SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

      Fiscal year ended December 31, 1996 Commission file number 1-3939

                            KERR-MCGEE CORPORATION
           (Exact name of registrant as specified in its charter)

          A DELAWARE CORPORATION                                      73-0311467
    (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                KERR-MCGEE CENTER, OKLAHOMA CITY, OKLAHOMA 73125
                    (Address of principal executive offices)

        Registrant's telephone number, including area code: (405)270-1313

            Securities registered pursuant to Section 12(b) of the Act:

                                                  NAME OF EACH EXCHANGE ON
         TITLE OF EACH CLASS                           WHICH REGISTERED

    Common Stock $1 Par Value                        New York Stock Exchange
    8-1/2% Sinking Fund Debentures,
       Due June 1, 2006                              New York Stock Exchange


        Securities registered pursuant to Section 12(g) of the Act: None


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes [X]  No

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant was approximately $3 billion as of February 28, 1997.

The number of shares of common stock  outstanding  as of February 28, 1997,  was
48,094,495.

                       DOCUMENTS INCORPORATED BY REFERENCE

Specified  sections  of  the  Kerr-McGee   Corporation  1996  Annual  Report  to
Stockholders,  as described herein, are incorporated by reference in Parts I and
II of this Form 10-K. The definitive Proxy Statement for the 1997 Annual Meeting
of Stockholders, which will be filed with the Securities and Exchange Commission
within 120 days after  December 31, 1996, is  incorporated  by reference in Part
III of this Form 10-K.

<PAGE>

                             KERR-McGEE CORPORATION

                                     PART I

Items 1. and 2.  Business and Properties

                         GENERAL DEVELOPMENT OF BUSINESS

        Kerr-McGee  Corporation,   an  energy  and  chemical  company,  had  its
beginning in 1929 with the  formation of Anderson & Kerr Drilling  Company.  The
company was  incorporated  in Delaware in 1932. With oil and gas exploration and
production as its base, the company has expanded into chemical manufacturing and
coal and mineral mining.  Kerr-McGee owns a large inventory of natural resources
that includes oil, gas, and coal reserves and chemical and mineral deposits.

        Effective  December  31,  1996,  the company  merged its North  American
onshore  exploration  and production  operations  into Devon Energy  Corporation
(Devon), a publicly traded oil and gas exploration and production  company.  The
company  received  9,954,000  shares  of Devon  common  stock,  representing  an
ownership interest in Devon of approximately 31%.

                                INDUSTRY SEGMENTS

        For  information  as to business  segments of the company,  reference is
made to Note 24 to the  Consolidated  Financial  Statements  in the 1996  Annual
Report to Stockholders, which note is incorporated by reference in Item 8.

                           EXPLORATION AND PRODUCTION

        The Exploration and Production Division manages Kerr-McGee's oil and gas
operations worldwide. This division acquires leases and concessions and explores
for, develops, produces, and markets crude oil and natural gas.

        The  areas  of  Kerr-McGee's   offshore  oil  and  gas  exploration  and
production  activities  are the Gulf of Mexico,  North Sea,  and China.  Onshore
exploration and production operations are in Indonesia,  Thailand, and, prior to
December 31, 1996, Canada and the United States. In early 1997, a concession was
signed with the Republic of Yemen.

        Kerr-McGee's  1996 oil  production  of 69,000  barrels  per day is about
equal to the 1995 production level.  Kerr-McGee's  average oil price rose 20% to
$19.16 per barrel in 1996, compared with 1995.

------------

        Except as indicated under Items 1 through 3, 5 through 8, and 10 through
14, no other information appearing in either the company's 1996 Annual Report to
Stockholders  or its 1997 Proxy  Statement is deemed to be filed as part of this
annual report on Form 10-K.

<PAGE>

        Natural gas sales averaged 281 million cubic feet per day in 1996,  down
slightly from 1995.  The average  natural gas price rose 39% from 1995 prices to
$2.12 per thousand cubic feet for 1996.

        The  level of 1996 oil and gas  production  was  about the equal to 1995
levels, even though divestitures of marginal and nonstrategic properties reduced
oil and gas  production  from the prior year by more than 6%. This reduction was
more than offset by new  production  from offshore China and the Gulf of Mexico.
Kerr-McGee's  operations are expected to average approximately 63,000 barrels of
oil and 200  million  cubic feet of gas per day in 1997.  These  reduced  levels
result from the merger of the North American  onshore  properties into Devon. If
31% of Devon's production,  representing  Kerr-McGee's equity interest in Devon,
is combined with the company's 1997 estimates, production levels are expected to
be approximately the same as in 1996.

Results of Operations,  Sales Prices,  Production  Costs,  Costs  Incurred,  and
Capitalized Costs

        Reference is made to Notes 25, 26, and 27 to the Consolidated  Financial
Statements  in  the  1996  Annual  Report  to  Stockholders,   which  notes  are
incorporated  by reference  in Item 8. These notes  contain  information  on the
results of operations from crude oil and natural gas  activities,  average sales
prices per unit of crude oil and natural gas, production costs per barrel of oil
equivalent (BOE), and costs incurred in crude oil and natural gas activities for
each of the past three years and capitalized  costs of crude oil and natural gas
activities at December 31, 1996 and 1995.

Reserves

        Kerr-McGee's  estimated  proved crude oil,  condensate,  and natural gas
reserves  at  December  31,  1996,  and the  changes in net  quantities  of such
reserves for the three years then ended are shown in Note 28 to the Consolidated
Financial  Statements of the 1996 Annual Report to  Stockholders,  which note is
incorporated by reference in Item 8.

        From time to time reports are filed with the United States Department of
Energy relating to the company's reserves. The reserves reported in the Notes to
Financial  Statements are consistent with other filings pertaining to proved net
reserves. Minor differences in gas volumes occur due to different pressure bases
being  required in the reports.  However,  the  difference in estimates does not
exceed 5% of the total estimated reserves.

Undeveloped Acreage

        As of December 31, 1996,  the company had interests in  undeveloped  oil
and gas leases in the Gulf of Mexico,  the  United  Kingdom  sector of the North
Sea, offshore China, and onshore in other international areas as follows:

                                                   Gross                 Net
Location                                          Acreage              Acreage

Domestic(1)                                        380,688              264,628
                                                 ----------           ----------

North Sea                                        1,041,240              428,675
                                                 ----------           ----------

China                                            1,886,641              925,447
                                                 ----------           ----------

Other international -
   Indonesia                                     1,380,028              414,008
   Thailand                                      1,464,834              512,692
                                                 ----------           ----------
                                                 2,844,862              926,700
                                                 ----------           ----------

      Total Undeveloped Acreage                  6,153,431            2,545,450
                                                 ==========           ==========

(1)Located in the Gulf of Mexico except for 3,043 gross or 433 net acres located
   onshore that are held for sale.
   
     Until December 31, 1996,  the company held certain North  American  onshore
properties  that were merged into Devon.  These totaled 178,619 gross or 106,719
net  undeveloped  acres in the  United  States and  115,025  gross or 74,164 net
undeveloped acres in Canada and are not included in the previous table.

Developed Acreage

        At December 31, 1996, the company had interests in developed oil and gas
acreage in the Gulf of Mexico,  the United  Kingdom sector of the North Sea, and
offshore China as follows:

                                                    Gross                Net
Location                                           Acreage             Acreage

Domestic(1)                                        401,628             209,467

North Sea                                          199,898              33,022

China                                               78,332              19,191

Indonesia                                          345,007             103,502
                                                 ---------             -------

      Total Developed Acreage                    1,024,865             365,182
                                                 =========             =======

(1)Located  in the Gulf of Mexico  except for  45,184  gross or 26,399 net acres
   located onshore that are held for sale.

<PAGE>

        Until December 31, 1996, the company held certain North American onshore
properties  that were merged into Devon.  These totaled 667,099 gross or 283,182
net  developed  acres in the  United  States  and  186,479  gross or 75,195  net
developed acres in Canada and are not included in the previous table.

Net Exploratory and Development Wells

        Domestic and  international  exploratory and  development  wells drilled
during the three years ended  December  31, 1996,  are as follows.  Included are
wells drilled on properties that were merged into Devon at year-end 1996.

                                      1996          1995           1994
                                      ---------------------------------

Exploratory Wells - Net(1)
   Domestic
      Productive                       4.91          2.00           7.53
      Dry holes                         .83          6.51           5.26
                                    -------       -------        -------
                                       5.74          8.51          12.79
                                    -------       -------          -----
   North Sea
      Productive                          -             -            .35
      Dry holes                        2.19           .77            .62
                                    -------       -------        -------
                                       2.19            77            .97
                                    -------       -------        -------
   China
      Dry holes                           -           .45              -
                                    -------       -------        -------

   Canada
      Productive                          -          1.71           1.73
      Dry holes                         .50          1.43           1.31
                                    -------       -------        -------
                                        .50          3.14           3.04
                                    -------       -------        -------
   Other international
      Dry holes                           -             -           1.28
                                    -------       -------        -------

         Total                         8.43         12.87          18.08
                                    =======         =====          =====

Development Wells - Net(1)
   Domestic
      Productive                      17.26         30.23          17.26
      Dry holes                        1.00          2.28           1.36
                                    -------       -------        -------
                                      18.26         32.51          18.62
                                    -------         -----          -----
   North Sea
      Productive                       1.09          1.26           1.62
      Dry holes                           -             -            .25
                                    -------       -------        -------
                                       1.09          1.26           1.87
                                    -------       -------        -------
   China
      Productive                       1.72          2.45              -
                                    -------       -------        -------

   Canada
      Productive                       1.26          6.92           3.39
      Dry holes                         .04           .67           3.02
                                    -------       -------        -------
                                       1.30          7.59           6.41
                                    -------       -------        -------

         Total                        22.37         43.81          26.90
                                      =====         =====          =====

(1)Net Wells - The total of the company's fractional working interests in "gross
   wells" expressed as the equivalent number of full-interest wells.

<PAGE>

Gross and Net Wells

        The number of  productive  oil and gas wells in which the company has an
interest at December  31, 1996,  is shown in the  following  table.  These wells
include 403 gross or 155.06 net wells associated with improved recovery projects
and 154 gross or 82.47 net wells that have multiple completions but are included
as single wells. Of the net wells below,  93% are domestic,  5% are in the North
Sea,  and 2% are in  China.  Of the  domestic  wells,  approximately  41% are in
Federal waters, 32% in state waters, and 27% are onshore held for sale.

                                                  Gross                 Net
Location                                          Wells                Wells

Crude Oil
   Domestic                                         418               149.15
   North Sea                                         75                10.28
   China                                             17                 4.17
                                              ---------              -------
                                                    510               163.60
                                              ---------               ------

Natural Gas
   Domestic                                         150                69.91
   North Sea                                         26                 1.99
                                              ---------              -------
                                                    176                71.90
                                              ---------              -------

      Total Wells                                   686               235.50
                                              =========               ======


        Due to the year-end  1996 merger of North  American  onshore  properties
into Devon and the  divestiture of  nonstrategic  and marginal  properties,  the
number of  productive  oil and gas wells in which the  company  has an  interest
declined  significantly  from year-end  1995.  Merged into Devon at December 31,
1996, was the company's  interest in the following onshore wells,  which are not
included in the preceding table.

                                                  Gross                 Net
Location                                          Wells                Wells

Crude Oil
   Domestic                                       7,447               330.63
   Canada                                           436                87.63
                                              ---------              -------
                                                  7,883               418.26
                                              ---------               ------

Natural Gas
   Domestic                                       2,025               389.08
   Canada                                           154                51.38
                                              ---------              -------
                                                  2,179               440.46
                                              ---------               ------

      Total Wells                                10,062               858.72
                                                 ======               ======

<PAGE>

Crude Oil and Natural Gas Sales

        The following table  summarizes the sales of the company's crude oil and
natural gas production for the three years ended December 31, 1996:

(In millions)                                         1996     1995     1994
                                                    ------   ------   ------

Crude oil and condensate - barrels
   Domestic                                           11.2     10.6      9.3
   North Sea                                          11.2     13.6     12.4
   China                                               1.3        -        -
   Canada                                              1.2      1.7      1.7
   Other international                                   -        -      1.0
                                                    ------   ------   ------
                                                      24.9     25.9     24.4
                                                    ======   ======   ======

Crude oil and condensate
   Domestic                                         $216.4   $165.7   $136.3
   North Sea                                         213.1    221.9    187.2
   China                                              25.0        -        -
   Canada                                             21.8     26.4     23.2
   Other international                                   -        -     14.4
                                                    ------   ------   ------
                                                    $476.3   $414.0   $361.1
                                                    ======   ======   ======

Natural gas - MCF
   Domestic                                           83.5     82.2     76.8
   North Sea                                          10.2      7.4      4.1
   Canada                                              9.3     16.5     18.1
                                                    ------   ------   ------
                                                     103.0    106.1     99.0
                                                    ======   ======   ======

Natural gas
   Domestic                                         $180.5   $127.8   $140.4
   North Sea                                          26.8     19.8      8.6
   Canada                                             10.6     14.1     24.9
                                                    ------   ------   ------
                                                    $217.9   $161.7   $173.9
                                                    ======   ======   ======

Sales of Production

        All of the company's crude oil is sold at market prices.  Gas production
is sold primarily to the company's marketing affiliates and ultimately resold to
utilities and industrial  customers under short-term contracts at market prices.
Although sold at market prices, the marketing of domestic natural gas is focused
on  long-term   relationships  with  selected  industrial  customers  and  local
distribution companies.

Improved Recovery

        The  company  continues  to  initiate  and/or  participate  in  improved
recovery projects where  geological,  engineering,  and economic  conditions are
favorable.  As of December 31, 1996, the company was  participating in 13 active
improved recovery  projects located  principally in the United Kingdom sector of
the  North  Sea.  Most  of  the  company's   operations  outside  North  America
incorporate  water injection.  Pressure-maintenance  operations began at or near
the time of initial production from these fields.

Wells in Process of Drilling

        At  year-end  1996,  the  company had wells  classified  as  temporarily
suspended or in the process of drilling as follows:

                                             Gross                      Net
                                             Wells                    Wells

        Domestic                               19                     10.98
        North Sea                               9                      1.31
        China                                   4                      1.19
        Indonesia                               8                      2.66
                                               --                     -----

           Total Wells                         40                     16.14
                                               ==                     =====


Exploration and Development Activities

North Sea Area

        The North Sea continues to be an important area of overseas activity. At
year-end 1996,  the company had interests  ranging from 3.6% to 60% in 47 blocks
covering  428,675  net  undeveloped  acres in the  North  Sea  area.  Kerr-McGee
operates  27 of these  blocks.  The North  Sea  portfolio  includes  prospective
exploration blocks and exploitation opportunities on producing properties.

        In  1996,  the  North  Sea  accounted  for 45% of  Kerr-McGee's  liquids
production,  primarily from the Gryphon,  Scott,  and Ivanhoe/Rob Roy fields and
the Brae area.  Deliveries  of North Sea natural gas  averaged 31 million  cubic
feet per day in 1996, primarily from the Brae area and Scott field.

        A  summary  of the  company's  key  developments  in the North Sea is as
follows:

        Janice field (KM 50.9%), Block 30/17a: Development planning is under way
for this  block  operated  by  Kerr-McGee.  Interest  in the block was  acquired
through lease purchase and by drilling two successful appraisal wells. The first
well  tested at a combined  rate of 33,000  barrels  of oil per day in  December
1995, and the other well at 11,000 barrels per day in April 1996.  Production is
estimated to begin in mid-1998.

        Gryphon field (KM 25%), Block 9/18b:  Production averaged 34,900 barrels
of  oil  per  day  in  1996.  Performance  of the  field's  innovative  floating
production,  storage,  and  offloading  vessel (FPSO) has exceeded  expectations
since  first  oil in  October  1993.  The  company  believes  that the  vessel's
availability of  approximately  99% was among the highest of any facility in the
U.K.  North Sea during 1996.  Kerr-McGee  operates this field,  the first in the
North Sea to use a  permanently  moored FPSO and to be  developed  totally  with
horizontal production wells.

        Scott field (5.2%), Blocks 15/21a and 15/22: Production averaged 147,000
barrels of oil per day in 1996.

        Brae  area,  blocks  16/3a,  16/7a  (both  KM 8%),  and  16/3b  (KM 5%):
Approximately  13% of  Kerr-McGee's  1996 net oil  production  flowed  from five
fields in the Brae  area.  A sixth  field,  West Brae on Block  16/7a,  is being
developed jointly with the Sedgwick field on an adjacent block. First production
is  expected  in late  1997.  Kerr-McGee's  share of  production  from the joint
development is 5.4%.

China and Other International

        During  1996,  Kerr-McGee  added  four  new  blocks  to the  undeveloped
leasehold  inventory in the Far East.  These  include one block in China's Bohai
Bay, one block in the South China Sea, and two blocks onshore Thailand.

        At December 31, 1996,  Kerr-McGee's  assets in China and Southeast  Asia
include  the Liuhua  field  development  in the South China Sea,  four  operated
exploration  blocks in China's Bohai Bay, one operated  exploration block in the
South China Sea, two onshore blocks in Thailand, and the onshore Jabung Block in
Indonesia.

        A  summary  of the  company's  key  developments  in the Far  East is as
follows:

        Liuhua 11-1 field (KM 24.5%), South China Sea: Production began in March
1996 and reached  nearly 50,000  barrels of oil per day at year-end.  Located in
1,000 feet of water 130 miles  southeast of Hong Kong,  the field was  developed
entirely with horizontal wells.

        Bohai Bay Block 04/36 (KM 45%): The first  discovery in Bohai Bay tested
at a  combined  flow rate of almost  7,000  barrels  of oil per day in 1996.  An
appraisal well was spudded in January 1997,  and additional  drilling is planned
during the year on adjacent  acreage,  where Kerr-McGee holds interests  ranging
from 45% to 57%.

        Jabung Block (KM 30%), Indonesia: The North Geragai field, discovered in
1995, is expected to come on stream in mid-1997.  Kerr-McGee has participated in
two other  discoveries - Northeast  Betara and Makmur - on this 1.7 million-acre
block on the island of Sumatra.  A 1996  appraisal  well on the Betara  prospect
tested gas at a rate of 12 million cubic feet per day. Makmur tested at combined
flow rates of nearly 4,000 barrels of oil per day in 1996.  Additional  drilling
is planned in 1997.

Gulf of Mexico

        The Gulf of Mexico  contributed 34% of  Kerr-McGee's  oil production and
55% of natural gas  production  during  1996.  Kerr-McGee  had an  inventory  of
264,195  net  undeveloped  acres in the Gulf of Mexico  at  year-end  1996.  The
company continues an aggressive lease acquisition and exploration program in the
Gulf of Mexico.  The company  also  continues to exploit  producing  properties,
using 3-D  seismic  surveys  to  accelerate  development  and  production  while
reducing risk.  Proven new technology  such as horizontal  drilling and fracture
stimulation is also used to increase production.

        Recent development activity includes projects in the Viosca Knoll, South
Timbalier, Ewing Bank, and Ship Shoal areas.

        Pompano Field (KM 25%), Viosca Knoll 989 area: This deepwater project is
exceeding  expectations.  The second  development phase started in May 1996, and
total  daily  production  at year-end  was 52,000  barrels of oil and 59 million
cubic feet of gas.  Development drilling and  better-than-anticipated  reservoir
performance in 1996 increased reserves by 46 million BOE.
Drilling will continue in 1997.

        South Timbalier 265 area (KM 100%):  Production  began in July 1996 from
the South  Timbalier  265 field and peaked at 132 million  cubic feet of gas and
7,700 barrels of oil per day in August 1996. Drilling on additional prospects in
this area is planned in 1997.

        Ewing Bank 910 (KM 40%):  A discovery  well was drilled in August  1996,
and two appraisal wells are planned in 1997.

        Ship Shoal  area:  Five  successful  wells were  drilled  during 1996 on
blocks 218, 232, 238, and 239,  where  Kerr-McGee  has existing  production  and
interests  ranging from 46% to 90%. By using  state-of-the-art  technology and a
fast-track approach to development,  the wells were brought on stream within the
same year. Their combined production was nearly 45 million cubic feet of gas and
4,000  barrels  of oil per day at  year-end.  These  blocks  are an  example  of
Kerr-McGee's  ongoing  effort to increase  production  through  exploitation  of
producing fields.

<PAGE>

                                    CHEMICALS

        Kerr-McGee   Chemical   Corporation   produces  and  markets   inorganic
industrial and specialty chemicals, forest products, and heavy minerals. Many of
these  products are  processed  using  proprietary  technology  developed by the
company.

        Industrial chemicals include titanium dioxide pigment, synthetic rutile,
manganese  products,  sodium  chlorate,  and  ammonium  perchlorate.   Specialty
chemicals are boron trichloride and elemental boron.  Forest product  operations
treat  railroad   crossties  and  other  hardwood  products  and  provide  other
wood-treating  services.  Heavy minerals produced are ilmenite,  rutile, zircon,
and leucoxene.

Pigment

        The  company's  synthetic  rutile  plant  at  Mobile,   Alabama,  has  a
production  capacity of 162,000 tons per year.  This product serves as feedstock
for the company's titanium dioxide pigment plant at Hamilton, Mississippi, which
has a production  capacity of 130,000 tons per year. An expansion is expected to
be  completed  in the  summer of 1997 and will  increase  the  Hamilton  plant's
production capacity to 160,000 tons.

        KMCC  Western   Australia  Pty.  Ltd.,  a  wholly  owned  subsidiary  of
Kerr-McGee  Chemical  Corporation,  owns a 50% interest in a joint  venture that
operates the world's first integrated titanium dioxide operation.  The operation
consists of a heavy-minerals  mine and mill and facilities for the production of
synthetic rutile and titanium dioxide pigment, located on three sites within 120
miles of Perth.

        Heavy  minerals are mined from a lease that contains  10,350 acres.  The
property's remaining reserves consist of 161 million tons of sand, which contain
3.4% heavy  minerals.  The valuable  heavy  minerals  contained  within this 5.5
million ton heavy-mineral  deposit are composed of 4.3% rutile,  60.9% ilmenite,
3.5% leucoxene, and 11.2% zircon, with the remaining 20.1% of minerals presently
having no value.  Additional  drilling  is  required  to  determine  the  actual
quantities and grade of heavy minerals contained in a second 2,540-acre property
and the extent to which it may be  feasible  to mine this  deposit.  The company
holds a 50% interest in both properties.

        The heavy  minerals are processed at the  separation  mill,  which has a
capacity of 559,000 tons per year.  The  recovered  ilmenite is  processed  into
synthetic  rutile at a facility  adjoining the  separation  mill.  The synthetic
rutile  facility  has a capacity of 200,000 tons per year.  Production  from the
synthetic  rutile plant serves as feedstock for the pigment  plants in Australia
and Saudi Arabia. The production  capacity of the pigment plant in Australia was
increased in 1996 from 73,000 tons per year to 88,000 tons per year.

        The company owns a 25% interest in the pigment plant in Yanbu,  Saudi
Arabia.  The plant has a capacity of 72,000 tons per year.

Electrolytic Products

        The company's  major  electrolytic  products are  manganese  dioxide and
sodium chlorate.

        An expansion of the sodium chlorate plant at the Hamilton,  Mississippi,
complex was  completed in late 1996,  increasing  production  capacity by 12% to
138,000  tons per year.  Also at Hamilton  is a  manganese  metal plant that has
capacity of 12,000 tons per year.

        Facilities  at  Henderson,   Nevada,   include  electrolytic  cells  and
processing  equipment for the manufacture of manganese  dioxide, a plant for the
manufacture of ammonium  perchlorate,  and a specialty  boron products plant. An
expansion of the  manganese  dioxide  plant,  completed in late 1996,  increased
capacity  by 15% to  28,500  tons per year.  Production  capacity  for  ammonium
perchlorate is 20,000 tons per year. Ammonium  perchlorate  blending and storage
facilities  are  located  25 miles  north  of the  Henderson  plant.  Production
capacities  for  elemental  boron and boron  trichlorate  are 80,000  pounds and
750,000 pounds per year, respectively.

Forest Products

        The company's  principal forest product is treated  railroad  crossties.
Other products include crossing  materials,  bridge timbers,  and utility poles.
The company operates six wood-preserving plants located along major railroads in
the United States. Five of the plants are east of the Rocky Mountains. A seventh
plant in  Pennsylvania  was placed on  standby  status at  year-end  due to weak
demand in the market area served by the plant.

Marketing

        Titanium dioxide pigment is the world's preferred white opacifier and is
used primarily in paint,  plastics,  and paper. The company's plant in Hamilton,
Mississippi,  one of the industry's lower-cost  producers,  primarily serves the
Americas. Most of the pigment production from the company's 50% joint venture in
Western Australia is sold in the Far East and Australia. The production from the
company's  plant (25%  interest) in Saudi Arabia is sold  primarily to customers
located in the Middle East and Europe.  A marketing  subsidiary sells all of the
pigment  production from the Western  Australia joint venture and  approximately
40% of the total  production  from the Saudi  Arabia  plant.  This  accounts for
approximately  6% of global  pigment  market share.  World demand is expected to
increase by an average of 3% to 4% per year over the next several years.

        Manganese  dioxide  is a major  component  of  alkaline  batteries.  The
company's share of the North American  manganese dioxide market is approximately
one-third.  Demand is projected to grow 5% to 8% annually through the year 2000.
The demand is driven by the need for alkaline batteries for portable  electronic
devices.

     Sodium chlorate is used in the  environmentally  preferred chlorine dioxide
process  for  bleaching  pulp.  U.S.  demand for sodium  chlorate is expected to
increase  approximately  5% per  year in the near  term as the  pulp  and  paper
industry continues conversion to the chlorine dioxide process. The company has a
10%  share of the  U.S.  market,  and its  plant in  Mississippi  is a  low-cost
producer.

        Manganese  metal is used in aluminum,  specialty,  and  stainless  steel
alloys.  The largest use of manganese metal is for alloying  aluminum can sheet.
The company has a 50% share of the U.S.
aluminum industry manganese requirements.

     Ammonium  perchlorate  is  used  as an  oxidizer  for  solid  rocket  fuel,
primarily in the U.S. space and defense programs.  Demand has declined in recent
years due to a reduction in  requirements by the U.S.  military.  The company is
one of two domestic producers of the product.

        Kerr-McGee is the world's largest producer of elemental boron,  which is
used  primarily in automobile  airbags.  Kerr-McGee  is the largest  producer of
boron trichloride,  which is used to produce boron filament for sports equipment
and composites for high-performance aircraft.

        The company's share of the U.S. railroad crosstie market is in excess of
40%.  Domestic crosstie demand is expected to remain relatively flat at about 13
million to 15 million ties per year.

        For  information  regarding  heavy-mineral  reserves,   production,  and
average market prices for each of the years 1992 through 1996, reference is made
to Note 30 in the Consolidated Financial Statements of the 1996 Annual Report to
Stockholders, which note is incorporated by reference in Item 8.

                                      COAL

        The  company's  coal   operations  are  conducted  by  Kerr-McGee   Coal
Corporation,  which  produces coal from Jacobs Ranch Mine, a surface mine in the
Wyoming  Powder  River  Basin,  and Galatia  Mine,  an  underground  mine in the
Illinois Basin.  The company sold Pioneer Fuel  Corporation,  a combined surface
and underground  operation in West Virginia, in February 1996 and has agreements
to sell the Clovis Point Mine, a Wyoming  surface mining  operation.  Closing of
the Clovis  sales is  contingent  on approval  by the Bureau of Land  Management
(BLM).  Neither transaction  resulted nor will result in a material gain or loss
to the company. Most 1996 sales were to electric utilities under long-term sales
contracts. The company also made spot sales to domestic and foreign customers.

Reserves and Production

        The  company  owns or leases  producing  coal  reserves  in Wyoming  and
Illinois.  As of December 31, 1996,  the company's coal reserves were as follows
(in millions of tons):


                              In-Place      Recoverable
                            Demonstrated    Demonstrated     Classifi-    Mining
 State/Mining Unit              Tons            Tons           cation     Method

Wyoming -
   Jacobs Ranch Mine            272             245             Steam    Surface
   Clovis Point Mine            326             293             Steam    Surface

Illinois -
   Galatia Mine -                                               Met./     Under-
      Harrisburg No. 5           92              59             Steam     ground
                                                                          Under-
      Herrin No. 6              327             213             Steam     ground
                              -----             ---

                              1,017             810
                              =====             ===

        Of the Wyoming  reserves,  91% are held under  Federal  leases,  and the
remaining 9% are leased from the State of Wyoming.  The Illinois  coal  reserves
are owned by Kerr-McGee or held under leases with private parties.


        Production from Kerr-McGee mines for 1996 and 1995 was as follows:

(In millions of tons)                     1996                  1995
                                          ----                  ----

Jacobs Ranch Mine                         24.5                  24.6
Galatia Mine                               6.6                   5.5
Clovis Point Mine                           .2                    .4
West Virginia operations                     -                    .6
                                         -----                ------

      Total Production                    31.3                  31.1
                                          ====                  ====

        For information regarding coal reserves,  production, and average market
prices for each of the years 1992 through 1996,  reference is made to Note 30 to
the Consolidated Financial Statements in the 1996 Annual Report to Stockholders,
which note is incorporated by reference in Item 8.

Jacobs Ranch Mine

        Jacobs Ranch Mine is located 50 miles southeast of Gillette, Wyoming, in
the South Powder River Basin.  The coal lease area contains 7,514 acres of land,
of which 2,992 acres are underlain by 245 million  recoverable tons of coal. The
company  also owns or  controls  the  surface  rights to 1,684 acres of a buffer
zone,  or  overstrip  area.  The mine  permit was  renewed in August  1994 for a
five-year period and expanded to incorporate  additional  leased acreage and the
buffer zone.  In February  1995,  the BLM approved  the  consolidation  of three
Federal  coal  leases  into one  logical  mining  unit to allow  use of the most
effective mining sequence for the combined leases. The terms of the Jacobs Ranch
Mine leases are scheduled for  adjustment  by the BLM in years 2000,  2005,  and
2012.

        The annual  production  capacity of Jacobs  Ranch Mine is  currently  25
million  tons of  low-sulfur  coal.  Further  increase in capacity  requires the
expansion of the Jacobs Ranch Mine preparation  plant,  which is currently under
way and expected to be completed in late 1997.  The expansion  will allow annual
production  at Jacobs Ranch to increase to 39 million  tons.  Actual  production
levels will increase as the market dictates.

        Shipments began in 1978 and,  through  December 1996,  totaled more than
264 million tons. All deliveries were made via the Burlington  Northern or Union
Pacific railroads.  Jacobs Ranch Mine coal meets Phase II emission  requirements
of the Clean Air Act  Amendments of 1990 and is sold primarily  under  long-term
contracts for ultimate use by electric utilities. Jacobs Ranch Mine is presently
the fourth-largest coal producer in the United States. Productivity continues to
increase through the use of larger, more efficient equipment and more productive
mining operations.

Clovis Point Mine

        Clovis Point Mine is located eight miles east of Gillette,  Wyoming.  In
1988, the company  consolidated  its Wyoming  mining  operations at Jacobs Ranch
Mine and ceased  shipments  from Clovis Point Mine. The facility was reopened in
1994 and met the due- diligence  production  requirements of the lease by August
1996.  The mine was then  returned to standby  status.  The mine permit has been
renewed until 1999.

        The Clovis  Point  mining area  consists of 3,143 acres  leased from the
Federal  government and 640 acres leased from the State of Wyoming.  The company
either owns or has surface-owner consent to mine 71% of the Federal lease permit
area.  The remaining 29% is positioned so that it would be mined near the end of
the mine life; however,  before mining,  surface-owner  consent must be obtained
and the mine  permit  amended.  The  terms of one of the two  Federal  leases at
Clovis Point Mine were  adjusted by the BLM in 1990,  and the terms of the other
Federal lease were renewed and extended without change in 1995. The terms of the
state lease, which contains the mine pit, were renewed for an additional 10-year
period in 1993. The three Clovis Point leases are held in a logical mining unit.

Galatia Mine

        The  Galatia  Mine is  located  in  southern  Illinois  near the town of
Galatia in Saline County. It produces coal from the Harrisburg No. 5 seam, which
can be used  as  either  a  semi-soft  coking  coal  or a  high-Btu,  relatively
low-sulfur  steam coal. Its use as a steam coal allows  utilities to comply with
Phase I of the Clean Air Act  Amendments  of 1990  without  installing  flue gas
desulfurization units or blending with other coals.

        Shipments  from the mine began in January  1984 and totaled more than 42
million tons through  December 1996.  Shipments are primarily by rail,  although
the mine  loadout is capable of loading  trucks,  and  weighing  facilities  are
on-site.  The  Illinois  Central  Railroad is the  originating  carrier for rail
shipments.

        Within the mine area,  Kerr-McGee  controls  approximately  33,400 acres
through leases and mineral ownership.  This includes control of the Herrin No. 6
seam,  which was mined at Galatia until July 1994. Its higher sulfur content and
resultant  decrease  in  demand  by  the  utilities,  because  of  the  emission
requirements  of the Clean Air Act  Amendments of 1990,  led to the cessation of
mining  in  the  No.  6  seam  and  transfer  of  the  mining  equipment  to the
lower-sulfur/higher-value Harrisburg No. 5 seam.

        Mining  capacity at Galatia Mine has increased  from 4.2 million tons in
1993  to the  current  capacity  of 6.6  million  tons of  high-Btu,  relatively
low-sulfur  coal. This increase was  accomplished  with the  introduction of the
second  longwall  mining  system in the No. 5 seam,  completion of the 1994 coal
processing  plant  expansion,  and  the  1996  installation  of  an  underground
coal-storage bunker.

Marketing

        Bituminous  and  sub-bituminous  steam  coals are sold  under  long-term
contracts and spot purchase  agreements to utilities in 17 states,  primarily in
the central and southeastern United States.  Export sales of steam coal produced
from the  Galatia  Mine were made to  utilities  in Germany in 1996.  While coal
sales  include  sales of coal  produced  by third  parties,  the  company is not
dependent on this purchased coal to meet its contract obligations.

        Coal markets continue to experience  competitive  pricing.  Kerr-McGee's
existing  long-term  contracts  continue to provide stable  earnings under these
competitive  conditions and are the basis for the expansion of business with key
domestic electric utilities.

        The company is well positioned with lower-sulfur  reserves to compete in
domestic  markets  governed  by the Clean Air  Amendments  of 1990.  Uncommitted
reserves  and  existing   production  capacity  should  permit  the  company  to
participate in the expected growth in domestic demand for  lower-sulfur  coal as
well as expand its export sales.

                                              OTHER

Research and Development

     The company's Technical Center, located in Oklahoma City, performs research
and development in support of its existing  businesses and in the pursuit of new
products and processes.  These programs  continue to concentrate on improvements
to chemical plant processes and products.

Employees

        On December 31,  1996,  the company had 3,851  employees,  none of which
were represented by a collective bargaining agreement.

Competitive Conditions

        In the petroleum  industry,  competition exists from the initial process
of bidding  for  leases to the sale of crude oil and  natural  gas.  Competitive
factors include finding and developing petroleum hydrocarbons,  transporting raw
materials,  and developing  successful marketing  strategies.  The volatility of
crude oil and  natural  gas  prices  during  the past  several  years has placed
increased emphasis on all competitive aspects of the petroleum industry.

        The  company  is one of seven  chloride-process  producers  of  titanium
dioxide pigment in the world. The chloride process results in significantly less
waste  than  the  more  costly  sulfate  process.  Pigment  customers  worldwide
increasingly prefer the chloride product due to environmental restrictions.  The
demand for  pigment is  expected  to increase by an average of 3% to 4% per year
through  the  end  of  the  century.  Manganese  dioxide  is in a  near-balanced
supply/demand position.  Excess worldwide capacity currently exists for titanium
dioxide  pigment,  sodium  chlorate,   ammonium  perchlorate,   boron  specialty
products, manganese metal, and railroad crossties.

        Most of the company's coal customers are domestic electric utilities, an
extremely competitive market. Cost efficiencies,  transportation strategies, and
product quality,  such as Btu and sulfur content, are key competitive factors in
the coal industry.

        It is not  possible  to  predict  the  effect of future  competition  on
Kerr-McGee's operating and financial results.

                        GOVERNMENT REGULATIONS AND ENVIRONMENTAL RESERVES

General

        The company is subject to extensive regulation by Federal, state, local,
and foreign governments. The production and sale of crude oil and natural gas in
the United States are subject to  regulation  by Federal and state  authorities,
particularly with respect to allowable rates of production, offshore production,
and  environmental  matters.   Stringent   environmental   protection  laws  and
regulations apply to almost all of the company's operations.  In addition, there
are special taxes that apply to the oil, gas, and coal mining industries.

Environmental Matters

        Federal, state, and local laws and regulations relating to environmental
protection affect almost all company plants and facilities.  During 1996, direct
capital and  operating  expenditures  related to  environmental  protection  and
cleanup of existing sites totaled $34 million.  Additional expenditures totaling
$56  million  were  charged to  environmental  reserves.  While it is  extremely
difficult  to estimate  the total  direct and  indirect  costs to the company of
government environmental regulations,  it is presently estimated that the direct
capital and operating  expenditures and expenditures charged to reserves will be
approximately $110 million in each of the years 1997 and 1998. Some expenditures
to reduce the occurrence of releases to the  environment may result in increased
efficiency;  however, most of these expenditures produce no significant increase
in production capacity,  efficiency, or revenue.  Operation of pollution-control
equipment  installed for these  purposes  usually  entails  additional  expense.
Moreover,  there are costs associated with staff and management time that cannot
be calculated or estimated with any assurance of accuracy.

        Based on present  information,  the company believes that it has accrued
and is accruing reasonable reserves for expenditures that may have to be paid in
the future for environmental  matters.  Because of continually changing laws and
regulations, the nature of the company's businesses, and pending proceedings, it
is not  possible  to  reliably  estimate  the  amount or  timing  of all  future
expenditures  relating to environmental  matters. The company provides for costs
related to environmental contingencies when a loss is probable and the amount is
reasonably  estimable.  Although management believes adequate reserves have been
provided for all known environmental  contingencies,  it is possible, due to the
above noted  uncertainties,  that  additional  reserves could be required in the
future  that  could  have a  material  effect  on  results  of  operations  in a
particular quarter or annual period.  However,  the ultimate resolution of these
environmental  contingencies,  to the extent not previously provided for, should
not have a material adverse effect on the company's financial position.


        Also see "Item 3.  Legal Proceedings," which follows.

Item 3.   Legal Proceedings

        The company  continues its efforts to decommission a facility located in
West Chicago, Illinois, which processed thorium ores and was closed in 1973. For
a  discussion  of  contingencies,  including a detailed  discussion  of the West
Chicago  matter,  reference  is made to the  Environmental  Matters  section  of
Management's  Discussion and Analysis and Note 10 to the Consolidated  Financial
Statements in the 1996 Annual Report to Stockholders,  which discussion and note
are incorporated by reference in Item 7 and Item 8, respectively.

Item 4.   Submission of Matters to a Vote of Security Holders

        None submitted during the fourth quarter of 1996.

<PAGE>
                                                
                      Executive Officers of the Registrant
<TABLE>

        The  following is a list of executive  officers,  their ages,  and their
positions and offices as of January 1, 1997:
<CAPTION>


       Name             Age                         Office
<S>                     <C>   <C>  

Frank A. McPherson      63    Chairman  of the  Board  and Chief  Executive  Officer  from
                              1983 until retirement in February 1997.

Luke R. Corbett         49    Chairman  of the  Board and Chief  Executive  Officer  since
                              February  1997.  President of  Kerr-McGee  Coal  Corporation
                              since 1995.  President of Kerr-McGee  China  Petroleum  Ltd.
                              since  1994.  President  of  Kerr-McGee  Canada  Ltd.  since
                              1989.  President  of  Kerr-McGee  Oil (U.K.) PLC since 1987.
                              President  and  Chief  Operating  Officer  from  1995  until
                              February   1997.   Group  Vice  President  from  1992  until
                              1995.  Senior Vice President from 1991 until 1992.

Tom J. McDaniel         58    Vice  Chairman  of the Board  since  February  1997.  Senior
                              Vice  President  from 1986 until  February  1997.  Corporate
                              Secretary from 1989 until February 1997.

John C. Linehan         57    Executive   Vice  President   since  February  1997.   Chief
                              Financial  Officer since 1987.  Senior Vice  President  from
                              1987 until February 1997.

Kenneth W. Crouch       53    Senior Vice  President  since  September  1996.  Senior Vice
                              President,   Exploration,    Explo-ration   and   Production
                              Division  since  Sep-tember  1996.  Senior  Vice  President,
                              North  America and  International  Exploration,  Exploration
                              and  Production  Division  from July 1996  until  September,
                              1996.  Vice  President,  Gulf of  Mexico  and  International
                              Exploration,  Exploration and Production  Division from 1995
                              until July 1996.  Vice  President  and Managing  Director of
                              Exploration  for  North  Sea  Operations,   Exploration  and
                              Production  Division  from 1993 until 1995.  Vice  President
                              of  Geophysics,  Exploration  and  Production  Division from
                              1989 until 1992.

William D. Hake         47    Senior Vice President  since  September 1996. Vice President
                              of Operations  for  Kerr-McGee  Coal  Corporation  from 1991
                              until September 1996.

George R. Hennigan      61    Senior Vice  President  since 1991.  President of Kerr-McGee
                              Chemical Corporation since 1991.

Russell G. Horner, Jr.  57    Senior  Vice   President  and  Corporate   Secretary   since
                              February   1997.    General   Counsel   since   1986.   Vice
                              President from 1986 until February 1997.

Robert C. Scharp        49    Senior Vice  President  since 1991.  Senior Vice  President,
                              Production,   Exploration  and  Production   Division  since
                              1995.  President of Kerr-McGee  Coal  Corporation  from 1991
                              until 1995.

Michael G. Webb         49    Senior Vice  President  since 1993.  Senior Vice  President,
                              Exploration,  Exploration and Production  Division from 1992
                              until  September  1996.  Vice  President,  Exploration  from
                              1992  to  1993.  Vice  President,   North  American  Onshore
                              Exploration from 1991 until 1992.

Julius C. Hilburn       46    Vice  President,  Human  Resources  since  Sep-tember  1996.
                              Manager,  Benefits  Administration from 1992 until September
                              1996.  Manager, Corporate Recruiting from 1990 until 1992.

Deborah A. Kitchens     40    Vice  President  and  Controller   since   September   1996.
                              Controller,  Exploration  and Production  Division from 1992
                              until  September  1996.  Director of Internal  Auditing from
                              1987 until 1992.

J. Michael Rauh         47    Treasurer  since  September  1996.  Vice  Presi-dent   since
                              1987.  Controller from 1987 until September 1996.

Donald F. Schiesz       59    Vice President,  Safety and Environment  since 1994.  Senior
                              Vice  President  of  Kerr-McGee  Chemical  Corporation  from
                              1991 until 1994.

Jean B. Wallace         42    Vice  President,   General  Administration  since  September
                              1996.  Vice  President,  Human  Resources  from  1989  until
                              September 1996.
</TABLE>

        There is no family relationship between any of the executive officers.

<PAGE>

                                   FORWARD-LOOKING INFORMATION

        This  report   contains   forward-looking   statements  and  assumptions
concerning Kerr-McGee's future results and prospects. These statements are based
on current  expectations and are subject to certain events and risks that may be
beyond the  company's  control.  In addition,  the company may from time to time
make  oral  forward-looking  statements.  In  connection  with the  safe  harbor
provisions of the Private Securities  Litigation Reform Act of 1995, the company
is hereby  identifying  important  factors  that could cause  actual  results to
differ materially from those contained in any forward-looking  statement made by
or on behalf of the company. Any such statement is qualified by reference to the
following cautionary statements.

        Such events and risks include the success of the oil and gas exploration
program,  ultimate  volume  of  recoverable  oil and gas  reserves,  success  of
cost-control efforts, general economic conditions, timely development and market
acceptance of customer products for which Kerr-McGee supplies raw materials, and
other  risk  factors  discussed  in this  annual  report  on Form  10-K  and the
company's 1996 Annual Report to  Stockholders.  Actual results and  developments
may differ from those expressed or implied in this report.

                                             PART II

Item 5.        Market for the Registrant's Common Equity and Related Stockholder
               Matters

        Information  relative to the market in which the company's  common stock
is traded, the high and low sales prices of the common stock by quarters for the
past two  years,  and the  approximate  number of  holders  of  common  stock is
furnished in Note 31 to the Consolidated Financial Statements in the 1996 Annual
Report to Stockholders, which note is incorporated by reference in Item 8.

        Quarterly  dividends declared totaled $1.64 per share for the year 1996,
$1.55 per share for the year 1995,  and $1.52 per share for the year 1994.  Cash
dividends  have been paid  continuously  since 1941 and  totaled  $83 million in
1996, $79 million in 1995, and $78 million in 1994.

Item 6.        Selected Financial Data

        Information  regarding  selected financial data required in this item is
presented in the schedule  captioned  "Six-Year  Financial  Summary" in the 1996
Annual Report to Stockholders and is incorporated herein by reference.

Item 7.        Management's  Discussion  and  Analysis  of  Financial  Condition
               and Results of Operations

        "Management's  Discussion  and  Analysis"  in the 1996 Annual  Report to
Stockholders is incorporated herein by reference.

Item 8.        Financial Statements and Supplementary Data

        The following  financial  statements and supplementary  data included in
the 1996 Annual Report to Stockholders are incorporated herein by reference:


               Report of Independent Public Accountants

               Consolidated Statement of Income

               Consolidated Statement of Retained Earnings

               Consolidated Balance Sheet

               Consolidated Statement of Cash Flows

               Notes to Financial Statements


Item 9.      Change in and  Disagreements  with  Accountants  on Accounting  and
             Financial Disclosure

        None.

                                             PART III

Item 10.       Directors and Executive Officers of the Registrant

(a)     Identification of directors -

           For information required under this section, reference is made to the
           "Election of Directors"  section of the company's proxy statement for
           1997 made in connection with its Annual  Stockholders'  Meeting to be
           held on May 13, 1997.

(b)     Identification of executive officers -

           The  information  required  under  this  section  is set forth in the
           caption "Executive  Officers of the Registrant" on pages 19 and 20 of
           this Form 10-K pursuant to Instruction 3 to Item 401(b) of Regulation
           S-K and General Instruction G(3) to Form 10-K.

(c)     Compliance with Section 16(a) of the 1934 Act -

           For information required under this section, reference is made to the
           "Compliance  with  Section  16(a) of the  Securities  Exchange Act of
           1934"  section  of the  company's  proxy  statement  for 1997 made in
           connection  with its Annual  Stockholders'  Meeting to be held on May
           13, 1997.

Item 11.       Executive Compensation

        For  information  required under this section,  reference is made to the
"Executive  Compensation and Other  Information"  section of the company's proxy
statement for 1997 made in connection with its Annual  Stockholders'  Meeting to
be held on May 13, 1997.


Item 12.       Security Ownership of Certain Beneficial Owners and Management

        For  information  required under this section,  reference is made to the
"Security  Ownership"  portion of the  "Election  of  Directors"  section of the
company's   proxy  statement  for  1997  made  in  connection  with  its  Annual
Stockholders' Meeting to be held on May 13, 1997.


Item 13.       Certain Relationships and Related Transactions

        For  information  required under this section,  reference is made to the
"Election of Directors"  and "Certain  Relationships  and Related  Transactions"
sections of the company's  proxy  statement for 1997 made in connection with its
Annual Stockholders' Meeting to be held on May 13, 1997.

                                             PART IV

Item 14.       Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) 1.  Financial Statements -

               The  following  consolidated  financial  statements of Kerr-McGee
               Corporation  and  its  subsidiary  companies,   included  in  the
               company's 1996 Annual Report to Stockholders, are incorporated by
               reference in Item 8:

                  Report of Independent Public Accountants

                  Consolidated  Statement of Income for the Years Ended
                  December 31, 1996,  1995, and 1994

                  Consolidated  Statement of Retained  Earnings  for the Years
                  Ended  December 31, 1996, 1995, and 1994

                  Consolidated Balance Sheet at December 31, 1996 and 1995

                  Consolidated  Statement  of Cash Flows for the Years Ended
                  December  31,  1996, 1995, and 1994

                  Notes to Financial Statements

(a)     2.     Financial Statement Schedules -

                  Report of Independent Public Accountants on Financial
                  Statement Schedule

                  Schedule II - Valuation  Accounts  and  Reserves for the Years
                  Ended December 31, 1996, 1995, and 1994

               Schedules  I, III,  IV, and V are omitted as the  subject  matter
               thereof  is either  not  present  or is not  present  in  amounts
               sufficient  to require  submission of the schedules in accordance
               with instructions contained in Regulation S-X.

(a)     3.     Exhibits -

               The following  documents are filed under  Commission  file number
               1-3939 as a part of this report.

               Exhibit No.

                     3.1            Restated  Certificate  of  Incorporation  of
                                    Kerr-McGee Corporation, filed as Exhibit 3.1
                                    to the  report on Form 10-Q for the  quarter
                                    ended June 30, 1987, and incorporated herein
                                    by reference.

                     3.2            Bylaws   of   Kerr-McGee   Corporation,   as
                                    amended, filed as Exhibit 3(b) to the report
                                    on Form 10-K for the year ended December 31,
                                    1986, and incorporated herein by reference.

                     4.1            Amended and Restated Rights  Agreement dated
                                    as July 9,  1996,  filed as Exhibit 1 to the
                                    report on  Form 8-K  dated July 9, 1996, and
                                    incorporated herein by reference.
    
                     4.2            The   company   agrees  to  furnish  to  the
                                    Securities  and  Exchange  Commission,  upon
                                    request,  copies  of each  of the  following
                                    instruments   defining  the  rights  of  the
                                    holders  of  certain  long-term  debt of the
                                    company:  the Indenture  dated as of June 1,
                                    1976,  between  the  company  and  Citibank,
                                    N.A., as trustee,  relating to the company's
                                    8-1/2%  Sinking Fund  Debentures due June 1,
                                    2006; the Indenture  dated as of November 1,
                                    1981,  between the company and United States
                                    Trust  Company  of  New  York,  as  trustee,
                                    relating to the company's 7% Debentures  due
                                    November 1, 2011; the Note  Agreement  dated
                                    as  of   November   29,   1989,   among  the
                                    Kerr-McGee    Corporation   Employee   Stock
                                    Ownership Plan Trust (the Trust) and several
                                    lenders,  providing for a loan guaranteed by
                                    the  company  of $125  million to the Trust;
                                    the  Facilities  Agreement  dated  March  3,
                                    1991,  providing for borrowings of up to $65
                                    million   through   September  3,  1993,  by
                                    National  Titanium  Dioxide  Company Limited
                                    (Cristal), a Saudi Arabian limited liability
                                    company   (owned  25%  by  a  wholly   owned
                                    subsidiary  of  the  company),  and  several
                                    banks with 25% of the loans  guaranteed on a
                                    several basis by a wholly owned  subsidiary;
                                    the $325  million  Credit Agreement dated as
                                    of December 4, 1996, providing  for  a five-
                                    year revolving credit facility with a bullet
                                    maturity  on  the fifth anniversary  of  the
                                    execution  of  the   Credit  Agreement;  the
                                    Revolving   Credit  Agreement  dated  as  of
                                    October 16, 1992, and the first amendment to
                                    the  Credit  Agreement  dated as of December
                                    21, 1994,   among   Kerr-McGee  Corporation,
                                    Kerr-McGee Oil (U.K.) PLC, and several banks
                                    providing for revolving credit of up to $230
                                    million   through   December 21,  1999;  and
                                    the  Revolving  Credit Agreement dated as of
                                    February 20, 1997,  between Kerr-McGee China
                                    Petroleum  Ltd., as borrower, and Kerr-McGee
                                    Corporation, as guarantor, and several banks
                                    providing for revolving credit of up to $105
                                    million  through March 6,  2000.  The  total
                                    amount of securities  authorized  under each
                                    of such instruments does not exceed  10%  of
                                    the  total assets of the   company  and  its
                                    subsidiaries on a consolidated basis.

                     4.3            Kerr-McGee Corporation Direct Purchase   and
                                    Dividend Reinvestment Plan filed on Form S-3
                                    effective  August 19, 1993, Registration No.
                                    33-66112,   and    incorporated   herein  by
                                    reference.

                    10.1*           Deferred  Compensation Plan for Non-Employee
                                    Directors as amended and restated  effective
                                    October 1, 1990,  filed as Exhibit  10(1) to
                                    the  report  filed on Form 10-K for the year
                                    ended  December 31, 1990,  and  incorporated
                                    herein by reference.

                    10.2*           Kerr-McGee  Corporation  Stock Deferred Com-
                                    pensation  Plan for Non-Employee   Directors
                                    as amended and restated  effective August 1,
                                    1995,  filed  on  Form 10-K  for  year ended
                                    December 31, 1995, and  incorporated  herein
                                    by reference.

                    10.3*           Description   of   the    company's   Annual
                                    Incentive  Compensation Plan,  filed on Form
                                    10-K for year ended  December 31, 1995,  and
                                    incorporated herein by reference.

                    10.4*           The Long Term  Incentive  Program as amended
                                    and restated effective May 9, 1995, filed as
                                    Exhibit  4.2 on Form  10-Q  for the  quarter
                                    ended  March  31,  1995,  and   incorporated
                                    herein by reference.

                    10.5*           Benefits  Restoration  Plan as  amended  and
                                    restated effective September 13, 1989, filed
                                    as Exhibit  10(6) to the report on Form 10-K
                                    for the year ended  December 31,  1992,  and
                                    incorporated herein by reference.

                    10.6*           Kerr-McGee  Corporation  Executive  Deferred
                                    Compensation  Plan as amended  and  restated
                                    effective  January 1, 1996, filed as Exhibit
                                    10.6 to the report on Form 10-K for the year
                                    ended  December 31, 1995,  and  incorporated
                                    herein by reference.

                    10.7*           Kerr-McGee  Corporation  Supplemental Execu-
                                    tive Retirement Plan as amended and restated
                                    effective May 3, 1994, filed as Exhibit 10.8
                                    on Form 10-K for the year ended December 31,
                                    1994,  and incorporated herein by reference.

                    10.8*           Amended  and  restated  Agreement,  restated
                                    as of December 31, 1992, between the company
                                    and  Frank  A.  McPherson  filed  as Exhibit
                                    10(9)  on  Form  10-K  for  the  year  ended
                                    December  31, 1992, and incorporated  herein
                                    by reference.

                    10.9*           Amended and restated Agreement,  restated as
                                    of December  31,  1992,  between the company
                                    and John C. Linehan filed as Exhibit  10(10)
                                    on Form 10-K for the year ended December 31,
                                    1992, and incorporated herein by reference.

                    10.10*          Amended and restated Agreement,  restated as
                                    of December  31,  1992,  between the company
                                    and Luke R. Corbett filed as Exhibit  10(11)
                                    on Form 10-K for the year ended December 31,
                                    1992, and incorporated herein by reference.

                    10.11*          Amended and restated Agreement,  restated as
                                    of December  31,  1992,  between the company
                                    and Tom J.  McDaniel  filed as Exhibit 10.13
                                    on Form 10-K for the year ended December 31,
                                    1994, and incorporated herein by reference.

                    10.12*          Agreement as of October 1, 1991, between the
                                    company and Robert C. Scharp.

                    10.13*          Consulting  agreement,  as  of  February  1,
                                    1997,  between  the  company  and  Frank  A.
                                    McPherson.

                    10.14*          Form of  agreement,  amended and restated as
                                    of December  31,  1992,  between the company
                                    and certain executive  officers not named in
                                    the Summary  Compensation Table contained in
                                    the company's definitive Proxy Statement for
                                    the 1997  Annual  Meeting  of  Stockholders,
                                    filed as Exhibit 10(14) on Form 10-K for the
                                    year   ended    December   31,   1992,   and
                                    incorporated herein by reference.

                    12              Computations  of  ratio of earnings to fixed
                                    charges.

                    13              1996 Annual Report to Stockholders.

                    21              Subsidiaries of the Registrant.

                    23              Consent of Arthur Andersen LLP.

                    24              Powers of Attorney.

                    27              Financial  Data  Schedule (electronic filing
                                    only).


*These exhibits relate to the compensation plans and arrangements of the
 company.


(b)     Reports on Form 8-K -

           No  reports  on Form 8-K  were  filed by the  Registrant  during  the
           quarter ended December 31, 1996.



<PAGE>


Report of Independent Public Accountants On Financial
    Statement Schedule

To Kerr-McGee Corporation:

        We  have  audited  in  accordance  with  generally   accepted   auditing
standards,   the  consolidated   financial  statements  included  in  Kerr-McGee
Corporation's  1996 Annual Report to  Stockholders  incorporated by reference in
this Form 10-K,  and have issued our report thereon dated February 17, 1997. Our
report  on  the  consolidated   financial  statements  includes  an  explanatory
paragraph  with  respect to 1995 changes in  accounting  for the  impairment  of
long-lived  assets and long-lived assets to be disposed of, as discussed in Note
11 to the financial statements. Our audit was made for the purpose of forming an
opinion on those statements taken as a whole. The Schedule of Valuation Accounts
and Reserves is the responsibility of the company's  management and is presented
for purposes of complying with the Securities  and Exchange  Commission's  rules
and is not part of the basic consolidated  financial  statements.  This schedule
has been subjected to the auditing  procedures applied in the audit of the basic
consolidated  financial  statements  and, in our opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic consolidated financial statements taken as a whole.



                                                         (ARTHUR ANDERSEN LLP)
                                                          ARTHUR ANDERSEN LLP




Oklahoma City, Oklahoma,
    February 17, 1997


<PAGE>
<TABLE>

                                                                     SCHEDULE II

                         KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                 VALUATION ACCOUNTS AND RESERVES

<CAPTION>


                                                          Additions
                                        Balance at  Charged to  Charged to   Deductions Balance at
                                         Beginning  Profit and     Other        from      End of
(In millions of dollars)                  of Year      Loss      Accounts      Reserves    Year


<S>                                         <C>       <C>        <C>           <C>        <C>    
Year Ended December 31, 1996
a. Deducted from asset accounts
   Allowance for doubtful notes
     and accounts receivable                $14       $  1       $  -          $  2       $ 13
   Warehouse inventory obsolescence           3          -          -             -          3
                                            ---       ----       ----          ----       ----
                                            $17       $  1       $  -          $  2       $ 16
                                            ===       ====       ====          ====       ====

b. Not deducted from asset accounts
   Environmental                           $230       $ 55       $  4 (A)      $ 54       $235
   Postretirement benefits                  112         11          -             6        117
   Oil and gas site dismantlement and coal
     site reclamation and restoration       103         14          -             7        110
   Surface mine stripping cost               16         35          -            36         15
   Pension benefits                          11          -         (4)(A)         -          7
   Other                                      6          2          -             1          7
                                            ---       ----       ----          ----       ----
                                           $478       $117       $  -          $104       $491
                                           ====       ====       ====          ====       ====

Year Ended December 31, 1995
a. Deducted from asset accounts
   Allowance for doubtful notes
     and accounts receivable                $11       $  3       $  1          $  1       $ 14
   Warehouse inventory obsolescence           2          1          -             -          3
                                            ---       ----       ----          ----       ----
                                            $13       $  4       $  1          $  1       $ 17
                                            ===       ====       ====          ====       ====

b. Not deducted from asset accounts
   Environmental                           $166       $121       $  4 (A)      $ 61       $230
   Postretirement benefits                  108         12         (1)(A)         7        112
   Oil and gas site dismantlement and coal
     site reclamation and restoration        94         12          -             3        103
   Surface mine stripping cost               12         37          -            33         16
   Pension benefits                           9          4          -             2         11
   Other                                      8          1         (2)(A)         1          6
                                            ---       ----       ----          ----       ----    
                                           $397       $187       $  1          $107       $478
                                           ====       ====       ====          ====       ====


Year Ended December 31, 1994
a. Deducted from asset accounts
   Allowance for doubtful notes
     and accounts receivable                $ 5       $  9       $  -          $  3       $ 11
   Warehouse inventory obsolescence           1          1          -             -          2
                                            ---       ----       ----          ----       ----
                                            $ 6       $ 10       $  -          $  3       $ 13
                                            ===       ====       ====          ====       ====

b. Not deducted from asset accounts
   Environmental                           $255       $ 21       $(50)(A)      $ 60       $166
   Postretirement benefits                  103         11          -             6        108
   Oil and gas site dismantlement and coal
     site reclamation and restoration        81         13          3 (B)         3         94
   Surface mine stripping cost               14         30          -            32         12
   Pension benefits                           -          4          6 (C)         1          9
   Other                                      7          2          -             1          8
                                            ---       ----       ----          ----       ----
                                           $460       $ 81       $(41)         $103       $397
                                           ====       ====       ====          ====       ====




(A) Transfer (to) from current liabilities.
(B) Obligation assumed in connection with property acquisitions.
(C) Additional minimum liability offset by an intangible asset in deferred
    charges.
</TABLE>

<PAGE>


                                            SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                             KERR-McGEE CORPORATION




                                            By:    Luke R. Corbett*
                                                   Luke R. Corbett,
                                                     Chairman of the Board and
                                                      Chief Executive Officer




March 27, 1997                              By:    (John C. Linehan)
        Date                                       John C. Linehan,
                                                   Executive Vice President and
                                                     Chief Financial Officer




                                            By:    (Deborah A. Kitchens)
                                                   Deborah A. Kitchens,
                                                   Vice President and Controller
                                                    and Chief Accounting Officer



*       By his signature set forth below, John C. Linehan has signed this Annual
        Report on Form 10-K as  attorney-in-fact  for the officer  noted  above,
        pursuant to power of attorney  filed with the  Securities  and  Exchange
        Commission.



                                            By:    (John C. Linehan)
                                                   John C. Linehan


<PAGE>


        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this report has been signed below by the following persons in the capacities and
on the date indicated.


                                            By:    Paul M. Anderson*
                                                   Paul M. Anderson, Director

                                            By:    Bennett E. Bidwell*
                                                   Bennett E. Bidwell, Director

                                            By:    E. H. Clark, Jr.*
                                                   E. H. Clark, Jr., Director

                                            By:    Luke R. Corbett*
                                                   Luke R. Corbett, Director

                                            By:    Martin C. Jischke*
                                                   Martin C. Jischke, Director

                                            By:    Robert S. Kerr, Jr.*
                                                   Robert S. Kerr, Jr., Director

March 27, 1997                              By:    Tom J. McDaniel*
        Date                                       Tom J. McDaniel, Director

                                            By:    William C. Morris*
                                                   William C. Morris, Director

                                            By:    John J. Murphy*
                                                   John J. Murphy, Director

                                            By:    John J. Nevin*
                                                   John J. Nevin, Director

                                            By:    Richard M. Rompala*
                                                   Richard M. Rompala, Director

                                            By:    Farah M. Walters*
                                                   Farah M. Walters, Director


        *By his  signature  set forth  below,  John C.  Linehan  has signed this
        Annual Report on Form 10-K as  attorney-in-fact  for the directors noted
        above,  pursuant  to power of  attorney  filed with the  Securities  and
        Exchange Commission.


                                            By:    (John C. Linehan)
                                                   John C. Linehan