JANUARY

THE MARKET: The near-month futures price for light, sweeet crude on the New York Mercantile Exchange ends the week of Jan. 2 at $17.57/bbl, down $8.07/bbl from the same week a year earlier. The gas futures price ends the same week at $2.24/MMBTU, down 62¢/MMBTU from a year earlier. By month`s end, the Nymex oil price is $17.23/bbl, gas $2.09/MMBTU...Organization of Petroleum Exporting Countries crude oil output is above the 27.5 million b/d ceiling by at least 500,000 b/d, but less than 1 million b/d.

ENVIRONMENTAL: Environmentalists hail the implementation of a 50-year moratorium on mining and oil exploration in the Antarctic...Toyota Motor Corp. announces that it will attempt to introduce its hybrid electric/gasoline-powered Prius compact simultaneously in the U.S. and Europe in the year 2000.

RESTRUCTURING: Russia`s second and seventh largest oil concerns, AO Yukos and AO Sibneft, announce a merger to create a new company to be named AO Yuksi. In terms of reserves, Yuksi will surpass Royal Dutch/Shell as the world`s largest private oil company and rank third behind Shell and Exxon Corp. in terms of production.

PRODUCTION: Elf Exploration Angola and partner Soc. Nacional de Combustiveis de Angola begin production of 9,500 b/d of oil from Oombo field off Angola...Elsewhere off Angola, Japan`s Mitsubishi Petroleum Development Co. begins oil production, also at 9,500 b/d, from a well in Block 3/91...Bohai Petroleum Co. begins production from the Bohai Sea`s Boxi oil field, where reserves are estimated at more than 37 million bbl of oil and 353 bcf of gas.

FEBRUARY

THE MARKET: The Nymex crude price is just above $16/bbl at month`s end, and gas is $2.21/MMBTU.

COURTS: A U.S. federal judge denies a preliminary injunction requested by civil rights lawyers that would have removed Unocal Corp. from a $1.2 billion pipeline project in Burma...Following a ruling by a federal judge denying a request from environmentalists and Native Americans seeking to block the sale of the Elk Hills Naval Petroleum Reserve, the U.S. Department of Energy formally transfers ownership of the reserve to Occidental Petroleum Corp.

GOVERNMENT: Philippines President Fidel Ramos signs into law legislation deregulating the country`s oil industry.

PRODUCTION: Norway`s Statoil AS and partners will invest $400 million to expand development of Venezuelan oil field LL 652, with a goal of increasing present 10,000 b/d production to 115,000 b/d during the next 10 years.

PIPELINES: Sudan signs a $600 million agreement with three foreign companies to lay a 994-mile pipeline to carry 150,000 b/d of oil from the western fields of Higlig to Bashair Port, near Port Sudan on the Red Sea.

RESTRUCTURING: Long-time competitors Halliburton Co. and Dresser Industries announce an $8.1 billion merger to form one of the world`s largest service/supplier companies.

MARCH

THE MARKET: The Nymex crude price rises to $16.50/bbl at the end of the month, a marked increase from its $15.23/bbl price to start the month. The gas price ends the month at $2.34/MMBTU...Lingering effects of low crude prices have U.S. independent producers scrambling to cut costs, improve efficiencies, and force belt-tightening by their E&P divisions.

PRODUCTION: The Jordanian government agrees to let Royal Dutch/Shell extract crude from southwestern Jordan`s 40 billion metric ton oil shale region...Amoco Corp. will invest $230 million to develop Amherstia field`s 2 tcf of natural gas reserves off Trinidad and Tobago...Shell Exploration & Production Co. plans to spend $1 billion developing Angus, Europa, and Macaroni oil and gas discoveries, which will add 300 million boe to the Gulf of Mexico`s deepwater inventory.

GOVERNMENT: Russia announces plans for the sale of state-owned Rosneft, the government`s last major holding in the oil industry. The government is offering a 75% stake in the firm at a starting price of $2.1 billion.

TRANSPORTATION: Following a long-time dispute over transit fees, Russia and Turkmenistan agree to transport 706 bcf of Turkmen natural gas to Ukraine via Russian territory.

EXPLORATION: The U.S. Interior Department`s Mineral Management Service (MMS) holds its semiannual lease sale in New Orleans, receiving bids on 794 of 4,180 tracts offered on 4.3 million acres in the central Gulf of Mexico. Oil producers submit bids totaling $810.4 million...MMS decides to exclude an area off the Arctic National Wildlife Refuge in Alaska from a lease sale scheduled for August 1998.

PROCESSING: Total SA signs an agreement with Nigerian National Petroleum Corp. to rehabilitate northern Nigeria`s 110,000 b/d Kaduna refinery, shut down since July 1997.

APRIL

THE MARKET: Kuwait News Agency reports that OPEC member countries have lost an estimated $8 billion in the first quarter of 1998 because of a global drop in oil prices. The Nymex crude price ends the month at $15.34/bbl, gas at $2.42/MMBTU.

EXPLORATION: Mobil and Exxon agree with Turkmenistan to explore for oil and gas in western Turkmenistan near the Caspian Sea.

GOVERNMENT: Kazakhstan`s President Nursultan Nazarbayev suspends further privatization of the country`s oil and gas sector.

PROCESSING: Saudi Arabia`s Petroma Refining & Marketing Co. and U.S.-based Hutchison Group plan to build a 500,000-b/d joint venture refinery in Bahrain`s Hidd industrial zone on Muharraq Island northeast of the mainland.

PIPELINES: Gas Authority of India reaches agreement in principle with U.K.-based Cairn Energy, U.S.-based Brown & Root, and Australia`s Command Petroleum to build a 1 bcf/year, $2.5 billion natural gas pipeline from fields off Myanmar to Orissa state on India`s east coast...About 1,000 pipeline workers laying a $2 billion, 1,863 mile, 283 million cu ft-1.1 bcf gas pipeline between Bolivia and southern Brazil agree to a 17.5% pay increase, ending a 7-day strike against construction company Brown Root Murphy, a unit of U.S.-based Halliburton Co.

PRODUCTION: Exxon and British Petroleum plan to spend $1.2 billion developing Hoover and Diana oil and gas fields, which hold combined estimated recoverable reserves of more than 300 million boe off Galveston, Tex....Saudi Arabia announces that it will implement crude oil output cuts by further delaying new light crude production from giant Ghawar field.

MAY

THE MARKET: After starting the month at $15.58/bbl, the Nymex crude price falls to $14.97/bbl to end the month, and gas ends the month at $2.09/MMBTU.

RESTRUCTURING: AO Yukos and AO Sibneft call off merger proceedings to form AO Yuksi, citing instability of the Russian stock market and sagging world oil prices...ARCO says it will acquire Union Texas Petroleum Holdings Inc., Houston, for $2.47 billion, which will add 140,000 boe/d to ARCO`s oil and gas production and increase total oil and gas reserves by 14%.

MARKETING: Shell Oil Co., Texaco Inc., and Saudi Arabia`s Aramco approve final terms and conditions of a proposed U.S. refining and marketing joint venture called Motiva Enterprises LLC, which will be the U.S.`s largest seller of gasoline.

EXPLORATION: Norway`s Statoil AS and Norsk Hydro AS agree with Russia`s Gazprom to jointly explore the hydrocarbon-rich Pechora Gulf area of the Barents Sea...Amoco Norway discovers oil and gas off Norway on the Donatello block, a find that Amoco estimates holds 200-500 million boe...China verifies that a Qaidam basin field in northwest Qinghai province holds 2.7 tcf of natural gas, which brings total proved gas reserves in Qinghai oil field to 5.3 tcf.

GOVERNMENT: The U.S. Federal Energy Regulatory Commission approves an agreement among the seven owners of the Trans-Alaska Pipeline System designed to increase competition and lower tariffs.

PIPELINES: Chevron Corp. selects Australian Gas & Light Co. and Malaysia`s state-owned Petronas to build, own, and operate a $938 million, 1,304-mile section of a natural gas pipeline linking Papua New Guinea with Australia.

JUNE

THE MARKET: S.M. Hosseini, Iran`s deputy oil minister for international affairs, reports that Iran is seeking to increase its oil production capacity and capture at least 7% of the world crude oil market by 2020. It currently holds 5.7%...The downward spiraling crude price ends the month at $14.14/bbl. The natural gas price increases 25¢/MMBTU from a month ago to close out the month at $2.36/MMBTU.

GOVERNMENT: Saudi Arabia calls for a new alliance of seven to nine major oil-producing countries, establishing an ad hoc group that would work together to raise oil prices and reduce the glut of oil in the current market...U.S. President Bill Clinton nominates Bill Richardson to be the next Secretary of Energy, replacing Federico Peña.

PRODUCTION: Cairn Energy starts production from a well in Bangladesh`s first operational offshore gas field at a rate of 20 MMcfd at Sangu-1 field in the Bay of Bengal, 30 miles southwest of Chittagong.

EXPLORATION: A Petrofina SA gas find off Viet Nam is the firm`s seventh discovery there. It is the company`s second gas-only discovery, yielding 36 MMcfd...President Clinton extends by 10 years the ban on offshore oil drilling for much of the U.S., preventing drilling in most parts of the Atlantic and Pacific coasts until 2012.

PIPELINES: Brazil`s Petroleo Brasileiro SA and five partners agree to build a 373-mile, 424 MMcfd capacity gas pipeline linking Brazilian cities Uruguayana and Porto Alegre.

JULY

THE MARKET: The Nymex oil price ends the month at $14.20/bbl, gas at $1.92/MMBTU.

EXPLORATION: Indonesia`s government postpones exploration of giant East Natuna gas field because of the economic crisis in Thailand and the oversupply of LNG in the world market...Australia`s Boral Ltd. confirms that its Bass Strait drilling program yielded estimated reserves of 450-600 bcf of natural gas in Yolla field.

PRODUCTION: British Petroleum begins oil production at its Schiehallion field off northern Scotland at an initial rate of 30,000 b/d...Mobil Oil and Royal Dutch/Shell announce pullout from the $3 billion Camisea natural gas project in Peru, saying that demands from the Peruvian government for local gas supplies at reduced rates made the project unprofitable.

PROCESSING: In response to poor market conditions, Singapore Refining Co. cuts crude oil throughput by 45,600 b/d, or 16%, at its 285,000 b/d Pulau Merlimau refinery...South Korea`s Samsung agrees to build a $240 million refinery for Ghana`s state-owned Tema Oil Refinery Co. Ltd., Tema, Ghana.

AUGUST

THE MARKET: Nymex oil and gas prices end the month at $13.54/bbl and $1.77/MMBTU, respectively. OPEC members eye production cuts to bolster falling oil prices.

ACQUISITION: British Petroleum announces that it will acquire Amoco Corp. for $48.2 billion in stock, becoming the world`s largest oil industry merger and the largest foreign takeover of a U.S. company to date.

LNG: Indonesia`s President B.J. Habibie approves ARCO`s plan to build a $4 billion LNG complex in Irian Jaya, Indonesia.

PRODUCTION: Saudi Arabia`s Aramco starts production at its new light crude Shaybah oil field, where capacity is expected to be 500,000 b/d in the estimated 7 billion bbl field...Phillips Petroleum Co. begins oil and gas production from Ekofisk II, the company`s $2.5 billion North Sea redevelopment project.

GOVERNMENT: Mexican and Venezuelan governments renew the San Jose Accord, under which they provide crude and products at favorable terms to other countries in Central America and the Caribbean Sea.

PIPELINES: The Caspian Pipeline Consortium submits the final draft of a construction feasibility study for a Caspian Sea oil pipeline to Russia`s regional authorities for approval. The $2 billion, 981-mile pipeline will transport 1.3 million b/d of oil from Kazakhstan`s Tengiz oil field to the Russian port city of Novorossiisk.

SEPTEMBER

THE MARKET: OPEC production cuts and North Sea maintenance programs arrest the oil price slide, but underlying oil demand growth remains weak. The Nymex crude futures price ends the month at $15.74/bbl, the Nymex gas price at $2.17/MMBTU.

EXPLORATION: China discovers its first large coalbed methane gas field, located in northern China`s Shanxi province, with proved reserves estimated at 1.9 tcf...Mobil`s Canadian unit receives six oil and gas exploration licenses totaling more than 1 million acres on the Grand Banks off Newfoundland.

GOVERNMENT: Turkey restores full diplomatic ties with Iraq after nearly 6 years of all-but-frozen relations...Saudi Arabia asks several U.S. oil companies for proposals to develop its oil reserves. The topic is raised in a meeting between Saudi Crown Prince Abdullah and executives from ARCO, Chevron, Conoco, Exxon, Mobil, Phillips, and Texaco.

RESTRUCTURING: Royal Dutch/Shell and Texaco Inc. announce that they will combine their European refining and marketing activities; together they will control 19 refineries and process 2.1 million b/d of oil, or about 15% of European capacity...Japan`s Ministry of International Trade & Industry decides to liquidate 27 exploration companies affiliated with the debt-ridden, state-run Japan National Oil Corp. as part of the ministry`s restructuring scheme.

OCTOBER

THE MARKET: The Nymex crude price falls to $14.26/bbl to close the month, while gas is about even with last month at $2.20/ MMBTU. So weak are oil market fundamentals that even an Oct. 31 outburst by Iraqi President Saddam Hussein does nothing to revive prices. Baghdad bans U.N. weapons inspectors from cataloging Saddam`s arsenal, which brings hints of military strikes against Iraq.

PROCESSING: South Korea`s refining sector fully deregulates, allowing for 100% foreign investment, a move designed to help reform its economy.

RESTRUCTURING: Phillips Petroleum Co. and Ultramar Diamond Shamrock Corp. agree to combine their gasoline stations and refineries into a joint-venture company to be called Diamond 66...Japan`s Nippon Oil Co., the country`s second largest petroleum distributor, and Mitsubishi Oil Co. agree to merge as of Apr. 1, 1999. The combined company will be the largest oil distributor in Japan.

PIPELINE: Turkey, Azerbaijan, Georgia, Kazakhstan, and Uzbekistan sign a declaration that affirms the Baku-Tblisi-Ceyhan pipeline project as the main oil export pipeline for Azerbaijan.

ENVIRONMENT: European Union nations approve an accord in which European car makers will voluntarily agree to cut carbon dioxide emissions 25% by 2008.

NOVEMBER

THE MARKET: The Nymex crude price ends the month at $12.14/bbl, the gas price at $2.15/MMBTU...The U.S. Energy Information Administration says the Asian economic crisis will continue to depress oil prices for much of the next decade, keeping them under $20/bbl until at least 2007.

PRODUCTION: Norway approves development of the North Sea`s Huldra field, which contains about 6.9 tcf of dry natural gas...China begins production at Shinxi field, the biggest desert oil field in Xinjiang province, expecting to produce 1 million bbl by year-end 1998.

GOVERNMENT: The U.S. is the 60th nation to sign the Kyoto Protocol, the global climate change agreement aimed at reducing greenhouse gas emissions...Russian Prime Minister Yevgeny Primakov issues a resolution approving a draft agreement between the Russian and Iranian governments promoting economic, scientific, and technical cooperation in exploration, development, and storage construction.

DECEMBER

THE MARKET: The Nymex crude futures price dips to about $11.80/bbl near month`s end, following midmonth U.S. and U.K. military air strikes on Iraq that temporarily raised prices 75¢/bbl. The gas price also falls, ending the month at $1.85/MMBTU.

EXPLORATION: Brazil opens its first oil and gas license round, which is expected to attract about $1.2 billion in investments...U.S. E&P companies reduce their price expectations for oil and plan to cut exploration spending and employment levels in 1999.

RESTRUCTURING: Exxon Corp. and Mobil Corp. announce plans to merge in a $70-77 billion deal that, if approved, will create the world`s largest corporation-Exxon Mobil Corp., based in Irving, Tex....Total and Petrofina SA announce a merger to create Total Fina, with an upstream division based in Paris and a downstream unit based in Brussels...Royal Dutch/Shell reacts to criticism from financial analysts by changing its command structure and slating a 5 year restructuring program. A major part of the change will involve the sale of about 40% of its chemicals portfolio, while high cost producing assets and refineries will also be chopped.

GOVERNMENT: U.S. President Bill Clinton is impeached, accused of perjury and obstruction of justice, and faces removal from office unless acquitted during trial before the U.S. Senate. The trial is to get under way in January 1999.

PRODUCTION: A proposed $1.8 billion joint venture involving Petroleos de Venezuela SA and Coastal Corp. to produce, upgrade, and market 100,000 b/d of extra heavy crude from Venezuela`s Orinoco belt is canceled because of low oil prices.