American International Petroleum Units Sign Agreements With Sargeant Marine Unit for Refining Crude Oil and Marketing Refined Products.

Business Editors

NEW YORK--(BUSINESS WIRE)--September 29, 2000

Contracts Could Generate Annual Revenues Exceeding $150 Million

American International Petroleum Corporation (NASDAQ - NM: AIPN) today announced that two of its wholly owned subsidiaries have signed agreements for refining crude oil and marketing refined products with Sargeant Bulktainers ("SB"), a unit of The Sargeant Group of Companies.

The first agreement provides for the Company's refining subsidiary, American International Refinery, Inc., ("AIRI"), to refine SB's crude oil at its Lake Charles, Louisiana refinery (the "Refinery") into naphtha, kerosene, diesel oil, vacuum gas oil, and asphalt for a fee. The agreement also provides for AIRI to obtain conventional financing from SB to expand the capacity and efficiency of the Refinery. The second agreement calls for the Company's new wholly owned subsidiary, Gulf Coast Petroleum Trading, Inc., to purchase these refined products from SB and market them throughout the U.S. The contracts become fully operational following the completion of minor capital improvements and a preliminary production run of 40,000 to 60,000 barrels of condensate. The capital improvements are being financed by SB, and should be completed by month end. Both agreements are expected to begin generating revenues in October 2000.

Based on the crude volumes of 10,000 to 18,000 barrels per day, which SB currently plans to process through the Refinery, and the current and anticipated prices and general market conditions for refined products, the Company expects these agreements, together with the joint venture agreement signed in August with SB, could provide it with aggregate annual revenues in excess of $150 million and generate standard industry operating margins.

In August this year, AIRI and SB signed a joint venture agreement whereby SB began financing and supplying AIRI with bulk conventional asphalt and raw materials. AIRI utilizes its facilities and expertise to blend the conventional asphalt into high-margin polymerized asphalt and market it throughout the Gulf Coast and other areas of the country.

The parties also intend to expand the Refinery's processing and storage capacity and to restart asphalt distribution operations at the Company's other refinery in St. Marks, Florida. This expansion will enable them to increase the initial processing rates at Lake Charles and expand the distribution capacity of the joint venture's asphalt business.

Dr. George Faris, Chairman of the Company's Board of Directors, commenting on these agreements, said, "We believe that the consequences of these contracts will dramatically change the Company's near and long term financial and operating status and will directly improve the prospect of advancing pending negotiations regarding our Licenses 953 and 1551 in Kazakhstan.

"Specifically these contracts, when implemented at the upper end of the projected daily processing rate, will provide the backbone for the Company to finally achieve financial self efficiency, which in turn will send a very positive message regarding our intent and financial capacity to the various entities with whom we are currently negotiating in Kazakhstan."

About the Sargeant Group of Companies:

The Sargeant Group of Companies, formed in 1983 and headquartered in Boca Raton, FL, is a world leader in the sales, marketing and transportation of asphalt and bitumen products. The Sargeant group operates the largest and most modern fleet of asphalt tankers, barges, and bulk containers in the world.

About American International Petroleum Corporation:

American International Petroleum Corporation is a diversified petroleum company which, through various wholly owned subsidiaries, is involved in oil and gas exploration and development in the Republic of Kazakhstan, and in refining, marketing and transportation of its refined products in the United States.

Statements herein may be identified as forward-looking for purposes of safe harbor provisions under Section 21E of the Securities and Exchange Commission Act of 1934. Such statements relating to the company's future business are subject to risks and uncertainties that could cause actual results to differ materially from those statements and other risks and factors, identified in the Company's SEC filings.