UNIMAR COMPANY

                       TABLE OF CONTENTS
  




PART I.  FINANCIAL INFORMATION

   ITEM 1.Financial Statements

        Condensed Consolidated Statements of Earnings
           for the Three Months and Six Months ended
           June 30, 1998 and June 30, 1997                    1
   
        Condensed Consolidated Balance Sheets
           as of June 30, 1998 and December 31, 1997          2

        Condensed Consolidated Statements of Cash Flows
           for the Six Months Ended June 30, 1998 and
           June 30, 1997                                      3

        Notes to Condensed Consolidated Financial Statements
           as of June 30, 1998                                4
        

   ITEM 2.Management's Discussion and Analysis of Financial
          Condition and Results of Operations                 6


PART II.  OTHER INFORMATION

   ITEM 5.Other Events                                        9

   ITEM 6.Exhibits and Reports on Form 8-K                    9


SIGNATURE                                                      10

                PART I.   FINANCIAL INFORMATION

                UNIMAR COMPANY AND SUBSIDIARIES

         CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                     (THOUSANDS OF DOLLARS)
                          (UNAUDITED)
<TABLE>
<CAPTION>
                             THREE MONTHS ENDED   SIX MONTHS ENDED
                                  JUNE 30,            JUNE 30,
                               1998      1997      1998      1997


<S>                           <C>       <C>       <C>       <C>
Oil and gas production
  Revenues                    $31,298   $50,042    $74,582  $116,325


Production costs                5,029     6,524      9,646    12,400
Depletion, depreciation and
 amortization                   8,598     9,893     19,322    21,513
Exploration costs including
 dry holes                        290        64        924       312
                                -----    ------     ------    ------

Operating profit               17,381    33,561     44,690    82,100


General and administrative
 expenses                          12       234        262       544
Other income                      (54)      (87)      (115)     (203)
                                -----   -------     ------     -----

Earnings before income taxes   17,423    33,414     44,543    81,759

Income tax expense (benefit)
   Current                     11,810    23,992     31,196    56,842
   Deferred                      (674)   (1,932)    (2,159)   (3,863)
                              -------   -------     ------     -----
                               11,136    22,060     29,037    52,979
                              -------   -------     ------     -----

Net earnings                   $6,287   $11,354    $15,506   $28,780
                               ======   =======    =======   =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
                 UNIMAR COMPANY AND SUBSIDIARIES
                                
              CONDENSED CONSOLIDATED BALANCE SHEETS
                     (THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
                                        June 30,   December 31,
                                          1998         1997
                                       ----------  -----------
                                       (Unaudited)
ASSETS
------
<S>                                      <C>           <C>
Current assets:
  Cash and cash equivalents              $  7,908     $ 4,454
  Accounts receivable                       9,102       8,670
  Inventories                               7,849       8,275
  Other current assets                      2,712       1,999
                                         --------     -------
     Total current assets                  27,571      23,398

Property, plant and equipment, at cost:
  Oil and gas properties (successful
   efforts method)                      1,109,624   1,097,568
  Other                                     2,417       2,348
                                       ----------      ------
                                        1,112,041   1,099,916

  Less:  accumulated depreciation
   and depletion                         782,558      763,151
                                         --------     --------
     Net property, plant and equipment   329,483      336,765

Other assets                               2,199        3,191
                                         --------    --------
                                         $359,253    $363,354
                                         ========    ========


LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current liabilities:
  Accounts payable                       $    125     $   752
  Advances from joint venture partners      3,923       2,637
  Accrued liabilities                      11,535      14,138
  Income and other taxes                    6,796      14,035
                                         --------     -------
     Total current liabilities             22,379      31,562

Deferred income taxes                     145,975     148,135
Other liabilities                          16,643      16,107

Partners' capital                         254,256     247,550
  Less:  demand notes receivable           80,000      80,000
                                         --------     -------
                                          174,256     167,550
                                         --------     -------

Commitments and Contingencies

                                         $359,253     $363,354
                                         ========     ========

</TABLE>
See accompanying Notes to Condensed Consolidated Financial
Statements
                 UNIMAR COMPANY AND SUBSIDIARIES
                                
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (THOUSANDS OF DOLLARS)
                           (UNAUDITED)
<TABLE>
<CAPTION>
                                               Six Months Ended
                                                  June 30,
                                               ----------------
                                               1998       1997
<S>                                           <C>       <C>
Operating activities:
Net earnings                                  $15,506   $28,780
Adjustments to reconcile to net cash
 provided by operating activities:
  Depletion, depreciation and amortization     19,407    21,637
  Deferred income taxes                        (2,159)   (3,863)
  Exploratory dry hole costs                       11        --
  Changes in working capital and other         (9,661)   (3,961)


Net cash provided by operating activities      23,104    42,593
                                              --------   -------
Investment activities:
  Capital expenditures                        (12,136)  (12,679)
                                              --------   -------
Net cash used in investing activities         (12,136)  (12,679)
                                              --------   -------
Financing activities:
  Capital contributions                         9,000    11,200
  Capital distributions                       (17,800)  (39,600)
                                              --------  --------
Net cash used in financing activities          (8,800)  (28,400)
                                               -------  -------
Increase in advances from joint venture
 partners                                       1,286       368
                                              -------    ------

Net increase in cash and cash equivalents       3,454     1,882

Cash and cash equivalents at beginning of
 period                                         4,454     3,274
                                              -------   -------
Cash and cash equivalents at end of period     $7,908    $5,156
                                               ======    ======

SUPPLEMENTAL CASH FLOW DISCLOSURE:
---------------------------------
IPU distributions paid                         $9,162   $14,336
                                               ======   =======
Income taxes paid                             $38,435   $65,479
                                              =======   =======
</TABLE>

See accompanying Notes to Condensed Consolidated Financial
Statements.
                 UNIMAR COMPANY AND SUBSIDIARIES
                                
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 1998
                           (UNAUDITED)


(1)  Unimar Company (the Company) is a general partnership
  organized under the Texas Uniform Partnership Act.  The
  Company's partners are Unistar, Inc., a Delaware corporation
  and a direct subsidiary of Union Texas Petroleum Holdings,
  Inc., a Delaware corporation and a wholly-owned subsidiary of
  Atlantic Richfield Company, and LASMO (Ustar) Inc., a Delaware
  corporation and an indirect wholly-owned subsidiary of LASMO
  plc, a public limited company organized under the laws of
  England.  Each partner shares equally in the Company's net
  earnings, distributions and capital contributions.  See Part
  II. Other Information - Item 5. Other Events.

(2)  These condensed consolidated financial statements should be
  read in the context of the consolidated financial statements
  and notes thereto included in the Company's 1997 annual report
  on Form 10-K.  In the opinion of management, the accompanying
  financial statements contain all adjustments of a normal
  recurring nature necessary for a fair presentation.  Interim
  results are not necessarily indicative of results on an
  annualized basis.

  The preparation of financial statements in conformity with
  generally accepted accounting principles requires management
  to make estimates and assumptions that affect the reported
  amounts of assets and liabilities and disclosure of contingent
  assets and liabilities at the date of the financial statements
  and the reported amounts of revenues and expenses during the
  reporting period.  Actual results could differ from those
  estimates.

(3)  The table below outlines the calculation of the Indonesian
     Participating Unit (IPU) participation payment for the second
     quarter of 1998.

<TABLE>
<CAPTION>
                                                    1998
                                               Second Quarter
                                        ----------------------------
                                           (Thousands of dollars)
<S>                                                <C>
  Positive cash flow:
    Gas receipts                                  $23,542
    Oil and condensate receipts                     8,284
    Other non-revenue cash receipts from the
   Joint Venture                                    1,378
                                                    ------
     Total positive cash flow                      33,204
                                                    ------
  Cash outflows:
    Expenditures to the Joint Venture              14,008
    Indonesian income taxes                        10,713
                                                   ------
     Total cash outflows                           24,721

  Net positive cash flow from 23.125% interest
   in the Joint Venture                           $ 8,483

  Net cash flow for the benefit of the IPU
   holders*                                       $ 2,078

  Participation Payment per IPU*                    $0.19
</TABLE>
   * Each IPU is entitled to 1/14,077,747 of 32% of net positive
  cash flow until September 25, 1999 at which time the Units
  will expire with no residual value.  As of June 30, 1998,
  there were 10,778,590 IPUs issued and outstanding.

                UNIMAR COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                         JUNE 30, 1998
                          (UNAUDITED)


(4)  In June 1997, the Financial Accounting Standards Board
  (?FASB?) issued Statement of Financial Accounting Standards
  (?SFAS?) No. 130, ?Reporting Comprehensive Income.?  This
  statement establishes standards for reporting and display of
  comprehensive income and its components in a full set of
  financial statements.  The Company adopted SFAS No. 130 in the
  first quarter of 1998.  The Company?s comprehensive income for
  the first six months of 1998 is as follows:
<TABLE>
<CAPTION>
                                          Six months ended June 30,
                                                1998      1997
                                               ------    -----
<S>                                           <C>        <C>
  Net income                                 $15,506    $28,780
  
  Other comprehensive income:
    Minimum pension liability adjustment         --         109
                                             ------     -------
  Comprehensive income                       $15,506    $28,889
                                             =======   ========
</TABLE>
  Adoption of SFAS No. 130 had no impact on Partners? Capital in
the first six months of 1998.

  
(5)  In June 1997, the FASB also issued SFAS No. 131,
  ?Disclosures about Segments of an Enterprise and Related
  Information.?  This statement establishes standards for
  reporting information about operating segments in annual
  financial statements and requires that enterprises report
  selected information about operating segments in interim
  reports.  The Company will adopt the provisions of SFAS No.
  131 during 1998.  As SFAS No. 131 establishes standards for
  reporting and display, the Company does not expect the
  adoption of this statement to have a material impact on its
  financial condition or results of operations.


(6)  In June 1998, the FASB also issued SFAS No. 133, "Accounting
  for Derivative Instruments and Hedging Activities".  This
  statement establishes standards of accounting for and disclosures
  of derivative instruments and hedging activities.  This statement
  is effective for fiscal years beginning after June 15, 1999.  The
  Company has not yet determined the impact of this statement on
  the Company's financial condition or results of operations.


                 UNIMAR COMPANY AND SUBSIDIARIES
                                
             MANAGEMENT?S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  The following discussion should be read in conjunction with
the business section, consolidated financial statements, notes,
and management's discussion contained in the Company's 1997
annual report on Form 10-K, and condensed consolidated financial
statements and notes contained in this report.

LIQUIDITY AND CAPITAL RESOURCES

  Cash flow from operations amounted to $23 million for the six
months ended June 30, 1998, as compared to $43 million for the
same period in 1997.  The decrease primarily resulted from lower
sales prices and lower LNG volumes.  Capital expenditures of $12
million were spent primarily on continued development activities
in the Indonesian Joint Venture (IJV).  Net distributions to the
partners for the first six months of 1998 were $9 million (six
months 1997, $28 million).

  The Company's ability to generate cash is primarily dependent
on the prices it receives for the sale of liquefied natural gas
(LNG) and, to a lesser extent, the sale of crude oil and
liquefied petroleum gas (LPG). LNG and LPG are primarily sold
under long term contracts whose prices are derived from a basket
of Indonesian crudes.  In the event cash generated from
operations is not sufficient to meet capital investment and other
requirements, the partners will fund any shortfall through
additional cash contributions.  The Company cannot predict with
any degree of certainty the prices it will receive in future
periods for its crude oil, LNG and LPG.  The Company's financial
condition, operating results and liquidity will be materially
affected by any significant fluctuations in its sales prices.
  
  The economic and political events in Southeast Asia since the
middle of 1997 have not significantly affected the Company, and
the IJV's production operations have continued without
interruption.  LNG revenue is protected by U.S. dollar
denominated, long-term, take-or-pay contracts, which are
administered through a U.S. based trustee.  The Company, through
the Operator of the IJV, is closely monitoring the situation both
in Indonesia and throughout the Asia Pacific region to measure
the effect of these events on its operating and financial
condition.

  See Part II. Other Information - Item 5. Other Events.

RESULTS OF OPERATIONS

QUARTER ENDED JUNE 30, 1998 COMPARED TO QUARTER ENDED JUNE 30,
1997

  Net earnings were $6 million for the second quarter of 1998,
as compared to $11 million for the second quarter 1997.   In
comparing the respective quarters, the combination of a $19
million decrease in revenues and a $12 million decrease in
current taxes, resulted in a net decrease of $7 million in after-
tax revenues. Of this net revenue decrease, 59 percent was due to
lower sales volumes and 41 percent resulted from lower realized
prices.

  The weighted average crude oil basket price used to determine
LNG prices was $12.99 per barrel for the second quarter of this
year, or $6.08 per barrel lower than in the corresponding 1997
quarter.  As a result, the average price received for LNG during
the second quarter of 1998 decreased $0.95 per million BTUs to
$2.10 per million BTUs.  The average realized crude oil price in
the second quarter of 1998 was $13.95 per barrel, as compared to
$18.88 per barrel in the corresponding 1997 quarter.  The prices
received by the Company for its products have reflected the
declining trend in world wide crude oil prices which has occurred
during this year.
                 UNIMAR COMPANY AND SUBSIDIARIES
                                
             MANAGEMENT?S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (CONT'D)


  The IJV's share of LNG sold during the second quarter of 1998
was 50 trillion BTUs (16.9 net equivalent cargoes), or 26 percent
lower than the 1997 second quarter volumes of 68 trillion BTUs
(23.3 net equivalent cargoes).  Crude oil volumes net to the
Company increased by 207 thousand barrels to 618 thousand
barrels. The increase in oil volumes enabled the IJV to cost
recover certain expenditures at a reduced oil price.
  
  Production costs for the second quarter of 1998 decreased by
approximately $2 million as compared to the corresponding quarter
in 1997 primarily due to favorable exchange rates on IJV
expenditures denominated in the Indonesian currency and non-
recurring prior year costs associated with the Operator's
business process reengineering plan.  Depletion, depreciation and
amortization charges decreased by approximately $1 million as
compared to the second quarter of 1997 because of the lower
overall level of production.  General and administrative expenses
were lower in the second quarter of 1997 as compared to the
corresponding quarter in 1996 due to the reversal of a provision
not required.
  
  Income taxes were $11 million for the second quarter of 1998,
as compared to $22 million for the same quarter in 1997.  This
decrease was primarily due to lower taxable revenues.  The
effective tax rates for the second quarters of 1998 and 1997 were
64 percent and 66 percent, respectively.  These rates are the
aggregate of Indonesian source income taxed at a 56 percent rate,
and certain expenses attributable to the Company's activities
which are not deductible in the partnership for Indonesian tax
purposes.
  
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE
30, 1997

  Net earnings were $16 million for the first six months of
1998, as compared to $29 million for the first six months of
1997.  The current year's first half results included a $42
million decrease in revenues and a $26 million decrease in
current taxes, resulting in a $16 million net decrease in after-
tax revenues as compared to last year's first half.
Approximately 45 percent of this decrease was volume-related and
55 percent was due to lower sales prices.
  
  The weighted average crude oil basket price used to determine
LNG prices was $14.09 per barrel for the first six months of this
year, or $6.81 per barrel lower than in the corresponding 1997
period.  As a result, the average price received for LNG during
the first half of 1998 decreased $1.05 per million BTUs to $2.28
per million BTUs.  The average realized crude oil price in the
first half of 1998 was $14.19 per barrel, as compared to $20.44
per barrel in the corresponding 1997 period.  The prices received
by the Company for its products have reflected the declining
trend in world wide crude oil prices which has occurred during
this year.

  The IJV's share of LNG sold during the first half of 1998 was
117 trillion BTUs (39.8 net equivalent cargoes), or 17 percent
lower than the 1997 first half volumes of 143 trillion BTUs (48.8
net equivalent cargoes).  Crude oil volumes net to the Company
increased by 281 thousand barrels to 1.1 million barrels. The
increase in oil volumes enabled the IJV to cost recover certain
expenditures at a reduced oil price.

  The IJV?s share of LNG shipments for 1998 is expected to
decline by about 20 percent as compared to 1997.  The primary
reasons for this decline are the phase-out of the original 1973
LNG Sales Contract in which the IJV had a higher participation
interest, a reduction in IJV equity percentages under terms of
the Indonesian Production Sharing Contract which become effective
August 8, 1998, and revisions to the LNG deliveries planned for
the year.  With regard to planned LNG deliveries for the year,
meetings between PERTAMINA, the state petroleum enterprise of
Indonesia, and Korea Gas Corporation (KGC), a LNG customer, were
held in late March of this year.  As a result of these meetings,
the effect on the IJV will be the
                 UNIMAR COMPANY AND SUBSIDIARIES
                                
             MANAGEMENT?S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (CONT'D)

deferral of four gross cargo commitments from 1998 until the year
2000 and an additional four gross cargo reduction from KGC?s
exercise of a downward flexibility provision in its contracts.
The effect of this eight-cargo reduction will not have a material
impact on the Company's profit or cash flow for the year.
Subsequent to the meetings in March, a request for additional
cargo relief was made by KGC but rejected by PERTAMINA.

  Production costs for the first half of 1998 decreased by
approximately $3 million as compared to the corresponding period
in 1997 primarily due to favorable exchange rates on IJV
expenditures denominated in the Indonesian currency and non-
recurring prior year costs associated with the Operator's
business process reengineering plan.  Depletion, depreciation and
amortization charges decreased by approximately $2 million as
compared to the first half of 1997, due to the lower overall
level of production.  General and administrative expenses were
lower in the first half of 1997 as compared to the corresponding
six months in 1996 due to the reversal of a provision not
required.
  
  Income taxes were $29 million for the first half of 1998, as
compared to $53 million for the same period in 1997.  This
decrease was primarily due to lower taxable revenues.  The
effective tax rate was 65 percent for both of the six-month
periods.  This rate is the aggregate of Indonesian source income
taxed at a 56 percent rate, and certain expenses attributable to
the Company's activities, which are not deductible in the
partnership for Indonesian tax purposes.

  The discussion of the Company's business and operations in
this report includes in several instances forward-looking
statements, which are based upon management's good faith
assumptions relating to the financial, market, operating,
political and other relevant environments that will exist and
affect the Company's business and operations in the future.  No
assurance can be made that the assumptions upon which management
based its forward-looking statements will prove to be correct, or
that the Company's business and operations will not be affected
in any substantial manner by other factors not currently
foreseeable by management or beyond the Company's control.  All
forward-looking statements involve risks and uncertainty,
including those described in this report, and such statements
shall be deemed in the future to be modified in their entirety by
the Company's public pronouncements, including those contained in
all future reports and other documents filed by the Company with
the Securities and Exchange Commission.

Year 2000

  The year 2000 issue relates to computer programs being written
with two digits rather than four to define the applicable year.
Computer programs that have date-sensitive software may recognize
a date using "00" as the year 1900 instead of 2000.  In 1997, the
Company successfully installed an accounting system, its only
significant processing system, which is year 2000 compliant.
Also in 1997, VICO, as Operator, completed an assessment of its
year 2000 issues.  VICO is in the process of converting to
systems which are year 2000 compliant and has initiated formal
communications with all of its significant suppliers, vendors and
customers in Indonesia to determine their year 2000 readiness.
While VICO expects to resolve its year 2000 issues substantially
through the replacement and upgrades of software, there can be no
guarantee that the systems of other companies on which VICO
depends will be timely converted or that the failure of another
company to convert, or a conversion which is not compatible with
the VICO system, would not have a material adverse effect on VICO
and, therefore, the Company.

                 UNIMAR COMPANY AND SUBSIDIARIES
                                


PART II.  OTHER INFORMATION


ITEM 5. Other Events
        ------------
        On June 29, 1998, Atlantic Richfield Company (ARCO)
        announced the completion of the merger of a subsidiary
        of ARCO into Union Texas Petroleum Holdings, Inc. (Union
        Texas).  Pursuant to this merger, Union Texas is now a
        wholly-owned subsidiary of ARCO.

        
ITEM 6. Exhibits and Reports on Form 8-K
        --------------------------------
        (a)  Exhibits
          
        (27)-1-  Financial Data Schedule for the six months
                 ended June 30, 1998.

        (b)  Reports on Form 8-K

             None.
                 UNIMAR COMPANY AND SUBSIDIARIES
                                
                                

                            SIGNATURE

    Pursuant to the requirements 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.



                               UNIMAR COMPANY



                               By:  /S/ Linda A. Kubecka
                                   ---------------------------
                                    Linda A. Kubecka
                                    (Principal financial officer
                                    and the officer duly
                                    authorized to sign on behalf
                                    of the registrant.)


DATE:  August 12, 1998
       ---------------