**Exhibit
      10.17**





**McMoRan
      EXPLORATION CO.**


**1998
      STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS**








ARTICLE
      I


PURPOSE
      OF THE PLAN




The
      purpose of the 1998 Stock Option Plan for Non-Employee Directors (the “Plan”) is
      to align more closely the interests of the non-employee directors of McMoRan
      Exploration Co. (the “Company”) with that of the Company’s stockholders by
      providing for the automatic grant to such directors of stock options (“Options”)
      to purchase Shares (as hereinafter defined), in accordance with the terms of
      the
      Plan.




ARTICLE
      II


DEFINITIONS




For
      the
      purposes of this Plan, the following terms shall have the meanings
      indicated:




Board :
      The
      Board of Directors of the Company.




Change
      in Control :
      A
      Change in Control shall be deemed to have occurred if either (a) any person,
      or
      any two or more persons acting as a group, and all affiliates of such person
      or
      persons, shall own beneficially more than 20% of the Common Stock outstanding
      (exclusive of shares held in the Company’s treasury or by the Company’s
      Subsidiaries) pursuant to a tender offer, exchange offer or series of purchases
      or other acquisitions, or any combination of those transactions, or (b) there
      shall be a change in the composition of the Board at any time within two years
      after any tender offer, exchange offer, merger, consolidation, sale of assets
      or
      contested election, or any combination of those transactions (a “Transaction”),
      so that (i) the persons who were directors of the Company immediately before
      the
      first such Transaction cease to constitute a majority of the Board of Directors
      of the corporation which shall thereafter be in control of the companies that
      were parties to or otherwise involved in such Transaction, or (ii) the number
      of
      persons who shall thereafter be directors of such corporation shall be fewer
      than two-thirds of the number of directors of the Company immediately prior
      to
      such first Transaction. A Change in Control shall be deemed to take place upon
      the first to occur of the events specified in the foregoing clauses (a) and
      (b).




Code :
      The
      Internal Revenue Code of 1986, as amended from time to time.




Committee :
      Until
      otherwise determined by the Board, the Corporate Personnel Committee of the
      Board.




Eligible
      Director :
      A
      director of the Company who is not an officer or an employee of the Company
      or a
      Subsidiary.




Fair
      Market Value :
      Except
      as provided below in connection with a cashless exercise, for any purpose
      relevant under the Plan, the fair market value of a Share or any other security
      shall




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be
      the
      closing per Share or security sale price on the Composite Tape for New York
      Stock Exchange-Listed Stocks on the date in question or, if there are no
      reported sales on such date, on the last preceding date on which any reported
      sale occurred. If on the date in question the Shares or other securities in
      question are not listed on such Composite Tape, the fair market value shall
      be
      the closing sale price on the New York Stock Exchange on such date or, if no
      sales occurred on such date, on the last previous day on which a sale on the
      New
      York Stock Exchange is reported. In the context of a cashless exercise, the
      fair
      market value shall be the price at which the Shares are actually
      sold.




Option
      Cancellation Gain :
      With
      respect to the cancellation of an Option pursuant to Section 4 of Article IV
      hereof, the excess of the Fair Market Value as of the Option Cancellation Date
      (as that term is defined in Section 4 of Article IV hereof) of all the
      outstanding Shares covered by such Option, whether or not then exercisable,
      over
      the purchase price of such Shares under such Option.




Shares :
      Shares
      of common stock, par value $0.01 per share, of the Company (including any
      attached preferred stock purchase rights).




Subsidiary :
      Any
      corporation of which stock representing at least 50% of the ordinary voting
      power is owned, directly or indirectly, by the Company; and any limited
      liability company or other entity of which equity securities or interests
      representing at least 50% of the ordinary voting power or 50% of the total
      value
      of all classes of equity securities or interests of such entity are owned,
      directly or indirectly, by the Company.




ARTICLE
      III


ADMINISTRATION
      OF THE PLAN




This
      Plan
      shall be administered by the Board. The Board will interpret this Plan and
      may
      from time to time adopt such rules and regulations for carrying out the terms
      and provisions of this Plan as it may deem best. Notwithstanding the foregoing,
      the Committee shall have the authority to make all determinations with respect
      to the transferability of Options in accordance with Article VIII hereof. All
      determinations by the Board or the Committee shall be made by the affirmative
      vote of a majority of its respective members, but any determination reduced
      to
      writing and signed by a majority of its respective members shall be fully as
      effective as if it had been made by a majority vote at a meeting duly called
      and
      held. Subject to any applicable provisions of the Company’s By-Laws or of this
      Plan, all determinations by the Board and the Committee pursuant to the
      provisions of this Plan, and all related orders or resolutions of the Board
      and
      the Committee, shall be final, conclusive and binding on all persons, including
      the Company and its stockholders, employees, directors and optionees. In the
      event of any conflict or inconsistency between determinations, orders,
      resolutions, or other actions of the Committee and the Board taken in connection
      with this Plan, the action of the Board shall control.




ARTICLE
      IV


STOCK
      SUBJECT TO THE PLAN




Section
      1.  The
      Shares to be issued or delivered upon exercise of Options shall be made
      available, at the discretion of the Board, either from the authorized but
      unissued Shares of




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the
      Company or from Shares reacquired by the Company, including Shares purchased
      by
      the Company in the open market or otherwise obtained.




Section
      2.  Subject
      to the provisions of Section 3 of this Article IV, the aggregate number of
      Shares which may be purchased pursuant to Options shall not exceed 75,000.
      To
      the extent an Option is forfeited or canceled prior to exercise, the Shares
      subject to such forfeited or canceled Option shall again be available for grant
      under the Plan. To the extent that Shares are delivered to pay the exercise
      price of an Option, the number of Shares so delivered shall again be available
      for grant under the Plan.




Section
      3.  In
      the
      event of any recapitalization, reclassification, stock dividend, stock split,
      combination of shares or other change in the Shares, all limitations on the
      number of Shares provided in this Plan, and the number of Shares subject to
      outstanding Options, shall be equitably adjusted in proportion to the change
      in
      outstanding Shares. In addition, in the event of any such change in the Shares,
      the Committee shall make any other adjustment that it determines to be
      equitable, including without limitation adjustments to the exercise price of
      any
      Option in order to provide Participants with the same relative rights before
      and
      after such adjustment.




Section
      4.  In
      the
      event the Company is merged or consolidated into or with another corporation
      in
      a transaction in which the Company is not the survivor, or in the event that
      substantially all of the Company’s assets are sold to another entity not
      affiliated with the Company, any holder of an Option, whether or not then
      exercisable, shall be entitled to receive (unless the Company shall take such
      alternative action as may be necessary to preserve the economic benefit of
      the
      Option for the optionee) on the effective date of any such transaction (the
      “Option Cancellation Date”), in cancellation of such Option, an amount in cash
      equal to the Option Cancellation Gain relating thereto, determined as of the
      Option Cancellation Date.




ARTICLE
      V


PURCHASE
      PRICE OF OPTIONED SHARES




The
      purchase price per Share under each Option shall be 100% of the Fair Market
      Value of a Share at the time such Option is granted, but in no case shall such
      price be less than the par value of the Shares subject to such
      Option.




ARTICLE
      VI


ELIGIBILITY
      OF RECIPIENTS




Options
      will be granted only to individuals who are Eligible Directors at the time
      of
      such grant.




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ARTICLE
      VII


GRANT
      OF
      OPTIONS




Section
      1.  Each
      Option shall constitute a nonqualified stock option which is not intended to
      qualify under Section 422 of the Code.




Section
      2.  On
      June
      1, 2003 and June 1 of each subsequent year that the Plan remains in effect,
      each
      Eligible Director, as of each such date, shall be granted an Option to purchase
      3,500 Shares.




Section
      3.  Each
      Option shall become exercisable with respect to one-fourth of the Shares subject
      thereto on each of the first, second, third and fourth anniversaries of the
      date
      of grant and may be exercised by the holder thereof with respect to all or
      any
      part of the Shares comprising each installment as such holder may elect at
      any
      time after such installment becomes exercisable but no later than the
      termination date of such Option; provided that each Option shall become
      exercisable in full upon a Change in Control.




Section
      4.  The
      purchase price of Shares subject to any Option shall be the Fair Market Value
      thereof on the respective date of grant.




ARTICLE
      VIII


TRANSFERABILITY
      OF OPTIONS




No
      Options granted hereunder may be transferred, pledged, assigned or otherwise
      encumbered by an optionee except:




(a)  by
      will;




(b)  by
      the
      laws of descent and distribution; or




(c)  if
      permitted by the Committee and so provided in the Option or an amendment
      thereto, (i) pursuant to a domestic relations order, as defined in the Code,
      (ii) to Immediate Family Members, (iii) to a partnership in which Immediate
      Family Members, or entities in which Immediate Family Members are the owners,
      members or beneficiaries, as appropriate, are the partners, (iv) to a limited
      liability company in which Immediate Family Members, or entities in which
      Immediate Family Members are the owners, members or beneficiaries, as
      appropriate, are the members, or (v) to a trust for the benefit of Immediate
      Family Members; provided, however, that no more than a *de
      minimus* beneficial interest in a partnership, limited liability company or trust
      described in (iii), (iv) or (v) above may be owned by a person who is not an
      Immediate Family Member or by an entity that is not beneficially owned solely
      by
      Immediate Family Members. “Immediate Family Members” shall be defined as the
      spouse and natural or adopted children or grandchildren of the optionee and
      their spouses.




Any
      attempted assignment, transfer, pledge, hypothecation or other disposition
      of
      Options, or levy of attachment or similar process upon Options not specifically
      permitted herein, shall be null and void and without effect.





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ARTICLE
      IX


EXERCISE
      OF OPTIONS




Section
      1.  Each
      Option shall terminate 10 years after the date on which it was
      granted.




Section
      2.  Except
      in
      cases provided for in Article X hereof, each Option may be exercised by the
      holder thereof only while the optionee to whom such Option was granted is an
      Eligible Director.




Section
      3.  A
      person
      electing to exercise an Option or any portion thereof then exercisable shall
      give written notice to the Company of such election and of the number of Shares
      such person has elected to purchase, and shall at the time of purchase tender
      the full purchase price of such Shares, which tender shall be made in cash
      or
      cash equivalent (which may be such person’s personal check) or in Shares already
      owned by such person and held for at least six months (which tender may be
      by
      actual delivery or by attestation) and which Shares shall be valued for such
      purpose on the basis of their Fair Market Value on the date of exercise, or
      in
      any combination thereof. The Company shall have no obligation to deliver Shares
      pursuant to the exercise of any Option, in whole or in part, until such payment
      in full of the purchase price of such Shares is received by the Company. No
      optionee, or legal representative, legatee, distributee, or assignee of such
      optionee shall be or be deemed to be a holder of any Shares subject to such
      Option or entitled to any rights of a stockholder of the Company in respect
      of
      any Shares covered by such Option distributable in connection therewith until
      such Shares have been paid for in full and have been issued or delivered by
      the
      Company.




Section
      4.  Each
      Option shall be subject to the requirement that if at any time the Board shall
      be advised by counsel that the listing, registration or qualification of the
      Shares subject to such Option upon any securities exchange or under any state
      or
      federal law, or the consent or approval of any governmental regulatory body,
      is
      necessary or desirable as a condition of, or in connection with, the granting
      of
      such Option or the issue or purchase of Shares thereunder, such Option may
      not
      be exercised in whole or in part unless such listing, registration,
      qualification, consent or approval shall have been effected or obtained free
      from any conditions not reasonably acceptable to such counsel for the
      Board.




Section
      5.  The
      Company may establish appropriate procedures to provide for payment or
      withholding of such income or other taxes as may be required by law to be paid
      or withheld in connection with the exercise of Options, and to ensure that
      the
      Company receives prompt advice concerning the occurrence of any event which
      may
      create, or affect the timing or amount of, any obligation to pay or withhold
      any
      such taxes or which may make available to the Company any tax deduction
      resulting from the occurrence of such event.




ARTICLE
      X


TERMINATION
      OF SERVICE


AS
      AN
      ELIGIBLE DIRECTOR




Section
      1.  If
      and
      when an optionee shall cease to be an Eligible Director for any reason other
      than death or retirement from the Board, all of the Options granted to such
      optionee




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shall
      be
      terminated except that any Option, to the extent then exercisable, may be
      exercised by the holder thereof within three months after such optionee ceases
      to be an Eligible Director, but not later than the termination date of the
      Option.




Section
      2.  If
      and
      when an optionee shall cease to be an Eligible Director by reason of the
      optionee’s retirement from the Board, all of the Options granted to such
      optionee shall be terminated except that any Option, to the extent then
      exercisable or exercisable within one year thereafter, may be exercised by
      the
      holder thereof within three years after such retirement, but not later than
      the
      termination date of the Option.




Section
      3.  Should
      an
      optionee die while serving as an Eligible Director, all the Options granted
      to
      such optionee shall be terminated, except that any Option to the extent
      exercisable by the holder thereof at the time of such death, together with
      the
      unmatured installment (if any) of such Option which at that time is next
      scheduled to become exercisable, may be exercised until the third anniversary
      of ****** the date
      of such death, but not later than the termination date of the Option, by the
      holder thereof, the optionee’s estate, or the person designated in the
      optionee’s last will and testament, as appropriate.




Section
      4.  Should
      an
      optionee die after ceasing to be an Eligible Director, all of the Options
      granted to such optionee shall be terminated, except that any Option, to the
      extent exercisable by the holder thereof at the time of such death, may be
      exercised until the third anniversary of the date the Participant ceased to
      be
      an Eligible Director, but not later than the termination date of the Option,
      by
      the holder thereof, the optionee’s estate, or the person designated in the
      optionee’s last will and testament, as appropriate.




ARTICLE
      XI


AMENDMENTS
      TO PLAN AND OPTIONS




The
      Board
      may at any time terminate or from time to time amend, modify or suspend this
      Plan; provided, however, that no such amendment or modification shall be made
      without stockholder approval if such approval is deemed necessary to comply
      with
      any regulatory requirements.




ARTICLE
      XII


TERMINATION
      OF PLAN




Subject
      to Article XI, no Options may be granted under the Plan later than October
      8,
      2008, which is ten years after the date the Plan was approved by the Company’s
      stockholders; provided, however, that Options granted prior to such date shall
      remain in effect until all such Options have either been satisfied, expired
      or
      canceled under the terms of the Plan, and any restrictions imposed on Shares
      in
      connection with their issuance under the Plan have lapsed.






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