JANUARY

THE MARKET: The near-month futures price for light, sweeet crude on the New York Mercantile Exchange ends the week of Jan. 1 at $11.81/bbl, down $5.76/bbl from the same week the previous year. The gas futures price ends the same week at $1.85/MMbtu, down 39¢/MMbtu from a year earlier. By month`s end, the NYMEX oil price is $12.40/bbl, gas $1.78/MMbtu.

RESTRUCTURING: British Petroleum Co. and Amoco Corp. complete their $53 billion merger...Santa Fe Energy Resources Inc. agrees to acquire Snyder Oil Corp. for about $450 million in stock in a deal combining the two midsize independents into what would be called Santa Fe Snyder Corp.

PIPELINE: A new crude oil pipeline carrying 50,000 b/d from Azerbaijan`s Caspian Sea fields across Georgia to the Black Sea port of Supsa begins operations.

EXPLORATION: More than 300 oil company officials attend a presentation by Brazilian petroleum regulators discussing the first oil and gas exploration blocks to be opened to foreign investors. Brazil is in the process of opening as much as 92% of its sedimentary basins to companies other than Petrobras, the country`s state-owned oil company. Twenty-seven blocks will be part of the first round of competitive bidding.

GOVERNMENT: Iranian Pres. Mohammad Khatami approves a plan to restructure Iran`s oil ministry. The plan focuses on decentralization of control by separating policy-making from executive affairs.

FEBRUARY

THE MARKET: The NYMEX crude price by month`s end stands at $12.42/bbl, while gas is $1.67/MMbtu.

GOVERNMENT: The US Senate acquits Pres. Bill Clinton of impeachment charges, which allows him to remain in office... Bangladesh and the US sign three agreements aimed at helping Bangladesh reorganize its energy sector to avoid power shortages and to improve the extraction and sale of natural gas...The US government announces plans to purchase 28 million bbl of crude oil for the federal Strategic Petroleum Reserve. The announcement is aimed at helping small US oil companies hurt by low oil prices.

DRILLING: Kuwait Petroleum Corp. confirms a find of sweet oil in Kra al-Marow oil field northwest of Kuwait City. Preliminary results indicate a test production rate of 1,800 b/d. Kra al-Marow, according to KPC, could be as large as Burgan, Kuwait`s largest oil field.

PIPELINES: Italy`s ENI SPA and Russia`s RAO Gazprom, the world`s largest natural gas producer, agree to build a gas pipeline from Russia to Turkey at a cost of nearly $3 billion. Each partner will hold a 50% stake in the proposed Blue Stream pipeline project.

MARCH

THE MARKET: In an effort to raise oil prices, which fell sharply in late 1997 and stayed low through 1998 and into early 1999, the Organization of Petroleum Exporting Countries agrees to cut oil output by 1.716 million b/d, effective Apr. 1, 1999, for 1 year...The NYMEX crude price rises to $15.64/bbl at the end of the month vs. $12.87/bbl to open the month, and the gas price is $1.79/MMbtu.

ACQUISITIONS: ARCO agrees to be acquired by BP Amoco PLC for $26.6 billion in stock...El Paso Energy Corp. agrees to buy rival Sonat Inc. for $3.9 billion in stock and $1.9 billion in assumed debt, creating the largest interstate natural gas pipeline company in the US...Reliant Energy agrees to spend $2.4 billion during the next 7 years to acquire about 60% of NV Energieproductiebedrijf UNA, one of the biggest power companies in The Netherlands.

TRANSPORTATION: Ford Motor Co., the world`s second largest automaker, and DaimlerChrysler AG, the fifth largest, unveil plans to introduce hydrogen fuel-cell cars to the mass market by 2004...ARCO scientists develop a transportation fuel that emits less pollution than regular diesel fuel. In preliminary tests, the fuel, called EC Diesel, emitted 15% less particulates and 5% less nitrogen oxide without reducing fuel economy, ARCO said...After 3 years of negotiations, Enron Corp. and the Qatari government cancel plans to build a $4 billion LNG facility. Enron originally intended to ship about 2 million tonnes/year of Qatari LNG to India to fuel the Dabhol power plant and to sell the facility`s remaining annual production to India and the Middle East.

APRIL

THE MARKET: The NYMEX price for crude ends the month at $18.22/bbl, gas at $2.31/MMbtu.

GOVERNMENT: Under new rules instituted by Ecuador`s government, state-run Petroecuador will be allowed to have private partners, either foreign or domestic, to increase oil production. Ecuador expects investments of $1-2 billion over the next 4 years.

ACQUISITIONS: Spain`s Repsol SA announces a bid to acquire the 85.01% of Argentina`s YPF SA that it does not already own. If the deal goes through, it would create the world`s eighth largest energy group, with annual revenues of more than $26 billion...A consortium of British Gas PLC and Royal Dutch/Shell Group buys a controlling 53% stake in Cia. De Gas de Sao Paulo, Brazil`s largest natural gas distributor, for $1 billion, more than double the Brazilian government`s minimum asking price.

PRODUCTION: Azerbaijan`s state-owned oil company, Socar, signs three oil and natural gas production-sharing agreements totaling an estimated $10 billion with Exxon Corp., Mobil Corp., and Moncrief Oil International...The US Department of Treasury`s Office of Foreign Asset Control notifies Mobil that it has turned down Mobil`s request for a license to swap crude oil it produces in Turkmenistan in exchange for Iranian oil. Mobil had hoped to be allowed to ship oil produced in Turkmenistan to northern Iranian oil refineries, while Iran, in turn, would provide Iranian oil from Iran`s Persian Gulf export terminals to Mobil for shipment to global markets as payment.

MAY

THE MARKET: Venezuelan Pres. Hugo Chavez states that a sharp increase in oil prices is not desirable. "If the price of a Venezuelan oil basket hovers around $13-14/bbl, I will be happy," he says...The NYMEX crude price near the end of the month is $17.17/bbl; gas is $2.26/MMbtu.

MERGERS: Exxon Corp. and Mobil Corp. shareholders approve an $81.2 billion merger that will create the world`s biggest oil company...Norsk Hydro AS, one of Norway`s state-owned oil companies, offers to buy out privately owned Norwegian exploration company Saga Petroleum AS for more than $2.2 billion.

ENVIRONMENTAL: The US Environmental Protection Agency states that it will not change its "Tier Two Plan" to cut gasoline sulfur content and tailpipe emissions, in response to an appellate court ruling that the EPA had overstepped its mandate in implementing some provisions of the Clean Air Act. Beginning in 2004, the Tier Two Plan would require refiners to cut gasoline sulfur content to an average of 30 ppm, down more than 90% from the current national average...US Pres. Clinton unveils a plan to apply the same standard for tailpipe emissions to cars, light-duty trucks, and most sport utility vehicles (SUVs). The plan would result in a 77% reduction for cars and a 95% reduction for light-duty trucks and SUVs-phased in during the 2004-07 model years.

RELATED ENERGY: Elf Aquitaine SA submits a proposal to the Saudi Arabian government to set up a natural gas and electricity project worth more than $1 billion. Elf proposes to develop a gas field in central Saudi Arabia and use the gas to fuel a 1,500-Mw electric power plant to be located near the field. This is the first firm proposal submitted to the Saudis since Saudi Crown Price Abdullah`s invitation to major energy companies to invest in Saudi gas projects.

JUNE

THE MARKET: NYMEX crude for August delivery closes at $19.29/bbl on June 30. The gas price closes at $2.26/MMbtu.

PIPELINES: Sudan starts shipping oil through its 250,000 b/d capacity pipeline linking Heglig oil field in western Kordofan province to Port Sudan on the Red Sea...Russia`s Transneft announces that it will begin moving crude oil from Baku in Azerbaijan to the Russian Black Sea port of Novorossiisk by rail, temporarily bypassing the troubled pipeline through the breakaway province of Chechnya...Citing a lack of funds, Jordan`s government announces that it has shelved plans to build a crude oil pipeline from Iraq to Jordan, which relies on trucks to transport 90,000 b/d of oil and products from Iraq.

RESTRUCTURING: Texaco Inc. terminates negotiations on the potential acquisition of the company by Chevron Corp. Texaco says that Chevron`s final proposal is "unacceptable" for reasons of complexity, feasibility, risk, and price...China National Petroleum Corp. announces plans to lay off 75,000 workers at five of its major refineries in northern China, reducing employment by 30% overall and 50% among managerial and administrative staff...Brazil`s Petroleo Brasileiro SA and Venezuela`s Petroleos de Venezuela SA sign a letter of intent for a strategic alliance. The agreement`s aim is to be "the starting point to establish the economic viability of a joint company, which will be called Petroamerica."

EXPLORATION: Petroleum Development Oman Ltd. makes what it calls the most significant oil discovery in Oman in 5 years.

JULY

THE MARKET: The NYMEX crude price at month`s end is $20.59/bbl, compared with $14.20/bbl a year earlier. Gas is $2.57/MMbtu, compared with $1.92/MMbtu at the same time the year before.

EXPLORATION: Phillips Petroleum Co. discovers oil in Bohai Bay Block 11/05 off southern China. Phillips intends to drill five more test wells, in addition to the two initial wells, which are capable of producing 3,000-5,000 bo/d.

RESTRUCTURING: TotalFina SA launches a $42 billion bid to take over Elf Aquitaine SA. Elf counters with a takeover bid for TotalFina.

ENVIRONMENTAL: An advisory panel of the US Environmental Protection Agency releases a report urging a substantial reduction in the use of methyl tertiary butyl ether as a fuel additive because of concerns about pollution of groundwater by MTBE.

EXPLOITATION: Italy`s ENI SPA agrees to invest $5.5 billion in oil and gas development in Libya. The projects to be funded include a 372-mile pipeline that will carry Libyan natural gas to Sicily.

AUGUST

THE MARKET: Oil and gas price increases continue as the NYMEX crude price ends the month at $21.22/bbl, gas at $3/MMbtu...NYMEX offers to buy as much as 70% of London`s International Petroleum Exchange.

MARKETING: Russia`s Fuel & Energy Ministry orders Russian oil companies to sell all of their gasoline on the domestic market for the month because of domestic shortages.

TRANSPORTATION: Chevron Corp. and Royal Dutch/Shell sign an agreement with Benin, Togo, Ghana, and Nigeria to develop the West Africa Gas Pipeline. The $400 million project is scheduled for completion in 2002...Russia`s Oil Ministry announces that the export duty for crude oil will be doubled, effective Oct. 1, 1999, to 10 euros/tonne.

PROCESSING: A major earthquake hits northwest Turkey, with its epicenter near the state-owned Turkish Petroleum Refineries Corp. refinery at Izmit. The resulting fire at the plant causes damage expected to keep the 226,000 b/d facility idle 4 months.

GOVERNMENT: The board of directors of Norway`s state-owned oil firm Statoil AS recommends to the Oil Ministry that the firm be partially privatized.

SEPTEMBER

THE MARKET: The NYMEX crude price ends the month at $24.50/bbl, gas at $2.54/MMbtu.

COMPANIES: China National Petroleum Corp. announces plans to inaugurate a holding company that will seek to have its shares listed on the New York Stock Exchange. An initial public offering of its stock is expected to attract $10 billion.

EXPLORATION: National Iranian Oil Co. discovers Azadegan oil field with an estimated 26 billion bbl of oil in place in Khuzestan province. The field is expected to produce 300,000-400,000 b/d 3-4 years after start of development in 2000...Brazil`s Petroleo Brasileiro SA discovers oil off Rio de Janeiro state in the Santos basin with crude reserves estimated at 600-700 million bbl.

COURTS: Chevron Corp. agrees to pay $95 million to settle allegations that it systematically underpaid royalties for crude oil produced from federal US lands. The settlement stems from a suit brought by two industry workers under the False Claims Act against a total of 18 firms that produce oil from federal lands.

GOVERNMENT: The US Senate approves a proposal to block the Clinton administration from changing royalty oil-valuation procedures.

ENVIRONMENT: BP Amoco PLC unit British Petroleum Exploration (Alaska) pleads guilty to a felony charge of illegally dumping hazardous waste on Alaska`s North Slope. The company agrees to a $22 million settlement to resolve the charges...Save Domestic Oil Inc. files an appeal with the Court of International Trade in New York seeking a reversal of the US Department of Commerce dismissal of their antidumping complaint against four non-US oil producing countries.

OCTOBER

THE MARKET: The NYMEX crude price ends the month at $22.60/bbl, gas at $3.01/MMbtu...Rem Vyakhirev, chief executive of Russia`s Gazprom, the world`s largest producer and exporter of natural gas, announces an attempt to forge a natural gas cartel in response to low prices in the European market.

PRODUCTION: The United Nations Security Council agrees to raise the monetary ceiling on Iraqi oil sales to $8.3 billion from $5.26 billion, guaranteeing the continuation of Iraqi production until the Nov. 20, 1999, end date for the current 6 month extension of the oil-for-aid program...Exxon Corp. begins production from Balder field in the Norwegian North Sea. The field is expected to reach a peak output of 100,000 b/d...The Norwegian Oil & Energy Ministry announces that the Norwegian government seeks to increase the country`s crude oil production in 2000 by 20% to 3.5 million b/d.

RESTRUCTURING: Japanese downstream oil firms Cosmo Oil Co. Ltd. and Nippon Mitsubishi Oil combine in a strategic alliance. The move, not a merger, is expected to result in cost reductions by eliminating duplicate operations. The action follows a period of low refining margins and excess refinery capacity in the Japanese oil industry...The French government announces its intention to retain its "golden share" in the merged TotalFina SA-Elf Aquitaine SA. The golden share gives the government the right to block any merger plans or takeover attempt involving the company.

GOVERNMENT: Saudi Oil Minister Ali I. al-Naimi says the Saudi government continues to evaluate proposals submitted by foreign oil companies for investment in Saudi Arabia. He stresses the need to consider projects that "complement the domestic industry, not replace it," such as petrochemical plants.

NOVEMBER

THE MARKET: As skittish oil markets approach the Y2K rollover, NYMEX crude prices at the end of the month reach $26.79/bbl, and gas is at $2.17/MMbtu.

EXPLOITATION: ARCO and Triton Energy Corp. conclude a $5 billion agreement with the state-run oil companies of Thailand and Malaysia to sell natural gas from blocks jointly held by the two firms in the Gulf of Thailand. Deliveries of 390 MMcfd are set to begin in 2002...Royal Dutch/Shell signs an $800 million development contract with National Iranian Oil Co. for two offshore fields in the Persian Gulf. The contract calls for an expansion of production at Soroush field to 150,000 b/d and at Nowruz field to 90,000 b/d.

PROCESSING: China and Germany sign a memorandum of understanding to build a $2.7 billion petrochemical complex in China. The project will be a joint venture between China`s state-owned petroleum firm China Petrochemical Corp. and BASF AG of Germany.

GOVERNMENT: The Russian government sells a 9% stake in Russia`s largest oil company, Lukoil, to a Cyprus-based firm, Reforma Investment. The Russian government had previously held a 27% stake in Lukoil...The US and China conclude an agreement on Chinese entry into the World Trade Organization. Under the agreement, China will make a limited opening of its internal petroleum products market to foreign competition, allowing foreign firms to open 30 retail gas stations every 3 years after China`s accession to the WTO. China also will abolish the existing oil import quota system in phases over 4 years.

DECEMBER

THE MARKET: The NYMEX crude price ends the month at $26.31/bbl, gas at $2.34/MMbtu.

RESTRUCTURING: The US Federal Trade Commission votes 4-0 to allow Exxon Corp. to acquire Mobil Corp. for $81 billion but gives the companies 9 months to divest 2,431 US gasoline stations...BP Amoco PLC wins approval from Alaska for its planned takeover of ARCO. FTC is still considering the matter.

ENVIRONMENT: California`s Air Resources Board approves a regulatory change that will halve the amount of sulfur allowed in gasoline sold in California from 30 ppm to 15 ppm, starting in 2003. The California limit would be half the national limit under a rule proposed by the US Environmental Protection Agency.

GOVERNMENT: Russian Pres. Boris Yeltsin makes a surprise announcement Dec. 31 that he is resigning immediately. Prime Minister Vladimir Putin becomes acting president, and presidential elections will be held within 90 days...The Panama Canal Zone reverts to Panamanian sovereignty at noon Dec. 31, after nearly a century of US control. More than 500,000 b/d of crude and products transit the canal.