STATEMENT OF TERMS AND CONDITIONS OF EMPLOYMENT

VAZON ENERGY LIMITED a company incorporated and existing under the laws of Guernsey with registered number 32244 (the “Company”)

LIZ LANDLES (the “Employee”) of St Louis, Doyle Road, St Peter Port, Guernsey GY1 1RD.

1

Job Title/Job Description

1.1

The Employee is employed by the Company on a full time permanent basis to fulfil the position of Corporate Secretary and Administration Manager to CanArgo Energy Corporation (“CanArgo”) and Director of subsidiary companies reporting to the Chief Executive Officer of CanArgo. In addition, the Employee is employed as PA to the Chief Executive Officer. The Company provides management services to CanArgo pursuant to the terms of the Agreement for the Provision of Management Services dated 18 ^th February 2004 (“MSA”), as such agreement is amended or varied from time to time.

1.2

The Employee’s principal duties as Corporate Secretary shall be administration of all corporate issues of CanArgo and its subsidiaries and overall administrative activities for CanArgo as set out in Appendix A hereto. Notwithstanding the foregoing, the Employee accepts that she may be required to perform other duties and tasks outwith the scope of her normal duties.

1.3

Whilst employed by the Company the Employee must:

during her hours of work devote the whole of her time, attention and abilities to the business of the Company and carry out her duties with due care and attention;

not, without the Company’s prior written consent, be in any way directly or indirectly engaged or concerned with any other business or employment whether during or outside her hours of work for the Company;

use her best efforts to promote and protect the interests of the Company and observe the utmost good faith towards the Company; and

comply with all the Company’s rules, regulations and policies from time to time in force and any rules which the Company’s clients may require her to observe whilst working on their premises.

2

Place of Work

The Employee’s place of work will be at Suite 9/10, Borough House, Rue du Pre, St Peter Port, Guernsey, Channel Islands or such other location within Guernsey as shall be notified by the Company to the Employee from time to time. The Employee may be required to travel and work at any of the premises of the Company or CanArgo as may be required for the proper fulfilment of the Employee’s duties, including in particular within the Former Soviet Union. Wherever possible, the Employee will be given reasonable notice of any change in her place of work.

3

Pay

3.1

The Employee’s base salary shall be £66,500 per annum payable monthly by bank transfer on or around the 15 ^th day of each calendar month into the bank account notified in writing by the Employee to the Company.

3.2

The Employee’s base salary shall be subject to review annually at the discretion of the Compensation Committee of CanArgo. The Company is not obliged to increase the Employee’s base salary at such review.

4

Hours of Employment

The Employee agrees that she shall work such hours as are necessary for the proper performance of her duties. The Employee shall work a minimum of 140 hours per month based upon an 8 hour day Monday to Friday (inclusive) between the hours of 8am and 6.00pm, with a break of one hour for lunch each day.

5

Overtime

The Employee will not receive additional remuneration for any hours worked over and above the normal hours of work narrated in Clause 4.

6

Holidays

6.1

The holiday year runs from ^1st January until 31 ^st December the same year. Holidays can be taken only with the advance permission of the Chief Executive Officer of CanArgo from time to time.

6.2

In addition to public and bank holidays, the Employee is entitled to a maximum of 25 working days holiday every calendar year. Such days holiday are accrued pro rata throughout the calendar year, depending on the Employee’s length of service within that year. Holiday entitlement will accrue per each month worked and will be rounded up to the nearest whole day.

6.3

There is no facility to carry holidays forward from one year to the next. However, except in exceptional circumstances, holidays not taken in one calendar year may be carried forward to the following calendar year provided they are taken within the first quarter and with the advance permission of the Chief Executive Officer.

6.4

On leaving, holiday pay will be paid for all entitlement accrued in the current holiday year but not taken at the time of termination of employment. In the event of holidays being taken but not earned, appropriate holiday pay will be deducted by the Company from the Employee’s final payment, the Company’s authority to do so being evidenced by the Employee’s signature to the Statement.

6.5

The Company may require the Employee to take accrued holidays during any period of notice.

7

Expenses

The Employee will be reimbursed for any expenses properly incurred in connection with her duties in accordance with the Company’s expenses policy as amended from time to time.

8

Notice

8.1

The Employment shall continue unless and until terminated at any time by:

8.1.1

the Company giving the Employee not less than 3 months’ previous notice in writing to that effect; or

8.1.2

the Employee giving to the Company not less than 3 months’ previous notice in writing to that effect.

8.2

The Company shall be entitled, at its sole discretion, to terminate the Employment in writing either instead of, or at any time after, notice of termination being given (by either the Company or the Employee) and in either case to make a payment to the Employee in lieu of notice.

8.3

Notwithstanding Clauses 8.1 and 8.2, if the Employee is dismissed for gross misconduct, he will receive no notice and no payment in lieu of notice.

9

Other Insurance & Benefits

9.1

Life Assurance

The Company (through CanArgo) will provide the Employee with the benefit of death in service life assurance which, in the event of death itself will pay a maximum amount of 4 times her annual salary, subject to the rules and conditions of the policy.

9.2

Health Care Scheme

9.2.1

The Company (through CanArgo) shall provide the Employee with PPP Healthcare cover at the expense of the Company, always subject to the terms and conditions of the PPP Healthcare scheme.

9.2.2

All payments under the PPP Healthcare scheme or the like will be subject to any deductions required by law.

9.1.3

The Company (through CanArgo) reserves the right at its absolute discretion to terminate or amend at any time the PPP Healthcare scheme or the Employee’s membership of any scheme. The Company (through CanArgo) will provide an equivalent benefit unless, in the reasonable opinion of the Company (through CanArgo), it is unable to secure membership for the Employee due to the medical condition of the Employee.

9.3

PHI

The Employee shall be entitled to participate in a Permanent Health Insurance (“PHI”) scheme (through CanArgo), always subject to the terms and conditions of the PHI scheme.

9.3.1

Payments

All payments under the PHI scheme or the like will be subject to the deductions required by law.

Where payments are made under the PHI scheme all other benefits provided to or in respect of the Employee will cease from the start of those payments (if they have n