1





                                                                    EXHIBIT 10.3

                            REIMBURSEMENT AGREEMENT


    AGREEMENT between CMS ENERGY CORPORATION ("CMS Energy") and CMS NOMECO OIL &
GAS CO. ("CMS NOMECO") dated as of December 9, 1994 relating to the
reimbursement of certain costs incurred by CMS Energy with respect to a letter
of credit provided for the benefit of CMS NOMECO.


1.  CMS Energy has arranged for the issuance of a Standby Letter Credit in the
    amount of $46,678,333 (or such lower amount as may be called for by the
    agreement with the beneficiary) in favor of Banco Latino Americano de
    Exportaciones S.A. to secure CMS NOMECO's performance under the Operating
    Services Agreement with respect to the Colon Unit, Venezuela (the "Letter
    of Credit").


2.  In consideration for arranging the issuance of the Letter of Credit, CMS
    NOMECO, together with its successors and assigns, hereby agrees:

    (i)  to reimburse CMS Energy on demand on and after each date on which a 
         draw has been made under the Letter of Credit a sum equal of the 
         amount of any such draw plus interest on such amount from the date of 
         such draw until repayment in full at a fluctuating interest rate per 
         annum equal to the rate of interest announced publicly by Union Bank 
         in Los Angeles, California as the Union Bank Reference Rate, and

    (ii) to pay to CMS Energy quarterly, in arrears, a fee equal to 212.5 basis
         points (2.125%) per annum multiplied by the average face amount of the
         Letter of Credit for such quarter.


3.  This Agreement embodies the entire agreement and understandings between CMS
    Energy and CMS NOMECO (or any subsidiary to which the underlying interest
    may be assigned) and supersedes all prior agreements and understandings
    between CMS Energy and CMS NOMECO relating to the subject matter hereof.


4.  This Agreement shall be governed by and construed in accordance with the
    laws of the State of Michigan.


    IN WITNESS WHEREOF, CMS Energy and CMS NOMECO have executed this Agreement 
as of the date first written above.


CMS ENERGY CORPORATION           CMS NOMECO OIL & GAS CO.

By:  /s/  T.A. McNish              By:    /s/ Paul E. Geiger         
    --------------------------     ------------------------------
          Thomas A. McNish                    Paul E. Geiger
                                        
Title: Vice President & Secretary  Title:  Vice President, Secretary & Treasurer
       --------------------------          -------------------------------------