) and the work
          executed shall become the property of the Joint Account.

9.5       Modality of Sole Risk: If ECOPETROL does not accept the existence of a
          Commercial Field, after having performed the additional work referred
          to in Clause 9 (numeral 9.3), THE ASSOCIATE shall be entitled to
          execute such work as it may consider necessary in or to exploit such
          field and to reimburse itself two hundred percent (200%) of the total
          cost of the work executed at its own account and risk in the such
          field and up to fifty percent (50%) of the Direct Exploration Costs
          carried out by THE ASSOCIATE before the date of the presentation of
          the commerciality surveys of such field. For the effects of this
          Clause the reimbursement shall be done with the value of the produced
          Hydrocarbons, less the royalties referred to in Clause 13, deducting
          the costs of production, gathering, transportation and sale. If THE
          ASSOCIATE abides to the modality of sole risk, it is understood that
          the term of the exploitation begins on the date in which ECOPETROL
          informs THE ASSOCIATE of the nonexistence of a Commercial Field. For
          the purposes of liquidation of the value in dollars of the
          disbursements done in pesos, it shall be liquidated at the
          representative market rate certified by the Superintendencia Bancaria
          or by the corresponding authority, on the date in which THE ASSOCIATE
          has made such disbursements. For the purpose of this Clause, the value
          of each barrel of Hydrocarbons produced in such Field during a
          calendar month shall be the average price per barrel that THE
          ASSOCIATE receives from the sales of its participation in the
          Hydrocarbons produced in the Contract area during the same month. With
          reference to the reimbursement of the Direct Exploration Costs, that
          established in paragraph of clause 9 (numeral 9.2.3) shall be applied.

          When THE ASSOCIATE has reimbursed itself of the percentage established
          in the present clause, all drilled wells, installations and all types
          of goods acquired by THE ASSOCIATE for the exploitation of the field
          and paid for as indicated in the present clause, shall become the
          property of a Joint Account without any cost, previous the acceptance
          by ECOPETROL to participate in the development of such field.

9.6       ECOPETROL may, at any time, start to participate in the operation of
          the field discovered and developed by THE ASSOCIATE without prejudice
          to THE ASSOCIATE' s right to reimburse itself for the investments it
          made at its expense, in the form and percentage stipulated in Clause 9
          (numeral 9.5). Once THE ASSOCIATE is reimbursed, ECOPETROL shall enter
          to participate in the economic results of the wells developed at the
          exclusive expense of THE ASSOCIATE.

9.7       The demarcation of the boundaries of a Commercial Field shall take
          into consideration all the geological and geophysical information and
          that of the wells drilled within said field or related to the same.

9.8       If after the commerciality of one or more fields is accepted, THE
          ASSOCIATE continues to fulfill the exploratory obligations established
          in Clause 5, it may continue to simultaneously carry out the
          exploitation of such fields before the expiration of the Exploration
          Period established in Clause 4, but only as of the date of its
          termination shall the Exploitation Period begin. When concerning Gas
          Fields, and ECOPETROL has granted a Retention

 
                                                                              13

          Period, the Exploitation Period for each Field shall begin on the date
          of expiration of the respective Retention Period.

9.9       If as a result of the drilling of Exploratory Wells, after confirming
          the existence of a Commercial field, THE ASSOCIATE proves the presence
          of additional accumulations of Hydrocarbons associated to such Field,
          it must request ECOPETROL to extend the area of the Commercial Field
          and its commerciality, following the procedure set forth in Clause 9
          (numeral 9.1). If ECOPETROL accepts its commerciality, it shall
          reimburse THE ASSOCIATE fifty percent (50%) of the Direct Exploration
          Costs exclusively related with the expansion of the area of the
          Commercial Field, in the terms established in numerals 9.2.2 and
          9.2.3. If ECOPETROL does not accept the commerciality, THE ASSOCIATE
          is entitled to reimburse itself up to two hundred percent (200%) of
          the total cost of the work executed on its own cost and risk for the
          exploitation of the Exploratory Wells that have resulted productive
          and up to fifty percent (50%) of the direct Exploration Costs carried
          out by THE ASSOCIATE exclusively related to the expansion of the area
          requested before the date in which ECOPETROL notifies on the same.
          Such reimbursement shall be done with the production originated from
          the Exploratory Wells that have resulted productive, after deducting
          royalties, following the procedure set forth in Clause 21 (numeral
          21.2) up to the percentages herein defined.

CLAUSE 10 - OPERATOR

10.1      The Parties agree that HARKEN DE COLOMBIA LIMITED is the Operator and,
          as such, with the limitations set forth in this contract, shall have
          the control of all the operations and activities it may consider
          necessary for an efficient technical and economic development of the
          exploitation of the hydrocarbons found within the area of the
          Commercial Field. They also agree that, nevertheless that in this
          contract - executed for the commercial purposes established in Clause
          1 of the same, HARKEN DE COLOMBIA LIMITED is the Operator, it is
          understood by the Parties, and thus determined, that for all labor
          legal effects, HARKEN DE COLOMBIA LIMITED does not act as a
          representative of the Parties, but as an only and true employer of the
          workers he contracts for the operation of the Commercial Field and, as
          a consequence, shall be responsible for the labor obligations that
          arise from the respective relations or work contracts, such as salary
          payments and social benefits, para-fiscal contributions, affiliation
          and payment of bids or contributions for pensions, health and
          professional risks to the Sistema de Seguridad Social Integral, to
          which Law 100 of 1993 refers to and its Reglementary decrees or those
          regulations that substitute or modify it.

10.2      The Operator has the obligation to carry out all of the development
          and production operations pursuant to the standards and practices
          generally accepted by the industry using the best technical methods
          and systems required for the economic and efficient exploitation of
          the Hydrocarbons and fulfilling the legal and regulatory provisions on
          the issue. Also, he must present on time, to the parties, the reports
          and documents mentioned in the contract, as well as any other
          information required by the Executive Committee with respect to the
          Joint Account and/or Operation.

10.3      Due to the afore mentioned, and in view that for the execution and
          fulfillment of the operation of the Commercial Field, HARKEN DE
          COLOMBIA LIMITED shall perform all the activities with its own
          resources, with liberty and technical and directive autonomy, for all
          the

 
                                                                              14

          purposes of this contract, such Operator shall be considered an entity
          different from The Parties hereto as well as for the purposes of the
          implementation of civil, labor and administrative legislation and for
          the Operator's relations with the personnel at his service, as set
          forth in clause 32.

10.4      The Operator shall have the right to resign as such, by written
          notification to the Parties six (6) months in advance of the effective
          date of such resignation. The Executive Committee shall then assign a
          new Operator pursuant to Clause 19 (numeral 19,3,5). In case the
          Operator assigned by the Executive Committee is a third person
          different from the Parties, a contract must be executed between the
          Parties and the new Operator.

10.5      The Operator shall carry out the operations described in this contract
          in a diligent, responsible, efficient and technically and economically
          adequate manner, being understood that at no time shall he be
          responsible for mistakes in criteria, or for losses or damages that
          are not the result of a serious fault by the Operator.

10.6      The Operator shall have the right to execute any type of work by means
          of contractors, subject to the faculty that the Executive Committee
          has, pursuant to Clause 11 (numeral 11.1). To fulfill that herein
          established, the Operator shall carry out the contracting operations
          following the procedure described in Annex "B" and subject to the
          principles of good faith, transparency, economy, equity,
          responsibility, planning, quality, celerity and social and
          environmental responsibility that must rule in the contracting.

CLAUSE 11 - EXPLOITATION PROGRAMS AND BUDGETS

11.1      Within the three (3) months following the acceptance of a Commercial
          Field in the Contract Area, the Operator shall present to the parties,
          a proposal for projects, programs and budget for the Development Plan
          of the commercial field for the remaining of the corresponding
          Calendar year, to be agreed on by the Executive Committee. In case
          there are less than six months and a half (6 - 1/2) for the expiration
          of such year, the Operator shall prepare and present a proposal for
          projects, programs and Budget for the following calendar year, within
          a term of three (3) months.

11.1.     The projects, programs and the Budget contained in the Development
          Plan of the Commercial Field shall be checked and adjusted on a yearly
          basis and presented by the Operator to the Parties during the month of
          May of each calendar year, for which the Operator shall send his
          proposal within the first ten (10) days of the month of May. Within
          the twenty (20) days following the receipt of the proposal of the
          projects, programs, and Budget of the Development Plan of the
          Commercial Field, the Parties shall inform the Operator in writing on
          the changes they wish to propose. When this occurs, the Operator shall
          consider the observations and proposed reforms made by the Parties for
          the elaboration of the revised Development Plan, that shall be
          submitted for final approval of the Executive Committee, at the
          ordinary meeting during the month of July of each year. In case the
          total Budget of the Commercial Field has not been approved before the
          month of July, those aspects of the Budget of the Commercial Field on
          which an agreement has been reached, shall be approved by the
          Executive Committee, and those aspects not approved shall be submitted
          immediately to the Parties, for study and final decision, as set forth
          in Clause 20.

 
                                                                              15

11.2.     The Parties may propose additions or revisions to the projects,
          programs and the annual Budget approved for each Commercial Field,
          but, except in cases of emergency, these must not be formulated with a
          frequency of less than three (3) months. The Executive Committee shall
          decide on the proposed additions or revisions at a meeting called
          within thirty (30) days following the presentation of the same.

11.3.     The main objectives of the projects, programs and Budgets are:

11.3.1    Determine the operations to be carried out and the expenses and
          investments (Budget) that the Operator is authorized to execute in
          each Commercial field during the following calendar year.

11.3.2    Maintain a vision of the development of each field in a horizon of
          medium and long term.

11.4      The projects, programs and annual Budget approved by the Executive
          Committee and contained in the Development Plan of each Commercial
          Field constitute the work plan shown and the expenses and investments
          estimated to be carried out by the Operator in the different aspects
          of the operation, such as:

11.4.1    Capital investments in production: drilling for the development of
          Reservoirs, well workover or recovery, and specific production
          constructions.

11.4.2    General construction and equipment: industrial and camp facilities,
          transportation equipment, drilling and production equipment. Other
          construction and equipment.

11.4.3    Maintenance and operating expenses: production expenses, geological
          expenses, administration expenses for the operation.

11.4.4    Working capital requirements.

11.4.5    Funds for contingencies

11.5      The Operator shall make all expenditures and investments and shall
          carry out the development and production operations set forth in the
          projects, programs and annual Budgets approved in the Development Plan
          for each Commercial Field referred to in Clause 11 (numeral 11.1),
          pursuant to the Operating Agreement (Annex B) that is part of this
          contract, without exceeding the total Budget for each year, except by
          authorization of the parties in special cases.

11.6      The Operator is authorized to carry out expenditures not contemplated
          expressly in the Budget of each Commercial field and chargeable to the
          Joint Account, without previous authorization of the Executive
          Committee, in the event of emergency measures aimed at safeguarding
          personnel or the property of the Parties, emergency expenses
          originating in fires, floods, storms or other disasters; emergency
          expenses essential for the operation and maintenance of the production
          facilities, including maintenance of the wells in a condition to
          produce with a maximum efficiency; emergency expenses essential for
          the protection and preservation of materials and equipment necessary
          in the operations. In such cases, the Operator shall call the
          Executive Committee to a special meeting as soon as possible, to
          obtain their approval in order to continue with the emergency
          measures.

 
                                                                              16

11.7      From the amount of the expenditures incurred in by and the contracts
          executed by the Operator for amounts that exceed the annual Budget
          approved by the Executive Committee for each Commercial Field, as set
          forth in Clause 19 (numeral 19.3.9), without them having been
          opportunely authorized by the Executive Committee, except the
          assumptives set forth in Clause 11 (numeral 11.6), the Operator shall
          be the only one responsible, who shall assume the totality of the
          corresponding value. When the expense or contract in question is
          confirmed by the Executive Committee, the corresponding value shall be
          paid to the operator, pursuant to the rules defined by the Executive
          Committee. In case in which the expenditure or contract is not
          accepted by the Executive Committee, the Operator, if possible, may
          withdraw the good in question reimbursing the Parties for any cost
          that its withdrawal may cause them. When it is impossible for the
          Operator to withdraw such goods, or he rejects doing so, the benefit
          or patrimonial increase resulting from these expenses or contracts,
          shall belong to the Parties in proportion to their Interest in the
          Operation.

CLAUSE 12 - PRODUCTION

12.1      Whenever necessary, the Operator shall determine, with the approval of
          the Executive Committee, the Maximum Efficiency Rate (MER) for each
          commercial Field. This Maximum Efficiency Rate (MER) shall be the
          maximum producing rate of Hydrocarbons that may be extracted from a
          Reservoir for the purpose of obtaining a maximum economic benefit in
          the final recovery of Reservoirs. In agreement with the economic and
          engineering principles and the practices and procedures generally used
          and in use in the international oil industry, in conditions and
          circumstances similar to those experienced in the activities under
          this contract. The estimated production must be adjusted as necessary
          to compensate the real or anticipated conditions of the operation,
          such as wells under repair that are not producing, limitations in the
          capacity of the collecting lines, in the pumps, in the separators, in
          the tanks, in the pipelines and in other facilities.

12.2      The Operator shall determine periodically, at least once a year, with
          the approval of the Executive Committee, the area deemed capable of
          producing Hydrocarbons in a commercial quantity in each Commercial
          Field.

12.3      The Operator shall prepare and deliver to each Party, at regular three
          (3) month intervals, a program showing each Party's share of
          production, and another one showing the distribution of each Party's
          production for the following six (6) months. The forecast for the
          production must be based on the Maximum Efficiency Rate (MER,) as set
          forth in Clause 12 (numeral 12.1) and adjusted to each party's rights
          according to this contract. The Production Distribution Program shall
          be determined based on each party's periodic requests, and, set forth
          in Clause 14 (numeral 14.2) with the corrections deemed necessary to
          ensure that none of the Parties, while being able to withdraw, will
          receive less than the quantity to which it is entitled to under
          provisions of Clause 14 and without prejudice to the stipulations of
          Clauses 21 (numeral 21.2) and 22 (numeral 22.5).

12.4      If either of the Parties foresees a reduction in its capacity to
          receive Hydrocarbons compared to the forecast given to the Operator,
          the Party must inform the Operator as soon as possible, and if such
          reduction is due to an emergency situation, the Party shall inform the
          Operator within the twelve (12) hours following the occurrence of the
          event that causes

 
                                                                              17

          the reduction. As a consequence, such Party shall give the Operator a
          new receipt schedule based on the appropriate reduction.

12.5      The Operator may use the Hydrocarbons that are consumed in the
          development of the production operations in the Contract Area and
          these consumptions shall be exempt from the royalties to which Clause
          13 (numeral 13.1) refer to.

CLAUSE 13 - ROYALTIES

13.1      For the payment of the royalties for the exploitation of the
          nationally owned Hydrocarbons, the Operator shall give ECOPETROL the
          percentage of the production established by Law. The delivery of this
          production shall be carried at the same place and time in which the
          Parties distribute the production that corresponds them pursuant to
          Clause 14 of this contract. In the case of Fields under exploitation
          in the modality of Sole Risk, THE ASSOCIATE shall give ECOPETROL the
          percentage of the production that corresponds to the royalties in the
          place agreed on by the Parties.

13.2      From the percentage of the production given to ECOPETROL in the terms
          of the previous numeral, ECOPETROL, in the way and terms established
          by law, shall pay those entities mentioned by law the royalties that
          are caused in favor of the Nation on the total of the production of
          the Field and, in no case, shall THE ASSOCIATE be responsible for any
          type of payment before these entities.

CLAUSE 14 - DISTRIBUTION AND AVAILABILITY OF THE HYDROCARBONS

14.1      The Hydrocarbons produced, except those that have been used in benefit
          of the operations of this contract and those that are inevitably
          wasted in these functions, shall be transported to the jointly owned
          tanks or to other measuring facilities agreed upon by the Parties. If
          there is no agreement, to the measuring site nearest to the control
          site established by the Ministry of Mines and Energy. The Hydrocarbons
          shall be measured pursuant to the regulations and methods accepted by
          the oil industry, and based on this measurement, the volumes to which
          Clause 13 refer to shall be determined. As of this moment, the
          remaining Hydrocarbons shall be the property of each Party in the
          proportions specified in this contract.

14.2 Distribution of Production

14.2.1    After having deducted the percentage that corresponds to the
          royalties, the rest of the Hydrocarbons produced by each Commercial
          Field are the property of the Parties in the proportion of fifty
          percent (50%) for ECOPETROL and fifty percent (50%) for THE ASSOCIATE,
          until the cumulative controlled production of the corresponding
          Commercial Field reaches the amount of sixty (60) million barrels of
          liquid Hydrocarbons or the amount of four hundred twenty (420) cubic
          gigafeet of gaseous Hydrocarbons to standard conditions, what ever
          occurs first (1 cubic gigafoot = 1 X 109 cubic feet).

14.2.2    Independently from the classification of the Commercial Field given by
          ECOPETROL in the definition of commercialization, exceeding the limits
          set forth in numeral 14.2.1, the distribution of the production of
          each Commercial Field (previous the deduction of the

 
                                                                              18

          percentage corresponding to royalties) is the property of the Parties
          in the proportion that results from applying factor R as follows:

14.2.2.1  If the Hydrocarbon that reached first the limit established in numeral
          14.2.1 of the present Clause was the liquid Hydrocarbon, the following
          table shall be applied:

R  FACTOR        Distribution of Production After Royalties (%)
                          ASSOCIATE           ECOPETROL

0.0 to 1.0                   50                 50
1.0 to 2.0                   50/R            100 - 50 R
2.0 or more                  25                 75

14.2.2.2. If the Hydrocarbon that reached first the limit established in numeral
          14.2.1 of the present Clause was the gaseous Hydrocarbon, the
          following table shall be applied:

R  FACTOR        Distribution of Production After Royalties (%)
                          ASSOCIATE          ECOPETROL

0.0 to 2.0                   50                  50
2.0 to 3.0                   50/(R-1)        100 - [50 /(R-1)]
3.0 or more                  25                  75

14.2.3    For the effects of the previous tables, factor R shall be defined as
          the relation of cumulative incomes, expressed in constant terms, over
          the cumulative expenses, equally expressed in constant terms,
          corresponding to THE ASSOCIATE for each Commercial Field in the
          following terms:

                                       IA
                         R = ---------------------------
                                 ID + A - B + GO

          Where:
          IA (Cumulative Income of THE ASSOCIATE): Is the valuation of the
          cumulative incomes corresponding to the volume of THE ASSOCIATE' s
          Hydrocarbons produced, after royalties, at the reference priced agreed
          on by the Parties, excluding re-injected Hydrocarbons in the Fields in
          the Contract Area, those consumed in the operation and the flared gas.

          The average reference price of the Hydrocarbons shall be determined by
          mutual agreement between the Parties.

          To determine the cumulative incomes, the Monthly Incomes shall be
          taken as a base, which shall be determined as a result of multiplying
          the monthly average reference price by the production of the month
          pursuant to the formats established for such effect by the Ministry of
          Mines and Energy.

 
                                                                              19

          ID (Cumulative Development Investments): Are fifty percent (50%) of
          the Cumulative Development Investments approved by the Executive
          Committee of the Association for each Commercial Field. The cumulative
          Development Investments done previous to the date of the initiation of
          the exploitation defined by the Ministry of Mines and Energy for the
          respective Field, shall be adjusted up to the present date in the same
          manner in which the Direct Exploration Costs are adjusted in the
          Paragraph of Clause 9 (numeral 9.2.2.).

          A: Are the Direct Exploration Costs in which THE ASSOCIATE has
          incurred in, pursuant to Clause 9 of this contract and adjusted
          pursuant to that established in Paragraph of clause 9 (numeral 9.2.2)

          B: Is the cumulative Reimbursement of the Direct Exploration Costs,
          previously mentioned, pursuant to Clause 9 of this contract.

          GO: (Cumulative Operation Expenses): Are the cumulative operation
          expenses approved by the Executive Committee of the Association, in
          the proportion that corresponds THE ASSOCIATE, plus the cumulative
          transportation costs of THE ASSOCIATE. As transportation costs it is
          understood, the investment and operation expenditures for the
          transportation of Hydrocarbons produced in the Commercial Fields
          located in the Contract Area, from it to the port of export or site
          where it is agreed to take the price to be used in the calculation of
          incomes IA. Such transportation costs shall be determined by the
          parties in mutual agreement once the exploitation stage of the Fields
          begins, which commerciality has been accepted by ECOPETROL. Within the
          Operation Expenses the Special Contributions are included or those
          similar that have direct application on the production of Hydrocarbons
          in the Contract Area.

          All values that, with posteriority to the date of initiation of the
          exploitation defined by the Ministry of Mines and Energy, included in
          the determination of factor R shall be taken in current dollars.

          For such effect, the expenses in pesos must be converted into dollars
          at the market rate certified by the Superintendencia Bancaria or by
          the corresponding authority, in charge on the date in which the
          corresponding disbursements have been done.

14.2.4    Calculation of factor R: The distribution of the production based on
          factor R shall begin to be applied as of the first day of the third
          calendar month after which the cumulative production of each
          Commercial Field reaches the amount of sixty (60) million barrels of
          liquid Hydrocarbons or to the amount of four hundred twenty (420)
          cubic gigafeet of gaseous Hydrocarbons at standard conditions,
          pursuant to numeral 14.2.1 of this clause.

          The calculation of factor R for each Commercial Field shall be done
          based on the accounting closing corresponding to the calendar month in
          which the cumulative control production of sixty (60) million barrels
          of liquid Hydrocarbons was reached or the amount of four hundred
          twenty (420) cubic gigafeet of gaseous Hydrocarbons at standard
          conditions, pursuant to numeral 14.2.1.

          The resulting distribution of the production shall be applied until
          June 30 of the following year. As of that moment, the distribution of
          the production with the application of factor R shall be done in one
          year terms (from July 1 to June 30), over its liquidation, based on
          the

 
                                                                              20

          cumulative values to December 31 of the year immediately preceding
          pursuant to the corresponding accounting closing.

14.3      In addition to the tanks and other jointly owned facilities, each
          Party shall have the right to build its own production facilities in
          the Contract Area for its own and exclusive use in compliance with the
          legal regulations. The transportation and delivery of Hydrocarbons by
          each Party to the pipeline and to other storage facilities that are
          not jointly owned shall be done on the sole account and risk of the
          Party that receives the Hydrocarbons.

14.4      When production is obtained in places not connected by pipelines, the
          Parties may agree to install pipelines up to a point in which the
          Hydrocarbons may be sold, or to a place that connects with the
          pipeline. If the parties agree on the construction of such pipelines,
          they shall enter the contracts they consider suitable for this purpose
          and appoint the Operator pursuant to the legal provisions in force.

14.5      Each Party shall be the owner of the Hydrocarbons produced and stored
          as a result of the Operation hereunder and that are made available to
          it pursuant to the provisions of this contract, and on its account
          each Party must receive them in kind or sell them or dispose of them
          separately, according to that established in Clause 14 (numeral 14.3).

14.6      Should any of the Parties be unable for any reason to dispose of or
          separately withdraw from the tanks Jointly Account all or part of the
          Hydrocarbons it is entitled to pursuant to this contract, the
          following procedure must be followed:

14.6.1    If ECOPETROL is the Party unable to withdraw, in all or in part, its
          quota of Hydrocarbons (share plus royalties), pursuant to clause 12
          (numeral 12.3), the Operator may continue to produce the field and
          delivering to the ASSOCIATE, in addition to the portion that the quota
          of THE ASSOCIATE represents in the operation on the basis of one
          hundred percent (100%) of the MER, all those Hydrocarbons that THE
          ASSOCIATE decides to and in the capacity of withdrawing up to a limit
          of one hundred percent (100%) of the MER, crediting ECOPETROL for
          subsequent delivery, the volume of Hydrocarbons that ECOPETROL had the
          right to withdraw but that did not do so. With regard to the not
          withdrawn volume of Hydrocarbons to which ECOPETROL is entitled to
          during the month for royalties, THE ASSOCIATE, at the request of
          ECOPETROL, shall pay ECOPETROL in dollars of the United States of
          America, the difference that exists between the amount of Hydrocarbons
          that for the concept of royalties ECOPETROL has lifted and the amount
          of Hydrocarbons that it is entitled to for the concept of the
          royalties to which Clause 13 refers to, being understood that any
          withdrawal of Hydrocarbons done by ECOPETROL shall be applied, in
          first place to royalty payment in kind, and subsequently, any
          additional withdrawals of Hydrocarbons performed shall be applied to
          the share that it is entitled to pursuant to Clause 14 (numeral 14.2).

14.6.2    Should THE ASSOCIATE be the Party unable to withdraw, in all or in
          part, its quota assigned under Clause 12 (numeral 12.3), the Operator
          shall deliver to ECOPETROL, on the basis of one hundred percent (100%)
          of MER, not only the share and the quota that corresponds to
          ECOPETROL, but also the Hydrocarbons that ECOPETROL is in the capacity
          of withdrawing up to a limit of one hundred percent (100%) of MER,
          accrediting THE ASSOCIATE for its subsequent delivery, the part that
          corresponds to its quota and that it has been unable to withdraw.

 
                                                                              21

14.7      When both parties are in the capacity to receive the Hydrocarbons
          assigned under Clause 12 (numeral 12.3), the Operator shall deliver to
          the Party that was previously unable to receive its quota of the
          production and, upon such Party's request, besides its share in the
          operation, a minimum of ten percent (10%) per month of the production
          that corresponds to the other Party on a monthly basis and, by mutual
          agreement, up to one hundred percent (100%) of the quota that was not
          received, up to the time in which the total amounts that were credited
          to the Party that was unable to received its Hydrocarbons, are
          cancelled.

14.8      Without prejudice of the legal provisions that rule the mater, each
          Party shall be free, at any moment, to sell or export its quota of the
          Hydrocarbons obtained, as agreed to in this contract, or to dispose of
          the same in any manner.

CLAUSE 15 - USE OF THE ASSOCIATED NATURAL GAS

In the case in which one or more fields of associated natural gas are
discovered, the Operator shall, within the three (3) years following to the date
of the initiation of the exploitation of the Field defined by the Ministry of
Mines and energy, submit a project on the use of the Natural Gas for benefit of
the Joint Operation. The Executive committee shall approve the project and, if
necessary, decide on the chronogram for the execution thereof. If the Operator
fails to present any project within the three (3) following years or does not
execute the project previously approved, within the time limits set by the
Executive Committee, ECOPETROL may take, free of charge, for itself, all the
associated natural gas available from the Reservoirs in exploitation, which is
not required for the efficient exploitation of the Field.

CLAUSE 16 - UNIFICATION

When an economically exploitable Reservoir extends continuously into other area
or areas outside the Contract Area, the Operator shall implement, in agreement
with the Parties and with any other interested parties, upon approval of the
Ministry of Mines and Energy, a unified exploitation program that meets the
Hydrocarbons exploitation engineering techniques.

CLAUSE 17 - SUPPLY OF INFORMATION AND INSPECTION DURING THE EXPLOITATION

17.1      The Operator shall deliver to the parties, as they are obtained,
          reproducible originals (sepias), and copies of the electric,
          radioactive and sonic logs of the wells drilled, historical records,
          core analysis, cores, production tests, reservoir surveys and other
          relevant technical information, as well as all routine reports made or
          received in connection with the operations and activities carried out
          in the Contract Area.

17.2      Each Party, at its own cost, expense and risk, shall have the right to
          inspect, through authorized representatives, the wells and the
          facilities in the Contract Area and the activities related thereto.
          Such representatives shall have the right to examine cores, samples,
          maps, logs for wells drilled, liftings, books and any other source of
          information connected with the performance of this contract.

17.3      To enable ECOPETROL to comply with the provisions of Clause 29, the
          Operator shall prepare and deliver to ECOPETROL all reports required
          by the National Government.

 
                                                                              22

17.4      The information and data connected with exploitation operations shall
          be treated as confidential, in the same way as set forth in Clause 6
          (numeral 6.3) of this contract.

                        CHAPTER IV - EXECUTIVE COMMITTEE

CLAUSE 18 - CONSTITUTION

18.1      Within the thirty (30) calendar days from the acceptance of the first
          commercial Field, each Party must appoint a representative and
          corresponding first and second alternates, who shall form the
          Executive Committee, notifying the other Party in writing of the names
          and addresses of its representatives and alternates. Each Party may
          replace its representative or alternates at any time, but shall give
          written notice thereof to the other Party. The vote or decision of the
          principal representative of each Party shall be binding upon such
          Party. If the principal representative of any of the Parties is unable
          to attend a Committee meeting, the alternate, in its order first or
          second, shall attend, and shall have the same authority as the
          principal.

18.2      The Executive Committee will hold ordinary meetings during the months
          of March, July and November, during which the exploitation program
          carried out by the Operator shall be reviewed as well as the
          development program and the immediate plans. Every year, at the July
          ordinary meeting, the Operator shall present the Executive Committee
          with the annual operating program and the investment and expenses
          Budget for each Commercial Field, for the next calendar year, and if
          it is the case, the Revised Development Program.

18.3      The Parties and the Operator may request a special Executive Committee
          Meeting to analyze specific conditions of the operation. The
          representative of the interested Party shall notify the date of the
          meeting and the issues to be discussed with a ten (10) calendar day's
          notice. Any issue not included in the agenda of the meeting may be
          discussed during the meeting, upon acceptance of the representatives
          of the Parties on the Committee.

18.4      Each Party's representative shall have a vote in all matters discussed
          in the Executive Committee, equivalent to the percentage of that
          Party's total Interests in the Joint Operation. However, the decisions
          of the Executive Committee on the issues set forth in numerals 19.3.4
          through 19.3.9 of Clause 19 of this contract, shall be adopted by a
          unanimous vote of the Parties.

          Any decisions taken by the Executive Committee, set forth in the
          procedure established in this clause, shall be binding and final upon
          the Parties and the Operator.

CLAUSE 19 - FUNCTIONS

19.1      The representatives of the Parties shall form the Executive Committee
          which shall have full authority and responsibility to establish and
          adopt exploitation, development and operations programs and Budgets in
          relation with this contract. A representative of the Operator shall
          attend the meetings of the Executive Committee.

 
                                                                              23

19.2      The Executive Committee shall designate a Secretary for each session.
          The Secretary shall take full, detailed records and minutes of all the
          meetings, including a summary of the discussions and decisions taken
          by the Committee. The Minutes shall be approved and signed by the
          representatives of the Parties within the ten (10) working days
          following the adjournment of the meeting and delivered to the Parties
          as soon as possible.

19.3      The responsibilities of the Executive Committee are, amongst others,
          as follows:

19.3.1    Adopt its own regulations.

19.3.2    Decide on those issues that the Operator submits for its
          consideration.

19.3.3    Supervise the performance of the Joint Account and of the Joint
          Operation

19.3.4    Create the necessary sub-committees and establish the functions they
          must perform under its direction.

19.3.5    Appoint the Operator in case of resignation or discharge, and dictate
          the regulations that the Operator must fulfill when he is a third
          person different from the Parties, definitely stating the motives for
          his discharge.

19.3.6    Appoint an External Auditor of the Joint Account.

19.3.7    Approve or reject the Development Plans and any subsequent
          modification or revision.

19.3.8    Determine the rules and policies on expenditures.

19.3.9    Approve or reject the projects, programs and the annual Budget of each
          Commercial Field and authorize extraordinary expenditures not included
          in the approved Budgets.

19.3.10   In general, to carry out all the functions authorized in this contract
          that do not correspond to the Operator, to any other entity or person
          under the specific clause hereof or under a legal or regulatory
          provision.

CLAUSE 20 - DECISION IN CASE OF DISAGREEMENTS

20.1      Any disagreement that cannot be solved in the Executive Committee,
          shall be directly submitted to the highest ranking executive of each
          of the Parties resident in Colombia, in order to reach a joint
          decision. If within the sixty (60) calendar days following the
          submission of the consultation, the Parties reach an agreement or a
          decision on the issue under discussion, they shall so advise the
          Operator, who, within the fifteen (15) calendar days following the
          receipt of the communication, shall call the Executive Committee to an
          extraordinary meeting, during which the agreement or decision adopted
          shall be approved.

20.2      If within the sixty (60) calendar days following to the date of the
          presentation of the consultation to the highest ranking executive of
          each of the Parties resident in Colombia, the Parties fail to agree on
          the issue, the procedures set forth in Clause 28 of this contract must

 
                                                                              24

          be followed, except if concerning issues related to the operations, in
          which case they may be executed pursuant to Clause 21.

CLAUSE 21 - OPERATIONS UNDER RISK OF ONE OF THE PARTIES

21.1      If at any time one of the Parties wishes to drill an Exploitation Well
          not approved in the operations program, it shall notify the other
          Party written notice not less than thirty (30) calendar days in
          advance of the next Executive Committee meeting, of its wish to drill
          such well, including information such as location, recommendation to
          drill, and estimated depth and costs. The Operator shall include such
          a proposal among the issues to be discussed in the next Executive
          Committee Meeting. If such proposal is approved by the Executive
          Committee such well shall be drilled at the expense of the Joint
          Account. If such proposal is not accepted by the Executive Committee,
          the Party wishing to drill such well, hereinafter called participating
          Party, shall have the right to drill, complete, produce or abandon
          such well at its sole cost and risk. The Party not wishing to
          participate in the previous operation shall be called the
          non-participating Party. The participating Party must begin the
          drilling of such well within one hundred eighty (180) days following
          its rejection by the Executive Committee. If the drilling is not
          commenced within said period, it must again be submitted to the
          Executive Committee for its consideration. Upon request of the
          participating Party, the Operator shall drill the previously mentioned
          well on account and risk of the participating Party, provided that by
          judgment of the Operator such operation does not interfere with the
          normal development of the operations of the field, upon advance
          payment to the Operator by the Participant Party of such amounts as
          the Operator may deem necessary in order to drill. If said well is
          unable to be drilled by the Operator without interfering in the normal
          development of the operations, the participating Party shall have the
          right to drill such well directly or through a competent service
          company and, in this case, the participating Party shall be
          responsible for such operation, without interfering with the
          development of the normal operations in the Field.

21.2      If the well referred to in Clause 21 (numeral 21.1) is completed as a
          producing well, it shall be administered by the Operator and the
          production of such well, after deducting the royalties referred to in
          Clause 13, it shall become the property of the participating Party,
          who shall pay for all the operation costs of such well until the net
          production value, after deducting the production costs, gathering,
          storage, transportation and similar costs, as well as sale costs, is
          equal to two hundred percent (200%) of the drilling and completing
          cost of such well, which thereupon and for the purposes of this
          contract shall become the property of the holders of the Joint Account
          in the proportion established, as if it had been drilled with the
          approval of the Executive Committee for the account of both Parties;
          for such purpose the investments done and the costs incurred, in the
          exploitation of this well shall become part of Factor R of the
          Commercial Field. For the purpose of the present Clause, the value of
          each barrel of Hydrocarbons produced in such well, during a calendar
          month, before deducting the previously mentioned costs, shall be the
          reference price agreed by the Parties.

21.3      If at any time one of the Parties decides to workover, deepen up to
          the Production Objectives or plug a well that is not in commercial
          production or a dry well drilled by the Joint Account, and if such
          operations have not been included in a schedule approved by the
          Executive Committee, such Party shall notify the other Party of its
          intention to workover,

 
                                                                              25

          deepen or plug such well. If in the location there is no equipment,
          the procedure mentioned in Clause 21 (numerals 21.1 and 21.2) shall be
          enforced. If at the well site there is adequate equipment to perform
          the operations proposed, the Party that receives the notification of
          the operations that the other Party wishes to carry out, shall have a
          term of forty eight (48) hours following the receipt of the notice, to
          approve or disapprove the operation, if during such term no answer
          whatsoever is received, it is understood that the operation shall be
          done on account and at the risk of the Joint Account. If the work
          proposed is carried out on account and sole risk of one participating
          Party, the well shall be administered pursuant to Clause 21 (numeral
          21.2).

21.4      If at any time one of the Parties wishes to build new facilities for
          the extraction of liquids from the gaseous Hydrocarbons and for the
          transportation and export of the Hydrocarbons produced, to be called
          additional facilities, such Party shall so advise the other in writing
          giving the following information:

21.4.1    General description, design, specifications and estimated costs of the
          additional facilities.

21.4.2    Projected capacity.

21.4.3    Approximate date of the initiation of the construction and duration of
          the same. Within ninety (90) calendar days from the date of
          notification, the other Party, by written notice, has the right to
          decide if it participates in the additional facilities projected. In
          case in which such Party decides not to participate in the additional
          facilities, or gives no answer to the proposal of the participating
          Party, from hereinafter referred to as the constructing Party, it may
          proceed with the additional installations and order the Operator to
          build, operate and maintain such facilities at the exclusive cost and
          risk of the constructing Party, without prejudice to the normal
          development of the Joint Operations. The constructing Party may
          negotiate with the other Party the use of such facilities for the
          Joint Operation. During the time in which the facilities are operated
          on the constructing Party sole account and risk, the Operator shall
          charge this party all operation and maintenance costs of the
          additional facilities pursuant to the accounting standards generally
          accepted.

                            CHAPTER V - JOINT ACCOUNT

CLAUSE 22 - HANDLING

22.1      Without prejudice to any provisions contained herein, the expenses
          covering Exploration Operations shall be on account and risk of THE
          ASSOCIATE.

22.2      As from the time ECOPETROL accepts the existence of a Commercial Field
          and subject to the provisions in Clause 5 (numeral 5.2) and of Clause
          13 (numerals 13.1 and 13.2), the property of the rights or Interest in
          the Operation of the Contract Area, shall be divided as follows:
          ECOPETROL fifty percent (50%), THE ASSOCIATE fifty percent (50%). From
          the moment of such acceptance, all expenses, payments, investments,
          costs and obligations incurred in and contracted for the development
          of the Joint Operation, in agreement with this contract, shall be
          charged to the Joint Account and the Direct Exploration Costs done by
          THE ASSOCIATE before a Commercial Field is accepted and its
          extensions, pursuant to Clause 9 (numeral 9.9), shall be registered in
          the Joint Account. Except for that established

 
                                                                              26

          in Clauses 14 (numerals 14.3) and 21, all properties acquired or used
          from there on for the fulfillment of the operation activities of the
          Commercial Field shall be paid for and belong to the Parties, in the
          same proportion established in the present clause.

22.3      Within the first five (5) days of each month, the Parties shall supply
          the Operator, in the bank account of the Joint Account, the quota that
          corresponds them in the Budget of each Commercial Field pursuant to
          the needs and in the currency in which the expenses must be made in,
          meaning, in Colombian pesos or in dollars of the United States of
          America, as per request of the Operator pursuant to the programs and
          Budgets approved by the Executive Committee. When THE ASSOCIATE has
          insufficient Colombian pesos to cover the quota that corresponds it
          from its share in this currency, ECOPETROL shall have the right to
          supply such pesos and to receive a credit for the contributions it
          must make in dollars, liquidated at the market rate certified by the
          Superintendencia Bancaria or by the corresponding authority, of the
          day in which ECOPETROL must make the corresponding contribution, when
          such transaction is allowed by the legal provisions.

22.4      The Operator shall present a monthly statement to the Parties within
          the ten (10) calendar days following the termination of each month,
          showing the funds advanced, expenses incurred, outstanding liabilities
          and a report on other debits and credits made to Joint Account; this
          report that shall be done as set forth in Annex "B", and in an
          independent Annex, the parameters and calculation of factor R as
          mentioned in Clause 14 (numerals 14.2.3 and 14.2.4). If the payments
          to which Clause 22 (numeral 22.3) refer to are not made within the
          term therein set forth and the Operator decides to cover the same, the
          Debtor Party shall pay the commercial interest in the same currency in
          which the payment has been incurred for the period of time for which
          the payment has been delayed.

22.5      Should either party, in a timely manner, fails to supply the Joint
          Account with the sums due and payable, as of the due at date such
          Party shall be considered as a Debtor Party, and the other Party, as
          the Prompt Party. If the Prompt Party has made the corresponding share
          to the Debtor Party, in addition to its own, after sixty (60) calendar
          days of delay such Party shall have the right to have the Operator
          issue it the total participation of the Debtor Party, in the Contract
          Area (excluding the percentage that corresponds to the royalty), up to
          an amount of production that shall allow the Prompt Party a net income
          for the sales made equal to the sums not paid by the Debtor Party,
          plus an annual interest equal to the Interest in Arrears after of
          commencement of default.. By "net income" it is understood the
          difference between the sales price of the Hydrocarbons taken by the
          Prompt Party, less cost for transportation, storage, loading and other
          reasonable expenses incurred in by the Prompt Party in the sale of the
          products taken. The right of the Prompt Party may be exercised at any
          time after thirty (30) calendar days from having notified the Debtor
          Party in writing of its intention to take part or all of the
          production shares that correspond to the Debtor Party.

22.6      Direct and Indirect Expenses.

22.6.1    All Direct Expenses of the Joint Operation shall be charged to the
          Parties in the same proportion in which the production is distributed
          after the royalties.

22.6.2    The indirect Expenses shall be charged to the Parties in the same
          proportion established in numeral 22.6.1 of the present Clause for
          Direct Expenses. The amount of these

 
                                                                              27

          expenditures shall be the result of taking the total annual value of
          the investments and direct expenditures (excluding the technical and
          administrative supports) and apply the equation a + m (X-b). In this
          equation "X" is the total value of the annual investments and
          expenditures, and "a", "m" and "b" are constants which values are
          shown in the following chart with relation to the amount of annual
          investments and expenditures:

     AMOUNT OF INVESTMENTS AND EXPENSES                VALUES OF THE CONSTANT
               "X" (US$)                   "a" (US$)   M (frac.)     "b"(US$)

1.            0       to   25.000.000         0            0.10           0
2.        25.000.001  to   50.000.000      2.500.000       0.08       25.000.000
3.        50.000.001  to  100.000.000      4.500.000       0.07       50.000.000
4.       100.000.001  to  200.000.000      8.000.000       0.06      100.000.000
5.       200.000.001  to  300.000.000     14.000.000       0.04      200.000.000
6.       300.000.001  to  400.000.000     18.000.000       0.02      300.000.000
7.       400.000.001  on                  20.000.000       0.01      400.000.000

          The equation shall be applied only one time per year, in each case
          with the value of the constants that correspond to the total value of
          the annual investments and expenditures.

22.7      The monthly statements of the account referred to in Clause 22
          (numeral 22.4) may be revised or objected by any of the Parties from
          the time they are received by the Parties up to two (2) years counted
          from the end of the calendar year to which they pertain to, clearly
          specifying the corrected or questioned entries and the reason thereof.
          Any account that has not been corrected nor objected within this
          period, shall be considered as final and correct.

22.8      The Operator shall keep the accounting records, vouchers and reports
          for the Joint Account in Colombian pesos pursuant with the Colombian
          laws and every debit or credit to the Joint Account shall be made
          pursuant to the accounting procedure established in Annex "B", that is
          part of this contract. In case of disagreement between such accounting
          procedure and that established in this contract, that stipulated in
          this later one shall prevail.

22.9      The Operator may sell materials or equipment during the first twenty
          (20) years of the Exploitation Period or the first twenty eight (28)
          years of the Exploitation Period, if it concerns a Gas Field, for the
          benefit of the Joint Account, when the value of that sold does not
          exceed five thousand dollars of the United States of America
          (US$5.000) or its equivalent in Colombian pesos. This type of
          operations, per calendar year may not exceed the amount of fifty
          thousand dollars of the United States of America (US$50.000) or its
          equivalent in Colombian currency. The sales in excess of these amounts
          or sales of real property shall be approved by the Executive
          Committee. The sale of such material or equipment shall be done at a
          reasonable commercial price pursuant to the conditions wear of the
          asset.

 
                                                                              28

22.10     Any machinery, equipment and other assets or personal property
          acquired by the Operator for the execution of this contract, charged
          to the Joint Account, shall be the property of the Parties in the same
          proportion to their Interest in the Operation. However, if one of the
          Parties has decided to terminate its interest in the contract prior to
          the end of the first seventeen (17) years of the Exploitation Period,
          with the exception of that established in Clause 25, such Party is
          obliged to sell its interest in such items to the other Party, at a
          price commercially reasonable or at book value, which ever is lower.
          Should the other Party not wish to purchase such items within the
          ninety (90) calendar days following the formal offer of sale made to
          it, the Party wishing to withdraw shall have the right to yield to a
          third person the Interest that corresponds it in such machinery,
          equipment and items. If THE ASSOCIATE decides to withdraw after
          seventeen (17) years of the Exploitation Period, its rights in the
          Joint Operation shall pass to ECOPETROL free of charge, previous its
          acceptance.

                      CHAPTER VI - DURATION OF THE CONTRACT

CLAUSE 23 - MAXIMUM DURATION

This contract shall have a maximum duration of twenty eight (28) years, counted
as from its Effective Date distributed as follows: up to six (6) years as an
Exploration Period pursuant to Clause 5 without prejudice of that set forth in
Clause 5 (numeral 5.4) and in Clause 9 (numeral 9.3); and twenty two (22) years
as an Exploitation Period as from the date of the termination of the Exploration
Period. It is understood that in the events contemplated in this contract, in
which the Period of Exploration is extended, in no case, shall the total term of
twenty eight (28) years be extended.

Paragraph 1: The Exploitation period for the Gas Fields that are discovered
within the Contract Area shall have a maximum duration of thirty (30) years as
from the date of expiration of the Exploration Period or of the Retention Period
granted. In any case, the total term of the contract for such Fields may not
exceed forty (40) years from its Effective Date.

Paragraph 2: Notwithstanding the afore mentioned, ECOPETROL and THE ASSOCIATE,
with an anticipation not less than five (5) years to the date of expiration of
the Exploitation Period of each Field, shall study the conditions to continue
with its exploitation subsequent to the term to which this Clause refers to. In
such case in which the Parties agree to continue such exploitation, they shall
define the terms and conditions within which it shall be performed.

CLAUSE 24 - TERMINATION

This contract shall be terminated in any of the cases hereinafter mentioned and
in which the rights of THE ASSOCIATE mentioned in this contract shall stop, both
as interested Party, and in its character of Operator, if at the time of the
expiration the two qualities mentioned concur in THE ASSOCIATE.

24.1      Due to the expiration of the Exploration Period without THE ASSOCIATE
          having discovered a Commercial Field, except for that provided in
          Clauses 5 (numeral 5.4), 9 (numerals 9.5) and 34.

 
                                                                              29

24.2      Upon expiration of the term of the duration of the contract as set
          forth in Clause 23.

24.3      At any time at THE ASSOCIATE' s will, upon fulfillment of its
          obligations as set forth in Clause 5 and of any others entered into
          hereunder, up to the date of its expiration.

24.4      If THE ASSOCIATE assigns this contract, fully or in part, without
          having fulfilled that set forth in Clause 27.

24.5      By not fulfilling the obligations acquired by THE ASSOCIATE pursuant
          to this contract.

24.5.1    ECOPETROL may not end this contract until after sixty (60) calendar
          days of having notified THE ASSOCIATE or its assignees in writing,
          clearly specifying the causes invoked to make such a declaration and
          only if the other Party has not presented the satisfactory
          explanations to ECOPETROL or if THE ASSSOCIATE has not corrected the
          failure in the fulfillment of the contract, without prejudice of the
          right of THE ASSOCIATE to present the legal resources it considers
          convenient.

24.5.2    If within the term previously mentioned THE ASSOCIATE presents the
          satisfactory explanations to ECOPETROL and the remaining term to
          complete the time of sixty (60) calendar days is insufficient to
          fulfill the pending obligations pursuant to the good oil industry
          practices, the Parties may agree on an additional term to allow such
          fulfillment, without prejudice of the right of ECOPETROL to demand the
          necessary guarantees to support it. If at the end of this term the
          operations agreed on have not been fulfilled, ECOPETROL shall
          terminate the contract.

24.6      At any time by mutual agreement of the Parties.

24.7      By the unilateral causes for termination mentioned in Clause 25.

CLAUSE 25 - CAUSES FOR UNILATERAL TERMINATION

25.1      ECOPETROL may unilaterally declare this contract terminated, at any
          time before the expiration of the period set forth in Clause 23, in
          the following instances.

25.1.1    By death or permanent physical disability or judicial interdiction of
          THE ASSOCIATE, if a natural person.

25.1.2    By initiation of a process of liquidation of THE ASSOCIATE if a
          juridical person.

25.1.3    By legal injunction of THE ASSOCIATE that seriously affects the
          fulfillment of the contract.

25.1.4    When THE ASSOCIATE is conformed by several legal and/or natural
          persons, the causes in numerals 25.1.1 and 25.1.2 shall be applied
          when they seriously affect the fulfillment of the contract.

25.2      In the case of declaration of a unilateral termination, the rights of
          THE ASSOCIATE mentioned in this contract shall end, both as interested
          Party to the Contract, and as

 
                                                                              30

          operator, if at the time of the declaration of a unilateral
          termination the two qualities mentioned concur in THE ASSOCIATE.

CLAUSE 26 - OBLIGATIONS IN CASE OF TERMINATION

26.1      Upon termination of the contract pursuant to Clause 24, either in the
          Exploration, Retention or Exploitation periods, THE ASSOCIATE shall
          leave in production any wells that are then producing and restitute
          the facilities, transfer pipelines and other real property of the
          Joint Account (located in the Contract Area), all of which, shall pass
          free of charge to ECOPETROL with the any rights of ways and assets
          obtained to the exclusive benefit of the contract, even though the
          former or the latter be located outside of the Contract Area.

26.2      If this contract is terminated for any reason after the first
          seventeen (17) years of the Exploitation Period, all Interest of THE
          ASSOCIATE in the machinery, equipment or other assets or facilities
          used or obtained by THE ASSOCIATE or by the Operator for the execution
          of this contract, shall pass to ECOPETROL free of charge.

26.3      If this contract is terminated before the seventeen (17) years of the
          Exploitation Period, that set forth in Clause 22 (numeral 22.10) shall
          be applied.

26.4      In case this contract is terminated by a declaration of a unilateral
          termination issued at any time, all the real and personal property
          acquired for the sole benefit of the Joint Account shall pass to
          ECOPETROL free of charge.

26.5      Upon termination of this contract by any cause and at any time, the
          Parties are obliged to satisfactorily fulfill their legal obligations
          between each other and before Third Parties and those acquired in this
          contract.

                        CHAPTER VII - VARIOUS PROVISIONS

CLAUSE 27 - RIGHTS OF ASSIGNMENT

27.1      THE ASSOCIATE shall be entitled to assign or transfer all or part of
          its interests, rights and obligations originated from this contract,
          with the previous written authorization of ECOPETROL, to another
          person, company or group that has the financial capacity, the
          technical competence, the necessary professional abilities and legal
          capacity to act in Colombia.

          For such purpose, THE ASSOCIATE shall submit a written request to
          ECOPETROL, indicating the essential elements of the negotiation, such
          as the name of the possible assignee, information on his legal,
          financial, technical and operational capacities, the cost of the
          rights and obligations to be assigned, scope of the operation, etc.
          Within the sixty (60) working days following the receipt of the
          request, submitted in a complete form, ECOPETROL, shall exercise the
          discretional faculty to study the information supplied by THE
          ASSOCIATE, after which it shall adopt its determination, without being
          obliged to motivate it.

27.1.1    When the assignments are in favor of companies that control or direct
          THE ASSOCIATE, or of any one of the companies that integrate it or
          their affiliates or subsidiaries, or between

 
                                                                              31

          companies that conform the same economic group, it shall be sufficient
          to previously and timely notify ECOPETROL on the essential elements of
          the negotiation previously mentioned.

27.1.2    The operations performed under the development of this clause, and
          that pursuant to the Colombian Legal Tax legislation, are taxable,
          shall cause the payment of the corresponding taxes.

          Paragraph: When THE ASSOCIATE is conformed by more than one company
          and one of them wishes to totally or partially assign its interests,
          rights and obligations in the contract pursuant to this clause, it
          must give preference to the other companies that integrate THE
          ASSOCIATE, offering them, before doing so to Private Parties, the
          interests, rights and obligations it wishes to assign, unless the
          companies that conform THE ASSOCIATE have agreed otherwise.

                            CLAUSE 28 - DISAGREEMENTS

28.1      In the event of any discrepancies or inconsistencies in the
          interpretation of the Clauses of this contract with relation to those
          set forth in Annex "B" called the "Operating Agreement", those
          stipulations of the first shall prevail.

28.2      The disagreements that arise between the Parties on matters of rights
          related with the interpretation and execution of the contract and that
          cannot be solved in a friendly way, are subject to the knowledge and
          decision of the legal branch of the Colombian public authorities.

28.3      Any difference as to the facto or technical matters that may arise
          between the parties hereto as a result of the interpretation or
          application of this contract and that cannot be solved in a friendly
          manner, shall be subject to a final decision of experts appointed as
          follows: one by each Party and, the third one, appointed by mutual
          agreement by the principal experts appointed. Should these two fail to
          reach an agreement as to the appointing of the third, the latter shall
          be designated upon request of either Parties by the Board of Directors
          of the Sociedad Colombiana de Ingenieros "SCI" (Colombian Society of
          Engineers), with offices in Bogota, D.C.

28.4      Any differences of an accounting nature that may arise between the
          Parties hereto by reason of the interpretation and implementation of
          the contract, which cannot be solved in a friendly manner, shall be
          referred for the decision of experts who shall be professional public
          accountants designated as follows: one by each Party and, the third
          appointed by the two principal experts; should these fail to reach an
          agreement and by request of any of the Parties, such third expert
          shall be designated by the Central Board of Accountants of Bogota
          (Junta Central de Contadores de Bogota).

28.5      Both parties declare that the experts decision shall have all the full
          effect of a settlement between them and in consequence, such decision
          shall be final.

28.6      In case of disagreement between the Parties on the technical,
          accounting or legal nature of the controversy, it shall be considered
          legal and Clause 28 (numeral 28.2) shall be applied.

 
                                                                              32

                        CLAUSE 29 - LEGAL REPRESENTATION

Without prejudice to THE ASSOCIATE's legal rights and as a consequence of the
legal provisions or of the clauses of this contract, ECOPETROL shall represent
the Parties before the Colombian authorities on any matters concerning the
exploitation of the Contract Area whenever it is necessary, and shall supply the
officers and government entities with all the data and reports that may be
legally required. The Operator shall be obliged to prepare and supply ECOPETROL
with the corresponding reports. Any expenses incurred in by ECOPETROL to attend
any matter to which this Clause refers to, shall be charged to the Joint
Account, and when such expenses exceed five thousand dollars of the United
States of America (US$5.000) or its equivalent in Colombian currency, the
previous approval of THE ASSOCIATE is required. The Parties declare, for any
relation with Third Parties, that neither that established in this Clause nor in
any other of this contract, shall imply the granting of a general power of
attorney, moreover that the Parties have constituted a civil or commercial
association or any other relationship under which, any of the Parties may be
considered as jointly and severally liable for the acts or omissions of the
other party or as having authority or mandate that may be binding upon the other
Party in relation to any obligation. This contract is concerned to the
activities within the territory of the Republic of Colombia, and even though
ECOPETROL is a Colombian State-Owned and industrial company, the Parties agree
that THE ASSOCIATE, given the case, may choose to be excluded from the
enforcement of all the provisions of Sub-chapter K titled PARTNERS AND
PARTNERSHIPS of Internal Revenue Code of the United States of America. THE
ASSOCIATE shall make such election on its behalf and in the appropriate manner.

CLAUSE 30 - RESPONSIBILITIES

30.1      The liabilities Contracted hereunder by ECOPETROL and by THE ASSOCIATE
          with relation to Third Parties shall not be joint and, in consequence,
          each Party shall be separately liable for its share in the expenses,
          investments and obligations that may result as a consequence of such
          liabilities.

30.2      Environmental Management. During the performance of all of the
          activities provided for in the contract, THE ASSOCIATE or the
          Operator, shall on time comply with the provisions of the National
          Code on Natural Renewal Resources and Environmental Protection, issued
          by the Colombian Government, as well as with all other relevant legal
          regulations. Also, motivate among their contractors, suppliers,
          intermediaries, and/or workers working in benefit of this contract,
          the conservation of a healthy environment, taking the necessary
          precautions to protect the environment, human life and property of
          others and prevent the contamination of the Contract Area. From the
          beginning of this contract, THE ASSOCIATE shall elaborate a general
          diagnostic on the environmental and social reality of the zones where
          the Exploration Operations shall be executed and shall establish the
          communication channels with the authorities and communities of the
          area.

          THE ASSOCIATE is obliged to execute a permanent preventive program to
          guarantee the preservation and restoration of the natural resources
          within the zones where the operations of Exploration, exploitation and
          transportation set forth in this contract are carried out.

          Such plans and programs must be made known by THE ASSOCIATE to the
          national and regional communities and entities related to this issue.
          Also, specific contingency programs must be established to face those
          emergencies that may occur and to carry out the

 
                                                                              33

          necessary remedial actions. For such effect, THE ASSOCIATE must
          coordinate such plans and actions with the competent authorities.

          The respective programs and Budgets must be prepared by THE ASSOCIATE
          pursuant to the corresponding Clauses of this contract.

          All costs caused shall be assumed by THE ASSOCIATE during the
          Exploration Period and in the exploitation under the modality of sole
          risk, and by both Parties with charge to the Joint Account in the
          Exploitation period.

CLAUSE 31 - TAXES, CHARGES AND OTHERS

The taxes and charges accrued after the opening of the Joint Account and before
the Parties receive their production share, chargeable to the exploitation of
Hydrocarbons, shall be charged to the Joint Account. Income, patrimony and
supplementary or presumptive taxes, shall be to the sole account of each of the
Parties as applicable to each of them.

CLAUSE 32 - PERSONNEL

32.1      When THE ASSOCIATE is the Operator, the assignment of the Manager of
          the Operator shall be previously consulted with ECOPETROL.

32.2      Pursuant to the terms of this contract and subject to the regulations
          established, the Operator in his condition as the sole and true
          employer, shall have the autonomy to assign the personnel required for
          the operations hereunder, being able to set the salaries, duties,
          ranks and conditions. The Operator shall adequately and diligently
          train the Colombian personnel required to replace the foreign
          personnel that the Operator considers necessary for the performance of
          the operations of this contract. In any case, the Operator must
          fulfill all the legal provisions that show the proportion of national
          and foreign employees and workmen.

32.3      Technological Transfer - THE ASSOCIATE is obliged to pay for or
          perform at its cost the training programs for the professionals of
          ECOPETROL in areas related to the development of the contract.

          For the fulfillment of this obligation in the Exploration Period, the
          training may also be in the areas of geology, geophysics and related
          areas, evaluation of Reservoirs and characterization of reservoirs,
          drilling and production. The supervised training shall be done
          throughout the entire Exploration Period of six (6) years and during
          its extensions, by integrating the professionals that are assigned by
          ECOPETROL, to the work group organized by THE ASSOCIATE for the
          Contract Area or for other activities handled by THE ASSOCIATE.

          To be able to choose to resign as set forth in Clause 5 of this
          contract, THE ASSOCIATE must have previously fulfilled the training
          programs herein mentioned.

          During the Exploitation Period, the scope, duration, place,
          participants, training conditions and other aspects, shall be
          established by the Executive Committee of the Company.

 
                                                                              34

          All costs for guided training, with the exception of those of work
          caused in favor of the professionals that receive it, shall be assumed
          by THE ASSOCIATE in the Exploration Period and by both parties with
          charge to the Joint Account in the Exploitation Period.

          PARAGRAPH: To fulfill all of the Technological Transference
          obligations pursuant to that herein mentioned, during the first three
          (3) years of the Exploration Period and for each year, THE ASSOCIATE
          is committed to carry out programs of guided training and technical
          exchanges for professionals of ECOPETROL in the areas of joint
          interest up to a value of forty thousand dollars (US$40.000) per year.
          The subject and type of program shall be previously agreed to between
          ECOPETROL and THE ASSOCIATE. In the event that the Exploration Period
          is extended, the guided training shall consist of similar programs to
          that herein considered.

CLAUSE 33 - INSURANCES

THE ASSOCIATE or the Operator shall obtain all the insurances required by the
Colombian laws. Also, it shall require that each contractor performing any type
of work during the development of this contract obtain all the insurances
considered necessary, that must be maintained in force. Also, the Operator shall
take all other insurances that the Executive Committee considers necessary.

At the expiration of this contract, at any moment during the exploitation period
or by expiration of a term set forth in clause 23, the Operator and/or THE
ASSOCIATE shall constitute an insurance policy that guarantees the payment of
salaries, benefits and indemnifications and other working credits for eventual
legal sentences derived from claims of the workers contracted by the Operator in
his condition as a sole and true employer of the same and during the time of
operation of the Commercial Field. The life of the policy shall not be less than
three (3) years as of the date of the termination of the Association Contract
and the sum insured shall be decided by the Executive Committee, subject to that
ordered in the labor regulations that apply to the respective labor contracts.

CLAUSE 34 - FORCE MAJEURE OR ACT OF GOD

The obligations to which this contract refer to shall be suspended for the time
in which any of the Parties is unable to fulfill them in whole or in part, due
to unforeseeable events that constitute a force majeure or Act of God, such as
strikes, lockouts, wars, earth quakes, floods or other catastrophes, laws or
government regulations or decrees that hinder the provision of essential
material and, in general, any non financial motive that really impedes the work,
even when not previously mentioned, but that affects the Parties and that is out
of their control. Should either Party be unable to fulfill its obligations with
this contract due to force majeure or Act of God, it must immediately notify the
other Party, for its consideration, specifying the causes of its impediment. In
no case can the events of force majeure or Act of God extend or prolong the
total period of exploration, retention and exploitation beyond a maximum
duration of the contract pursuant to that set forth in Clause 23, but any
impediment of force majeure during the period of six (6) years of exploration
set forth in Clause 5, which duration is more than sixty (60) consecutive days,
shall extend this period of six (6) years for the same period of the duration of
the impediment.

 
                                                                              35

CLAUSE 35 - APPLICATION OF THE COLOMBIAN LAWS

The Parties set the city of Bogota, D.C., Republic of Colombia for any purposes
hereunder. This contract is governed ruled in all of its parts by the Colombian
laws and THE ASSOCIATE abides by the jurisdiction of the Colombian Courts and
waives any diplomatic claim in respect to its rights and obligations hereunder,
except in the case of denial of justice. Denial of justice shall not be deemed
to exist when THE ASSOCIATE in its condition as a Party or as Operator has had
access to all the resources and ways of action that, pursuant to the Colombian
laws, may be used before a jurisdictional branch of the public power.

CLAUSE 36 - NOTIFICATIONS

Notices or communications between the Parties hereto in relation to this
contract, shall require for their validity mentioned or the pertinent clauses
and shall be sent to the representatives or delegates assigned by the Parties to
the following addresses: ECOPETROL: Carrera 13 No. 36.24, Bogota, D.C.,
Colombia. To THE ASSOCIATE: Calle 114 No. 9-01 Bogota, D.C., Colombia. The
change of address and of representative shall be notified to the other Party in
advance.

CLAUSE 37 - VALUATION OF THE HYDROCARBONS

The payments or Reimbursements set forth in Clauses 9 (numerals 9.2 and 9.4) and
22 (numeral 22.5), shall be made in dollars of the United States of America, or
in Hydrocarbons based on the price in effect and with the limitations
established or that may be established by the Colombian legislation for the sale
of that portion of the Hydrocarbons payable in dollars, originated from the
Contract Area, and to be refined within the national territory.

CLAUSE 38 - PRICES FOR HYDROCARBONS

38.1      The Hydrocarbons to which THE ASSOCIATE is entitled to in the
          development of this contract, to be refined or used in internal
          supply, shall be paid when situated at the refinery where they shall
          be processed or at the station where they are received as agreed to by
          the Parties, pursuant to the government rules and regulations in force
          or those that substitute them.

38.2      The differences that arise from the application of this Clause shall
          be solved through the systems established in this contract.

CLAUSE 39 - DELEGATION AND ADMINISTRATION

The PRESIDENT of EMPRESA COLOMBIANA DE PETROLEOS - ECOPETROL appoints the
administration of this contract in the Vice-President of Exploration and
Production, pursuant to the rules and Reglementary provisions of ECOPETROL, with
faculties to execute all the matters concerning the development of this
Contract. The Vice-President of Exploration and Production is authorized to
perform this assignment through the Assistant Vice-Presidents of Exploration and
Production.

 
                                                                              36

CLAUSE 40 - LANGUAGE

For all effects and acts related to this contract, the official language is
Spanish.

CLAUSE 41 - VALIDITY

To be valid, this contract requires the approval of the Ministry of Mines and
Energy.

In witness whereof, it is signed in Bogota, D.C., before witnesses, on the
twentieth (20) day of the month of December of the year two thousand (2001).

                         EMPRESA COLOMBIANA DE PETROLEOS
                                    ECOPETROL

                               (Signed) illegible
                             ALBERTO CALDERON ZULETA
                                    President

                           HARKEN DE COLOMBIA LIMITED

                               (Signed) illegible
                         GABRIEL GUSTAVO CANO VELASQUEZ
                         Principal Legal Representative

                                    WITNESSES

          (Signed) Illegible                      (Signed) Illegible
          VICTOR EDUARDO PEREZ                      ALBERTO TOVAR

 
                                                                              37

                                  CAJARO SECTOR
                                     ANNEX A

 
                                                                              38

                                     ANNEX A
                                  CONTRACT AREA
             ANNEX TO THE ASSOCIATION CONTRACT OF THE CAJARO SECTOR

The area of the polygon formed by the vertices mentioned hereinafter is of
thirty four thousand one hundred ninety five (34.195) hectares with seven
thousand fifty eight (7.058) square meters and is located within the municipal
jurisdiction of Mani in the department of Casanare. The cartographic information
was taken from the Political Map of Colombia, digital file of the I.G.A.C., at a
scale of 1:1'500.000.

The Contract Area is described as follows and, as it appears on the map enclosed
as Annex "A", that is part of this contract, as well as the corresponding
charts: The Geodesic Vertex "RECREO- 912" of the Agustin Codazzi Geographical
Institute has been taken as the point of reference, which flat GAUSS coordinates
with origin Bogota are: N-1'051.829,47 meters, E-1'158.055,62 meters, that
correspond to the geographic coordinates Latitude 05(0) 03'58"0,207 to the North
of the Equator, Longitude 72(0) 39'20"0,698 West of Greenwich. From this vertex
it bears S 50(0) 43'3"0,552 E for a distance of 70.494,393 meters until reaching
point "A" start off point of boundaries which coordinates are N-1007.196,48
meters, E-1'212.620,77 meters. From this point it bears S 67(0) 33'25"0.116 E
for a distance of 3.709,75 meters until reaching point "B", which coordinates
are N- 1'005.780,23 meters, E-1'216.049,54 meters. The line "A-B" is contiguous
in all of its extension with line "C-B" of the Alcaravan Association Contract
operated by Harken. From this point it bears S 58(0) 57'42"0.358 E for a
distance of 18.968, 27 meters until reaching point "C" which coordinates are
N-996.000,00 meters, E 1'232.302,00 meters. From this point it bears S 54(0)
42'41"0.066 W for a distance of 22.725,46 meters until reaching point "D" which
coordinates are N-982.871,61 meters, E- 1'213.752,28 meters. The point "D" is
contiguous with point "D" of the Vuelta Laraga Association Contract operated by
the Emerald company. From this point it bears N 23(0) 38'28"0.601 W for a
distance of 9.395,40 meters until reaching point "E" which coordinates are
N-991.478,49 meters, E- 1'209.984,64 meters. From this point it bears N 51(0)
1'59"0.565 W for a distance of 9.036,48 meters until reaching point "F", which
coordinates are N- 997.161,26 meters, E- 1'202.958,68 meters. From this point it
bears N 43(0) 54'53"0.153 E for a distance of 13.930,60 meters until reaching
point "A" start off point and closure of the boundaries. Lines "D-E", "E-F" and
"F-A" are contiguous in all their extension with lines "O-N", "N-M" and "M-L" of
the Bicudo Association Contract operated by the Braspetro company.

 
                                                                              39

                                                                        ANNEX -A

                         EMPRESA COLOMBIANA DE PETROLEOS
                        Calculation of Area, courses and
                Distances as of Gauss Coordinates. Origin Bogota

                  Data and Results Chart for the CAJARO Sector
          Municipal Jurisdiction of Mani in the Department of Casanare

POINT Coord. N. Coord. E. Distance Dif.N. Dif. East Courses

 
                                                                              40

                       ANNEX B TO THE OPERATIONS AGREEMENT

                        ANNEX TO THE ASSOCIATION CONTRACT

                             FOR THE "CAJARO" SECTOR

Entered into by the Empresa Colombiana de Petroleos - ECOPETROL and HARKEN DE
COLOMBIA LIMITED, with effective date February eighteenth (18th) year two
thousand two (2002), which hereinafter shall be known as The Contract.

                           PART 1 - TECHNICAL ASPECTS

                            Section One - Exploration

The geological and geophysical information that THE ASSOCIATE is to provide to
ECOPETROL, shall be provided following the international norms accepted by the
industry, compatible with the norms used by ECOPETROL (included in ECOPETROL's
information provision manual) in order to allow for regional assessments of the
sedimentary basins. As a supplement of what is provided for in Clause 6 (number
6.2) in The Contract, THE ASSOCIATE or the Operator shall deliver to ECOPETROL,
as it becomes available, the following information with respect to the
exploratory activities that are undertaken by THE ASSOCIATE.

1.1       The geological, geophysical, magnetometric, gravimetric information
          from remote sensors, electrical methods and, in general, from any
          Exploration Work performed by THE ASSOCIATE in the development of The
          Contract shall be submitted in magnetic media, in a reproducible
          original and one copy, with its respective support information,
          including the maps related with the acquisition and interpretation of
          the acquisition, processing and interpretation reports for the data
          acquired.

1.2       Processed seismic sections for each line, obtained in two scales,
          together with an interpretation report to contain: information used,
          background, seismic programs, geological information and geophysical,
          geological and economic considerations that back up the conclusions
          and technical recommendations.

1.3       Two (2) sets of magnetic tapes corresponding to the seismic lines, one
          with the de- multiplexed information and the other with the stacked
          information, with their support information and processing report. For
          the case of vibrators, a copy of the field tape is to be delivered in
          lieu of the de- multiplexed tape.

1.4       One seismic shot-point map, in reproducible sepia and copy, with the
          information of coordinates and elevations. This information shall also
          be delivered on magnetic tapes.

1.5       Magnetic, gravimetric profiles and residual maps in reproducible
          originals, copies and magnetic tapes, with all of the support
          information generated.

1.6       Report on the seismic, gravimetric and magnetometric interpretation,
          together with all of the sections, profiles and maps interpreted,
          submitted set forth in the norms that ECOPETROL has established for
          this information.

1.7       Geological, structural, isopach, isolithic, facies, seismic, etc. maps
          for The Contract area, in reproducible sepias and copies, with the
          scales established by ECOPETROL for each basin.

1.8       Before starting to drill the well: Intention to Drill (Form 4- CR of
          the Ministry of Mines and Energy), drilling program, well location
          map, isochronic or structural map of the prospective

 
                                                                              41

          area and the geological drilling prognosis, duly approved by the
          Ministry of Mines and Energy. In the event of Exploratory Wells, the
          following shall also be submitted in three scenarios: the calculation
          for the Reservoirs in the prospective area to be drilled and the
          forecast of investments and production. The location of the
          Exploratory Wells shall be referenced to the seismic maps that served
          as the basis for the definition of the prospect. For each of the
          Exploratory Wells that is drilled in The Contract area, a geodesic
          precision point shall be materialized, duly accepted by the Agustin
          Codazzi Geographical Institute - "IGAC," obtained by satellite and
          with its respective azimuth line.

1.9       Daily drilling and geology reports: These reports shall be delivered
          to ECOPETROL, preferably by telefax, and shall contain the basic
          information on the well, the drilling conditions, the properties of
          the drilling fluid, the manifestations of Hydrocarbons that are being
          obtained, the geological description of the formations penetrated, the
          daily and cumulative cost and the program to be carried out. The
          ASSOCIATE or the Operator shall advise ECOPETROL with sufficient
          advance notice on the performance of electrical logs, cores and
          testing, so that the latter can send a representative to attend and
          witness all of the operations.

1.10      Copy of the reports sent to the Ministry of Mines and Energy (Form 5-
          CR) every two weeks.

1.11      Final Geological Report: This report is compulsory for any well that
          is drilled in the country, whether it be exploratory, stratigraphic,
          or development, and shall be submitted in Spanish, by a registered
          geologist, latest ninety (90) days after the date of termination or
          abandonment of the well, and shall include the following information
          by chapters:

1.11.1    Summary of all activities performed during the drilling operations

1.11.2    Location of the well and maps at a 1:250,000 scale.

1.11.3    Stratigraphy: shall include the stratigraphic column, determination of
          environments and age for each of the formations drilled.

1.11.4    Biostatigraphy: The dispersion charts, analyses performed and possible
          correlations are to be submitted.

1.11.5    Geochemistry: All of the analyses performed shall be included, both
          for the ditch samples and for each of the cores recovered.

1.11.6    Electrical logs: All of the calculations performed for the
          determination of RW, SW shall be included. The analysis of log
          velocity shall be included in this chapter.

1.11.7    Formation testing: All of the results obtained for each of the tests
          performed shall be included, as well as the results of the analyses
          performed in the laboratories for water and Hydrocarbons.

1.11.8    The Final Geological Report shall contain the following Annexs:

          Annex A: Description of the ditch samples at every ten (10) feet.

          Annex B: Detailed description of the cores and side wall samples that
          may have been recovered.

          Annex C: All of the laboratory analyses that are performed on the
          cores and side wall samples.

 
                                                                              42

          Annex D: Composite graphic log, in reproducible sepia and copy at a
          1:500 scale. The symbols that are used by the American Association of
          Petroleum Geologists (AAPG) for these cases shall be used for the
          various lithologies included in the composite graphic log.

          Annex E: Final report issued by the company that performed the
          "logging" for the well, including the "Grapholog" log.

1.12      Reproducible sepias and copies of each and every log run in the well,
          including the velocity log, in 1:200 and 1:500 scales. In addition,
          the magnetic tapes in LIS format for each of the logs shall be
          delivered, together with the computer tabulations in the formats
          established by ECOPETROL for these cases.

1.13      Report on the formation and/ or production tests performed, including
          the analysis of bottom hole pressure (both open well and closed).

1.14      Two sets of ditch samples shall be delivered to ECOPETROL, one
          unwashed every thirty (30) feet and a dry one every ten (10) feet,
          with the detailed lithological description.

1.15      Coring report, whenever performed, including the detailed description
          for it, as well as on all of the analyses that are carried out. With
          this report, THE ASSOCIATE is to deliver photographs to ECOPETROL, as
          well as 50% of the core.

1.16      A report on all of the materials used during drilling.

1.17      Biostratigraphic analyses with their dispersion chart: These analyses
          shall be performed for Exploratory Wells, since the sedimentation
          environments and the age of each of the formations drilled are defined
          with this information. This type of analysis can also be performed on
          the various recovered cores.

1.18      Geochemical analyses performed on the ditch, side wall and core
          samples.

1.19      Official completion, plugging or abandonment report for the well (Form
          6- CR or 10A- CR) and, in general, any other report related with the
          termination of the well (further work, multiple termination).

1.20      Final Well Report. Shall include all of the engineering information
          and a summary of the Final Geological Report. It shall be submitted in
          the Spanish language, latest ninety (90) days after the date of
          termination or abandonment of the well, with the approval of a duly
          registered petroleum engineer.

1.21      Copy of the Annual Technical Report (Geology and Geophysics and of the
          Engineering Report), with their respective support, submitted to the
          Ministry of Mines and Energy, set forth in the existing legal
          provisions.

1.22      Any other engineering or geology study that may be performed.

CLAUSE 2 - RESTITUTED OF AREAS

2.1       The areas that THE ASSOCIATE shall restitute to ECOPETROL, set forth
          in Clause 8 of The Contract shall be, inasmuch as possible, regular
          lots with a polygon shape, attempting to facilitate the demarcation of
          borders, without prejudice of the areas in the existing Fields. For
          such purpose, an imaginary grid or grille shall be superimposed upon
          the initially Contract area, divided into ten rows and columns in a
          north- south direction, the limits of which shall be given by the
          maximum and minimum border north and east coordinates,

 
                                                                              43

          which shall define the base cells for the areas to be restituted
          herein. Every time an area is restituted, the imaginary grid or grille
          shall be adjusted, based on the new coordinates for the Contract Area.

2.2       THE ASSOCIATE shall determine the areas that it shall restituted to
          ECOPETROL, based on the imaginary grid or grille mentioned in the
          above point. For such purpose, it shall carry out the restitution of
          up to two lots made up by one or more cells that are contiguous and
          adjacent on their sides, and trying to conserve a sole polygon, unless
          THE ASSOCIATE demonstrates that this is not possible or convenient,
          for which purpose it shall require ECOPETROL's approval.

CLAUSE 3 - EXTENSIVE PRODUCTION TESTS

The following is the established procedure for performing Extensive Production
Testing for Exploratory Wells and for the handling of Hydrocarbons from such
tests, prior acceptance or not of the existence of a Commercial Field by
ECOPETROL, set forth in Clause 9 of The Contract:

3.1       THE ASSOCIATE is entitled to perform Extensive Production Tests for
          the Exploratory Wells that turn out to be producers, with the purpose
          of assessing in the best manner, the Reservoir or Reservoirs
          discovered and prepare the Development Program for the possible Field.
          Before initiating the Extensive Production Tests THE ASSOCIATE shall
          obtain ECOPETROL's approval and subsequently, permission from the
          Ministry of Mines and Energy. Such tests shall be performed with
          temporary production facilities and shall not require more than ninety
          (90) calendar days, unless THE ASSOCIATE proves the contrary and
          obtains timely approval from ECOPETROL and from the Ministry of Mines
          and Energy, respectively.

3.2       THE ASSOCIATE, on its own account and risk, shall, set forth in
          international oil industry recommended rules and practices, carry out
          the Extensive Production Tests accepted by ECOPETROL and authorized by
          the Ministry of Mines and Energy, set forth in the operations program.
          In order to obtain such approvals, THE ASSOCIATE shall prepare and
          submit to ECOPETROL the operations program for the Extensive
          Production Testing, which shall contain, among others, the following
          aspects:

3.2.1     Information of the completion of the Exploratory Well and of the
          Reservoirs to be tested.

3.2.2     Specific objectives for the Extensive Production Tests.

3.2.3     Information to be compiled on the Reservoirs and fluids, periodicity
          for sampling, analyses and data on the possible Field, such as type,
          quality and properties of rocks and fluids, pressures, volumes of "in
          situ" and recoverable Hydrocarbons, maximum economic Hydrocarbons
          production rate, production mechanism, etc.

3.2.4     Information on the subsurface equipment and temporary surface
          facilities to be used to handle and decant the volumes of fluids
          obtained and other equipment required to ensure the safety of the
          operations, including the location diagram for the temporary surface
          facilities on site.

3.2.5     Detailed chronogram on the main activities to be performed in order to
          achieve the specific objectives referred to in number 3.2.2. mentioned
          above.

3.2.6     Budget for the main activities to be carried out and the estimated
          disbursement schedule.

 
                                                                              44

3.2.7     Destination of the Hydrocarbons and other fluids to be recovered from
          the Extensive Production Testing.

3.2.8     Evacuation and marketing scheme for the Hydrocarbons from the
          Extensive Production Tests (including the volume the corresponds to
          royalties) and reference price proposal subject to be agreed upon with
          ECOPETROL for the valuation of such Hydrocarbons.

3.2.9     Draft contract and proposals (at least three) for the transport of the
          Hydrocarbons to be produced corresponding to the royalties set forth
          in Clause 13 of The Contract, from the Exploratory Well to the
          delivery point of such Hydrocarbons to ECOPETROL.

3.2.10    Any other information that THE ASSOCIATE may consider necessary.

3.3       ECOPETROL may request clarification or suggest adjustments to the
          operations program submitted by THE ASSOCIATE for the execution of the
          Extensive Production Tests. When this occurs, THE ASSOCIATE shall
          submit the explanations to ECOPETROL and, if required, shall bear in
          mind the comments proposed by ECOPETROL, it being understood that, in
          any case, the responsibility and the risk for any operation that is
          included in the operations program for the Extensive Production Tests
          shall be the responsibility of THE ASSOCIATE. Once the operations
          program is accepted by ECOPETROL and the appropriate agreements have
          been reached, it shall be submitted to the Ministry of Mines and
          Energy by THE ASSOCIATE in order to obtain the corresponding
          permission.

3.4       THE ASSOCIATE shall be responsible for one hundred percent (100%) of
          the disbursements incurred during the Extensive Production Tests,
          including the costs of transporting the volumes of hydrocarbons
          corresponding to the royalties, if this were the case, from the
          Exploratory Well to the delivery point that the Parties agree to, set
          forth in the transportation proposal accepted by ECOPETROL. The costs
          incurred on account of Extensive Production Testing for each
          Exploratory Well shall be charged as an increased value for the
          respective Exploratory Well and shall be considered as Direct
          Exploration Costs (without including administrative or technical
          support from Head Office, nor from the central headquarters of the
          Company) for purposes of their recovery or Reimbursement, set forth in
          the origin of their disbursement.

3.5       The volumes produced during the Extensive Production Tests shall be
          those recovered from the respective Exploration Well during the
          maximum time period for testing approved by the Ministry of Mines and
          Energy in the corresponding permit, discounting any volume of the
          Hydrocarbons that may be used as consumption in the testing
          operations. The remaining production, once the percentage
          corresponding to royalties has been discounted, which shall be paid
          directly by ECOPETROL, shall be taken by THE ASSOCIATE, and the income
          stemming from the valuation of such Hydrocarbons at the reference
          price agreed to by the Parties, shall be deducted from the Direct
          Exploration Costs for the respective Exploratory Well, up to a maximum
          of fifty percent (50%) of such costs, for purposes of their recovery
          or Reimbursement in the following order: i) Direct Exploration Costs
          in the Extensive Production Tests; ii) Direct Exploration Costs in the
          drilling and completion of the respective Exploratory Well; and iii)
          Direct Exploration Costs incurred in Exploration Work undertaken
          before the drilling of the respective Exploratory Well. Once fifty
          percent (50%) of the Direct Exploration Costs has been recovered, the
          production from the Extensive Production Tests shall be distributed
          between the parties in a proportion of fifty percent (50%) for
          ECOPETROL and fifty percent (50%) for THE ASSOCIATE.

 
                                                                              45

3.6       Prior consent by ECOPETROL, THE ASSOCIATE may carry out the sale of
          the portion of production of Hydrocarbons from the Extensive
          Production Tests corresponding to the royalties and to ECOPETROL. In
          this case, the Parties shall previously enter into the corresponding
          agreement.

3.7       THE ASSOCIATE shall keep at the disposal of ECOPETROL the daily logs
          of the production and consumption measurements of Hydrocarbons and
          fluids, the disbursements incurred and the valuation of the produced
          Hydrocarbons at the agreed to reference price, with their respective
          support documentation and the balance in the recovery of Direct
          Exploration Costs in the development of the Extensive Production Tests
          for each Exploratory Well. In addition to the periodic reports on the
          progress of the Extensive production Tests for each Exploratory Well,
          THE ASSOCIATE shall, within the first ten (10) days each month, submit
          to ECOPETROL, a report wherein the development of the operations
          program for the Extensive Production Tests, the results obtained in
          the fulfillment of the specific objectives for the tests and the
          status of income and disbursements are reflected, taking as the basis
          the cumulative values for the accounting closure for the month prior
          to that for which the report is submitted. The information that THE
          ASSOCIATE submits in the periodic reports shall be subject to audit by
          ECOPETROL under the terms provided for in Clause 22 of this agreement.

                           Section Two - Exploitation

CLAUSE 4 - COMMERCIAL FIELD

4.1       THE ASSOCIATE, once it has obtained sufficient information related to
          the development of the Field, shall carry out the necessary studies to
          define the criteria on the petrophysical parameters, improved
          demarcation of the productive area, calculation of Reservoirs and
          commercial feasibility of the Field. Such studies shall be carried out
          by THE ASSOCIATE at its own expense, using the technical methods
          available in country or abroad; when the circumstances require it, the
          appropriate reviews shall be performed.

4.2       For new facilities, expansions or modifications, the basic production
          designs and detail engineering shall be submitted to the consideration
          of the Technical Subcommittee.

4.3       The engineering for the production facilities shall be Contract with
          national companies, unless, in the decision of the Technical
          Subcommittee, their technological complexity requires the involvement
          of a foreign company, preferably in a consortium with a national
          company.

4.4       The final mechanical completion of the wells passing to the Joint
          Account's property must agree upon by the Technical Subcommittee. The
          Reimbursement for such completion for the Exploratory Wells shall be
          made as set forth in Clause 9 (numbers 9.2.1 through 9.2.3) herein.

4.5       With respect to the dry Exploratory Wells, THE ASSOCIATE shall abandon
          them as set forth in the actual legal and environmental provisions.

CLAUSE 5 - SOLE RISK

 
                                                                              46

5.1       The Reimbursement corresponds to two hundred percent (200%) of the
          total cost of the work executed on the account and risk of THE
          ASSOCIATE in the exploitation of the corresponding Field and of up to
          fifty percent (50%) of the Direct Exploration Costs made by THE
          ASSOCIATE on its own account and risk within the Contract Area before
          the date on which ECOPETROL makes a statement with respect to the
          commerciality of the Field, which have not been previously charged to
          a different Field. ECOPETROL shall carry out an audit to determine the
          amount of the reimbursable investments.

5.2       In the same manner as set forth in Clause 11 numeral 11.1 of The
          Contract, THE ASSOCIATE shall submit to ECOPETROL the proposal on the
          projects, programs and Budget, set forth in the Field Development
          Program, for the first time, within sixty (60) calendar days following
          the date of the notification to ECOPETROL by THE ASSOCIATE with
          respect to its intention to exploit the Field under the sole risk
          method and subsequently, latest on the fifteenth (15th) of November of
          each year. ECOPETROL may, with the corresponding justification,
          request clarification or suggest adjustments to the programs, projects
          and Budget submitted by THE ASSOCIATE. When this were to occur, THE
          ASSOCIATE shall submit the explanations to ECOPETROL and, if this were
          the case, shall bear in mind the comments proposed by ECOPETROL in the
          preparation of the revised Development Plan, being understood that in
          all cases, the responsibility and the risk for any operation shall
          fall upon THE ASSOCIATE. The Development Plan for the Fields that are
          exploited under the sole risk method shall be reviewed annually and
          shall be consistent with international oil industry standards for the
          technical, efficient and economic exploitation of each field.

5.3       During the exploitation of a Field under the sole risk method, THE
          ASSOCIATE shall deliver to ECOPETROL, within the first ten (10) days
          of each quarter, a report listing all of the technical, economic,
          legal, administrative and accounting information for the previous
          quarter, such as the entering into of contracts, well completion, flow
          lines, production facilities, measuring systems, storage capacity,
          wells in production, restriction orifices, production reports,
          economic studies, etc. It is understood that the various Clauses in
          The Contract and the clarification in this document are fully
          applicable in the case of Clause 21 of The Contract, Operations for
          the Risk of one of the Parties, for purposes of timely information,
          the technical control of Reservoirs and other administrative aspects.

5.4       Within the first three (3) months of each year, THE ASSOCIATE shall
          contract an external auditor, accepted by ECOPETROL, to review the
          total costs of the work executed for the account and risk of THE
          ASSOCIATE for the exploitation of the respective field and the Direct
          Exploration Costs. The cost of the audit shall be part of the expenses
          that THE ASSOCIATE shall recover. THE ASSOCIATE shall deliver to
          ECOPETROL, immediately after having received them, the reports issued
          by the external auditor and shall maintain at its disposal all of the
          documentation on the costs in which THE ASSOCIATE has incurred in the
          exploitation of the respective field.

CLAUSE 6 - INSPECTION OF THE OPERATIONS

For the inspection and audit of the activities that are carried out in the
Contract Area, ECOPETROL may send its representatives. During their stay in the
area, THE ASSOCIATE or the Operator shall provide lodging and other conditions
designated by ECOPETROL, equal to those provided for its engineers.

 
                                                                              47

CLAUSE 7 - PRODUCTION

7.1       The Operator shall also transmit to the Parties any information of
          improvements in production techniques that it may develop during the
          Exploitation Period.

7.2       For the control and prevention of Hydrocarbon losses and damage to the
          environment, the Operator and the Parties shall apply the appropriate
          measures, with the generally accepted methods used by the oil industry
          in order to avoid Hydrocarbon losses or spills in any way during the
          drilling, production, transport and storage operations.

7.3       The Operator shall maintain a daily control of consumption of
          Hydrocarbons for the operation and shall submit a monthly report of
          these to the Parties, attaching the forms that the Ministry of Mines
          and Energy has for this purpose.

CLAUSE 8 - DISTRIBUTION AND AVAILABILITY OF HYDROCARBONS

8.1       As per Clause 14 (number 14.1) of The Contract, the Operator shall
          carry out the measurement, sampling and quality control of the
          Hydrocarbons produced and maintain the measuring equipment or
          instruments calibrated, as set forth in the standards and methods
          accepted by the oil industry (ASTM, AGA and API) and the legal and
          regulatory provisions in force, performing the appropriate analyses
          and performing the pertinent corrections for the settlement of the net
          volumes of Hydrocarbons received and delivered under standard
          conditions. In order to preserve the integrity, reliability and safety
          of the facilities and the equipment or instruments for control, the
          Operator shall adopt all of the necessary actions and shall maintain,
          for purposes of review by the Parties, the records of periodic
          calibration of such equipment or instruments and of the daily
          measurements of production and consumption of Hydrocarbons and fluids.
          For the case of Extensive Production Testing and for Fields exploited
          under the sole risk, it shall be THE ASSOCIATE's responsibility to
          abide by the obligations assigned to the Operator in this number. The
          volumes of Hydrocarbons that the Operator accepts for its
          transportation shall be determined with the measuring equipment that
          the Operator shall have installed for this purpose at the receiving
          stations or delivery points.

8.2       If at any time the Parties were to ascertain that there has been an
          error in the calculation of the R Factor set forth in Clause 14
          (numbers 14.2.3 and 14.2.4) herein, and that on account of this error
          it turns out that a different R Factor than the one applied is to be
          applied, or that it should have been applied at a different time than
          the one it was applied at, the corresponding correction shall then be
          made, with effect for the year in which the error was incurred in,
          adjusting the percent participation that corresponds to each Party as
          of that year. To perform the respective corrections with regard to the
          distribution of production, a similar procedure to the one described
          in Clause 14 (number 14.7) of The Contract shall be followed.

CLAUSE 9 - SUPPLY OF HYDROCARBONS FOR EXPORT

For purposes of Clause 14 of The Contract, in order to proceed with the export
of Hydrocarbons, THE ASSOCIATE's priority shall be the domestic requirements of
the country, before performing any export of Hydrocarbons, set forth in the
legal provisions that may be in force regarding this matter.

 
                                                                              48

                   PART II - ACCOUNTING AND FINANCIAL ASPECTS

                  Section One - Programs, Projects and Budgets

CLAUSE 10 - EXPLORATION BUDGET AND PROGRAMS

10.1      With respect to the Budget set forth in Clause 7 herein, THE ASSOCIATE
          shall differentiate and detail it, according to the type of
          Exploration Work and to the indication of the currency in which the
          disbursement is forecast to be made. With respect to the reports every
          six months, these shall be submitted within the first ten (10)
          calendar days of the months of January and July. The January report
          shall refer fully to the previous year and the July report to the
          first half of the current calendar year.

CLAUSE 11 - EXPLOITATION PROGRAMS AND BUDGETS

11.1      For purposes of Clause 11 herein, the Operator shall submit the
          proposal for projects, programs and annual Budget, set forth in the
          Development Plan for each Commercial Field, with a detail short- term
          and medium- term outlook. The short- term Budget shall be submitted
          annually and by quarters, in order to facilitate its execution and for
          the preparation of the corresponding treasury flows.

11.2      The Operator shall submit to ECOPETROL the organization chart for the
          operation of each Commercial Field, which shall be agreed to at
          Subcommittee level and approved by the Executive Committee.

CLAUSE 12 - BUDGET PREPARATION AND PRESENTATION

The following norms and procedures constitute the guidelines for the
preparation, presentation and control of the Budgets during the exploitation of
each Commercial Field that may be discovered in the development of The Contract.
The Budget shall be divided into three (3) parts, namely:

12.1      Income Budget

12.2      Expenditures Budget

12.3      Other provisions


CLAUSE 13 - INCOME BUDGET

This Budget, is in turn, broken down into two (2) sections: Current income
Budget and Capital contributions.

13.1      Current Income:

          All funds which regularly accrue in the Joint Account and which the
          Operator can forecast. Such income includes the following items, when
          applicable:

13.1.1    Product sales:

          Income from the sale of Hydrocarbons that the Operator may perform on
          behalf of the Parties, to one of the Parties, or to Third Parties (it
          shall be understood that these sales are different from those made by
          each of the Parties of the production to which they are entitled to).

 
                                                                              49

13.1.2    Services Furnished:

          All services that the Operator furnishes to one of the Parties or to a
          Third Party, in accordance with the rates established by the
          Sub-Committees and approved by the Executive Committee.

13.1.3    Sales of assets or materials:

          Sales of equipment or materials which the Operator makes to the
          Parties or to third parties as provided in Clause 20 (numeral 20.2) of
          this Agreement.

13.1.4    Other income:

          All funds received by the Operator on account on behalf of the Joint
          Account, for items such as the yield on temporary financial
          investments and other income that may be forecast by the Operator.

13.2      Capital Contributions:

          All funds received by the Operator on account of advances made by each
          of the Parties according to their share in The Contract. This income
          is given the name of advances or advance payments (cash calls) and
          shall be handled as set forth in the procedures in Clause 15 (number
          15.5) in this Agreement.

CLAUSE 14 - EXPENSE BUDGET

As a prior step to its preparation, the Executive Committee, through the
respective Subcommittees, shall set the policies and general parameters to be
borne in mind when elaborating the Budget for the respective Commercial Field.
The expense or appropriations Budget is made by the Operational Expenses Budget
and by the Investment Budget, each of which shall be prepared in the currency of
origin for its disbursement in pesos and in dollars of the United States of
America, and shall be consolidated in dollars.

14.1      Operations expense Budget.

          The operations expense budget shall be prepared by the Operator as set
          forth in the norms and policies established by the Executive Committee
          as per Clause 19 (number 19.3.8) of The Contract, and taking as the
          base parameters and economic indicators, that the respective
          Subcommittee has defined as being the most representative for the
          budget execution term.

14.1.1.   Preparation Procedure

          The Operator shall submit the Operating Expenses Budget, identifying
          the requirements of the Joint Operation, and shall detail the expense
          items set forth in the classification indicated in Clause 14 (number
          14.1.2) of this Agreement.

          The cost factors for the assessment of the various activities that it
          plans to carry out during the year to which the Budget refers to,
          shall correspond to the true figures known at the time of preparation
          or, to the best information available. In all cases, the operating
          expense Budget shall be calculated bearing in mind the costs that are
          required by the entities that,

 
                                                                              50

          directly, render services to the Joint Account and, as such, are to be
          assumed one hundred percent (100%) by the Joint Account and charged
          back to the Parties in the proportion that Clause 22 (number 22.6.1)
          of The Contract refers to. The Indirect Expenses that are to be
          assumed by the Joint Account shall be charged to the Parties and shall
          be determined as set forth in Clause 22 (number 22.6.2) of The
          Contract.

14.1.2    Classification for the operating expenditure Budget

          For all presentation purposes, the operating expenditure Budget shall
          be broken down into programs, groups and expenditure concept. The
          expenditure programs within the Budget represent homogeneous
          activities necessary for the development of the Joint Operation,
          including those programs related with the investment projects. The
          expenditure groupings in numerical and continuous order within each
          program and project represent the object of the expense, shall be duly
          supported and explained, and shall be expressed in expenditure
          concepts. Following is a listing of the groups and the main
          expenditure concepts to be used:

14.1.2.1  Personnel expenses - organization chart

          Salaries

          Social Benefits

          Parafiscal contributions

14.1.2.2  Material and operation supplies

          Repair and maintenance materials

14.1.2.3  Contracted Services

          Technical services for the operation and Field maintenance

          Services given by the Operator

          Other Services

14.1.2.4  General Expenditures

          Equipment and office rental

          Shared expenses.

          Insurances.

          Public Utilities.

          Community relations

          Other general expenses.

14.1.2.5  Environmental Management

          Materials

          Contracted services

          Well abandonment

          Area restoration

          Other expenses

14.1.2.6  Added tax value (IVA)

 
                                                                              51

14.1.2.7  Indirect expenses

14.1.3    Calculation base.

          Calculation for the operating expenses Budget shall be based on the
          following:

          The salary and social benefits Budget shall be calculated as set forth
          in the organization charts approved by the Executive Committee and
          their estimate shall be made as set forth in Clause 18 (number 18.1.1)
          herein. The calculation of salaries, social benefits and other special
          extra-legal bonuses originated by national and foreign personnel shall
          be presented separately, according to the origin of the disbursement,
          to be presented to the Subcommittees and the Executive Committee.

          The estimate of the cost of materials and supplies shall be made based
          on actual prices or updated quotations and, in general, with the best
          available information.

          Importation expenses shall be based on the FOB price calculations for
          the materials and/or equipment to be imported, and in their
          preparation the following factors shall be considered: freight,
          insurance, taxes for the use of Colombian ports, import duties and all
          other import expenses.

          The value of maintenance and operational services contracted shall be
          estimated on contracts formalized or to be formalized that the Joint
          Operation may have at the time the Budget is prepared.

          Indirect expenses chargeable to he Joint Account for services that are
          or may be provided by the Operator shall be calculated as set forth in
          Clause 22 (number 22.6.2) of The Contract).

          The purpose for the Budget for environmental expenses is to
          appropriate the annual funds that are required to fulfill
          environmental norms.

          General expenses shall be calculated taking into account the specific
          need of the Joint Operation in the normal course of its work. Shared
          expenses are those expenditures that are to be assumed by the Joint
          Account as a result of the use of facilities and/or services that are
          shared between Fields in the same Contract or with other areas. The
          Budget and the charges made to the Joint Account for general expenses
          shall be recommended by the Subcommittees and approved by the
          Executive Committee. Community Assistance will be budgeted on both the
          request of the interested parties and according to the policies that
          for such effect are established by the Executive Committee. In special
          duly-justified circumstances, the Operator may deal with requests
          according to its procedures, after first notifying each of the Parties
          on such matters

14.1.4    Budget Execution

          Execution of the operations expense Budget shall be made as follows:

14.1.4.1  All services, purchases or contracts that are charged to the Joint
          Account on account of operations expenses shall be budgeted and fully
          justified.

14.1.5    Budget execution control

 
                                                                              52

          The Operator is responsible for controlling the expense budget
          execution and must see that expenses are properly managed.

          Within the first ten (10) calendar days following the end of the
          respective quarter, the Operator shall prepare and submit to the
          Parties a report explaining the results obtained in the Budget
          execution, which shall contain:

14.1.5.1  Expenses accrued to date, itemized as per expense categories set forth
          Clause 14 (number 14.1.2) in this Agreement.

14.1.5.2  Special comments on items which deviate significantly from budget
          average or quarterly estimate.

14.1.5.3  Estimated expenses forecast for disbursements per quarter or for the
          rest of the year.

14.1.5.4  Justification for possible budget additions, adjustments or transfers
          that the Operator may deem necessary or that are proposed by one of
          the Parties.

14.2      Investment Budget

          Constitutes the basic planning, execution and control tool for each of
          the investment programs and projects that the Joint Operation foresees
          it shall carry out, and acts as means to estimate the required funds
          in the execution of the various programs that are approved by the
          Executive Committee.

14.2.1    The investment Budget is composed of items allotted for the following
          items:

14.2.1.1  Purchase of durable goods, materials and services required for the
          execution of the different projects approved by the Executive
          Committee.

14.2.1.2  Purchase of major maintenance equipment and tools destined for the
          Joint Operation shops, in order to ensure the normal development of
          the operations.

14.2.1.3  Construction and/ or expansion of buildings that the operation may
          require, including the facilities destined for workers in the
          Commercial Field's organization chart.

14.2.2    Classification of the Investment Budget

          For all presentation purposes, the Investment Budget shall be grouped
          into programs and projects. Programs, in numerical order within each
          Budget, represent a set of projects to be undertaken which, on account
          of their technical, operational and administrative characteristics,
          merit being controlled in a connected manner and which the Joint
          Operation shall execute through the Operator. Projects, in a numerical
          and continuous order within each program, constitute the set of
          activities that are common to a specific work or job and shall be duly
          supported and explained. Following are the main programs and projects
          to be used:

14.2.2.1  Development Wells

          Locations

          Drilling

          Completion

          Surface equipment, artificial lifting, recompletion and services that
          are capitalizable to the wells.

14.2.2.2  Surface facilities

 
                                                                              53

          Collection system and transfer lines

          Separation and treatment system

          Storage system

          DISPOSAL OF WATER AND CONTAMINANTS

          Pressure maintenance and/ or improved recovery system

          Pump Stations

          Hydrocarbon transport and transfer system

          Other support systems

14.2.2.3  Civil Work

          Roads

          Bridges

          Constructions (camp, workshops, warehouses and offices)

14.2.2.4  Other assets

          Automotive equipment

          Firefighting equipment

          Communications equipment

          Office equipment

          Electromechanical maintenance equipment

          Major tools

          Cleaning or workover equipment

14.2.2.5  Special programs

          Environmental management

          Reservoir studies

          Simulation studies

          Pressure, interference, etc. tests

          Others

14.2.2.6  Warehouses

          For projects.

          For maintenance materials.

 
                                                                              54

14.2.2.7  Each one of the above projects can be broken down into sub-projects as
          needed, using a uniform identification. Final presentation thereof
          shall be made on a project by project basis, according to the
          classification given above and using forms two (2) and four (4)
          established by ECOPETROL for such purpose which may be adapted by
          previous agreement between the Parties, through the corresponding
          Subcommittee. In order to achieve increased clarity in the preparation
          and structuring of the investment Budget, the following considerations
          are to taken into account:

14.2.2.7.1 Maintenance investments

          All investments made in equipment, materials and construction for the
          purpose of keeping facilities in good operating condition as well as
          their original capacity and performance limits.

14.2.2.7.2 Enlargement Investment

          The investments are to be classified as such if their objective is to
          increase the facility capacity, increase the authorized provision of
          automotive equipment, office equipment, etc.

14.2.2.7.3 Special investments

          These include all of those investments which, on account of their
          amount, their importance for the industrial activities or their impact
          on a social or ecological level, merit being classified as special.

14.2.3    Preparation and presentation of the Budget

          Each and every one of the projects within the various programs that
          make up the Investment Budget shall be fully justified and analyzed
          before being included in the general Budget. In this sense, the
          Operator shall prepare an investment draft which shall contain the
          following general information:

          a)   Analysis of needs

          b)   Project justification

          c)   General project description

          d)   Estimated amount of the investment

          e)   Execution chronogram

          f)   Critical path for the project

          g)   Economic evaluation

          The draft with the aforementioned information, plus any other
          information that may be considered necessary for its assessment that
          the Operator may submit, shall be studied jointly by the respective
          Subcommittees, which shall recommend or object to the viability of the
          project, as set forth in the policies drawn up by the Executive
          Committee.

          Once such Subcommittees recommend that a specific project be
          undertaken, the project shall then be included in the Budget to be
          approved by the Executive Committee for the respective Commercial
          Field.

 
                                                                              55

          All of the general information that is submitted to justify each
          project will be compiled in a Technical-Financial Annex, which shall
          serve as support when presenting the Budget for each Commercial Field
          for the approval of the Executive Committee.

14.3      Budget Consolidation.

          Once the Joint Operation's requirements have been defined, the
          Operator will consolidate the Operations Expense and Investment Budget
          for each of the Commercial fields, as set forth in classification in
          Clause 14 of this Agreement (numerals 14.1.2 and 14.2.2 respectively)
          and shall present it to the Executive Committee for final approval.
          The Operation Expense Budget and the investment Budget, will be
          submitted in four columns that will contain the accrual origin in
          United States of America dollars, accrual origin in pesos, a
          consolidated statement in dollars and one in pesos, using the forecast
          of the exchange rate for the respective year for this purpose. In
          addition, the Operator shall prepare, for information purposes, a
          disbursement chronogram that indicates the cash requirements in the
          short term, itemized by quarter and by currency origin, at the level
          of expense group, program and investment project.

14.4      Budget Execution

          In all cases, the Operator is authorized to make all of the operations
          and investment expenses that the Joint Operation requires, set forth
          in the approved Budget and subject to the procedures in this
          Agreement, and those that the Executive Committee may establish. The
          execution of the budget shall be performed by the Operator through its
          various departments and set forth in the previously established
          execution schedules.

          The appropriations assigned to each project shall be identified with a
          previously defined code, which shall be used on all documents that
          originate in carrying out its budgetary execution.

14.5      Budget Control.

          The Operator shall be responsible for carrying out each of the
          investment programs and projects and shall be accountable for the
          execution of these within the conditions under which they were
          approved.

          Similarly, it shall be responsible for the verification that the
          corresponding steps for the performance of the projects are taken
          adequately and on a timely basis. In the event that any problem is
          encountered that prevents the normal development of the projects, it
          shall immediately report it in writing to each of the Parties, in
          order to seek the solution to the difficulty that has been
          encountered. The Operator, as the responsible party for the
          Development Plan, the programs, projects and Budget, shall prepare the
          quarterly reports regarding the budget and technical advance of these,
          which it shall send to each of the Parties for their study and
          subsequent approval by the Executive Committee.

          The quarterly report that is to be prepared and presented by the
          Operator within the ten (10) days following the end of each quarter,
          shall contain the following information:

          a)   Period covered by the report.

          b)   Project code and description.

          c)   Total project budget.

          d)   Financial advances from its start to final date. Investments per
               current-year, accumulated to date.

 
                                                                              56

          e)   Technical progress of the work.

          f)   Quarterly projection of work to be carried up to year-end, for
               information purposes.

CLAUSE 15 - OTHER PROVISIONS

15.1      Budget Additions

          If, during the execution of the Budget, it were necessary to add
          supplementary items above and beyond the appropriations approved by
          the Executive Committee, the Operator shall request the corresponding
          modifications from the Parties in an extraordinary manner and their
          ratification shall be made in the next ordinary meeting of the
          Executive Committee.

          On a periodic basis, requests for budget transfers or additions for
          expenses and investments may be submitted, studied and approved, every
          time the Executive Committee meets on an ordinary basis. However, the
          Executive Committee may meet in an extraordinary manner to deal with
          budgetary issues any time a special situation may so merit.

          Every time that a budget addition is requested, the Operator shall
          initiate, with due lead time, the corresponding procedures, submitting
          the requests to the respective Subcommittee for its study and
          subsequent recommendation to the Executive Committee. In any event,
          the requests for budget additions shall be fully justified, explaining
          the reasons that gave rise to the variation in the appropriated items,
          with their respective technical and financial Annex, as specified in
          Clause 14 (number 14.2.3) in this Agreement.

15.2      Budget transfers

          Those appropriations that are carried over from one year to another as
          a result of those projects that could not be concluded during the term
          for which they were budgeted for reasons such as the lack of
          availability of equipment, importation procedures, bad weather, among
          others, shall be considered to be budget transfers.

          When a project is not totally completed, the value of the budget shall
          become part of the Budget for the immediately following year and shall
          be subjected to approval by the Executive Committee. The presentation
          of these projects within the Budget shall be singled out and
          specifically identified and shall be considered in the preparation of
          the disbursement schedule that Clause 15 (number 15.4) in this
          Agreement refers to. In addition, budget transfers shall give rise to
          an Annex wherein the cause for the budget transfer shall be explained,
          as well as the way in which it is to be executed during the following
          term.

15.3      Approvals

          The Executive Committee shall be entity entrusted with approving the
          programs, projects and the Budget recommended by the Subcommittees,
          and with authorizing the Operator to purchase or contract, for the
          account of the Joint Account, all of those goods and services that are
          required by Joint Operation.

15.4      Disbursement Schedule

          Together with the overall Budget, the Executive Committee shall
          approve the Budget by quarters submitted by the Operator and
          recommended by the Subcommittees for the immediately following year,
          and which shall constitute the basis on which the monthly cash calls
          shall be calculated.

 
                                                                              57

15.5      Cash Calls

          The requests for advances of funds or cash calls shall be made by the
          Operator to each of the Parties, based on the obligations entered into
          by the Joint Operation for the month immediately following the one of
          the request, referring to the quarterly Budget approved by the latest
          Executive Committee and the forecast cash flows. The management of the
          advances or cash calls that this Clause refers to shall be made
          through a bank account that the Operator shall establish for such
          purpose, for the exclusive use by the Joint Operation. In the
          preparation of the requests for advances or cash calls, the following
          requirements are to be followed:

15.5.1    Preparation

          Based on the approved Budget and the obligations entered into on
          behalf of the Joint Operation for the following month, the Operator
          shall prepare the requests for advances, bearing in mind the following
          conditions:

15.5.1.1  The request shall be made by the Operator separately for each of the
          Commercial Fields being exploited in the Contract Area, identifying
          operations and investment expenses, in pesos and in United States of
          America dollars, depending on the origin in which the disbursement is
          forecast to be made.

15.5.1.2  The request shall be by programs and projects, in the case of
          investments, and by group and expense item in the case of expenses, in
          the same manner in which they are listed in the Budget approved by the
          Executive Committee.

15.5.1.3  For each of the projects and expense items listed in the request for
          advance funds to be considered, they must be included in the Budget;
          otherwise, they shall be deducted from the total amount requested.

15.5.1.4  The projects and expense groups shall necessarily have a sufficient
          Budget.

15.5.2    Presentation

          The request for funds (cash call) shall be made by the Operator within
          the first twenty (20) days of the immediately preceding month to the
          month in which the contributions are to be made. If the Operator were
          to have to make extraordinary disbursements, that are not provided for
          at the time that the monthly advance cash call is made, it shall
          request special advances in writing from the Parties, covering their
          respective share in such disbursements.

          Every request for an advance or cash calls shall be submitted for
          processing in the form previously agreed to by the Parties in the
          respective Subcommittee and shall show the actual and estimated
          charges for investments and expenses and shall comprise the following
          documents:

15.5.2.1  Letter of Request

15.5.2.2. Request format, wherein the financial status for each of the programs,
          projects and expense items is shown on the date on which the request
          is made.

15.5.2.3. General comments of a technical nature in which the destination of the
          requested funds is identified, within the main projects or expense
          items.

 
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                       Section Two - Accounting Procedure

CLAUSE 16 - ACCOUNTING PROCEDURE

In each half- yearly report that Clause 10 (number 10.1) in this Agreement
refers to, THE ASSOCIATE shall submit to ECOPETROL the direct Explorations Costs
for the period of the report that could be subject to reimbursement in agreement
with Clause 9 of The Contract, with the indication of the currency in which the
disbursement was made and a consolidated statement in United States of America
dollars. In addition, in this same report, THE ASSOCIATE shall submit the
preliminary cumulative value that is to be included as variable "A" for the
calculation of the R Factor that Clause 14 (numbers 14.2.3 and 14.2.4) in The
Contract refers to, clearly showing the parameters used for the calculation, It
is understood that the Direct Exploration Costs shall only be definitive once
they have been audited and accepted by ECOPETROL.

During exploitation of each Commercial Field, the credits and charges incurred
in by the Operator in development of the Joint Operation, shall be charged to
the Joint Account set forth in the provisions of Clause 22 of The Contract. The
Joint Account shall be divided into three main items, as stated below, for each
Commercial Field discovered in performance of The Contract, and the consolidated
statement, when there is more than one Commercial Field in the Contract Area:

16.1      General Joint Account (clarification, charges and entries).

          This account shall reflect all of the movements, as is expressed later
          on, and shall be fully distributed on a monthly basis between the
          Parties, in a share of fifty percent (50%) for ECOPETROL and fifty
          percent (50%) for THE ASSOCIATE with respect to the investments, and
          in the proportion that is set out in Clause 22 (numbers 22.6.1 and
          22.6.2) in The Contract for Direct Expenses and Indirect Expenses.
          That is to say, it shall serve as the basis for monthly billing, set
          forth in the provisions of this procedure, ending every month with a
          balance of zero (0).

          All of the accounting operations related with this account shall be
          booked by the Operator in Colombian pesos, set forth in the laws of
          the Republic of Colombia, but the Operator may, in turn, keep ledgers
          wherein it shows the disbursements it may incur in any currency other
          than Colombian pesos.

16.2      Joint operations current account.

          This account shall record the cash calls received from the Parties and
          the charges or credits corresponding to the invoicing of these and, at
          all times, shall show a balance in favor or against each of the
          Parties, as appropriate. This account shall be divided into two sub-
          accounts, set forth in the monetary origin of the transaction, namely:
          Colombian pesos and United States of America dollars.

16.3      Joint property records.

          Through the Joint Account, the Operator shall keep a record of all of
          the assets acquired that are subject to inventory, indicating in
          detail the kind of asset, the date of purchase and its original cost.

          The accounts mentioned in Clause 16 (numbers 16.1, 16.2 and 16.3) of
          this Agreement shall constitute part of the Operator's official
          accounting records, but without mixing them with accounting records
          other than those of the Joint Account. The three aforementioned
          records shall be subject to Clause 22 of this Agreement.

 
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16.4      The Operator shall send to ECOPETROL on a monthly basis, together with
          the information cited in Clause 17 (number 17.2.2) of this Agreement,
          in an independent Annex, the parameters and the calculation of the R
          Factor, set forth in the provisions of Clause 14 (number 14.2.3 and
          14.2.4) of the Contract. The Operator shall keep in its files and at
          the disposal of the Parties, all of the support documentation for the
          charges made to the variables that are included in the calculation of
          the R Factor for each Commercial Field.

CLAUSE 17 - ADVANCES, INVOICES AND ADJUSTMENTS

17.1      Advances.

          Despite the fact that the Operator shall pay and clear, initially, all
          of the costs and expenses incurred set forth in The Contract, charging
          each Party with its percentage share, it is agreed that, to finance
          such share, each Party, at the Operator's request, shall advance to
          the latter, from the moment of acceptance by the Parties of the
          existence of a Commercial Field and, latest within the first five (5)
          days of every month, the proportion of the disbursements for the
          account of each and that were estimated for the operations of the
          given month. These advances shall be made in United States of America
          dollars and in Colombian pesos, set forth in the requirements
          established in the approved Budget by quarter and in the forecast cash
          flow for each Commercial Field and in the requests for advances (cash
          calls) prepared by the Operator, set forth in Clause 15.5 in this
          Agreement.

17.2      Invoices.

17.2.1    The Operator shall prepare an initial invoice for ECOPETROL after the
          acceptance of the existence of each Commercial Field, in the amount of
          fifty percent (50%) of the Direct Exploration Costs incurred in before
          the date of ECOPETROL's statement regarding the commerciality of each
          new Commercial Field discovered, that is audited and accepted by
          ECOPETROL set forth in Clause 22 of this Annex and that has not
          previously been charged to another Field. In the Direct Exploration
          Costs for the Exploratory Wells, all of the direct costs incurred in
          drilling, termination and testing shall be included for the case of
          Exploratory Wells that are producers, and the cost of drilling and
          abandonment of the Exploratory Wells that are dry. Such invoice shall
          also include fifty percent (50%) of the costs of additional work that
          Clause 9 (number 9.3) in The Contract refers to, if applicable. For
          the monthly update of the values that the paragraph in Clause 9
          (number 9.2.2) in The Contract refers to, one twelfth (1/12th) of the
          value resulting from averaging the percent annual variation available
          for the last two (2) years in the consumer price index for
          industrialized countries shall be used, taken from the "International
          Financial Statistics" of the International Monetary Fund (page S63 or
          its replacement) or, if not available, the publication that may be
          agreed to by the Parties. This invoice shall include a summary of the
          costs, expressing separately the currency in which the investments and
          the expenses were made, that is to say, in Colombian pesos or in
          United States of America dollars.

17.2.2    Set forth in Clause 22 (number 22.2) of The Contract, the Operator
          shall charge the Parties, within the ten (10) days following the last
          day of each month, their proportional share of the investments and
          operational expenses during that month. In the invoices, the details
          that may be available in the Operator's accounting procedures shall be
          noted, including a detailed summary of accounts, expressing separately
          the investments and operational expenses originating in pesos and
          those originating in United States of America dollars.

 
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17.2.3    Investments and expenses during the Retention Period.

          The costs and expenses made by THE ASSOCIATE during the Retention
          Period to establish the commercial viability of a Gas Field shall be
          assumed by THE ASSOCIATE in their entirety.

17.3      Adjustments

          The invoices shall be adjusted between the Operator and the Parties
          after deducting the advances in United States of America dollars and
          in Colombian pesos.

          When the advances made by either of the Parties differ from their
          share in the actual costs determined for each period, the difference
          in pesos and/ or in dollars shall be adjusted in the invoices for the
          following month.

17.4      Acceptance of the invoices.

          The payment of the invoices shall not affect the right of the Parties
          to protest or inquire about the accuracy of these, set forth in the
          terms of Clause 22 (number 22.7) of The Contract.

CLAUSE 18 - CHARGES

Subject to the limitations that are set forth below, the Operator shall charge
the Joint Account and invoice each Party, set forth in the percentages
established in Clause 16 (number 16.1) of this Agreement, for the following
expenses:

18.1      Labor.

18.1.1    National and foreign employees

18.1.1.1  The salaries of the Operator's employees or workers that are working
          directly for the benefit of the Joint Operation, including the payment
          for overtime, nighttime surcharge, payment of Sundays and holidays and
          their respective compensatory rest periods and, in general, all
          payments that constitute salary.

18.1.1.2  Social benefits, compensation, insurance, subsidies, bonuses and, in
          general, any benefit that is not salary and that is awarded to the
          workers and/ or their relatives or dependents, whether it is granted
          individually or collectively, or whether it is granted to them by
          virtue of the labor contract, the law, arbitration conventions or
          sentences, with the exception of housing plans, with respect to which
          a special agreement shall be required. Among the aforementioned, one
          can cite, among others, the following: severance pay, vacation,
          retirement and disability pensions, benefits to retirees and their
          relatives, benefits and aid caused on account of professional or non-
          professional illnesses and accidents, service bonuses, life insurance,
          compensation or indemnity on account of contract cancellation, labor
          union benefits, all types of bonuses, subsidies and aid, for savings,
          health, education and, in general, for social security. In addition,
          the contributions to the Colombian Family Welfare Institute (ICBF),
          National Vocational Training Service (SENA), Social Security Institute
          (ISS) and other similar ones that may be established.

18.1.1.3  All expenses incurred for the benefit of the Joint Operation with
          respect to the maintenance and operation of the camp, its offices and
          service facilities at the site. Among these, the following expenses
          are also included, not in a restrictive manner but rather as a
          listing, as indicated below, whether the services are rendered for
          free or for payment, or

 
                                                                              61

          whether they be for the workers, their dependents or relatives, of
          that these be provided in a voluntary or compulsory manner.

          Such services include the following:

          18.1.1.3.1    Medical, pharmaceutical, surgical and hospital services.

          18.1.1.3.2    Camp and full services thereof, including its repairs
                        and sanitation.

          18.1.1.3.3.   Training and educational expenses.

          18.1.1.3.4    Workers recreation.

          18.1.1.3.5    Maintenance of schools for the workers, their children
                        and dependent relatives.

          18.1.1.3.6    Safety, social work and camp surveillance.

18.1.1.4  It is understood that the expenses and services outlined in the
          aforementioned Clause 18 (numbers 18.1.1.1, 18.1.1.2 and 18.1.1.3)
          shall be for the account of the Joint Account when, by provisions of
          law, labor agreements and/ or arbitration sentences or voluntarily,
          they are applicable in a direct or by extension to contractors,
          subcontractors, intermediaries and/ or their workers who are working
          for the benefit of the operation.

18.1.1.5  With respect to retirement pensions and disability compensation, the
          Executive Committee shall proceed set forth in the provisions of the
          Social Security and Pension System established by Law 100 issued in
          1993 and other norms that regulate it or substitute it.

18.2      Materials, equipment and supplies

          The materials and supplies that are necessary to undertake the
          operations shall be charged to the Joint Account. The materials and
          supplies shall be purchased for warehouse inventories for the projects
          or for the maintenance materials warehouse when it is convenient for
          the operation and shall be credited to it, at cost in the books, as
          they are withdrawn from the warehouse to be used. The capital
          equipment units shall be charged directly to the Joint Account. The
          book cost is determined as follows:

18.2.1    Book cost

          It is understood that book cost means the last average price of the
          inventory in the warehouse, based on the cost obtained in the import
          liquidation sheets, or the local cost, as follows:

18.2.1.1  For imported materials, equipment and supplies, the book cost shall
          include the net price on the manufacturer or vendor's invoices, the
          cost of purchases, freight and delivery charges between the supply
          point and the loading point, freight to the entry port, insurance,
          import duties or any other tax, handling from the vessel to the
          customs warehouse and transport to the site of operations.

18.2.1.2  For materials, equipment and supplies purchased locally, the book cost
          shall include the seller's net invoice, plus sales taxes, procurement
          expenses, transport, insurance and other similar costs paid to Private
          Parties, from the purchase location to the site of operations.

18.2.1.3  the materials shall be charged to the Joint Account set forth in the
          monetary purchase origin, so that it can similarly be charged to each
          Party.

 
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18.2.2    Return of materials to Joint Operation's warehouses, as the case may
          be.

          The materials, equipment and supplies that are returned to the
          warehouses of the Joint Operation shall be valued as follows:

18.2.2.1  New materials, at book cost.

18.2.2.2  Second- hand materials, in good condition and that can render service,
          as well as equipment that can subsequently be used without repairs,
          can be reincorporated by the Operator to the corresponding warehouse
          at one hundred percent (100%) of their cost on the books, crediting
          the respective project in the Joint Account.

18.2.2.3  Second- hand equipment and materials which, when repaired, can be
          used, can be reincorporated by the Operator to the corresponding
          warehouse at one hundred percent (100%) of their cost on the books.

          These materials, upon being used again, shall be charged at the new
          book value.

18.2.3    Sales by the Parties. The materials, equipment and supplies sold by
          the Parties to the Joint Operations shall be valued at the replacement
          price agreed to by the Parties. The corresponding transport costs
          shall be for the account of the Joint Operation. In the cases of sales
          by the Joint Operation to one of the Parties, these shall be valued at
          the replacement price agreed to by the Parties, and the transport
          costs shall be for the account of the purchasing Party.

18.2.4    Local transport of materials

18.2.4.1  For materials shipped through an external transporter, at cost, set
          forth in the invoice issued by the transportation company.

18.2.4.2  For materials sent in transportation units owned by the Parties, at
          the fees calculated to cover the actual costs, pursuant to the
          procedure established in Clauses 18 (number 18.4) and 23 (number
          23.1.1) in this Agreement.

18.2.5    Materials for projects that have been cancelled, postponed or changed.
          When there is an accumulation of inventory in the warehouse on account
          of the change, deferral or cancellation of projects approved by the
          Parties, the cost of such materials shall be charged to the warehouse
          account. These materials may be sold to Private Parties set forth in
          the provisions of Clause 20 (number 20.2.1) in this Agreement and what
          is obtained shall be credited to the Joint Account. Surplus materials
          from projects, purchased with direct charge. Once the project has been
          finalized, these should be reincorporated to the warehouse and
          credited to the corresponding projects. The Operator shall advise the
          Parties of this operation at the ordinary meetings of the Financial
          Subcommittee when this were to occur.

18.3      Travel expenses

          All travel expenses incurred on behalf of the Joint Operation for
          Colombian or foreign personnel, such as transport, hotels, food, etc.

18.4      Service units and facilities

          The value of the service rendered for equipment and facilities that
          are owned by any of the Parties shall be charged to the Joint Account
          at reasonable rates, as provided for in Clause 23 of this Agreement.
          The rates that are established shall be applied until such time as
          they are modified by mutual agreement.

 
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18.5      Service

          Services rendered by Private Parties, including contractors, to the
          Joint Operation, at their actual cost. Similarly, technical services,
          such as laboratory analyses and special studies, require the
          recommendation of the Technical Subcommittee and approval by the
          Executive Committee.

18.6      Repairs

          Expenses for repairs made to the equipment or elements of either of
          the Parties, destined for use by the Joint Operation, unless these
          costs have already been charged through leasing or in another manner.

18.7      Litigation

          Expenses to the Joint Operation regarding the threat of effective
          lawsuits (including the investigation and collection of evidence),
          lifting encumbrances, sentences, legal claims and procedures for
          claims, compensation for accidents, settlement for death and funeral
          expenses, provided that these charges have not been recognized by an
          insurance company or covered by the proportional surcharges mentioned
          in Clause 18 (number 18.1.1) in this Agreement. When legal services
          are provided in these matters by permanent or external counsel, whose
          total or partial compensation is included in indirect costs, no
          additional charges shall be made for their services, but rather, these
          shall be charged to Direct Expenses incurred in such procedures.

18.8      Damages and losses of Joint Operation property and equipment.

          All costs and expenses necessary to replaced or repair damage or
          losses caused by fire, flood, storm, theft, accident or any other
          similar event. The Operator shall notify the Parties in writing
          regarding the damages or losses occurred, as soon as possible.

18.9      Taxes and rentals

          The value of all taxes paid or accrued in carrying out the Joint
          Operation shall be charged to the Joint Account, in keeping with the
          existing legal provisions.

          The value of leases, right of way and indemnity for improvements, the
          occupation of land, etc. shall also be charged to the Joint Account.

18.10     Insurance

18.10.1   Premiums paid for insurance taken out for the benefit of the
          operations that The Contract refers to, together with all of the
          expenses and indemnities accrued and paid, an all losses, claims and
          other expenses that have not been covered by the insurance companies,
          including the legal services mentioned in Clause 18 (number 18.7) in
          this Agreement, shall be charged to the Joint Account.

18.10.2   When no insurance exists, the actual costs incurred, mentioned above,
          and paid for by the Operator, shall also be charged to the Joint
          Account.

CLAUSE 19 - CREDITS

19.1      Incomes

          The Operator shall credit the Joint Account for incomes resulting from
          the following items:

 
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19.1.1    Collection of insurance with respect to the Joint Operation, the
          premiums for which have been charged to such operation.

19.1.2    Sale of geological information, when previously authorized by the
          Parties, provided that the collection of such information was charged
          to the Joint Operation.

19.1.3    Sale of property, plants, equipment and materials owned by the Joint
          Operation.

19.1.4    Rental payments received, the reimbursement for claims of customs
          duties and tax or transportation, etc. shall be credited to the Joint
          Operation if such lease payments or reimbursements pertain thereto.

19.1.5    Any other income from operations or contractual income authorized by
          the Executive Committee on behalf of and for the service of the Joint
          Account.

19.2      Warranty

          In the event of defective equipment, once the Operator has received
          the corresponding adjustment from the manufacturer or its agents,
          credit shall be made to the Joint Account.

CLAUSE 20 - DISPOSAL OF EXCESS  MATERIALS AND EQUIPMENT.

20.1      Excess materials and equipment

          The Operator shall advise the Parties in writing regarding the Joint
          Operation's surplus materials and equipment, thirty (30) days after
          finalizing the inventory that Clause 21 of this Annex refers to. Each
          of the Parties shall designate a representative to review the status
          and establish which materials or equipment are to be put up for sale.
          For the purchase of the useable materials or equipment, ECOPETROL
          shall have the first option and THE ASSOCIATE the second option; these
          options shall be exercised within sixty (60) days following the date
          of notification. In the event that they are not purchased by these,
          the Operator shall report it in writing and they shall be put up for
          auction.

20.2      Disposal of capital equipment and materials.

          Set forth in Clause 22 (number 22.9) of The Contract, the Operator may
          sell the materials and equipment owned by the Joint Account under the
          following conditions:

20.2.1    The sale by the Operator to Private Parties of major materials and
          capital equipment that may have been charged to the Joint Account
          shall only be made with the approval of the Executive Committee. The
          revenue shall be credited to the Joint Account. Only for this
          particular purpose, major materials are defined as any asset that has
          an estimated sales value that is greater than the amount that is
          approved by the Executive Committee for such purpose, as a result of
          the request submitted in advance by the Operator, set forth in Clause
          19 (number 19.3.2) of The Contract.

20.2.2    Minor materials charged to the Joint Account and not required for the
          operation or which are returned to the warehouse, may be sold by the
          Operator and its proceeds shall be credited to the Joint Account.

20.2.3    For any abandonment and dismantling of the assets whose cost or
          estimated value is greater than the amount approved by the Executive
          Committee for this purpose, as a result of a request presented
          beforehand by the Operator set forth in Clause 19 (number 19.3.2) of
          The Contract, prior authorization by the Executive Committee is
          required.

 
                                                                              65

20.2.4    Neither of the parties is under the obligation to purchase the
          interest of the other in surplus materials, whether they are new or
          second- hand. The withdrawal of major items of surplus materials, such
          as towers, tanks, motors, pumping units and piping shall be subject to
          approval by the Executive Committee. However, the Operator shall have
          the right to dispose of the damaged or useless materials in any
          manner.

20.2.5    All of the taxes that may be caused on account of the sale or transfer
          of materials or assets from the Joint Account shall be the Operator's
          responsibility, for the account of the Joint Account.

CLAUSE 21 - INVENTORY

At ECOPETROL's request, the Operator shall submit the necessary information to
perform the inventory analyses in warehouses and the Parties shall agree upon
their joint participation in inventory control. The Operator shall provide the
ease and cooperation that ECOPETROL may require to carry out the physical task
of accounting for the fixed assets at the facilities at each Commercial Field,
prior agreement with the respective Subcommittee, regarding the date, time and
number of persons who are to perform the inventory.

21.1      Inventory and Audit

          Set forth in the existing norms and, at least once every three (3)
          years, the Operator shall perform an inventory of all of the Joint
          Operation assets.

21.2      The notification of the intention of carrying out an inventory shall
          be given by the Operator to the Parties in writing with at least one
          (1) month advance notice to the date on which it is to commence, so
          that the latter can be present. However, non- attendance by one of the
          Parties to carry out the inventory does not jeopardize or reduce the
          validity and effectiveness of the inventory thus carried out by the
          Operator.

21.3      The Operator shall provide the Parties with a copy of each inventory,
          with a copy of its reconciliation, and shall submit the results to the
          Subcommittees of the Joint Operation, which shall study the report and
          shall propose the actions to be taken in this regard.

21.4      Inventory adjustments for surpluses or shortfalls shall be brought to
          the attention of the Executive Committee for its consideration and
          approval.

21.5      With due timing and through midnight of the last day of the term set
          forth as the Exploitation Period, the Parties shall carry out
          inventories of the materials that are in the warehouses and that are
          the property of the Joint Account, as well as of the products produced
          that are in the collection batteries, the pipes that lead from them to
          the storage tanks and in the storage tanks, all within the
          exploitation sites, and such inventories shall be distributed between
          the Parties, after having deducted the royalties, in the same manner
          provided for in Clause 13 of The Contract.

CLAUSE 22 - AUDIT

Subject to Clause 17 (number 17.4) in this Agreement, the Parties may, through
their own auditors or their representatives, examine and control the Operator's
records related to the joint properties and the operation of these. Similarly,
ECOPETROL may carry out audits to the records of the Fields exploited by THE
ASSOCIATE under the sole risk method. In order to facilitate the review of the
Direct Exploration Costs that Clause 17 (number 17.2.1) of this Agreement refers
to, once THE ASSOCIATE or the Operator advises the Parties regarding the date on
which any reimbursable

 
                                                                              66

Exploration Work is to commence, THE ASSOCIATE or the Operator shall allow that,
prior timely notification, ECOPETROL auditors periodically examine the accounts
for such Exploration Work, in such a way that, when the existence or not of a
Commercial Field is accepted, the aforementioned review has already been
performed under the best conditions of timing and location. In the audit reviews
that are provided for in this Agreement, in addition to the representatives for
the Parties, representatives from the Comptroller General of the Republic may
also intervene, if such organization deems it convenient for this to be the
case. The costs and expenses of such review shall be for the account of the
interested Party.

22.1      Once the audit report is delivered, THE ASSOCIATE or the Operator
          shall have a maximum six (6) month term in order to respond and
          support the objections made. Once this term expires, without the
          Operator having responded, it shall be considered that the objections
          have been accepted and consequently, all shall proceed accordingly.
          The notes or observations from the audit that are not resolved within
          the three (3) months following this term shall be resolved set forth
          in Clause 20 of The Contract.

CLAUSE 23 - RATE AND FEE CHARTS

23.1      Subject to the aforementioned limitations, the services rendered to
          the Joint Operation for facilities that are ECOPETROL or THE
          ASSOCIATE's exclusive property, shall be charged at the corresponding
          rates, in order to allow for the recovery of the actual costs. Such
          costs shall include the normal costs for work, salaries, social
          benefits, depreciation and other operational expenses, bearing the
          following in mind:

23.1.1    The rate for transportation units that is normally calculated, using
          as a basis the time of operation, shall include the time required for
          loading and unloading, the time elapsed waiting to be loaded, and the
          waiting time for unloading to take place. Charges for transportation
          units assigned to the operation shall include Sundays and holidays,
          except when the vehicles are out of service for repairs.

23.1.2    When the material for aforementioned operations is transported
          together with other materials by river or land fleet that is the
          exclusive property of ECOPETROL or of THE ASSOCIATE, the charge shall
          be made based on the tonnage transported, at rates that are not any
          higher than commercial ones.

23.2      Rates for the lease of equipment and tools

          The procedure to calculate the lease rate for equipment and tools that
          are the property of the Parties, excluding drilling equipment and
          major equipment, where the rates are to be calculated separately and
          approved by the Executive Committee, shall comprise a value for
          depreciation plus a value for maintenance, and the procedure shall be
          as follows:

23.2.1    Description, model, number, date of purchase and original cost of the
          equipment.

23.2.2    Site where the equipment is to be used, reasons for leasing it and
          estimated time of use.

23.2.3    Value of the annual depreciation for the equipment, calculated based
          on the depreciated book value and its estimated remaining useful life
          (the minimum book value considered shall be ten percent (10%) of the
          original cost, that is to say, the salvage value).

23.2.4    The annual maintenance value shall be a percentage of the original
          cost, which may vary between five percent (5%) for new equipment and
          up to fifteen percent (15%) for equipment

 
                                                                              67

          that has already been depreciated, depending on the time it has been
          depreciated. For example:

          Equipment A: (Five [5] years of life)

          Time (in years) 1, 2, 3, 4, 5: equipment one hundred percent (100%)
          depreciated

          Maintenance: 5, 6, 7, 8, 9: 15%.

          Equipment B: (Ten [10] years of life)

          Time (in years) 1, 2, 3, 4, 5, 6, 7, 8, 9, 10: equipment one hundred
          percent (100%) depreciated.

          Maintenance: 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15: 15%.

          Note: The time for useful life and depreciation shall be those that
          are established by accounting techniques applicable to oil operations.

23.2.5    The rate for annual lease is equal to the value provided for in Clause
          23 (number 23.2.3) of this Agreement, plus the one established in
          number 23.2.4 of this same Clause.

23.2.6    The rate for monthly or daily lease of equipment shall be equal to the
          provided for in Clause 23 (number 23.2.5) in this Agreement, divided
          by twelve (12) or by three hundred and sixty five (365), as
          appropriate.

23.2.7    No lease charge shall be made for "stand by," but it shall be charged
          to Private Parties.

23.2.8    The aforementioned lease rates do not include transport, installation,
          operation, lube and fuel costs, which shall be charged to the
          operation that the equipment is destined for.

23.2.9    The aforementioned lease rates shall be applied to the possible use of
          one hundred percent (100%) equipment and tools owned by the operation,
          THE ASSOCIATE or the Operator, and vice versa.

23.2.10   In every case, the Subcommittees shall recommend to the Executive
          Committee the use of leased equipment and may apply the rate system
          that the latter may recommend.

23.2.11   The lease rate for equipment shall be calculated in United States of
          America dollars, but for the respective collection, it shall be
          invoiced in Colombian pesos, at the rate that the Parties may agree
          to.

23.3      Rate for rental for warehouses and fixed assets

          For the calculation of the lease rate for warehouses that are the
          property of one of the Parties or of the Joint Account, for their
          complete or partial use, a procedure shall be followed which shall be
          agreed to by the respective Subcommittee.

CLAUSE 24 - CONTRIBUTIONS IN KIND

ECOPETROL or THE ASSOCIATE shall contribute in kind, those materials that they
may consider convenient, set forth in the agreements that may be established by
the Parties.

 
                                                                              68

             PART III - ADMINISTRATIVE ASPECTS AND OTHER PROVISIONS

                        Section One - Executive Committee

CLAUSE 25 - CONDITIONS FOR FUNCTIONING

For the exercise of its functions, the Executive Committee shall fulfill the
conditions provided for in Clause 19 of The Contract, as indicated below:

25.1      The Executive Committee shall be alternately chaired by the Parties,
          beginning with ECOPETROL.

25.2      The Executive Committee shall name its Secretary, alternating between
          the persons designated by ECOPETROL and by THE ASSOCIATE. The Chair
          and the Secretary shall fall n the same Party.

25.3      The Executive Committee shall meet in an ordinary manner during the
          months of March, July and November, and in an extraordinary manner
          every time that the Parties and/ or the Operator may consider it
          necessary. At such meetings, the exploitation strategy being carried
          out by the Operator shall be reviewed, as well as the Development Plan
          and the immediate programs and plans. The Executive Committee may be
          attended by the advisors that each of the Parties may consider
          convenient, it being understood that each of the Parties shall bring
          along the smallest possible number of persons.

25.4      For the ordinary meetings of the Executive Committee, the
          representative entrusted with presiding the following meeting shall
          notify the other representatives (the principal and his alternates) of
          the other Party and of the Operator, with ten (10) days advance notice
          of the date of the meeting, the venue and the issues to be discussed
          (agenda).

25.5      Pursuant to Clause 18 (number 18.3) of The Contract, both for the
          regular meetings as well as the extraordinary meetings of the
          Executive Committee, the issues to be discussed that have not been
          included in the agenda may be considered during the meeting, prior
          acceptance by the representatives of the Parties on the Committee.

                          Section Two - Sub Committees

CLAUSE 26 - CREATION OF THE SUBCOMMITTEES

In development of the function provided for in Clause 19 (number 19.3.4) of The
Contract, the Executive Committee may create the advisory Subcommittees that it
may consider necessary. In any case, the Executive Committee shall designate a
Technical Subcommittee and Financial Subcommittee.

These Subcommittees shall be the organizations established to control and define
the technical, financial and legal considerations of The Contract before the
Executive Committee and shall be governed by The Contract and this Agreement.
Each Subcommittee shall establish its own internal regulation, approved by the
Executive Committee.

CLAUSE 27 - RIGHTS AND OBLIGATIONS

 
                                                                              69

27.1      Set forth in Clause 10 of The Contract, the Operator shall conduct the
          Joint Operations itself, or through its contractors, under the overall
          guidance of the Executive Committee. In any event, the Operator shall
          be responsible for the Joint Operation, set forth in the provisions of
          The Contract.

27.2      The following are among the Operator's obligations:

27.2.1    The preparation, presentation and implementation of the Development
          Plan, the Budgets and Exploration and Exploitation Programs, as well
          as for the approval of expenses.

27.2.2    The direction and control of all statistics and accounting services.

27.2.3    Planning and obtaining all services and materials required for the
          proper development of the Joint Operation.

27.2.4    Providing all the technical skill and consulting required for the
          efficient development of the Joint Operation.

27.2.5    Planning the tax effects and fulfilling all tax obligations that may
          be derived from the operations performed and providing the timely
          report to the Parties for the proportion that corresponds to each of
          them.

27.2.6    Establishing a bank account for the exclusive management of the Joint
          Account resources.

27.3      The Operator may not establish any encumbrance whatsoever on the
          properties of the Joint Operation.

27.4      The resignation or removal of the Operator may be made without
          prejudice of any right, obligation or responsibility acquired during
          the time in which the Operator acted as such; if the Operator resigns
          or is removed before fulfilling the obligations established in The
          Contract, it may not charge the Joint Account for the costs and
          expenses in which it incurred on account of the change. But if the
          Executive Committee were to approve them, these charges and expenses
          may then be charged to the Joint Account.

27.5      Once the Operator is notified of his removal or of the acceptance of
          its resignation, for the transfer or responsibilities, ECOPETROL shall
          audit the Joint Account and shall perform an inventory of all of the
          properties of the Joint Operation. Such inventory shall be used for
          purposes or return and accounting for the procedure of such transfer
          or responsibilities. All costs and expenses incurred with respect to
          such inventory and audit shall be for the account of the Joint
          Account.

27.6      The Operator shall not be responsible for any loss or damage on
          account of the Joint Operation, unless such damages or losses are the
          result of:

27.6.1    Gross negligence by the Operator

27.6.2    Failure to obtain and maintain any of the insurance required in Clause
          33 of The Contract, except when the Operator has made all possible
          efforts to obtain it and maintain them, and the results of such
          efforts have been fruitless, a situation which the Operator must first
          communicate to the Parties in writing.

 
                                                                              70

                      Section Four - Contracting Procedure

CLAUSE 28 - SUPPLIER REGISTRATION AND BIDDERS LIST

28.1      It shall be the Operator's responsibility to maintain an updated
          registration of vendors, classified pursuant to the various activities
          that the operation may require, as well as to establish the
          qualification criteria for the firms to be included in the bidders'
          list. The respective Subcommittee may request a review of the criteria
          before approving the bidders' list.

28.2      ECOPETROL may review the Operator's vendor registration on an annual
          basis and may suggest to it, through the respective Subcommittee, that
          vendors be included or excluded from the registration. Despite the
          above, ECOPETROL may, at any time, by means of a request that duly
          explains the motives, request the withdrawal of persons or entities
          from the registration.

28.3      In all cases that imply soliciting proposals to contract, the vendor
          registration shall be consulted, recording a statement on the
          corresponding document.

28.4      The persons or entities that are included in the vendor registration
          shall accredit technical, moral and economic solvency, in addition to
          the experience, not only of the company but that of its partners as
          well, and also that of its technicians that are permanently hired by
          it.

28.5      Set forth in the aforementioned criteria, the Operator shall establish
          a registration of qualified vendors, which shall be updated
          periodically, set forth in their performance.

28.6      In the Fields that are exploited under the sole risk, THE ASSOCIATE
          shall have the right that is provided for in Clause 10 (number 10.6)
          of The Contract.

CLAUSE 29 - BIDDING PROCESS

29.1      Responsibility: The Operator shall be responsible for preparing the
          Request for Proposals in due time, and shall submit it to
          consideration by the corresponding Subcommittee.

29.2      The list of those invited to submit proposals shall be prepared based
          on the information in the Registration of Vendors.

29.3      In every bidding process, the Operator shall invite at least three
          companies. If this were not to be possible, a statement shall be made
          with respect to the justification in the report of recommendations to
          the respective Subcommittee.

29.4      It shall be endeavored not to invite more than six (6) companies, in
          order to avoid additional costs in the assessment of the proposals
          and, similarly, to provide a greater opportunity to the participating
          companies to successfully obtain the respective contract.

29.5      All other factors being the same, the order of priorities to be
          included in the list of bidder shall be as follows: - Companies
          registered and with headquarters in the department or departments
          where the Commercial Field or Fields are located, but with a branch
          established in such department. - Colombian companies whose
          headquarters are outside the department or departments where the
          Commercial Field or Fields are located, but with a branch established
          in such department. - Foreign companies with a branch in Colombia. -
          Foreign companies that do not have a branch in Colombia.

 
                                                                              71

29.6      In the list of companies to be invited to submit proposals, those
          companies that are technically and commercially qualified and that
          have not had the opportunity to participate in similar bids in the
          past shall also be kept in mind.

29.7      The Operator shall prepare the bid documents and shall submit these to
          the consideration of the respective Subcommittee with sufficient
          advance notice.

29.8      It shall be clearly expressed in the bidding documents that:

29.8.1    Cost shall be one of the criteria to be considered, though not the
          sole one, for the award of the contract;

29.8.2    The assessment of the bid shall bear in mind other factors other than
          cost, which shall be included in the bid documents;

29.8.3    All proposals that exceed the range of real cost for this activity
          shall be disqualified;

29.8.4    The proposals are to be submitted set forth in the terms of the
          invitation, and the failure to observe this requirement may lead to
          not being considered as valid proposals;

29.8.5    The request for proposals shall include a table with the details of
          the prices which is to be filled out by the bidders, in order to
          facilitate comparing the proposals;

29.9      The list of bidders shall be reviewed and approved by the Technical
          Subcommittee before the invitations to bid are sent out.

29.10     Once the bid documents have been distributed, the following rules
          shall apply:

29.10.1   Any information, modification or clarification of the original bid
          documents shall be sent out to all the bidders. The Procurement and
          Supplies Department of the Operator shall be responsible for these
          changes. The changes shall be duly justified by means of a document in
          writing.

29.10.2   No bidders can be added or deleted from the list of bidders originally
          approved by the corresponding Subcommittee.

29.10.3   Any bidder that does not abide by the bid procedures and rules, or
          that may violate the Operator's business ethics code shall be
          disqualified immediately.

29.11     The content and format for all of the materials in a request for
          proposals shall fulfill the requirements of the procedure known as
          "Documentation format submitted to the Technical Subcommittee" and
          shall be submitted to the consideration of the corresponding
          Subcommittee.

29.12     The internal approvals that are required by the Operator and by
          ECOPETROL depend on the estimated value of the contract, set forth in
          the internal procedures of the former and the latter.

CLAUSE 30 - AWARDS OF CONTRACTS AND PURCHASE ORDERS

30.1      The Operator is responsible for awarding bids for contracts and
          purchase orders. For this purpose, it shall submit its recommendation
          to the respective Subcommittee, subject to the procedures that have
          been established by the Executive Committee for this purpose.

 
                                                                              72

30.2      Value: The awards shall be based on the best global (overall) value.
          The lowest price does not always mean the best proposal, since, in
          addition to the amount, other aspects are borne in mind, such as
          scheduling and quality, experience, reputation and the Colombian
          content submitted by the bidder. In the event that the contract is not
          awarded to the lowest amount proposal, such decision should be
          justified.

30.3      Justification in writing: The Operator shall present a recommendation
          in writing to the corresponding Subcommittee, justifying the contract
          and purchase order award, subject to the procedures that are
          established for such purpose by the Executive Committee. Such
          justification shall include a summary of the commercial and technical
          assessments of the proposals received and the basis for the Operator's
          recommendation.

30.4      Direct contracting: Direct contracting shall be supported and
          presented in writing to the respective Subcommittees, clearly
          identifying their justification. The Operator may contract directly,
          without having to go through a bidding process, in any of the
          following events:

30.4.1    When only one vendor can be obtained, within the time frame required
          to satisfy the project schedule;

30.4.2    When an item or service Contract before in a direct manner does not
          have an equivalent or satisfactory substitute;

30.4.3    When a service or work is derived from a previous one or is an
          extension to an existing contract or work order issued during the last
          ninety days and the commercial conditions are not modified, or when
          the evidence stemming from a recent bid justify contracting without
          undergoing a bidding process;

30.4.4    When the Operator has standardized a specific item or service for all
          of the applications within its are of operations and there is only one
          known vendor for such item or service;

30.4.5    When it is considered that a sole item or service fulfills the
          Operator's requirements within a specified delivery time period;

30.4.6    When an item or service is obtained for testing or assessment;

30.4.7    When there is an emergency. The Operator shall notify ECOPETROL at the
          corresponding Subcommittee's immediately next meeting after such
          emergency.

30.5      Partial awards: A bid can be awarded partially to two or more bidders,
          provided that all of the following conditions are met:

30.5.1    The possibility of a partial award is specifically indicated in the
          request for proposals;

30.5.2    The successful bidders have fulfilled the requirements established in
          the Request for Proposals;

30.5.3    The partial award represents the best value for the items or services
          that shall be obtained;

30.5.4    Any change in the scope of work or in the award criteria shall be
          clearly communicated to all of the bidders before the partial award.

30.6      Rejection of proposals: The Operator may declare a bid null and void
          when the respective Subcommittee finds motives to justify such
          decision and/ or when the proposals are out of line with the actual
          costs.

30.7      Notification to the unsuccessful bidders: The result of the award
          shall be communicated in writing to all participants.

 
                                                                              73

30.8      Clarification: During the assessment period, the Operator may request
          clarification from the bidders. The Technical Subcommittee shall
          approve the significant commercial clarifications. No new approval
          shall be required by the respective Subcommittee when clarifications
          refer to technical issues. Clarifications that may affect the bid
          shall be communicated in writing to all of the bidders.

CLAUSE 31 - MANAGEMENT OF CONTRACT AND WORK ORDER

31.1      The Operator shall be responsible for managing the contracts and
          purchase orders during their execution.

31.2      The bases for contract or purchase order management are their
          execution itself, which shall include all of the agreed- to prices,
          schedule and quality requirements.

31.3      The Operator shall maintain a written record of all modifications to
          the original contract. The cost impact for each change to the contract
          shall be assessed by the Operator and negotiated with the vendor or
          contractor before the contract price is changed.

31.4      Any change in the initially approved value of the contract shall be
          subject to consideration by the respective Subcommittees and, if
          required, shall be approved by the Executive Committee, set forth in
          the procedure that is established for such purpose by the Executive
          Committee.

31.5      The Operator is responsible for cost control.

31.6      Any additional work or job under the terms of the contract shall be
          authorized by the Operator's Project Manager or Operations Manager,
          who shall consult with the Procurement and Logistics Manager or with
          the departments that fulfill these functions, before making any
          modification to the contract. This dual responsibility ensures control
          for the integrity of the change process. In the event that the changes
          imply modifications to the text of the contract, these shall be
          submitted to approval by the Operator's Legal Department.

31.7      Quality control shall be managed with the QA/QC (Quality Control /
          Quality Assurance) process, which shall include the independent
          inspection and verification of the work and shall be performed at
          appropriate moments during the execution of the work.

31.8      The processes used by the Operator for cost control shall be described
          in a cost control procedure.

31.9      The Parties shall receive a monthly report on work progress, with cost
          documentation and schedule, including the analysis of the variations
          with respect to the originally agreed- to Budget for the main
          contracts and purchase orders.

31.10     Once the main contracts and purchase orders have been executed, a
          detailed analysis shall be undertaken to assess the experiences
          learned that could be applied to similar contracts or work orders, and
          also in order to allow for improvements in their control.

CLAUSE 32 - INSURANCE

For purposes of Clause 33 in the Contract, with respect to Insurance, the
Operator shall deliver the following information to ECOPETROL, for the latter to
insure fifty percent (50%) of the assets corresponding to the Commercial Field:

 
                                                                              74

32.1      Description of the assets, differentiated, inasmuch as possible, as
          follows:

32.1.1    Offices, camps and other non- industrial facilities

32.1.2    Collection stations, specifying tanks (number and capacity) and other
          equipment.

32.1.3    Diverse warehouses and other facilities

Note:     The external pipelines and the wells are not insured under the fire
          policy, since, in this case,

ECOPETROL assumes the risk directly.

32.2 Value of the assets, indicating only the value of the part that belongs to
ECOPETROL and indicating the percentage of the value that it represents.

32.2      Geographic location.

32.4      Date of receipt, as of which the risk is transferred to the Joint
          Operation.

CLAUSE 33 - FORCE MAJEURE OR ACTS OF GOD

33.1      Clause 34 of The Contract only suspends fulfillment of those specific
          obligations whose performance becomes impossible on account of events
          that constitute force majeure or acts of God. Similarly, it only
          interrupts the obligations on the assets, properties, production
          facilities, etc. that are affected by the aforementioned circumstance.
          The affected Party shall notify the termination of the force majeure,
          providing details on the magnitude of the damages and the corrective
          actions that affect the system.

33.2      If one of the Parties cannot, on account of force majeure or acts of
          God, fulfill the obligations of this Contract, it shall notify this to
          the other Party for its consideration, within ten (10) working days
          following the date on which the cause was produced, specifying the
          causes of its impediment, the estimated period of suspension of the
          activities and the way in which it affects fulfillment of the
          corresponding affected obligation. The other Party shall respond in
          writing, either accepting the cause or not for force majeure or acts
          of God.

33.3      The Party affected by the cause for force majeure or acts of God shall
          recommence fulfillment of the affected obligations within a reasonable
          term once such cause has disappeared, for which it shall advise the
          other Party within ten (10) working days after the cause has
          disappeared. In the event of partial or delayed execution of the
          obligation affected by force majeure or acts of God, the Party that is
          obligated to its fulfillment shall exert its best efforts to execute
          it within the terms and conditions agreed- to between the Parties in
          this Contract, having to continue with the fulfillment of the
          remaining contractual obligations.

33.4      If the force majeure cause were to affect the execution of any of the
          Exploration Work agreed to as part of the exploratory activities that
          Clause 5 of this Contract refers to, the guarantee that supports the
          fulfillment of the affected Exploration Work shall be extended for the
          same period of time that the impediment may last, which were not
          executed during this period of time. For such purpose, THE ASSOCIATE
          shall extend or substitute such guarantee, as the case may be.

 
                                                                              75

CLAUSE 34 - REVISION OF THE OPERATIONS AGREEMENT

This Operations Agreement may be revised when the Parties consider it convenient
to do so, at the request of any of the Parties. For its revision or
modifications the Executive Committee is fully empowered to do so. This
Operations Agreement shall be valid until one of the following events occurs:

34.1      Termination of The Contract

34.2      Agreement in writing between the Parties

34.3      The signing of a new Agreement.

In faith of the previously mentioned, the Parties sign the present Operations
Agreement, in contract paper of ECOPETROL on the twentieth (20) day of the month
of December of the year two thousand two (2002).

                         EMPRESA COLOMBIANA DE PETROLEOS
                                    ECOPETROL

                               (Signed) illegible
                             ALBERTO CALDERON ZULETA
                                    President

                           HARKEN DE COLOMBIA LIMITED

                               (Signed) illegible
                         GABRIEL GUSTAVO CANO VELASQUEZ
                         Principal Legal Representative

                                    WITNESSES

             (Signed) Illegible                (Signed) Illegible
            VICTOR EDUARDO PEREZ                   ALBERTO TOVAR

 
                                                                              76

                                        ANNEX C - LINEAMENTS FOR THE PREPARATION
                                                         OF THE DEVELOPMENT PLAN

                    ANNEX C - LINEAMENTS FOR THE PREPARATION
                             OF THE DEVELOPMENT PLAN

The present Annex establishes the main aspects that must be considered for the
preparation of the initial Development Plan and of the programs, projects and
annual Budget for each of the Fields discovered in the development of The
Contract, which shall be subject to the consideration of ECOPETROL. In this
document the general conditions of the Development Plan are described without
including a detailed explanation of the format or of the level of detail to be
presented, further than the coverage of the main issues identified herein.
Additional information may be presented in each Development Plan as it is
considered appropriate.

A.   INITIAL DEVELOPMENT PLAN

1.   Outline of the Development Strategy

     Summary of the background of the Field, of the development strategy and of
     the most relevant aspects of the economic and commercial conclusions.

2.   Description of the Field

     Includes the geological synthesis of the Reservoirs discovered and the
     determination of the geometry of the field. In this section the area
     capable of producing Hydrocarbons of the different Reservoirs is determined
     and the commercial area is delimited, using the plain Gauss coordinates, by
     the projection in surface of the lowest level of Hydrocarbons commercially
     exploitable.

3.   Reservoir Engineering

     This implies the evaluation of the properties of the rocks and of the
     fluids contained in the Field Reservoirs and other analysis that conduce
     to:

     a)   Determine the original volumes of Hydrocarbons in each Reservoir, the
          tested, probable and possible Reservoirs of the Field (in each case,
          based on its useful life, independently from the duration of the
          Exploitation Period established in The Contract) and discriminated by
          Liquid Hydrocarbons and Gas Hydrocarbons.

     b)   Establish the forecast for production of Hydrocarbons that THE
          ASSOCIATE expects to produce during each year of exploitation of the
          Field, both for the tested Reservoirs and for the tested Reservoirs
          plus those probable.

     c)   Define the strategy for exploitation so that the production profile,
          in the case of tested Reservoirs, achieves the Maximum Degree of
          Productive Efficiency (MER) or the top of the production, in that case
          in which THE ASSOCIATE identifies restrictions to achieve he MER, and
          expose the preliminary strategy of exploitation of the probable
          Reservoirs.

 
                                                                              77

     d)   Specify the program of obtainment of information to be executed for
          the adequate administration of the Reservoirs.

4.   Criteria of the Design of the Development Plan

     Description of the logics and coherence of the Development plan and
     synopsis of the criteria, bases and presumptives taken into consideration
     for the design of the plan.

5.   Development Drilling and Completion

     Back ground of the main aspects that refer to the drilling and completion
     of Development Wells.

6.   Surface Installations

     Presentation of the options of development that were taken into account,
     the justification of the option chosen, its general specifications, key
     aspects and diagram of each of the Production Systems; Treatment and
     Storage; Transportation and Transfer, and of Support to the production of
     Hydrocarbons that come from the Field.

7.   Construction and Assembly

     Explanation of the strategy for the Development drilling and the
     construction and assembly of the surface facilities and the assurance of
     the quality.

8.   Operation and Maintenance

     General Description of the scheme and logistics of the operation with its
     corresponding proposal of the Organizational Letter for the handling of the
     field with a background of the contingency plans for the control of the
     critical factors.

9.   Abandonment of the Field and Restoration of the Area

     Synthesis of the program, methods and practices foreseen for the
     abandonment of the wells and the withdrawals of the surface facilities and
     alternatives considered for the provision of funds for the abandonment of
     the field and the recuperation of the area

10.  Economic and Commercial Aspects.

     They include the evaluation of the commercialization options of the
     Hydrocarbons discovered, the economic viability of the Field and the
     reasons why such alternative was chosen. It must also include:

     a)   Estimate of the Direct Exploration Costs incurred in before the
          presentation of the initial Development Plan.

 
                                                                              78

     b)   Annual budget and chronogram for disbursements on account of capital
          expenses (investments) and operational (Direct and Indirect Expenses)
          in current dollars during the exploitation of the Field, with relation
          to the Reservoirs tested and the Reservoirs tested plus those
          probable.

     c)   Main economic indicators obtained in the economic evaluation and
          optimization carried out for the determination of the commerciality of
          the Field.

     d)   When it is necessary to unify the field or when the design of the
          Development Plan suggests the need to share the production facilities
          of the Field with other Fields discovered in the development of the
          same Contract, or of another Association Contract, the proposal of a
          unified exploitation plan that THE ASSOCIATE proposes to submit for
          the consideration of others interested and/or the proposal of the
          agreement to share facilities or other assets, including cost
          assignments and other distributions necessary, must be attached.

B.   PROGRAMS, PROJECTS AND ANNUAL BUDGET

The Operator, or THE ASSOCIATE if concerning a field exploited under the
modality of only risk, pursuant to that established in The Contract and in the
Operating Agreement (Annex B), shall prepare and present to the Parties the
proposal of the programs, projects and Budget for the following calendar year,
pursuant to the initial Development Plan accepted for the field.

For all effects of the presentation of the annual programs and projects, by
program it is understood the group of projects to be developed, or that by their
technical, operational and administrative characteristics deserve to be
controlled in a joint manner (for example: Building of Battery X). Each program
includes the presentation of the projects to be carried out, their sequence of
execution and the general conditions to which they must abide by to obtain a
determined result.

By project it is understood the group of activities proper of a work or an
specific necessary work for the development and production of the field.
(example: Civil work, Access roads, Facilities, Separation and Treatment System,
etc.). Each project shall be duly supported with the explanatory documents and
the technical and economic specifications.

The annual Budget shall be divided into Expense Budget and Investment Budget.
For all effects of the presentation, the Expense Budget shall be divided into
programs, groups and concepts of expenses and that of Investments in programs
and projects, in numerical order and continuous within each section of the
Budget. With respect to the Expense Budget, the programs and projects shall be
divided into expense groups and these into concept of expenses. By expense
groups it is understood the purpose or object of the expense (for example
Personnel Expenses) and by concept of expenses the specific assignment granted
(for example: Salaries, Social Benefits).

              EXAMPLE OF THE INDEX OF THE INITIAL DEVELOPMENT PLAN

1.   Development Scheme of the field

     .    History and Location of the Field

     .    Development Strategy

 
                                                                              79

     .    Production Curve and Investment and Expense Program

     .    Commercial and Economic Conclusions

2.   Description of the Field

     .    Geology

          .    Regional Frame

          .    Local Frame

          .    Structural

          .    Geology of Reservoirs (Stratigraphy, Sedimentology and factors
               that control the quality of the reservoir)

     .    Geophysics - Seismic Information

          .    Seismic Data Base

          .    Seismic Data Processing

          .    Analysis and Interpretation of Seismic Data

     .    Petrophysics

          .    Subsurface Logging Information

          .    Data on recovered Nucleus

          .    Calibration of the information on Logs and Nucleus

          .    Analysis and Interpretation of Petrophysical data

     .    Maps and Geological Patterns

          .    Isopachous

          .    Structural

          .    Isoporosity

          .    Others

 
                                                                              80

3.   Reservoir Engineering

     .    Basic Reservoir Information

          .    Rock Properties

          .    Fluid Properties

          .    Analysis of Nucleus and PVT

          .    Gas-Oil and Oil-Water Contacts

          .    Productivity of the wells

     .    Simulation of Reservoirs

          .    Models of Reservoirs

          .    Predictions

     .    Original Hydrocarbons "in-situ". OOIP and OGIP

          .    Uncertainties

     .    Calculation of Reservoirs (scenarios for Tested, Probable and Possible
          Reserves)

     .    Production Forecasts (of Tested Reservoirs and of Tested plus
          Probable)

     .    Exploitation Strategy

          .    Development Wells Spacing (Productive and Injectors)

          .    Pressure Maintenance Projects

     .    Conservation and/or Use of Gas


     .    Administration of Reservoirs and Obtainment of Data

          .    Well Testing

          .    Pressure Measurement and Fluid Sampling

          .    Coring and Logging

          .    Production Behavior

 
                                                                              81

          .    Production Optimization

     .    Projects of Improved Recovery

     .    Opportunities for Future Developments

          .    Well Testing


4.   Criteria of the Design of the Development Plan

     .    Logics of the Design

     .    Regulations and Standards Observed

     .    Environmental Criteria

          .    Environmental Diagnostic and Impacts

          .    Operational Limits

     .    Functional Criteria

          .    Production Mechanisms of the Reservoirs

          .    Flow Rates and Production Capacities

          .    Useful Life

          .    Specifications of the fluids produced

     .    Geotechnical Criteria

5.   Development Drilling and Completion

     .    Development wells

          .    Location

          .    Design of the Wells (pursuant to the purpose of the well, type
               and trajectory of the hole.

          .    Drilling Strategy and Chronogram

          .    Critical success factors (technical and operational)

 
                                                                              82

     .    Completion of Wells under Development

          .    Design of the completion of Producer and Injector Wells

          .    Artificial Lifting

     .    Subsequent Operations

          .    Overhauling

          .    Stimulation

6.   Surface Installations (Diagram, Specifications and Key Aspects)

     .    Production System

          .    Systems considered

          .    Justification of the system(s) proposed

          .    Sub-system of Pressure Maintenance

          .    Improved Recovery

     .    Treatment and Storing System

          .    Gathering

          .    Separation and Treatment

          .    Measurement and Sampling

          .    Water, gas and impurities disposition

          .    Storing

          .    Pumping

     .    Support Systems

          .    Safety and Control of the Production

          .    Telecommunications

          .    Power Generation

          .    Camping, Warehouses, workshops, Offices and Transportation
               Terminals

 
                                                                              83

     .    Transportation System and Transference of Hydrocarbons.

7.   Construction and Assembly

     .    Strategy

          .    Coordination of Activities

          .    Permissions and Licenses required

          .    Construction and Assembly Chronogram

          .    Required Services

     .    Quality Assurance and Control

8.   Operation and Maintenance

     .    Proposal of an Organizational Letter of the Field

     .    Operational Limits of the surface and subsurface systems.

     .    General Vision of the Logistics of the Operation

          .    Production

          .    Health, Safety and Environmental Monitoring

          .    Relations with the Community and the Government

          .    Personnel lodging

          .    Warehouses

          .    Materials and Supplies

          .    Displacement and Transportation

          .    Communications

          .    Others

 
                                                                              84

     .    Contingency Plans

          .    Evaluation of Operational Risks

          .    Organization and Training for Emergencies Response

9.   Abandonment of the field and Restoration of the Area

     .    Methods and Practices of Abandonment and withdrawal of installations

          .    Development Wells (Producers and Injectors)

          .    Surface Installations

     .    Restoration and recuperation of the area

10.  Economic and Commercial Aspects

     .    Commercialization

          .    Market Opportunities and Options considered

          .    Justification of the Option(s) proposed

          .    Estimation of Incomes

          .    Critical success factors

     .    Direct Exploration Costs caused before the design of the Plan

          .    Acquisition of Seismic Information

          .    Exploratory Wells

     .    Estimation of Capital Costs and Operation Expenses

          .    Investments (Distributed between the main operations or goods)

          .    Direct Expenses (Distributed between the main activities)

          .    Indirect Expenses

 
                                                                              85

     .    Disbursement Chronograms

          .    Investments

          .    Expenses

          .    Total

     .    Economic Analysis and Evaluation of the project

          .    Economic Indicators

          .    Sensibility Analysis

          .    Exploratory Wells