GUARANTEE AGREEMENT

EXHIBIT 10.2

EXECUTION COPY

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INVESTMENT NUMBER 11090


GUARANTEE AGREEMENT


BETWEEN


VAALCO ENERGY, INC.

AND


INTERNATIONAL FINANCE CORPORATION


DATED MAY 28, 2002


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TABLE OF CONTENTS

ARTICLE I................................................................... 2

DEFINITIONS AND INTERPRETATION.............................................. 2

Section 1.01. Definitions............................................... 2
Section 1.02. Guaranteed Obligations.................................... 2
Section 1.03. Interpretation............................................ 2
Section 1.04. Third Party Rights........................................ 4

ARTICLE II.................................................................. 4

GUARANTEE AND INDEMNITY..................................................... 4

Section 2.01. Guarantee................................................. 4
Section 2.02. Indemnity................................................. 4
Section 2.03. Continuing Guarantee...................................... 6
Section 2.04. No Set-off................................................ 7
Section 2.05. Taxes..................................................... 7
Section 2.06. Currency Indemnity........................................ 7
Section 2.07. Certificate............................................... 8
Section 2.08. Application of Payments................................... 8

ARTICLE III................................................................. 9

SAVING PROVISIONS........................................................... 9

Section 3.01. Waiver of Defenses........................................ 9
Section 3.02. Immediate Recourse........................................ 10
Section 3.03. Non-Competition........................................... 10
Section 3.04. Bankruptcy or Liquidation of Borrower..................... 11
Section 3.05. Appropriation of Moneys................................... 11
Section 3.06. Reinstatement............................................. 11
Section 3.07. Additional Security....................................... 11

ARTICLE IV.................................................................. 12

REPRESENTATIONS AND WARRANTIES.............................................. 12

Section 4.01. Representations and Warranties............................ 12
Section 4.02. IFC Reliance.............................................. 13
Section 4.03. Rights and Remedies not Limited........................... 13



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ARTICLE V................................................................... 13

COVENANTS................................................................... 13

Section 5.01. Guarantor's Covenants..................................... 13

ARTICLE VI.................................................................. 14

MISCELLANEOUS............................................................... 14

Section 6.01. Notices................................................... 14
Section 6.02. English Language.......................................... 15
Section 6.03. Expenses.................................................. 15
Section 6.04. Remedies and Waivers...................................... 16
Section 6.05. Jurisdiction and Enforcement.............................. 16
Section 6.06. Successors and Assignees.................................. 18
Section 6.07. Amendment................................................. 18
Section 6.08. Severability.............................................. 18
Section 6.09. Counterparts.............................................. 18


GUARANTEE AGREEMENT

This Agreement is executed as a deed this 28th day of May, 2002,
between VAALCO ENERGY INC., a corporation organized and existing under the laws
of the State of Delaware, United States of America (the "Guarantor") and
INTERNATIONAL FINANCE CORPORATION, an international organization established by
Articles of Agreement among its member countries including the Republic of Gabon
("IFC").

WHEREAS:

(A) By a loan agreement dated April 19, 2002, as amended May 28,
2002 (as amended, the "Loan Agreement"), between IFC and VAALCO Gabon (Etame),
Inc., a corporation organized and existing under the laws of the State of
Delaware, United States of America (the "Borrower"), IFC has agreed to extend to
the Borrower a loan (the "Loan") in a principal amount not to exceed ten million
Dollars ($10,000,000), subject to the terms and conditions set forth in the Loan
Agreement.

(B) The Guarantor has been provided with, and hereby acknowledges
receipt of, a copy of the Loan Agreement.

(C) It is a condition of the first disbursement of the Loan that
the Guarantor has guaranteed the obligations of the Borrower in respect of the
Loan on terms and conditions satisfactory to IFC.

(D) The Guarantor, as the owner of all of the equity interests in
the share capital of the Borrower, will obtain benefits as a result of the Loan
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Agreement.

(E) Each of the Guarantor and IFC intend this Agreement to take
effect as a deed.

NOW, THEREFORE, the parties hereto agree as follows:



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ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01. Definitions. Terms defined in the Loan Agreement shall
have the same meanings when used in this Agreement, unless the context otherwise
requires.

Section 1.02. Guaranteed Obligations. In this Agreement the term
"Guaranteed Obligations" means all debts and monetary liabilities of the
Borrower to IFC under or in relation to the Loan Agreement or any other
Transaction Document and in any capacity irrespective of whether the debts or
liabilities:

(a) are present or future;

(b) are actual, contingent or otherwise;

(c) are at any time ascertained or unascertained;

(d) are owed or incurred by or on account of the Borrower alone,
or severally or jointly with any other person;

(e) are owed or incurred to or for the account of IFC alone, or
severally or jointly with any other person;

(f) are owed or incurred as principal, interest, fees, charges,
taxes, duties or other imposts, damages (whether for breach of contract or tort
or incurred on any other ground), losses, costs or expenses, or on any other
account; or

(g) comprise any combination of the above.

Section 1.03. Interpretation. In this Agreement, unless the context
otherwise requires:

(a) headings are for convenience only and do not affect the
interpretation of this Agreement;

(b) words importing the singular include the plural and vice
versa;


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(c) a reference to a natural person includes any company,
partnership, trust, joint venture, association, corporation or other body
corporate and any governmental authority or agency;


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(d) a reference to an Annex, Article, party, Schedule or Section
is a reference to that Article or Section of, or that Annex, party, or Schedule
to, this Agreement;

(e) a reference to a document includes an amendment or supplement
to, or replacement or novation of, that document but disregarding any amendment,
supplement, replacement or novation made in breach of this Agreement or the Loan
Agreement; and

(f) a reference to a party to any document includes that party's
successors and permitted assigns.

Section 1.04. Third Party Rights. No term of this Agreement is
enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person
who is not a party to this Agreement.

ARTICLE II

GUARANTEE AND INDEMNITY

Section 2.01. Guarantee. The Guarantor hereby irrevocably, absolutely
and unconditionally:

(a) guarantees to IFC the due and punctual payment of the
Guaranteed Obligations whether at stated maturity, upon acceleration or
otherwise; and

(b) undertakes with IFC that whenever the Borrower does not pay
any amount of the Guaranteed Obligations when due the Guarantor will immediately
and in any event, forthwith upon demand by IFC, pay that amount to IFC, in the
currency prescribed in the Loan Agreement or the relevant Transaction Document,
and otherwise in the same manner in all respects as the Guaranteed Obligations
are required to be paid by the Borrower under the Loan Agreement as if it was
the principal obligor.

Section 2.02. Indemnity. The Guarantor hereby irrevocably, absolutely
and unconditionally agrees, as a primary obligation and not merely as surety, to
indemnify IFC from time to time on demand from and against any cost, loss or
liability incurred by IFC as a result of any of the Guaranteed Obligations being
or becoming void, voidable, unenforceable, illegal or ineffective for any reason
whatsoever, whether or not known to IFC, the amount of such loss being the


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amount which IFC would otherwise have been entitled to recover from the
Borrower.


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Section 2.03. Continuing Guarantee. (a) The guarantee and indemnity
contained in this Agreement are each a continuing security of the Guarantor,
notwithstanding any settlement of account or the occurrence of any other event
or thing, and shall remain in full force and effect until the earlier of:

(i) the date on which the Guaranteed Obligations have
been fully paid strictly in accordance with the
provisions of the Loan Agreement, regardless of any
intermediate payment or discharge in whole or in
part;

(ii) the date on which the obligations of the Guarantor
have been finally discharged by IFC; or

(iii) the Phase One Completion Date occurs, provided such
Phase One Completion Date occurs on or before March
31, 2003.

(b) The guarantee and the indemnity contained in this Agreement
shall be additional, separate and independent obligations of the Guarantor and
shall survive the termination of any Transaction Document.

(c) The Guarantor's obligations under this Agreement can be
discharged only by performance and then only to the extent of such performance.
These obligations are not subject to any prior notice to, demand upon or action
against the Borrower or to any prior notice to the Guarantor with regard to any
default by the Borrower.

(d) Notwithstanding that this guarantee is a guarantee for the
whole of the Guaranteed Obligations, IFC agrees that the maximum amount
recoverable under Sections 2.01 and 2.02 shall not exceed, the amount then
outstanding under the Loan Agreement provided however that if (i) for any
reason, the Phase One Completion Date does not occur on or before March 31,
2003; or (ii) any other Event of Default has occurred, IFC may accelerate the
Loan and immediately demand payment of the entire balance of the Loan and all
other amounts due to IFC under the Loan Agreement.

(e) Without limiting the remedies available to IFC under this
Agreement or otherwise, if the Guarantor fails to pay any amount payable by it
pursuant to this Agreement on or before its due date under this Agreement or, if
not so specified, as notified by IFC to the Guarantor, the Guarantor shall pay,
in respect of the amount of such payment due and unpaid, interest at the rate of
two


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per cent (2%) per annum plus the applicable interest rate in accordance with the
Loan Agreement, from the date any such payment became due under this Agreement
until the date of actual payment (as well after as before judgment). Such
interest shall be payable on demand.

Section 2.04. No Set-off. All payments which the Guarantor is required
to make under this Agreement shall be made without any set-off, counterclaim or
condition.

Section 2.05. Taxes. (a) The Guarantor shall pay or cause to be paid
all Taxes other than taxes, if any, payable on the overall income of IFC on or
in connection with the payment of any and all amounts due under this Agreement
that are now or in the future levied or imposed by any Authority of Gabon, the
United Kingdom or the United States of America or by any organization of which
Gabon, the United Kingdom or the United States is a member or any jurisdiction
through or out of which a payment is made.

(b) All payments of principal, interest, fees and other amounts
due under this Agreement shall be made without deduction for or on account of
any Taxes.

(c) If the Guarantor is prevented by operation of law or otherwise
from making or causing to be made those payments without deduction, the
principal or (as the case may be) interest, fees or other amounts due under this
Agreement shall be increased to such amount as may be necessary so that IFC
receives the full amount it would have received (taking into account any Taxes
payable on amounts payable by the Guarantor under this subsection) had those
payments been made without that deduction.

(d) If Section 2.05 (c) applies and IFC so requests, the Guarantor
shall deliver to IFC official tax receipts evidencing payment (or certified
copies of them) within thirty (30) days of the date of that request.

Section 2.06. Currency Indemnity. (a) All payments under this Agreement
shall be made in Dollars to the account specified by IFC in its demand.

(b) The tender or payment of any amount payable under this
Agreement (whether or not by recovery under a judgment) in any currency other
than Dollars shall not novate, discharge or satisfy the obligation of the
Guarantor to pay in Dollars all amounts payable under this Agreement except to
the extent


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that (and as of the date when) IFC actually receives funds in Dollars in the
account specified pursuant to Section 2.06 (a).

(c) The Guarantor shall indemnify IFC against any losses resulting
from a payment being received or an order or judgment being given under this
Agreement in any currency other than Dollars or any place other than the account
specified pursuant to Section 2.06 (a). The Guarantor shall, as a separate
obligation, pay such additional amount as is necessary to enable IFC to receive,
after conversion to Dollars at a market rate and transfer to that account, the
full amount due to IFC under this Agreement in Dollars and in the account
specified in pursuant to Section 2.06 (a).

(d) Notwithstanding the provisions of Section 2.06 (a) and Section
2.06 (b), IFC may require the Guarantor to pay (or reimburse IFC) for any Taxes,
fees, costs, expenses and other amounts payable under Section 2.05 and Section
6.03 in the currency in which they are payable, if other than Dollars.

Section 2.07. Certificate. A certificate by an officer of IFC
specifying amounts due and payable under or in connection with any of the
provisions of this Agreement shall, in the absence of manifest error, be
conclusive and binding on the Guarantor.

Section 2.08. Application of Payments. IFC may apply any amounts
received by it or recovered under any Security, and any other document or
agreement which secures any of the Guaranteed Obligations and any other moneys,
in any manner and for such purposes in respect of the Loan Agreement, this
Agreement or any other Transaction Document as IFC in its sole discretion
determines, notwithstanding any instruction that the Guarantor or the Borrower
may give to the contrary.


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ARTICLE III

SAVING PROVISIONS

Section 3.01. Waiver of Defenses. The Guarantor's obligations under
this Agreement shall not be affected or impaired by any act, omission,
circumstance (other than complete payment of the Guaranteed Obligations), matter
or thing which, but for this provision, would reduce, release or prejudice any
of its obligations under this Agreement or which might otherwise constitute a
legal or equitable discharge or defense of a surety or a guarantor, including
(whether or not known to the Guarantor or to IFC):

(a) any time, waiver or consent given to, or composition with, the
Borrower, the Guarantor or any other person;

(b) any taking, holding, reviewing, exchanging, varying,
releasing, waiving or omitting to take, perfect or enforce any rights, remedies
or security against or granted by the Borrower, the Guarantor or any other
person;

(c) any amplification, amendment (however fundamental), variation
or replacement of the provisions of any Transaction Document or of any other
agreement between IFC and the Borrower;

(d) any failure of the Borrower or the Guarantor to comply with
any requirement of any law, regulation or order;

(e) the dissolution, liquidation, reorganization or other
alteration of the legal status or structure of the Borrower or the Guarantor;

(f) any purported or actual assignment of the Loan by IFC to any
other party;

(g) the Loan Agreement or any other Transaction Document being in
whole or in part illegal, void, voidable, avoided, invalid, unenforceable or
otherwise of limited force and effect;

(h) the release of the Borrower or any other person under the
terms of any composition or arrangement with any creditor of any of the
Guarantor or the Borrower;


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(i) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or status of the Borrower
or any other person; or

(j) any other circumstance howsoever caused or arising and whether
or not similar to any of the foregoing (other than payment in full of the
Guaranteed Obligations by the Borrower or the Guarantor in accordance with the
Loan Agreement or this Agreement) which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.

Section 3.02. Immediate Recourse. The Guarantor waives any right it may
have of first requiring IFC (or any trustee, agent or other person acting on its
behalf) to proceed against or enforce any other rights or security or claim
payment from any person before claiming from the Guarantor under this Agreement.

Section 3.03. Non-Competition. (a) If any amounts have become payable
or have been paid by the Guarantor under this Agreement, the Guarantor shall
not, in respect of such monies, seek to enforce repayment, obtain the benefit of
any security or exercise any other rights or legal remedies of any kind which
may accrue to the Guarantor against the Borrower, whether by way of subrogation,
set-off, counterclaim or otherwise, in respect of the amount so payable or so
paid (or in respect of any other monies for the time being due to the Guarantor
from the Borrower) if and for so long as any Guaranteed Obligations remain
payable. The Guarantor shall hold in trust for, and forthwith pay or transfer
to, IFC any payment or distribution or benefit of security received by it
contrary to this Section 3.03, together with any amounts received by it and
referred to in Section 3.04.

(b) Upon the payment, satisfaction or discharge in full of all the
Guaranteed Obligations and provided that IFC is not under any further obligation
(actual or contingent) to advance monies to the Borrower under the Loan
Agreement, the Guarantor, if it has made a payment under this Agreement, shall
be entitled to exercise all relevant rights of subrogation against the Borrower
pursuant to the Loan Agreement. IFC shall promptly execute, at the expense of
the Guarantor, an assignment and such other documents in such form as the
Guarantor may reasonably request to transfer such rights of IFC against the
Borrower to the Guarantor as are required for the Guarantor to obtain the full
benefit of such subrogation. The Guarantor shall enforce such rights directly
against the Borrower in its own name and not in the name of IFC.


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Section 3.04. Bankruptcy or Liquidation of Borrower. If the Borrower
becomes bankrupt, enters into a composition or makes any arrangement with its
creditors, or is dissolved, liquidated or wound up, the Guarantor shall not
claim, rank, prove or vote as a creditor of the Borrower or its estate in
competition with IFC in respect of any amounts owing to the Guarantor by the
Borrower on any account whatsoever, but instead shall give IFC the benefit of
any such proof and of all amounts to be received in respect of that proof until
all Guaranteed Obligations have been fully paid.

Section 3.05. Appropriation of Moneys. Until all of the Guaranteed
Obligations have been irrevocably paid in full, IFC (or any trustee, agent or
other person acting on its behalf) may:

(a) refrain from applying or enforcing any other monies, security
or rights held or received by IFC (or such trustee, agent or other person) in
respect of the Guaranteed Obligations, or apply and enforce the same in such
manner and order as it sees fit (whether against the Guaranteed Obligations or
otherwise) and the Guarantor shall not be entitled to the benefit of the same;
and

(b) hold and keep for such time as it thinks prudent any monies
received, recovered or realized under this Agreement, to the credit either of
the Guarantor or such other person or persons as it thinks fit or in a suspense
account.

Section 3.06. Reinstatement. Where any discharge (whether in respect of
the obligations of the Borrower, the Guarantor or any security for those
obligations or otherwise) is made in whole or in part or any arrangement is made
on the faith of any payment, security or other disposition which is avoided or
must be restored on insolvency, liquidation or otherwise without limitation, the
liability of the Guarantor under this Agreement shall continue or shall be
reinstated (as the case may be) as if such discharge or arrangement had not
occurred and IFC shall be entitled to recover the value or amount of that
security or payment from the Borrower or the Guarantor as if the payment,
discharge, avoidance or reduction had not occurred.

Section 3.07. Additional Security. This Agreement is in addition to,
and is not in any way prejudiced by, any collateral or other security now or
hereafter held by IFC, including without limitation, the Sponsor Escrow Account,
nor shall such collateral or other security held by IFC or the liability of any
person for all or any part of the Guaranteed Obligations be in any manner
prejudiced or affected by this Agreement.


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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.01. Representations and Warranties. The Guarantor represents
and warrants that as of the date of this Agreement:

(a) it is a company duly incorporated under the laws of Delaware
and has the corporate power to enter into and deliver and to perform its
obligations under this Agreement;

(b) the execution and delivery by it of this Agreement and the
performance by it of its obligations hereunder have been duly authorized;

(c) this Agreement has been duly executed by it and constitutes
its valid and legally binding obligations enforceable in accordance with its
terms;

(d) neither the execution and delivery by it of this Agreement nor
the performance by it of its obligations under this Agreement conflicts or will
conflict with or result in any breach of any of the terms, conditions or
provisions of, or violate or constitute a default or require any consent under:

(i) any indenture, mortgage, contract, agreement or other
instrument or arrangement to which it is a party or
which purports to be binding upon it or any of its
property or assets, and will not result in the
imposition or creation of any lien, charge, or
encumbrance on, or security interest in, any part
thereof pursuant to the provisions of any such
agreement, instrument or arrangement; or

(ii) any of the terms or provisions of its Charter; or

(iii) any statute, rule or regulation or any judgment,
decree or order of any Authority; and

(e) all Authorizations required for the execution and delivery of
this Agreement by it and the performance by it of its obligations hereunder,
have been duly obtained or granted and are in full force and effect.

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Section 4.02. IFC Reliance. (a) The Guarantor acknowledges that it
makes the representations in Section 4.01 with the intention of inducing IFC to
enter into this Agreement and the Loan Agreement and that IFC enters into this
Agreement and the Loan Agreement on the basis of, and in full reliance on, each
of such representations.

(b) The Guarantor warrants to IFC that each of such
representations is true and correct in all material respects as of the date of
this Agreement and that none of them omits any matter the omission of which
makes any of such representations misleading and that they will be deemed to be
repeated each day whilst the Guarantor has any liability (actual or contingent)
under this Agreement.

Section 4.03. Rights and Remedies not Limited. IFC's rights and
remedies in relation to any misrepresentation or breach of warranty on the part
of the Guarantor are not prejudiced:

(a) by any investigation by or on behalf of IFC into the affairs
of the Guarantor;

(b) by the execution or the performance of this Agreement; or

(c) by any other act or thing which may be done by or on behalf of
IFC in connection with this Agreement and which might, apart from this Section,
prejudice such rights or remedies.

ARTICLE V

COVENANTS

Section 5.01. Guarantor's Covenants. The Guarantor shall:

(a) when requested by IFC, do or cause to be done anything which
aids the exercise of any power, right or remedy of IFC under this Agreement
including, but not limited to, the execution of any document or agreement;

(b) obtain, maintain and renew when necessary all Authorizations
required:


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(i) to enable it to perform its obligations under this
Agreement; or

(ii) for the validity or enforceability of the Agreement;
and

(c) comply in all respects with the terms of all Authorizations.

ARTICLE VI

MISCELLANEOUS

Section 6.01. Notices. Any notice, request or other
communication to be given or made under this Agreement shall be in writing. Any
such communication may be delivered by hand, airmail, facsimile or established
courier service to the party's address specified below or at such other address
as such party notifies to the other party from time to time, and will be
effective upon receipt.

For the Guarantor:

VAALCO Energy, Inc.
4600 Post Oak Place
Suite 309
Houston, TX 77027
United States of America

Facsimile: 1-713-623-0982

Attention: President


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For IFC:

International Finance Corporation
2121 Pennsylvania Avenue, N.W.
Washington, D.C. 20433
United States of America

Facsimile: 1-202-974-4322

Attention: Director, Oil, Gas & Chemicals Department

With a copy (in the case of communications relating to payments) sent
to the attention of the Senior Manager, Financial Operations Unit, at:

Facsimile: 1-202-974-4371.

Section 6.02. English Language. (a) All documents to be provided or
communications to be given or made under this Agreement shall be in the English
language.

(b) To the extent that the original version of any document to be
provided, or communication to be given or made, to IFC under this Agreement is
in a language other than English, that document or communication shall be
accompanied by an English translation certified by an Authorized Representative
to be a true and correct translation of the original. IFC may, if it so
requires, obtain an English translation of any document or communication
received in another language other than English at the cost and expense of the
Guarantor. IFC may deem any such English translation to be the governing version
between the Guarantor and IFC.

Section 6.03. Expenses. The Guarantor shall pay to IFC or as IFC may
direct on demand:

(a) the fees and expenses of IFC's counsel in London, England,
Delaware and any other jurisdiction incurred in connection with:

(i) the preparation and/or review, execution, translation
and, where appropriate, stamping or registration of
this Agreement;

(ii) the giving of any legal opinions required by IFC in
respect of this Agreement;

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(iii) any amendment, supplement or modification to, or
waiver under, this Agreement; and

(b) the costs and expenses incurred by IFC in relation to the
enforcement or protection or attempted enforcement or protection of its rights
under this Agreement, including legal and other professional consultants' fees
and any taxes, duties, fees or other charges payable by IFC in connection with
the enforcement of this Agreement.

Section 6.04. Remedies and Waivers. No failure or delay by IFC in
exercising any power, remedy, discretion, authority or other rights under this
Agreement shall waive or impair that or any other right of IFC. No single or
partial exercise of such a right shall preclude its additional or future
exercise. No such waiver shall waive any other right under this Agreement. All
waivers or consents given under this Agreement shall be in writing.

Section 6.05. Jurisdiction and Enforcement. (a) This Agreement is
governed by and shall be construed in accordance with the laws of England.

(b) For the exclusive benefit of IFC, the Guarantor irrevocably
agrees that any legal action, suit or proceeding arising out of or relating to
this Agreement may be brought in the courts of England. By the execution of this
Agreement, the Guarantor irrevocably submits to the jurisdiction of such courts
in any such action, suit or proceeding. Final judgment against the Guarantor in
any such action, suit or proceeding shall be conclusive and may be enforced in
any other jurisdiction, including Delaware and Gabon, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the
judgment, or in any other manner provided by law.

(c) Nothing in this Agreement shall affect the right of IFC to
commence legal proceedings or otherwise sue the Guarantor in Delaware, Gabon or
any other appropriate jurisdiction, or concurrently in more than one
jurisdiction, or to serve process, pleadings and other papers upon the Guarantor
in any manner authorized by the laws of any such jurisdiction.

(d) The Guarantor hereby irrevocably designates, appoints and
empowers the Chief Executive and Head of the Litigation Group of Bird & Bird
located at 90 Fetter Lane, London EC4A 1JP (reference VAAEN.0001), as its
authorized agent solely to receive for and on its behalf service of the writ of


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summons or other legal process in any action, suit or proceeding IFC may bring
in the courts of England.

(e) As long as this Agreement or any other Transaction Document to
which the Guarantor is a party remains in force, the Guarantor shall maintain a
duly appointed and authorized agent to receive for and on its behalf service of
the writ of summons or other legal process in any action, suit or proceeding
brought by IFC in the courts of England with respect to this Agreement or such
other Transaction Documents. The Guarantor shall keep IFC advised of the
identity and location of such agent.

(f) The Guarantor irrevocably waives:

(i) any objection which it may have now or in the future
to the laying of the venue of any action, suit or
proceeding in any court referred to in this Section;
and

(ii) any claim that any such action, suit or proceeding
has been brought in an inconvenient forum.

(g) To the extent that the Guarantor may be entitled in any
jurisdiction to claim for itself or its assets immunity with respect to its
obligations under this Agreement from any suit, execution, attachment (whether
provisional or final, in aid of execution, before judgment or otherwise) or
other legal process or to the extent that in any jurisdiction that immunity
(whether or not claimed), may be attributed to it or its assets, the Guarantor
irrevocably agrees not to claim and irrevocably waives such immunity to the
fullest extent now or in the future permitted by the laws of such jurisdiction.

(h) The Guarantor also consents generally with respect to any
proceedings arising out of or in connection with this Agreement to the giving of
any relief or the issue of any process in connection with such proceedings
including, without limitation, the making, enforcement or execution against any
property whatsoever (irrespective of its use or intended use) of any order or
judgment which may be made or given in such proceedings.

(i) To the extent that the Guarantor may, in any suit, action or
proceeding brought in any of the courts referred to in Section 6.05 (b) or a
court of Delaware, Gabon or elsewhere arising out of or in connection with this
Agreement be entitled to the benefit of any provision of law requiring IFC in
such suit, action or proceeding to post security for the costs of the Guarantor,
or to post a bond or to take similar action, the Guarantor hereby irrevocably
waives such benefit, in


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each case to the fullest extent now or in the future permitted under the laws of
England, or, as the case may be, the jurisdiction in which such court is
located.

Section 6.06. Successors and Assignees. This Agreement binds and inures
to the benefit of the respective successors and assignees of the parties, except
that the Guarantor may not assign or otherwise transfer all or any part of its
rights or obligations under this Agreement without the prior written consent of
IFC. The benefit of this Agreement may be freely and unconditionally assigned,
transferred or otherwise disposed of, in whole or in part, by IFC to any other
person, corporate or otherwise.

Section 6.07. Amendment. Any amendment of any provision of this
Agreement shall be in writing and signed by the parties.

Section 6.08. Severability. If, at any time, any provision of this
Guarantee is or becomes illegal, invalid or unenforceable in any respect under
the term of any relevant jurisdiction, neither the legality, validity or
enforceability of that provision under the law of any jurisdiction, shall be
affected or impaired in any way.

Section 6.09. Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, but all of which together constitute
one and the same agreement.


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IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Agreement to be executed as a deed,
as of the day and year first above written.

Signed as a deed
by VAALCO Energy, Inc.


By:
---------------------------
Name:
Title: Authorized Representative


by International Finance Corporation


By:
---------------------------
Name:
Title: Authorized Representative