                           REVISED, JUNE 12, 1998


                   IN THE UNITED STATES COURT OF APPEALS
                           FOR THE FIFTH CIRCUIT
                           _____________________

                                No. 96-20497
                           _____________________


PENNZOIL EXPLORATION AND
PRODUCTION COMPANY; PENNZOIL Plaintiffs - Appellees-Cross-Appellants,
INTERNATIONAL INC; PENNZOIL
CASPIAN DEVELOPMENT CORPORATION;
PENNZOIL CASPIAN CORPORATION,
                                          versus

RAMCO ENERGY LIMITED; RAMCO HAZAR
ENERGY LIMITED,
                              Defendants - Appellants-Cross-Appellees.
________________________________________________________________________
         Appeal from the United States District Court for the
                      Southern District of Texas
_____________________________________________________________________

____
                                May 13, 1998

Before JOLLY, EMILIO M. GARZA, and JOHN R. GIBSON,* Circuit Judges.
JOHN R. GIBSON, Circuit Judge.

        The issue before us is whether Ramco's2 dispute with Pennzoil over
development rights in the Karabakh Prospect, granted to Pennzoil by the

Azerbaijan Government to satisfy obligations arising from work performed

on a gas utilization project, is subject to binding arbitration.      The
district court held that the dispute is arbitrable under a Joint

  *
      Circuit Judge of the Eighth Circuit, sitting by designation.
        1
      Throughout this opinion "Ramco" will refer to "Ramco Hazar Energy
Limited," formerly known as "Ramco Energy Limited." We will refer to
the various Pennzoil companies as simply Pennzoil.

                                    -1-
Operating Agreement entered into by Ramco, Pennzoil, and various other

energy companies.    Ramco appeals, arguing that the dispute does not

arise under or relate to the Joint Agreement, but rather is governed by

a June 7, 1993 letter agreement between Ramco and Pennzoil that does not

contain an arbitration clause. We affirm the district court's judgment.
      Ramco and Pennzoil are parties to numerous agreements relating to

the development of oil and gas in the Apsheron Trend, an area located
in the Caspian Sea offshore Azerbaijan.

      Ramco and Pennzoil's contractual relationship originated in a
February 13, 1992 letter agreement, referred to as the "Letter of

Intent."   In the Letter of Intent, Ramco and Pennzoil agreed to conduct
a feasibility study for the development of the Guneshli3 and Chirag4
Fields, two fields located in the Apsheron Trend.   The Letter of Intent
outlined Ramco and Pennzoil's financial relationship and allocated any
potential development rights the Azerbaijan Government may award the

parties in the two fields.
      On May 22, 1992, Pennzoil, Ramco, and Kaspmorneftegas (KMNG), the

negotiating representative of the Azerbaijan Government, entered into
an "Agreement To Construct A Geological Model of the Guneshli Field in

the Azerbaijan Sector of the Caspian Sea."   This agreement, expressing
"a view to enhancing development ... from Guneshli Field," was referred

to as the "Guneshli Agreement."     It contains an arbitration clause

stating that "[a]ny disputes between the parties will be settled,



  3
   This field was initially referred to as the "April 28 Field," and
Guneshli is, in some agreements, spelled differently.
  4
   The letter referred to this field as the "Kaverochkin Field,"
later renamed Chirag.

                                  -2-
exclusively and finally, by arbitration."

     After constructing the geological model, and as a development

contract for the Guneshli Field became more imminent, Pennzoil and Ramco

executed   a   second   letter   agreement   dated   August    18,   1992.   This

agreement amended the parties' financial relationship and the allocation
of potential development rights in the Guneshli Field as set out in the

February 13 Letter of Intent.
     By October of 1992, the State Oil Company of the Azerbaijan

Republic (SOCAR), the new negotiating representative of the Azerbaijan
Government, had not granted Ramco and Pennzoil development rights in the

Guneshli Field.     To secure development rights in the Guneshli Field,
Pennzoil entered into a "Gas Utilization Agreement for Guneshli and Neft
Dashlary Fields" with SOCAR on October 1, 1992.               In this agreement,
later referred to as GUP 1, Pennzoil agreed to build an offshore natural
gas compressor station to capture the natural gas being vented from the

Guneshli and Neft Dashlary Fields and to transport the gas to energy-
starved Azerbaijan.

     In conjunction with GUP 1, and on the same date, Pennzoil and
Ramco, collectively as "Contractor," entered into a "General Agreement

On Terms and Principles for Concluding the Guneshli Field Development
Contract" with SOCAR and the Azerbaijan Government to implement a

program for gathering and transporting natural gas from the Guneshli and

Neft Dashlary Fields to shore.      The agreement, later referred to as the
"General Agreement," also provided that the parties immediately set up

a committee to prepare an acceptable Production Sharing Contract (PSC)

for the Guneshli Field.
     In May of 1993, before Ramco and Pennzoil could secure development


                                      -3-
rights in the Guneshli Field, SOCAR announced its intent to "unitize"

the development of the Apsheron Trend, consisting of the Azeri, Chirag,

and Guneshli Fields (the "ACG Unit").          In light of this decision, Ramco

and Pennzoil executed the third letter agreement of June 7, 1993,

defining the terms of their relationship in light of SOCAR's decision
to include the Guneshli Field in the unitized development of the

Apsheron Trend.     This agreement, which specifically superseded the two
previous letter agreements, states:

      For the purposes of this Letter Agreement, the Gunashli,
      Chirag and Azeri Fields, and any other areas which shall be
      developed pursuant to any joint development, field management
      or other contract or agreement (the "Contract") granting
      rights to explore for, develop, produce, transport and/or
      market hydrocarbons from said fields, whether pursuant to
      Unitisation or otherwise, within the jurisdiction of the
      Azerbaijan Republic shall be deemed the "Contract Area."

The parties agreed that any interests in any contract relating to the
"Contract Area" acquired by Pennzoil and/or Ramco shall be subject to
the   June   7,   1993   letter   agreement.      Like   the   other   two   letter
agreements, this agreement does not contain an arbitration provision.

      Because of SOCAR's decision to unitize, Ramco, Pennzoil, and six
other petroleum companies that had been negotiating with SOCAR for
development rights in the Azeri, Chirag, or Guneshli Fields, entered
into the Azerbaijan-Apsheron Trend Agreement, otherwise referred to as

the "AMI Agreement."       The AMI Agreement, dated October 19, 1993,          set

out the parties participating interests in the potential development
rights in the unitized development of the Apsheron Trend (later referred

to as the AMI area on an attached map).5         The costs incurred by Pennzoil


  5
   The AMI Agreement referred to SOCAR's previous          negotiations for
separate production sharing agreements with three          groups. Among
these were the Guneshli Field Group, comprised of          Pennzoil and Ramco,
and the Azeri Field Group, comprised of Ramco and          five other parties

                                       -4-
and Ramco under the GUP agreement, and the obligations of the other

parties for such costs, are treated specifically and in detail in the

AMI   agreement.     The    AMI   Agreement   provides    that   "any   dispute    or

difference arising out of or in connection with the Agreement, including

any question regarding its existence, validity or termination, shall be
... resolved exclusively by arbitration."

      SOCAR's decision to unitize the Guneshli, Chirag, and Azeri Fields
necessarily meant that Ramco and Pennzoil would not obtain exclusive

development rights in the Guneshli Field as GUP 1 and the General
Agreement had contemplated. As a result, on January 17, 1994, Pennzoil,

on behalf of itself and Ramco, entered into an agreement with SOCAR
entitled "Additional Agreement On The Gas Utilization Project From
Guneshli and Neft Dashlary Fields," referred to as GUP 2.                GUP 2 set
forth alternative methods for SOCAR reimbursing Pennzoil and Ramco for
costs incurred in constructing the gas utilization facilities, including

payment in currency, delivery of crude oil or hydrocarbon products,
credit toward the total signature bonus for the first Development

Agreement covering all or any part of the Azerbaijani territory to which
the Pennzoil Group is a party, or any other equitable                   method     or

mechanism.     The agreement contains an arbitration clause.
      On September 20, 1994, SOCAR, the eight parties to the AMI

Agreement, and two additional companies entered into an "Agreement on

the Joint Development and Production Sharing for the Azeri and Chirag
Fields   and   the   Deep   Water   Portion   of   the   Gunashli   Field   in    the

Azerbaijan Sector of the Caspian Sea."         In this agreement, referred to

as the "PSC," "Production Sharing Contract," or "Unit Agreement," SOCAR


to the AMI Agreement.

                                       -5-
awarded    participating         interests    to    the    contractor    parties    in   the

unitized Apsheron Trend, including Pennzoil and Ramco.                      The agreement

contains references to the gas utilization agreement, and contains an

arbitration clause for disputes arising between SOCAR and any or all of

the contractor parties.
     On November 4, 1994, the signatories to the PSC, except SOCAR,

executed a Joint Operating Agreement which regulated the relation of the
parties in the exercise of their rights and obligations under the PSC.

     The JOA contains an arbitration clause stating:
     Any dispute, controversy or claim arising out of or in
     relation to or in connection with this Agreement or the
     operations carried out under this Agreement, including
     without limitation any dispute as to the validity,
     interpretation, enforceability or breach of this Agreement,
     shall be exclusively and finally settled by arbitration, and
     any Party may submit such a dispute, controversy or claim to
     arbitration.
     On December 3, 1994, SOCAR and Pennzoil signed a "Payment Agreement
for Costs Related to the Guneshli and Neft Dashlari Gas Utilization
Project," to satisfy SOCAR's obligations                  pursuant to GUP 2.     SOCAR and

Pennzoil agreed that SOCAR would satisfy the costs incurred by Pennzoil
in connection with the Gas Utilization Project by, among other things,
granting Pennzoil a thirty percent equity interest in the Karabakh
Prospect,    an    area    outside      the    Apsheron      Trend.       This   agreement

specifically      refers    to    the   paragraph     of     GUP   2   setting   forth   the

alternative methods of reimbursement, and also to Pennzoil's share of
the bonus payable under the PSC or Unit Agreement.

     Soon    after       learning    that     Pennzoil      and SOCAR had entered the
December    3,    1994    Payment    Agreement,      Ramco     sought    assurances      from

Pennzoil that it would share in the equity interest in the Karabakh

Prospect under the terms of the June 7 letter agreement.                           Pennzoil

                                              -6-
refused, and repeated its refusal to a Ramco letter demand.          Pennzoil

then filed a motion to compel arbitration with the district court,

arguing that the Guneshli Agreement, the AMI Agreement, GUP 2, and the

JOA all required arbitration of the dispute.

      The district court determined that the dispute was not arbitrable
under the Guneshli Agreement, the AMI Agreement, or GUP 2, but that it

was arbitrable under the Joint Operating Agreement.
      On appeal, Ramco argues that the district court erroneously granted

Pennzoil's motion to compel arbitration under the JOA.         Pennzoil cross-
appeals, arguing that, in addition to the JOA, the AMI Agreement and GUP

2 also compel arbitration of the dispute.
                                      I.
      Arbitration is a matter of contract between the parties, and a
court cannot compel a party to arbitrate a dispute unless the court
determines the parties agreed to arbitrate the dispute in question. See

AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 648
(1986); Neal v. Hardee's Food Systems, Inc., 918 F.2d 34, 37 (5th Cir.

1990).   "[A]s with any other contract, the parties' intentions control,
but   those   intentions   are   generously   construed   as   to   issues   of

arbitrability."    Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 626 (1985).     This applies with special force in the

field of international commerce. Id. at 631.

      Determining whether the parties agreed to arbitrate the dispute in
question involves two considerations: (1) whether a valid agreement to

arbitrate between the parties exists; and (2) whether the dispute in

question falls within the scope of that arbitration agreement.               See
Webb, 89 F.3d at 258; Hornbeck Offshore (1984) Corp.v. Coastal Carriers


                                     -7-
Corp., 981 F.2d 752, 754 (5th Cir. 1993); Midwest Mechanical Contractors

v. Commonwealth Const. Co., 801 F.2d 748, 750 (5th Cir. 1986).         We

review de novo the grant or denial of a motion to compel arbitration.

See Webb v. Investacorp, Inc., 89 F.3d 252, 257 (5th Cir. 1996).

                                    II.
        We first consider whether there is a valid agreement to arbitrate

between the parties.    Pennzoil and Ramco are parties to five agreements
containing arbitration clauses -- the Guneshli Agreement, the AMI

Agreement, GUP 2, the PSC6, and the JOA.
                                     A.

        We agree with the district court that the arbitration clauses in
the Guneshli Agreement and GUP 2 do not apply to disputes between
Pennzoil and Ramco.    The Guneshli Agreement provides that "Party means
either Pennzoil/Ramco or KMNG as applicable." Throughout the agreement,
Pennzoil and Ramco are collectively referred to as "Pennzoil/Ramco."

Similarly, in GUP 2, Pennzoil and Ramco are collectively referred to as
the "Pennzoil Group," and the agreement was entered into between SOCAR

and Pennzoil "on behalf of itself and Ramco."     The arbitration clauses
in these agreements do not apply to disputes between Ramco and Pennzoil,

but rather apply to disputes between Pennzoil/Ramco, as a single party
on the one hand, and either KMNG or its successor SOCAR, on the other

hand.     Accordingly, Ramco cannot be forced to arbitrate the dispute

under either the Guneshli Agreement or GUP 2.
                                     B.

        Ramco also argues that the AMI's arbitration clause does not apply


  6
   Pennzoil does not argue that arbitration is mandated under the
PSC.

                                    -8-
to disputes between Ramco and Pennzoil because Ramco and Pennzoil are

a single party to the AMI Agreement.           In support of this argument, Ramco

points to the fact that Pennzoil/Ramco together are awarded an undivided

seventeen percent "Participating Interest" in the total rights and

obligations the parties may acquire in the AMI area.
     Many rights and obligations set forth in the AMI Agreement are

calculated based upon the parties' "Participating Interests."                     For
example,    Article     2.2   states    that   "the   proposals    and    negotiating

positions to be put forward shall be those which receive the affirmative
vote of the Parties ... with each Party having a voting interest equal

to its Participating Interest."            Article 3.1 states that any costs
incurred by a party pursuant to the voting procedures in Article 2.2
"shall     be   borne   by    the    Parties   pro    rata   to   their    respective
Participating Interests."           Ramco argues that the AMI Agreement proves
that "Party" necessarily means the individual companies or groups of

companies who were awarded Participating Interests.               Because Ramco and
Pennzoil are provided an undivided Participating Interest, Ramco argues

they are a single party to the contract.
     That Ramco and Pennzoil are allocated an undivided participating

interest in the AMI Agreement does not establish that Ramco and Pennzoil
are a single party to the agreement.             The AMI Agreement commences by

stating, "This Agreement is made ... between:" and then identifies eight

separate corporate entities, including Ramco and Pennzoil.                Immediately
following the listing, the AMI Agreement states that the entities are

"hereinafter collectively referred to as the 'Parties' and individually

as 'Party.'"      At the end of the document, a Pennzoil representative
signed "on behalf of Pennzoil" and a Ramco representative signed "on


                                         -9-
behalf of Ramco."   The terms of the AMI agreement do not support Ramco's

position.

     Other evidence in the record lends support to our view that

Pennzoil and Ramco are separate parties to the contract.7   In a February

10, 1994, fax transmission to Pennzoil, Ramco states, "There appears to
be some confusion as to whether Ramco should be circulated directly....

Let me please clarify: Ramco is a separate party to the AMI and will be
a separate signature to the PSC and therefore should be included in each

of your circulation lists...."   We conclude that the arbitration clause
in the AMI Agreement is a valid agreement to arbitrate disputes between

Pennzoil and Ramco.
                                   C.
     The fourth agreement which contains an arbitration clause is the
Joint Operating Agreement.    Ramco does not dispute the validity of the
JOA's arbitration clause or that Ramco and Pennzoil are separate parties

to the agreement.     Instead, it argues that the dispute does not fall
within the scope of this agreement.

     Having concluded that the AMI Agreement and the JOA contain valid
agreements to arbitrate between the parties, we turn to whether the

dispute before us comes within the scope of either of these agreements.
                                   III.

     Whether the dispute falls within the arbitration agreement is a



     7
      Two other parties to the AMI Agreement, "BP" and "Statoil," were
also allocated an "undivided participating interest" in potential
development rights in the AMI Area. Like Pennzoil and Ramco, BP and
Statoil were also individually listed and signed separately.
Following Ramco's rationale, BP and Statoil must also be a singular
party to the Agreement, a reading which seems to contradict Article
4.1(b) which specifically allows BP to nominate a person to fill the
most senior position in the to-be-formed Joint Operating Entity.

                                  -10-
determination this court must make, and both parties urge that we do so.

We have stated in Executone Information Systems v. Davis, 26 F.3d 1314,

1321 (5th Cir. 1994), that the question of whether a party can be

compelled to arbitrate, as well as the question of what issues a party

can be compelled to arbitrate, is an issue for the court rather than the
arbitrator to decide.           We   are satisfied that AT & T Technologies Inc.

v.       Communications    Workers,    475    U.S.       643,     649   (1986),    makes    this
abundantly clear.8         See also Litton Financial Printing Div. v. National

Labor Relations Bd, 501 U.S. 190, 208, 209 (1991).
          This dispute centers around the December 3, 1994 "Payment Agreement

for Costs Related to the Guneshli and Neft Dashlary Gas Utilization
Project" entered into by Pennzoil and SOCAR which, among other things,
awards Pennzoil a thirty percent equity interest in the Karabakh
Prospect.
          Ramco argues that the June 7, 1993 letter agreement is the "joint

venture       agreement"    defining       the    terms      of    Pennzoil       and    Ramco's
relationship.           Ramco   explains     that       because    Pennzoil   obtained       the

Karabakh interest as reimbursement for GUP-related expenditures it is
necessarily a joint asset governed by the June 7, 1993 joint venture

agreement.       Furthermore, Ramco argues that the Karabakh Prospect is
within the "Contract Area" as defined in the June 7, 1993 letter

agreement,       and,    therefore,    the       June    7   letter     agreement       governs.


     8
   We recognize that some of our decision might be read to the
contrary, see Sedco, Inc. v. Petroleos Mexicanos Mexican National Oil
Co., 767 F.2d 1140, 1150 (5th Cir. 1985); and Hornbeck Offshore
(1984) Corp. v. Coastal Carriers Corp., 981 F.2d 752, 754-55 (5th
Cir. 1993). Should a claim arise that might require that we
determine whether there is a conflict between our decisions and to
what extent, we will decide the issue at that time.


                                             -11-
Finally, Ramco argues that the Karabakh Prospect is not a part of the

Guneshli, Chirag, or Azeri Fields, and thus, the AMI Agreement and the

JOA, which are limited to those fields, are irrelevant to the dispute.

      Pennzoil does not dispute that the Karabakh Prospect is outside the

geographic area covered by the JOA and the AMI Agreement, or that Ramco
has not based its claim on either of these agreements. Rather, Pennzoil

argues that Pennzoil and Ramco's relationship is confined to the fields
of   the   Apsheron    Trend,   that   the    JOA   is   the   controlling    document

regulating those rights, and that the June 7 letter merely governs the
financing of Pennzoil's and Ramco's rights in the Apsheron Trend.

      We emphasize that our sole responsibility is to determine whether
this dispute is governed by an arbitration clause, not to determine the
merits of the dispute.      See Snap-On Tools Corp., v. Mason, 18 F.3d 1261,
1267 (5th Cir. 1994).           "We resolve doubts concerning the scope of
coverage     of   an    arbitration     clause      in    favor    of     arbitration.

...[A]rbitration should not be denied 'unless it can be said with
positive assurance that an arbitration clause is not susceptible of an

interpretation which would cover the dispute at issue.'" Neal, 918 F.2d
at 37 (internal citations omitted).             See also AT&T Technologies, 475

U.S. at 650.
                                         A.

      We first examine whether the dispute falls within the scope of the

JOA's arbitration clause, which mandates arbitration of "[a]ny dispute,
controversy or claim arising out of or in relation to or in connection

with this Agreement or the operations carried out under this Agreement,

including    without     limitation     any    dispute     as     to    the   validity,
interpretation, enforceability or breach of this Agreement."


                                        -12-
             Both the Supreme Court and this court have characterized similar

arbitration clauses as broad arbitration clauses capable of expansive

reach.         See Prima Paint Corp., v. Flood & Conklin Mfg. Co., 388 U.S.

395, 397-98 (1967) (labelling as "broad" a clause requiring arbitration

of "[a]ny controversy or claim arising out of or relating to this
Agreement"); Nauru Phosphate Royalties, Inc. v. Drago Dais Interests,

Inc., 1998 WL 145363, *4 (5th Cir. 1998) (holding that when parties
agree to an arbitration clause governing "[a]ny dispute ... arising out

of or in connection with or relating to this Agreement," they "intend
the clause to reach all aspects of the relationship.").

             Furthermore, courts distinguish "narrow" arbitration clauses that
only require arbitration of disputes "arising out of" the contract from
broad arbitration clauses governing disputes that "relate to" or "are
connected with" the contract.            See, e.g., Tracer Research Corp. v.
National Envtl. Svcs. Co., 42 F.3d 1292, 1295 (9th Cir. 1994) (comparing

"relating to" language with "arising out of" language).                  The Joint
Operating Agreement uses not only the phrase "arising out of," but also

"in connection with or relating to."            This resolves any doubt that this
is       a   "broad"   clause.   Broad   arbitration   clauses,   like   the   JOA's

arbitration clause, are not limited to claims that literally "arise
under the contract," but rather embrace all disputes between the parties

having a significant relationship to the contract regardless of the

label attached to the dispute.9          See J.J. Ryan & Sons v. Rhone Poulenc
Textile, 863 F.2d 315, 321 (4th Cir. 1988); Miller v. Flume, 1998 WL



     9
   We realize that even broad clauses have their limits. Because we
are concerned only with the dispute before us and its connection with
or relation to the several agreements before us, we need not explore
these outer limits.

                                         -13-
128443, *7 (7th Cir. 1998).

       Ramco argues that this dispute is not arbitrable under the JOA

because Ramco has not based its claim to an interest in the Karabakh

Prospect pursuant to the JOA, but rather has based its claim under the

June 7, 1993 letter agreement.
       The fact that Ramco's claim is based on the June 7 letter agreement

does not decide whether the dispute is arbitrable under the JOA's
arbitration provision.        See Neal, 918 F.2d at 37; American Recovery

Corp. v. Computerized Thermal Imaging, 96 F.3d 88, 93 (4th Cir. 1996);
ARW    Exploration   Corp.    v.   Aguire,   45   F.3d   1455,   1461   (10th   Cir.

1995)(While       agreement    did    not    contain     an   arbitration   clause,
arbitration provision in other agreements broad enough to encompass
dispute).
       Pursuant to the JOA's arbitration clause, "any" dispute arising out
of "or in relation to" or "in connection with" the JOA shall be settled

by arbitration.      Therefore, it is not necessary that the dispute arise
out of the JOA to be arbitrable -- but only that the dispute "relate to"

or be "connected with" the JOA.         See Commerce Park; 729 F.2d at 339,
n.4.    With such a broad arbitration clause, it is only necessary that

the dispute "touch" matters covered by the JOA to be arbitrable.                 See
Mitsubishi, 473 U.S. at 625 n.14; Commerce Park, 729 F.2d at 339 n.4.

       Bearing in mind the strong federal policy in favor of arbitration,

we conclude the dispute is "related to" the JOA and is therefore
arbitrable under its extremely broad arbitration provision. The dispute

flows from a series of interrelated agreements, all of which center

around the overriding goal of acquiring development rights from the
Azerbaijan government in the Guneshli Field, before unitization, and the


                                       -14-
Guneshli, Chirag, and Azeri Fields after unitization.     In addition to

being related to the same overriding goal, the agreements themselves

evidence their inter-relationship.    The first agreement entered into by

Ramco and Pennzoil, the February 13, 1992 Letter of Intent, recites:

        During the Study period the parties expect to commence
        commercial negotiations with the appropriate Azerbaijani
        authorities relating to the [Guneshli] and [Chirag] Fields.
        During this time the parties will also use their best
        endeavors to conclude a joint operating agreement ('JOA')
        governing their mutual relationship. When executed, the JOA
        will supersede this letter agreement.

        The August 18, 1992 letter agreement refers to the February 13
Letter of Intent, the feasibility study relating to the development of

the Guneshli Field, and a proposed contract currently under draft and
discussion (the "PEC") which was to be entered into by the Azerbaijan
government, Ramco, and Pennzoil relating to the development of the
Guneshli Field. This letter acknowledged, as did the February 13 Letter
of Intent, that it did not set out all details governing the parties'

relationship.
        Like the two preceding letter agreements, the June 7, 1993 letter

agreement also acknowledged that it did not set out all the details
governing the parties' relationship.      Pennzoil and Ramco agreed that,

as soon as SOCAR awarded a percentage interest in respect to the
unitization of the three fields, they would negotiate a more definitive

agreement, but in the interim, the June 7 letter agreement controlled.

Similarly, the AMI Agreement also contemplated that the parties would
conclude a joint operating agreement governing operations in the AMI

Area.     The AMI Agreement also specifically refers to Pennzoil and

Ramco's costs incurred in performing the gas utilization project and
contains detailed provisions for allocation of and responsibility for


                                   -15-
these costs by the parties.

     GUP 2 specifically refers to GUP 1 and the concurrent General

Agreement and recognizes that the primary inducement for Ramco and

Pennzoil committing to those agreements was SOCAR's commitment to grant

Ramco and Pennzoil exclusive development rights in the Guneshli Field.
The PSC recognizes that SOCAR and the Pennzoil Group (Pennzoil and

Ramco) had previously entered into the GUP 1 and GUP 2 agreements, and
provides for reimbursement of Pennzoil and Ramco's costs incurred in

connection with the Gas Utilization Project.         In addition, the PSC
specifically states that the Pennzoil Group and SOCAR can amend or

modify the Gas Utilization Agreement and negotiate one or more methods
for SOCAR to satisfy its obligations to the Pennzoil Group under the Gas
Utilization Agreement.
     The JOA is directly tied to the PSC as its purpose is to regulate
the parties in the exercise of their rights with regard to the Azeri,

Chirag, and Guneshli Fields. The JOA provides that the Agreement is the
entire agreement of the Parties in relation to the matters dealt with

therein   and   supersedes   all   prior   understandings,   agreements   and
negotiations of the Parties relating hereto.       The agreements, by their

terms, plainly show their interrelation.10


     10
      Furthermore, there is evidence that Ramco recognized this
interrelationship among the documents in a December 8, 1993, letter
accompanying a draft financing agreement. Ramco's attorney states:
     I undertook to send . . . an outline of the financing
     agreement which will need to be put in place between
     Pennzoil and Ramco, the final terms which will, of course,
     depend on the final form of the JOA. A draft follows
     which will look quite similar to a version I provided
     [Pennzoil] earlier this year in the context of the
     Gunashli JOA. . . . I would like to have your preliminary
     observations on the outline primarily to identify any
     significant areas which have been omitted. The draft

                                    -16-
     We need not decide whether these letter agreements were in fact

superseded by the JOA to determine the issue before us.   We merely use

this language from the Joint Operating Agreement as further illustration

of the interrelatedness and interdependency of the numerous agreements

entered into by Ramco and Pennzoil - particularly the June 7 agreement
and the JOA.

     Ramco is essentially disputing the terms of the December 3, 1994
Payment Agreement entered into between Ramco and Pennzoil.   The Payment

Agreement, entered into to satisfy GUP 2, specifically provides that
SOCAR will satisfy a portion of its obligation by crediting "Pennzoil's

share of the bonus payable under Article 29.2 (i) of the [PSC]."    The
parties entered into the JOA to "define their respective rights and
obligations with respect to their operations under the PSC." Thus, this
dispute, which clearly relates to the Payment Agreement, also "relates
to" the JOA.

     Although Ramco is relying on the June 7, 1993, letter agreement,
both the June 7 letter agreement and the JOA specifically deal with the

acquisition of development rights from the Azerbaijan Government in the
Guneshli, Chirag, and Azeri Fields.   This dispute relates to Ramco and

Pennzoil's agreements entered to secure those development rights from
the Azerbaijan Government, of which the Gas Utilization Project was a

key factor.

     Pennzoil and Ramco entered into GUP 1 and the General Agreement to



     financing agreement stated: "This agreement and the Joint
     Operating Agreement supersede in all respects those
     certain Letter Agreements between [Pennzoil] and Ramco
     dated 13 February 1992, 18 August 1992, and 10 June 1993
     respectively."


                                 -17-
secure exclusive development rights in the Guneshli Field.               Because of

SOCAR's decision to unitize the Guneshli, Chirag, and Azeri Fields, this

did not happen.11      Therefore, Ramco and Pennzoil entered into GUP 2 with

SOCAR to provide for reimbursement of GUP related costs.                    SOCAR's

payment to Pennzoil to satisfy GUP 2 is at the center of this dispute.
       Although the dispute may not "arise under" the JOA, the dispute

"relates   to"   the    JOA   and   therefore    falls   within   the   JOA's   broad
arbitration provision.

                                         B.
       Like the JOA, the AMI Agreement contains a broad arbitration

clause.    The AMI Agreement mandates arbitration of "any dispute or
difference arising out of or in connection with this Agreement."
       The AMI Agreement, like the JOA, is another agreement in the line
of agreements dealing with the acquisition of development rights in the
Guneshli, Chirag, and Azeri Fields.             SOCAR's decision to unitize the

three fields led the companies that had previously been negotiating with
SOCAR for development rights in those fields to enter the AMI Agreement.

The AMI Agreement specifically divides the rights and obligations which
may be acquired by the parties in the event the parties reach an

agreement with SOCAR for development rights in the Guneshli, Chirag, and
Azeri Fields.     Furthermore, the AMI Agreement recognizes that Pennzoil

and Ramco incurred costs in performing under GUP 1 and sets forth how

those costs will be borne by the parties if an agreement for development
rights with SOCAR includes the Guneshli Field.            Ramco is now attempting

to establish rights arising from the Gas Utilization Project and the

  11
   SOCAR's decision to unitize also led to Ramco and Pennzoil
executing the June 7, 1993 letter agreement, and eventually the JOA.


                                        -18-
June 7 letter agreement which covers the same unitized fields the AMI

Agreement regulates.        Much of our discussion of the JOA above, and of

governing legal principles, is equally applicable to the AMI.               Like the

JOA, Ramco's claim is connected to the AMI Agreement and therefore the

dispute falls within the AMI Agreement's broad arbitration clause.
                                    CONCLUSION

        For the reasons stated above, we conclude (1) that both the AMI
Agreement and the JOA contain valid agreements to arbitrate disputes

between Ramco and Pennzoil; and (2) that the dispute falls within the
scope    of   the   AMI    Agreement's   arbitration    clause     and   the   JOA's

arbitration clause.        Accordingly, we affirm the district court's order
granting Pennzoil's motion to compel arbitration in New York, New York
in   accordance     with   the   Arbitration    Rules   of   the   United   Nations
Commission on International Trade law.




                                         -19-
