UNITED STATES
                       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

                   For the Fiscal year ended December 31, 1998

                          Commission file number 1-3939

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

               DELAWARE                               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
    Preferred Share Purchase Right
    8-1/2% Sinking Fund Debentures,
      Due June 1, 2006                          New York Stock Exchange
    7-1/2% Convertible Subordinated
      Debentures Due May 15, 2014               New York Stock Exchange

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

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 [ ]    

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. [_]

The aggregate  market value of the voting stock held by  non-affiliates  of the
registrant was  approximately  $2.7 billion as of March 15, 1999.

The  number of shares of common  stock  outstanding  as of March 15,  1999,  was
83,614,002.

                       DOCUMENTS INCORPORATED BY REFERENCE

Specified  sections  of  the  Kerr-McGee   Corporation  1998  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 1999 Annual Meeting
of Stockholders, which will be filed with the Securities and Exchange Commission
within 120 days after  December 31, 1998, is  incorporated  by reference in Part
III of this Form 10-K.


                             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 titanium  dioxide  pigment
manufacturing and marketing and minerals, mining and marketing.  Kerr-McGee owns
a large  inventory of natural  resources  that includes oil and gas reserves and
chemical and mineral deposits.

         For a discussion of recent business developments,  reference is made to
the  "Kerr-McGee/Oryx"  section of  Management's  Discussion and Analysis in the
1998  Annual  Report  to  Stockholders,  which  discussion  is  incorporated  by
reference in Item 7, and the Exploration and Production  discussion  included in
this Form 10-K.

                                INDUSTRY SEGMENTS

         For  information as to business  segments of the company,  reference is
made to Note 21 to the  Consolidated  Financial  Statements  in the 1998  Annual
Report to Stockholders, which note is incorporated by reference in Item 8.

                           EXPLORATION AND PRODUCTION

         Kerr-McGee  Corporation manages oil and gas operations  worldwide.  The
company acquires leases and concessions and explores for, develops, produces and
markets crude oil and natural gas through its subsidiaries, Kerr-McGee Oil & Gas
Corporation,  Kerr-McGee Oil (U.K.) PLC,  Kerr-McGee  Resources  (U.K.) Limited,
Kerr-McGee China Petroleum Ltd. and various other subsidiaries.

         The  areas of  Kerr-McGee's  offshore  oil and gas  exploration  and/or
production  activities are the Gulf of Mexico,  North Sea,  China,  Thailand and
Gabon.  Onshore exploration and/or production  operations are in Indonesia,  the
United Kingdom, Thailand and Yemen.

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

         Except as indicated under Items 1 through 3, 5 through 8 and 10 through
14, no other information appearing in either the company's 1998 Annual Report to
Stockholders  or its 1999 Proxy  Statement is deemed to be filed as part of this
annual report on Form 10-K.


         Kerr-McGee's  average daily  proprietary oil production during 1998 was
66,800 barrels, an increase of 17% from 1997. Kerr-McGee's average oil price was
$11.88 per barrel in 1998, compared with $18.51 per barrel for 1997.

         During 1998,  proprietary  natural gas sales averaged 198 million cubic
feet per day,  up 8% from 1997  sales.  The 1998  average  natural gas price was
$2.18 per thousand  cubic feet compared  with $2.56 per thousand  cubic feet for
1997.

         Kerr-McGee  continued to add to its  worldwide  prospect  inventory in
1998.   Gross  acreage  at  year-end  1998  was  more  than 27 million acres, an
increase of 47% compared with year-end 1997.

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

         Reference is made to Notes 24, 25 and 28 to the Consolidated  Financial
Statements  in  the  1998  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 and production  costs per barrel of
oil  equivalent  (BOE) for each of the past three  years;  capitalized  costs of
crude oil and natural gas  activities  at December 31, 1998 and 1997;  and costs
incurred  in crude oil and  natural  gas  activities  for each of the past three
years.

Reserves

         Kerr-McGee's  estimated  proved crude oil,  condensate  and natural gas
reserves  at  December  31,  1998,  and the  changes in net  quantities  of such
reserves for the three years then ended are shown in Note 27 to the Consolidated
Financial  Statements of the 1998 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, 1998, the company had interests in  undeveloped  oil
and gas leases in the Gulf of Mexico,  the United  Kingdom and Danish sectors of
the North Sea and onshore and offshore in other international areas as follows:

                                              Gross               Net
Location                                     Acreage            Acreage

Gulf of Mexico                               810,739            464,564
                                           ---------          ---------

North Sea                                  1,624,754            750,002
                                           ---------         ----------

Other international -
     Yemen                                 9,880,007          4,624,432
     Thailand                              6,324,659          2,648,609
     Gabon                                 3,115,998            436,240
     China                                 2,998,623          1,481,437
                                          ----------         ----------
                                          22,319,287          9,190,718
                                          ----------         ----------

         Total                            24,754,780         10,405,284
                                          ==========         ==========


Developed Acreage

         At December 31, 1998,  the company had  interests in developed  oil and
gas acreage in the Gulf of Mexico,  the United  Kingdom sector of the North Sea,
offshore China and onshore Indonesia as follows:

                                               Gross            Net
Location                                     Acreage            Acreage

Gulf of Mexico                               355,727            158,915
                                             -------            -------

North Sea                                    295,464             68,960
                                             -------            -------

Other international -
     Indonesia                             1,725,035            517,511
     China                                    78,332             19,191
                                           ---------            -------
                                           1,803,367            536,702
                                           ---------            -------

        Total                              2,454,558            764,577
                                           =========            =======


Net Exploratory and Development Wells

         Domestic and  international  exploratory and development  wells drilled
during the three years ended December 31, 1998, are as follows. Included in 1996
are wells drilled on onshore North  American  properties  that were later merged
into an equity affiliate or divested.

                                            1998      1997      1996
                                            ----      ----      ----

Exploratory Wells - Net(1)
     Domestic
         Productive                         1.40      2.65      4.91
         Dry holes                          2.73      2.65       .83
                                            ----      ----      ----
                                            4.13      5.30      5.74
                                            ----      ----      ----
    United Kingdom
         Dry holes                          1.05       .40      2.19
                                            ----      ----      ----

     Other international
         Dry holes                          3.64      1.37       .50
                                            ----      ----      ----

              Total                         8.82      7.07      8.43
                                            ====      ====      ====

Development Wells - Net(1)
     Domestic
         Productive                         6.99      5.11     17.26
         Dry holes                          1.00         -      1.00
                                           -----      ----     -----
                                            7.99      5.11     18.26
                                           -----      ----     -----
     United Kingdom
         Productive                         1.77       .55      1.09
         Dry holes                             -         -         -
                                           -----      ----     -----
                                            1.77       .55      1.09
                                           -----      ----     -----

     Other international
         Productive                         2.54      4.12      2.98
         Dry holes                             -         -       .04
                                           -----      ----     -----
                                            2.54      4.12      3.02
                                           -----       ----    -----

              Total                        12.30      9.78     22.37
                                           =====      ====     =====



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


Gross and Net Wells

         The number of productive  oil and gas wells in which the company had an
interest at December  31, 1998,  is shown in the  following  table.  These wells
include 274 gross or 24.92 net wells associated with improved  recovery projects
and 146 gross or 76.10 net wells that have multiple completions but are included
as single wells.

                                            Gross                  Net
Location                                    Wells                Wells

Crude Oil
     Gulf of Mexico                           192               76.61
     North Sea                                166               16.31
     China                                     25                6.13
     Indonesia                                 13                3.90
                                              ---              ------
                                              396              102.95
                                              ---              ------

Natural Gas
     Gulf of Mexico                            81               38.36
     North Sea                                 40                2.90
                                              ---              ------
                                              121               41.26
                                              ---              ------

         Total                                517              144.21
                                              ===              ======


Wells in Process of Drilling

         At  year-end  1998,  the company had wells  classified  as  temporarily
suspended or in the process of drilling as follows:

                                                Gross                  Net
                                                Wells                Wells

     Gulf of Mexico                                15                5.20
     North Sea                                     29               10.72
     Indonesia                                     14                4.20
                                                   --               -----

         Total                                     58               20.12
                                                   ==               =====

Crude Oil and Natural Gas Sales

         The following table  summarizes the sales of the company's  proprietary
crude oil and natural gas production for the past three years:

(Millions)                                    1998         1997          1996
                                            ------        ------        -----

Crude oil and condensate - barrels
     Domestic                                  8.1           8.8         11.2
     North Sea                                12.4           8.7         11.2
     Other international                       3.9           3.4          2.5
                                            ------        ------       ------
                                              24.4          20.9         24.9
                                            ======        ======       ======

Crude oil and condensate
     Domestic                               $ 94.6        $163.8       $216.4
     North Sea                               148.9         162.8        213.1
     Other international                      46.2          59.5         46.8
                                            ------        ------       ------
                                            $289.7        $386.1       $476.3
                                            ======        ======       ======

Natural gas - MCF
     Domestic                                 60.2          56.5         83.5
     North Sea                                12.1          10.6         10.2
     Other international                         -             -          9.3
                                            ------        ------       ------
                                              72.3          67.1        103.0
                                            ======        ======       ======

Natural gas
     Domestic                               $127.6        $145.4       $180.5
     North Sea                                30.1          26.7         26.8
     Other international                         -             -         10.6
                                            ------        ------       ------
                                            $157.7        $172.1       $217.9
                                            ======        ======       ======


Sales of Production

         All of the  company's  crude  oil and  natural  gas is  sold at  market
prices.  Kerr-McGee has formed  strategic  alliances  with two energy  marketing
companies to sell  substantially all proprietary  domestic crude oil and natural
gas production.  International crude oil is sold both under contract and through
spot market sales in the geographic area of production.

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, 1998, the company was  participating in 15 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 begin at or near
the time of initial production from these fields.

Merger with Oryx Energy Company

         On October 14, 1998,  Kerr-McGee  Corporation  and Oryx Energy  Company
signed a strategic  merger that was  completed on February 26, 1999.  The merger
created one of the largest  U.S.-based  independent  oil and gas exploration and
production  companies.  The  combination  resulted in  significant  additions to
Kerr-McGee's  core  exploration and production  operations in the Gulf of Mexico
and the  North  Sea  and  further  contributed  to the  company's  international
exploration efforts.

         Through the merger  Kerr-McGee added more than 600,000 net acres to the
company's  Gulf of Mexico  inventory  and several  currently  producing  fields,
including Baldpate and Neptune in deepwater. The merger also added about 225,000
net acres,  both  developed and  undeveloped,  in the North Sea. The company has
acquired  interest in eight  additional  North Sea fields and is operator of the
Ninian,  Murchison,  Hutton and Lyell  fields.  The  combined  company  also has
exploration  and/or production  operations in Ecuador,  Kazakhstan,  Algeria and
Australia.

Exploration and Development Activities

Gulf of Mexico

         Since 1947,  the Gulf of Mexico has been a major area of operation  for
Kerr-McGee and accounted for nearly 50% of  Kerr-McGee's  oil and gas production
in 1998. The company  continues  aggressive lease  acquisition,  exploration and
exploitation programs. In 1998, Kerr-McGee was awarded approximately 124,000 net
acres  through  federal and state lease sales.  About 75% of this new acreage is
located in deepwater  areas at depths ranging from 2,000 feet to more than 8,000
feet of water.  Additional deepwater acreage and exploration  opportunities were
acquired   through   the   establishment   of   a   strategic   alliance,    and
multi-disciplinary asset teams were formed to target exploitation  opportunities
in established fields.

         During 1998, three new fields started production in the Gulf of Mexico.
A summary of these and other key developments is as follows:

         Garden Banks 65 (60%):  First production from this  Kerr-McGee-operated
field began in May 1998, and development was completed in late July. At year-end
1998,  production averaged 100 million cubic feet of gas per day and 150 barrels
of oil per  day.  Kerr-McGee  leases  the  production  and  processing  facility
associated  with this  project  from a  pipeline  company,  which  significantly
reduced development cost. Additional  exploratory drilling is scheduled for 1999
on two adjacent company-operated blocks.

         Ewing Bank  910(40%):  First  production  commenced  in  December at an
initial rate of 3,500 barrels of oil per day.  Located in 560 feet of water, the
production facility is the tallest company-operated  stand-alone platform. Ewing
Bank 910 and 954 and South  Timbalier  block  320 are tied into this  production
facility. Additional development drilling and completion work are expected to be
finished in mid-1999.

         West   Cameron   638   (40%):    First   gas   production   from   this
Kerr-McGee-operated  field began in  December  1998.  This  subsea  development,
located in 375 feet of water, is expected to reach peak production in 1999.

         Pompano  Field,  Viosca Knoll 989 area (25%):  Average 1998  production
from the Pompano Field  exceeded  50,000 barrels of oil per day and more than 60
million  cubic feet of gas per day.  Processing of 4D seismic data was completed
in 1998,  and  evaluation is under way to determine the benefit from  additional
development  wells.  At year-end 1998, the 29 wells from the platform and subsea
were capable of producing about 61,000 barrels of oil per day.

North Sea

         Kerr-McGee  has been  active in the North Sea area since  1976.  In May
1998, the company  completed the purchase of the United Kingdom North Sea assets
of Gulf Canada  Resources  Limited  (GCRL),  which  significantly  increased the
company's North Sea reserve base and  production.  As a result of this strategic
acquisition  in this core area,  Kerr-McGee  now has interests in six additional
producing  fields,  and the company's  daily  production  rates in the North Sea
increased by 80% from 1997 levels. In 1998, the North Sea production represented
more than 51% of the company's  worldwide liquids  production and 19% of its gas
sales.

         North Sea exploration  activity in 1998 also included  participation in
both the United  Kingdom and Danish  North Sea license  rounds.  Kerr-McGee  was
awarded four blocks in the 18th United  Kingdom  round,  totaling  approximately
43,000  net  acres,  and  two  blocks  in  the  fifth  Danish  round,   totaling
approximately 35,500 net acres. Kerr-McGee is the operator for these new blocks.

         Following is a summary of the company's key  developments  in the North
Sea:

         Gryphon field, block 9/18b (46.5%): Kerr-McGee operates this field, and
as a result of the Gulf Canada  transaction,  the company's  interest  increased
from  25% to  46.5%.  Gryphon  was the  first  field in the  North  Sea to use a
permanently moored floating production, storage and offloading (FPSO) vessel. In
1998, the field production rate averaged more than 22,200 barrels of oil per day
and  contributed  more  than  15% of  the  company's  total  net  worldwide  oil
production.

         The Gryphon  Asset Team  successfully  expanded  operations  into areas
adjacent to Gryphon.  Kerr-McGee  was  awarded  block 9/24a in the 18th  license
round  and  reached  an   agreement  to  acquire   equity  in  block  9/23a.   A
new-technology  3D ocean bottom cable seismic survey is planned for 1999,  which
will cover the field and nearby prospective areas.

         Janice field,  block 30/17a  (50.9%):  Modifications  to the Janice "A"
floating  production  unit were  completed,  and the vessel was  inaugurated  in
October  1998.  First  oil from  this  Kerr-McGee-operated  field  commenced  in
February 1999, with peak daily  production  expected to exceed 55,000 barrels of
oil.

         Ross  field,  blocks  13/28a,  13/29a and 13/28c  (14.5%):  Development
drilling and  construction of the FPSO vessel  continued in 1998. First oil from
this new field acquired in the GCRL transaction is expected in 1999 with initial
production estimated at 40,000 barrels of oil per day.

         Brae area,  blocks 16/3a,  16/7a (8%) and 16/3b (5%):  Production  from
the six fields in the Brae area  contributed  more than 11% of Kerr-McGee's  net
worldwide oil production.

         Wytch Farm field (7.4%): Wytch Farm is the largest onshore oil field in
Europe and this  interest was acquired in the GCRL  transaction.  Located on the
southern coast of Dorset, England, production is achieved through extended-reach
horizontal  wells. In 1998, the field averaged nearly 100,000 barrels of oil per
day.

Other International

         In 1998, Kerr-McGee continued its exploration and production efforts by
strategically  expanding  into  various  international  areas.  Significant  new
reserves  were added in  Indonesia,  new  acreage was  acquired in Thailand  and
Gabon, and a strategic alliance was formed in Yemen.

A summary of key developments follows:

Indonesia:

         Jabung block (30%), Sumatra:  Discovered in 1995, this 1.7 million-acre
block  consists  of five  proven  oil  and gas  fields.  An  integrated  plan of
development is being prepared for submission to the Indonesian government, which
will  include the existing  facilities  servicing  the North  Geragai and Makmur
fields.  Completion  of gas  marketing  negotiations  is  expected  in 1999 with
initial deliveries planned for 2001.

         Combined  production from the Makmur field,  which began  production in
January 1998,  and the North  Geragai field  averaged more than 9,700 barrels of
oil per day. After completion of additional  horizontal  drilling and well work,
production in 1999 from these two fields is expected to average more than 11,500
barrels of oil per day.

         Appraisal  work  continued  on the  Northeast  Betara and North  Betara
fields.  The Gemah oil and gas field was  discovered  in late 1998.  Delineation
continues with oil production expected in 2000.

         Several new exploratory  prospects are under  consideration for Jabung.
Drilling plans will be made in 1999.

China:

         Liuhua 11-1 field  (24.5%),  South China Sea:  This field was developed
entirely with horizontal wells. Production averaged nearly 33,000 barrels of oil
per day in 1998.

         Block 04/36 (45%), Bohai Bay: Kerr-McGee is the operator of this block.
A 3D seismic survey was completed in 1998, and a comprehensive evaluation of the
development  potential  of the area has been  completed.  Meetings  with partner
groups are scheduled for early 1999 to evaluate  technical data and  development
options.

Thailand:

         Block W7/38  (42.5%),  Andaman  Sea:  Kerr-McGee  was awarded  this 4.9
million-acre block in March 1998 and is the operator.  A reconnaissance  seismic
survey was acquired and interpreted in 1998, and additional seismic data will be
acquired  in early  1999 to further  delineate  prospective  areas.  Exploration
drilling is planned for 2000.

Gabon:

         In November 1998, the company  acquired a 14% interest in two adjoining
exploration blocks located offshore along the southern coast of Gabon. The Anton
Marin and Astrid Marin blocks  total 3.3 million  acres in water depths  ranging
from 3,000 feet to more than 9,000 feet.  A 3D seismic  program is  scheduled to
begin in 1999, followed by exploration drilling in 2000.

Yemen:

         In 1998,  Kerr-McGee entered into a partnership with a company that has
significant  existing  infrastructure in Yemen. The agreement includes blocks 50
(47.5%) and 51 (43.8%),  which cover nearly 10 million acres.  Interpretation of
seismic data is ongoing, and exploratory drilling is anticipated in 2001.

Brazil:

         Kerr-McGee  and  partners  began  negotiations  in 1998 with  Brazilian
authorities for Block BS-1 (40%),  which covers 2.3 million acres and is located
in water depths ranging from more than 200 feet to 5,000 feet.  Kerr-McGee  will
be  the  operator.   The  company  expects   completion  of  final   contractual
negotiations in 1999.


                                    CHEMICALS

         Kerr-McGee's   chemical   operations   produce  and  market   inorganic
industrial and specialty  chemicals,  heavy minerals and forest products through
its  subsidiaries,  Kerr-McGee  Chemical LLC, KMCC Western  Australia Pty. Ltd.,
Kerr-McGee  Chemical  GmbH,  and  Kerr-McGee  Pigments  Limited.  Many of  these
products are processed using proprietary technology developed by the company.

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

Pigment

         The company's  primary  chemical  product is titanium  dioxide pigment,
which is produced at four titanium  dioxide  (TiO2) plants in the United States,
Australia,  Germany  and  Belgium.  The  plants in  Hamilton,  Mississippi,  and
Kwinana,  Western  Australia,  manufacture TiO2 using the company's  proprietary
chloride-process  technology.  The plants in  Uerdingen,  Germany,  and Antwerp,
Belgium, produce TiO2 using the sulfate process.

         The company's titanium dioxide pigment plant at Hamilton,  Mississippi,
has a  production  capacity of 150,000  metric tons per year.  An  expansion  is
expected to be completed in the third  quarter of 1999,  which will increase the
Hamilton plant's  production  capacity to 178,000 metric tons. The feedstock for
the  Hamilton  plant is  synthetic  rutile from the  company's  plant at Mobile,
Alabama. The annual production capacity at Mobile is 200,000 metric tons.

         On March 31, 1998,  the company  acquired an 80% interest in Bayer AG's
(Bayer)  European  titanium  dioxide  pigment  business,   including  plants  at
Uerdingen,  Germany,  and Antwerp,  Belgium. The Uerdingen plant has capacity of
100,000 metric tons per year, and the Antwerp  plant's annual capacity is 30,000
metric tons.

         The  company  also owns a 25% equity  interest  in a  titanium  dioxide
pigment  plant  in  Yanbu,  Saudi  Arabia.  The  plant  utilizes  the  company's
proprietary chloride process in its manufacturing process.

         The company  owns a 50% interest in a joint  venture  that  operates an
integrated  titanium dioxide project located within 120 miles of Perth,  Western
Australia. The project consists of a heavy-minerals mine and mill and facilities
for production of synthetic rutile and TiO2.

         Heavy minerals are mined from 20,700 acres that are leased by the joint
venture.  The  company's  50% interest in the  property's  remaining  proved and
probable  reserves  represents 151 million metric tons of sand  containing  3.7%
heavy minerals, or heavy minerals in place totaling 5.6 million metric tons. The
valuable  heavy  minerals  are  composed of 4.4% rutile,  61.9%  ilmenite,  3.4%
leucoxene and 11.1% zircon, with the remaining 19.2% of heavy minerals presently
having no value.

         The heavy  minerals are  processed  at the 507,000  metric-ton-per-year
separation mill. The recovered ilmenite is processed into synthetic rutile at an
adjoining synthetic rutile facility, which has a capacity of 195,000 metric tons
per year. Production from the synthetic rutile plant serves as feedstock for the
pigment plants in Australia and Saudi Arabia. The annual production  capacity of
the pigment plants in Kwinana,  Western  Australia,  and Yanbu, Saudi Arabia, in
which the  company  owns  interest of 50% and 25%,  respectively,  is 83,000 and
67,000 metric tons, respectively.

         Information regarding  heavy-mineral  reserves,  production and average
prices  for the three  years  ended  December  31,  1998,  is  presented  in the
following  table.  Mineral  reserves  in this table  represent  those  estimated
quantities  of  proved  and  probable  ore  that,  under  presently  anticipated
conditions,  may be profitably  recovered  and  processed for the  extraction of
their mineral content. Future production of these resources is dependent on many
factors, including market conditions and government regulations.

(Thousands of metric tons)                          1998       1997      1996
--------------------------                         -----      -----     -----

Proved and probable (demonstrated)
     reserves                                      5,600      5,900     5,000

Production                                           209        212       135

Average market price (per metric ton)               $124       $140      $157

Electrolytic Products

         Facilities  at the  Hamilton,  Mississippi,  complex  include  a sodium
chlorate plant with a production  capacity of 130,000 metric tons per year and a
manganese metal plant that has an annual capacity of 11,000 metric tons.

         The  Henderson,  Nevada,  facilities  include  electrolytic  cells  and
processing  equipment for the  manufacture of manganese  dioxide and a specialty
boron products plant. Annual production capacity for each product is as follows:
manganese dioxide - 26,500 metric tons; boron  trichloride - 340,000  kilograms;
and elemental boron - 36,000 kilograms.

         In March 1998, Kerr-McGee sold its ammonium perchlorate business.

Forest Products

         The  principal  forest  product is treated  railroad  crossties.  Other
products  include  crossing  materials,  bridge timbers and utility  poles.  The
company's six operating  wood-preserving plants are located along major railways
in Madison, Illinois; Indianapolis, Indiana; Columbus, Mississippi; Springfield,
Missouri; The Dalles, Oregon; and Texarkana, Texas.

Marketing

         Titanium  dioxide pigment is the world's  preferred white opacifier and
is used  primarily  in  coatings,  plastics and paper.  The  company's  plant at
Hamilton,  Mississippi,  primarily  serves  the  Americas.  Most of the  pigment
production from the joint venture in Kwinana,  Western Australia, is sold in the
Far East and Australia. The production from the Uerdingen, Germany, and Antwerp,
Belgium, operations is primarily sold in Europe. The acquisition of the European
plants has increased Kerr-McGee's annual gross titanium dioxide pigment capacity
to about 10% of global  capacity.  World  demand for  pigments  is  expected  to
increase by an average of about 3% per year over the next five 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  for the next five
years.  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.  Sodium chlorate demand in the United States
is expected to be flat in 1999, then increase  approximately  5% annually in the
near  term as the  pulp and  paper  industry  continues  the  conversion  to the
chlorine dioxide process. The company has about a 7% share of the U.S. market.

         Manganese  metal is used in aluminum and specialty and stainless  steel
alloys.  The primary use of manganese metal is for alloying  aluminum can sheet.
The company supplies  approximately 40% of the U.S. aluminum industry  manganese
requirements.

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

         The  company's  share  of the U.S.  railroad  crosstie  market  is 38%.
Domestic  crosstie  demand is  expected  to remain  relatively  flat at about 13
million to 15 million ties per year.


                             DISCONTINUED OPERATIONS

         In early  1998,  the  company  announced  its  intent  to exit the coal
business.  The  sales  of the  coal  assets  were  completed  in July  1998  for
approximately  $600  million.  For  additional   discussion  about  discontinued
operations,  reference  is  made  to  the  "Transactions  in  1998"  section  of
Management's  Discussion and Analysis and Note 22 to the Consolidated  Financial
Statements in the 1998 Annual Report to Stockholders,  which are incorporated by
reference in Items 7 and 8.

                                      OTHER

Research and Development

         The company's  Technical Center 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, 1998,  the company had 3,367  employees.  Approximately
600, or 18% of these employees were represented by chemical industry  collective
bargaining agreements in Europe.

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,  producing  crude oil and
natural gas efficiently, transporting the produced crude oil and natural gas and
developing successful marketing strategies.

         The titanium dioxide pigment business is very  competitive.  The number
of  competitors  in the industry has  declined due to recent  consolidations,  a
trend  that is  expected  to  continue  as  companies  owning  chloride  process
technology  acquire  operations  that use the older  sulfate  technology.  It is
expected  that many of these  sulfate  plants will be  converted to the chloride
technology.  Worldwide,  Kerr-McGee  is one of  only  four  companies  that  own
chloride  technology to produce titanium dioxide pigment.  Cost efficiencies and
product  quality are key  competitive  factors in the titanium  dioxide  pigment
business.

         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 exploration
and 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 and gas industry.

Environmental Matters

         Federal, state and local laws and regulations relating to environmental
protection affect almost all company operations. During 1998, direct capital and
operating  expenditures  related  to  environmental  protection  and  cleanup of
existing  sites  totaled $37  million.  Additional  expenditures  totaling  $105
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  $115 million in both 1999 and 2000.  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.

         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,  negotiations 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  environ-mental  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.

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

Item 3.   Legal Proceedings

         The company  continues its efforts to  decommission  a facility 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 9 to the Consolidated  Financial  Statements in
the 1998 Annual Report to  Stockholders,  which are incorporated by reference in
Items 7 and 8, respectively.

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

         None submitted during the fourth quarter of 1998.

                      Executive Officers of the Registrant
<TABLE>

         The following is a list of executive  officers,  their ages,  and their
positions and offices as of March 1, 1999:

<CAPTION>

     Name                Age                                     Office     

<S>                       <C>     <C>                                        
Robert L. Keiser          56      Chairman  of the  Board  since  February  1999.  Chairman  of  the  Board  and  Chief
                                  Executive Officer of Oryx Energy Company from 1994 until February 1999.

Luke R. Corbett           52      Chief  Executive  Officer since 1997.  Chairman of the Board from 1997 until February
                                  1999.  President  and Chief  Operating  Officer  from 1995  until  1997.  Group  Vice
                                  President from 1992 until 1995.

Tom J. McDaniel           60      Vice Chairman of the Board since 1997.  Senior Vice  President  from 1986 until 1997.
                                  Corporate Secretary from 1989 until 1997.

John C. Linehan           59      Executive Vice President since 1997. Chief Financial  Officer since 1987. Senior Vice
                                  President from 1987 until 1997.

Kenneth W. Crouch         55      Senior Vice President since 1996.  Senior Vice President,  Worldwide  Exploration and
                                  Production  operations  since 1998.  Senior Vice President,  Exploration,  Kerr-McGee
                                  Oil & Gas Corporation  from 1996 to 1998.  Senior Vice President,  North American and
                                  International  Exploration,  Exploration  and Production  Division  during 1996. Vice
                                  President, Gulf of Mexico and International  Exploration,  Exploration and Production
                                  Division from 1995 until 1996.  Vice  President and Managing  Director of Exploration
                                  for North Sea Operations, Exploration and Production Division from 1993 until 1995.

Russell G. Horner, Jr.    59      Senior Vice  President  and Corporate  Secretary  since 1997.  General  Counsel since
                                  1986.  Vice President from 1986 until 1997.

Michael G. Webb           51      Senior Vice President for Strategic  Planning since 1996. Senior Vice President since
                                  1994. Senior Vice President,  Exploration,  Exploration and Production  Division from
                                  1994 until 1996.

George D. Christiansen    54      Vice President,  Safety and  Environ-mental  Affairs since March 1998. Vice President
                                  Environmental  Assessment  and  Remedi-ation  from  1996  to  1998.  Vice  President,
                                  Minerals Exploration, Hydrology and Real Estate from 1994 to 1996.

Julius C. Hilburn         48      Vice President,  Human Resources since 1996.  Manager,  Benefits  Administration from
                                  1992 until 1996.

Deborah A. Kitchens       42      Vice  President and Controller  since 1996.  Controller,  Exploration  and Production
                                  Division from 1992 until 1996.

J. Michael Rauh           49      Treasurer since 1996. Vice President since 1987.  Controller from 1987 until 1996.

Jean B. Wallace           45      Vice President,  General  Administration since 1996. Vice President,  Human Resources
                                  from 1989 until 1996.

W. Peter Woodward         50      Senior Vice President since May 1997.  Senior Vice President for Kerr-McGee  Chemical
                                  since May 1997.  Senior Vice President  Chemical  Marketing for  Kerr-McGee  Chemical
                                  Corporation  from May 1996  until May 1997.  Director  Pigment  Business  Management,
                                  Kerr-McGee Chemical Corporation from 1993 until 1996.
</TABLE>



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

                           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  1998  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 29 to the Consolidated Financial Statements in the 1998 Annual
Report to Stockholders, which note is incorporated by reference in Item 8.

         Quarterly dividends declared totaled $1.80 per share for the years 1998
and 1997 and $1.64 per share for the year 1996.  Cash  dividends  have been paid
continuously since 1941 and totaled $86 million in 1998, $85 million in 1997 and
$83 million in 1996.

Item 6.           Selected Financial Data

         Information  regarding selected financial data required in this item is
presented in the schedule  captioned  "Five-Year  Financial Summary" in the 1998
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 1998 Annual  Report to
Stockholders is incorporated herein by reference.

Item 7a.          Quantitative and Qualitative Disclosure about Market Risk

         For information  required under this section,  reference is made to the
"Market  Risks"  section of  Management's  Discussion  and  Analysis in the 1998
Annual Report to  Stockholders,  which  discussion is  incorporated by reference
above.

Item 8.           Financial Statements and Supplementary Data

         The following  financial  statements and supplementary data included in
the 1998 Annual Report to Stockholders are incorporated herein by reference:

                  Report of Independent Public Accountants
                  Consolidated Statement of Income
                  Consolidated Statement of Comprehensive Income
                      and Stockholders' Equity
                  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  1999   made  in   connection   with  its   Annual
              Stockholders' Meeting to be held on May 11, 1999.

(b)      Identification of executive officers -

              The  information  required  under this section is set forth in the
              caption "Executive  Officers of the Registrant" on pages 17 and 18
              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 1999 made in
              connection with its Annual Stockholders' Meeting to be held on May
              11, 1999.

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 1999 made in connection with its Annual  Stockholders'  Meeting to
be held on May 11, 1999.

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  1999  made  in  connection  with  its  Annual
Stockholders' Meeting to be held on May 11, 1999.

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 1999 made in connection with its
Annual Stockholders' Meeting to be held on May 11, 1999.

                                     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 1998 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, 1998, 1997 and 1996

                      Consolidated   Statement  of   Comprehensive   Income  and
                      Stockholders'  Equity  for the Years  Ended  December  31,
                      1998, 1997 and 1996

                      Consolidated Balance Sheet at December 31, 1998 and 1997

                      Consolidated  Statement of Cash Flows  for the Years Ended
                      December 31, 1998, 1997 and 1996

                      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, 1998, 1997 and 1996

                  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.

                          3.2               Bylaws of Kerr-McGee  Corporation as
                                            approved February 26, 1999.

                          4.1               Amended   and     Restated    Rights
                                            Agreement dated  as of 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               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,  filed
                                            as Exhibit 2 to Form S-7,  effective
                                            June  10,  1976,   Registration  No.
                                            2-53878,  and incorporated herein by
                                            reference.

                          4.3               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
                                            filed  as  Exhibit  4  to Form S-16,
                                            effective    November    16,   1981,
                                            Registration    No.   2-772987,  and
                                            incorporated  herein  by  reference.

                          4.4               Indenture dated as of August 1, 1982
                                            filed  as  Exhibit  4 to  Form  S-3,
                                            effective     August    27,    1982,
                                            Registration  Statement No. 2-78952,
                                            and    incorporated     herein    by
                                            reference,  and its first supplement
                                            dated  May  7,  1996,   between  the
                                            company  and   Citibank,   N.A.,  as
                                            trustee,  relating to the  company's
                                            6.625%  notes due October 15,  2007,
                                            and 7.125%  debentures  due  October
                                            15, 2027;

                          4.5               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,  filed as Exhibit  4.5 to
                                            the  report  filed on Form  10-K for
                                            the year ended  December  31,  1997,
                                            and    incorporated     herein    by
                                            reference.

                          4.6               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
                                            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  Amended
                                            and restated Credit  Agreement dated
                                            as  of   April   26,   1998,   among
                                            Kerr-McGee  Corporation,  Kerr-McGee
                                            Oil (U.K.) PLC,  and  several  banks
                                            providing for revolving credit of up
                                            to a total  of $225  million  -- $75
                                            million  through  February  8, 1999,
                                            and $150 million  through  April 28,
                                            2002; 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  $75
                                            million  through March 6, 2000,  and
                                            the  $76  million  Credit  Agreement
                                            dated   May   15,   1998,    between
                                            Kerr-McGee Resources (U.K.) Limited,
                                            Kerr-McGee      Andrew      Limited,
                                            Kerr-McGee    Dorset   Limited   and
                                            various    banks    providing    for
                                            revolving credit.  The $100 million,
                                            8% Note  Agreement  entered  into by
                                            Oryx Energy  Company (Oryx) dated as
                                            of October 20, 1995, and due October
                                            15, 2003.  The $150 million,  8-3/4%
                                            Note Agreement  entered into by Oryx
                                            dated as of July 17,  1996,  and due
                                            July 15,  2004.  The  $150  million,
                                            8-1/8% Note  Agreement  entered into
                                            by  Oryx  dated  as of  October  20,
                                            1995,  and due October 15, 2005. The
                                            $11  million,  9-1/4%  Series A Note
                                            Agreement  entered  into by Oryx and
                                            due   January  2,  2002.   The  $2.2
                                            million,   9-1/2%   Series   A  Note
                                            Agreement  entered  into by Oryx and
                                            due  February  1,  2002.   The  $100
                                            million,  10% Note Agreement entered
                                            into by Oryx  dated  as of June  27,
                                            1991,  and due  June 15,  1999.  The
                                            $100 million,, 9-1/2% Note Agreement
                                            entered  into  by Oryx  dated  as of
                                            June 27,  1991,  and due November 1,
                                            1999.  The  $150  million,  10% Note
                                            Agreement entered into by Oryx dated
                                            as of April 10, 1991,  and due April
                                            1,   2001.   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.

                          4.7               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.

                          4.8               The $250  million  Credit  Agreement
                                            dated   as  of  February  26,  1999,
                                            providing  for  a  364 day revolving
                                            credit    facility,      filed    as
                                            Exhibit  4.8  to the report filed on
                                            Form  10-K  for   the   year   ended
                                            December 31, 1998.

                          4.9               The  $500  million  Credit Agreement
                                            dated   as  of  February  26,  1999,
                                            providing for a three-year revolving
                                            credit   facility   with   a  bullet
                                            maturity on the third anniversary of
                                            the    execution   of   the   Credit
                                            Agreement,  filed  as Exhibit 4.9 to
                                            the report  filed on  Form  10-K for
                                            the year ended December 31, 1998.

                          4.10              Indenture  dated as  of May 15, 1989
                                            by and between  Oryx Energy  Company
                                            and Texas  Commerce  Bank   National
                                            Association,  as trustee,   relating
                                            to    Oryx's   7-1/2%    Convertible
                                            Subordinated  Debentures due May 15,
                                            2014,   filed    as  Exhibit  4.1 to
                                            Oryx's  Form  S-1,  effective May 5,
                                            1989,    Registration  No. 33-28494,
                                            and incorporated herein by reference
                                            and the First Supplemental Indenture
                                            among    Oryx     Energy    Company,
                                            Kerr-McGee  Corporation   and  Chase
                                            Bank of Texas, National Association,
                                            as trustee, dated as of February 26,
                                            1999,  and  filed  as Exhibit 4.1 to
                                            Form 8-K  filed March 11,  1999, 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   Compensation   Plan   for
                                            Non-Employee  Directors  as  amended
                                            and  restated  effective  August  1,
                                            1995,  filed as Exhibit  10.2 to the
                                            report  filed  on Form  10-K for the
                                            year ended  December 31,  1995,  and
                                            incorporated herein by reference.

                         10.3*              Description of the company's  Annual
                                            Incentive Compensation  Plan,  filed
                                            as Exhibit 10.3 to the  report filed
                                            on  Form  10-K for  the  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 10.5
                                            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
                                            Executive 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  an   John  C.
                                            Linehan  filed as Exhibit  10(10) on
                                            Form  10-K   for   the   year  ended
                                            December  31, 1992, and incorporated
                                            herein by reference.

                         10.9*              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.

                         10.10*             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.

                         10.11*             Amended   and  restated   Agreement,
                                            restated  as  of  December 31, 1992,
                                            between  the  company and Russell G.
                                            Horner,  Jr.  filed as Exhibit 10.11
                                            on  Form  10-K  for  the  year ended
                                            December 31, 1997, and  incorporated
                                            herein by reference.

                         10.12*             Amended   and  restated   Agreement,
                                            restate   as   of December 31, 1992,
                                            between  the  company and Kenneth W.
                                            Crouch  filed  as  Exhibit  10.12 on
                                            Form   10-K   for   the  year  ended
                                            December  31, 1997, and incorporated
                                            herein by reference.

                         10.13*             Employment  Letter  Agreement, as of
                                            October  14,    1998,   between  the
                                            company  and  Robert L. Keiser filed
                                            as Exhibit 10.1  on  Form S-4 dated 
                                            January 27, 1999,  and  incorporated
                                            herein by reference.

                         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   1998   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                 1998 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 -


              Current Report on Form 8-K filed October 19, 1998,  reported items
              5 and 7 announcing the merger between  Kerr-McGee  Corporation and
              Oryx Energy Company. Current Report on Form 8-K filed November 13,
              1998,  reported on items 5 and 7 and included  restated  financial
              information and statements at December 31, 1997, 1996 and 1995 and
              for the years then ended.


Report of Independent Public Accountant 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  1998 Annual Report to  Stockholders  incorporated by reference in
this Form 10-K,  and have issued our report thereon dated February 26, 1999. 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




Oklahoma City, Oklahoma,
     February 26, 1999



                                                                    SCHEDULE II

                 KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                         VALUATION ACCOUNTS AND RESERVES


<TABLE>
<CAPTION>



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


<S>                                               <C>            <C>           <C>            <C>            <C>   
Year Ended December 31, 1998
a.   Deducted from asset accounts
     Allowance for doubtful notes
       and accounts receivable                       $  14        $   1         $  -             $  1         $  14
     Warehouse inventory obsolescence                    3            2            -                1             4
                                                     -----        -----         ----             ----         -----
                                                     $  17        $   3         $  -             $  2         $  18
                                                     =====        =====         ====             ====         =====

b.   Not deducted from asset accounts
     Environmental                                    $160        $  59         $ 29(A)          $105          $143
     Postretirement benefits                           120            1            -                8           113
     Oil and gas site dismantlement and coal
       site reclamation and restoration                 91           11            -               29            73
     Surface mine stripping cost                        19           21            -               40             -
     Pension benefits                                   10            4            -                1            13
     Other                                               7            6            -                6             7
                                                     -----        -----         ----             ----         -----
                                                      $407        $ 102         $ 29             $189          $349
                                                      ====        =====         ====             ====          ====

Year Ended December 31, 1997
a.   Deducted from asset accounts
     Allowance for doubtful notes
       and accounts receivable                       $  13        $   2         $  -             $  1         $  14
     Warehouse inventory obsolescence                    3            1            -                1             3
                                                     -----        -----         ----             ----         -----
                                                     $  16        $   3         $  -             $  2         $  17
                                                     =====        =====         ====             ====         =====

b.   Not deducted from asset accounts
     Environmental                                    $235        $  30         $(11)(A)(B)       $94          $160
     Postretirement benefits                           117           11            -                8           120
     Oil and gas site dismantlement and coal
       site reclamation and restoration                110           (3)         (11) (B)           5            91
     Surface mine stripping cost                        15           38            -               34            19
     Pension benefits                                    7           11            5  (A)          13            10
     Other                                               7            1            -                1             7
                                                     -----        -----         ----             ----         -----
                                                      $491        $  88         $(17)            $155          $407
                                                      ====        =====         ====             ====          ====

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
                                                      ====         ====         ====             ====          ====


(A)  Transfer  (to) from  current  liabilities.
(B)  Transfer  from reserve for abandonment to environmental.

</TABLE>

                                   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,
                                                  Chief Executive Officer




March 30, 1999                           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




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

                              By:      William E. Bradford*     
                                       William E. Bradford, Director

                              By:      Sylvia A. Earle*      
                                       Sylvia A. Earle, Director

                              By:      David C. Genever-Watling*  
                                       David C. Genever-Watling, Director

March 30, 1999                By:      Martin C. Jischke*      
    Date                               Martin C. Jischke, Director

                              By:      Robert L. Keiser*       
                                       Robert L. Keiser, Director

                              By:      Tom J. McDaniel*     
                                       Tom J. McDaniel, Director

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

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

                              By:      Leroy C. Richie*        
                                       Leroy C. Richie, Director

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

                              By:      Matthew R. Simmons*      
                                       Matthew R. Simmons, Director

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

                              By:      Ian L. White-Thomson*     
                                       Ian L. White-Thomson, 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 the powers of attorney filed with the Securities and
         Exchange Commission.


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