UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                         ---------------
                            FORM 10-Q


(Mark One)

[x]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended     March 31, 1998
                               ---------------------------------------------

                                OR

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

For the transition period from                       to
                               ---------------------    --------------------
Commission file number               1-720
                       -----------------------------------------------------

                    PHILLIPS PETROLEUM COMPANY
      (Exact name of registrant as specified in its charter)


           Delaware                                          73-0400345
-------------------------------                          -------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)


         Phillips Building, Bartlesville, Oklahoma 74004
       (Address of principal executive offices)  (Zip Code)


                           918-661-6600
       (Registrant's telephone number, including area code)
                         ---------------

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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.


                             Yes   X     No
                                 -----      -----

The registrant had 261,049,066 shares of common stock, $1.25 par value,
outstanding at April 30, 1998.


<PAGE>



                   PART I. FINANCIAL INFORMATION

-----------------------------------------------------------------
Consolidated Statement of Income       Phillips Petroleum Company


                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                    March 31
                                              -------------------
                                                1998         1997
                                              -------------------
Revenues
Sales and other operating revenues            $3,093        3,944
Equity in earnings of affiliated companies        26           30
Other revenues                                   135           20
-----------------------------------------------------------------
    Total Revenues                             3,254        3,994
-----------------------------------------------------------------

Costs and Expenses
Purchased crude oil and products               1,698        2,455
Production and operating expenses                555          514
Exploration expenses                              50           40
Selling, general and administrative expenses     144          161
Depreciation, depletion and amortization         231          183
Taxes other than income taxes                     65           74
Interest expense                                  46           54
Preferred dividend requirements of
  subsidiary and capital trusts                   13           20
-----------------------------------------------------------------
    Total Costs and Expenses                   2,802        3,501
-----------------------------------------------------------------
Income before income taxes                       452          493
Provision for income taxes                       209          266
-----------------------------------------------------------------
Net Income                                    $  243          227
=================================================================

Net Income Per Share of Common Stock
  Basic                                       $  .93          .86
  Diluted                                        .92          .86
-----------------------------------------------------------------

Dividends Paid                                $  .34          .32
-----------------------------------------------------------------

Average Common Shares Outstanding
    (in thousands)
  Basic                                      262,256      263,532
  Diluted                                    264,367      265,805
-----------------------------------------------------------------
See Notes to Financial Statements.


                                 1

<PAGE>



-----------------------------------------------------------------
Consolidated Balance Sheet             Phillips Petroleum Company


                                            Millions of Dollars
                                          -----------------------
                                          March 31    December 31
                                              1998           1997*
                                          -----------------------
Assets
Cash and cash equivalents                  $   194            163
Accounts and notes receivable (less
  allowances: 1998 -- $18; 1997 -- $19)      1,562          1,717
Inventories                                    527            500
Deferred income taxes                          135            168
Prepaid expenses and other current assets      157            100
-----------------------------------------------------------------
    Total Current Assets                     2,575          2,648
Investments and long-term receivables          980            964
Properties, plants and equipment (net)      10,173         10,022
Deferred income taxes                           85             82
Deferred charges                               151            144
-----------------------------------------------------------------
Total                                      $13,964         13,860
=================================================================

Liabilities
Accounts payable                           $ 1,436          1,546
Notes payable and long-term debt due
  within one year                               99            234
Accrued income and other taxes                 478            365
Other accruals                                 251            300
-----------------------------------------------------------------
    Total Current Liabilities                2,264          2,445
Long-term debt                               2,929          2,775
Accrued dismantlement, removal and
  environmental costs                          714            713
Deferred income taxes                        1,296          1,257
Employee benefit obligations                   448            436
Other liabilities and deferred credits         775            770
-----------------------------------------------------------------
Total Liabilities                            8,426          8,396
-----------------------------------------------------------------

Company-Obligated Mandatorily Redeemable
  Preferred Securities of Phillips
  Capital Trusts I and II                      650            650
-----------------------------------------------------------------

Common Stockholders' Equity
Common stock -- 500,000,000 shares
  authorized at $1.25 par value
    Issued (306,380,511 shares)
      Par value                                383            383
      Capital in excess of par               2,046          2,031
    Treasury stock (at cost:
      1998 -- 15,898,754 shares;
      1997 -- 14,000,882 shares)              (839)          (752)
    Compensation and Benefits Trust (CBT)
      (at cost: 1998 -- 29,125,863 shares;
      1997 -- 29,200,000 shares)              (987)          (989)
Foreign currency translation adjustments        (8)            (8)
Unearned employee compensation -- Long-
  Term Stock Savings Plan (LTSSP)             (332)          (342)
Retained earnings                            4,625          4,491
-----------------------------------------------------------------
Total Common Stockholders' Equity            4,888          4,814
-----------------------------------------------------------------
Total                                      $13,964         13,860
=================================================================
See Notes to Financial Statements.
*Reclassified to conform to current presentation.


                                 2

<PAGE>



-----------------------------------------------------------------
Consolidated Statement of              Phillips Petroleum Company
Cash Flows

                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                    March 31
                                              -------------------
                                               1998          1997
                                              -------------------
Cash Flows from Operating Activities
Net income                                    $ 243           227
Adjustments to reconcile net income to net
  cash provided by operating activities
    Non-working capital adjustments
      Depreciation, depletion and
        amortization                            231           183
      Dry hole costs and leasehold impairment    12             8
      Deferred taxes                             51            84
      Other                                      29            42
    Working capital adjustments
      Increase in aggregate balance of
        accounts receivable sold                150             -
      Decrease in other accounts and notes
        receivable                                2           247
      Decrease (increase) in inventories        (28)           17
      Increase in prepaid expenses and other
        current assets                          (54)          (23)
      Decrease in accounts payable             (112)         (239)
      Increase in taxes and other accruals      117            92
-----------------------------------------------------------------
Net Cash Provided by Operating Activities       641           638
-----------------------------------------------------------------

Cash Flows from Investing Activities
Capital expenditures and investments,
  including dry hole costs                     (416)         (378)
Proceeds from asset dispositions                 12             6
Long-term advances to affiliates and
  other investments                              (6)          (11)
-----------------------------------------------------------------
Net Cash Used for Investing Activities         (410)         (383)
-----------------------------------------------------------------

Cash Flows from Financing Activities
Issuance of debt                                330             -
Repayment of debt                              (311)         (232)
Purchase of company common stock               (106)            -
Issuance of common stock                          7             4
Issuance of company-obligated mandatorily
  redeemable preferred securities                 -           350
Dividends paid on common stock                  (89)          (84)
Other                                           (31)          (47)
-----------------------------------------------------------------
Net Cash Used for Financing Activities         (200)           (9)
-----------------------------------------------------------------

Increase in Cash and Cash Equivalents            31           246
Cash and cash equivalents at beginning
  of period                                     163           615
-----------------------------------------------------------------
Cash and Cash Equivalents at End of Period    $ 194           861
=================================================================
See Notes to Financial Statements.


                                 3

<PAGE>



-----------------------------------------------------------------
Notes to Financial Statements          Phillips Petroleum Company


Note 1 -- Interim Financial Information

The financial information for the interim periods presented in
the financial statements included in this report is unaudited and
includes all known accruals and adjustments which Phillips
Petroleum Company (hereinafter referred to as "Phillips" or "the
company") considers necessary for a fair presentation of the
consolidated financial position of the company and its results of
operations and cash flows for such periods.  All such adjustments
are of a normal and recurring nature.


Note 2 -- Accounting Changes

Comprehensive Income

Effective January 1, 1998, the company adopted Financial
Accounting Standards Board (FASB) Statement No. 130, "Reporting
Comprehensive Income."  Statement No. 130 establishes new rules
for the reporting and display of comprehensive income and its
components.  Comprehensive income is net income, plus certain
other items that are recorded directly to stockholders' equity,
bypassing net income.  The only such item currently applicable to
Phillips is foreign currency translation adjustments.

During the first quarters of 1998 and 1997, total comprehensive
income was $243 million and $201 million, respectively.  The
adoption of this Statement had no impact on the company's net
income, cash flow or common stockholders' equity.

Segments

The company adopted FASB Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information," effective
January 1, 1998.  The adoption of this Statement did not result
in a change in the composition of the company's operating
segments, or in the previously reported net income for each
segment.

Full interim disclosures are not required by Statement No. 131
until the first quarter of 1999.


                                 4

<PAGE>



Note 3 -- Inventories

Inventories consisted of the following:

                                            Millions of Dollars
                                          -----------------------
                                          March 31    December 31
                                              1998           1997
                                          -----------------------

Crude oil and petroleum products              $169            156
Chemical products                              265            254
Materials, supplies and other                   93             90
-----------------------------------------------------------------
                                              $527            500
=================================================================


Note 4 -- Properties, Plants and Equipment

Properties, plants and equipment included the following:

                                            Millions of Dollars
                                          -----------------------
                                          March 31    December 31
                                              1998           1997
                                          -----------------------
Properties, plants and equipment
  (at cost)                                $21,742         21,426
Less accumulated depreciation,
  depletion and amortization                11,569         11,404
-----------------------------------------------------------------
                                           $10,173         10,022
=================================================================


Note 5 -- Debt

In March 1998, the company issued $300 million of 7.125%
Debentures due March 15, 2028, in the public market.

At March 31, 1998, no amounts were outstanding under the
company's revolving bank credit facility or commercial paper
program.  Under the Phillips Petroleum Company Norway
$300 million revolving credit facility, $170 million was
outstanding.


Note 6 -- Income Taxes

The company's effective tax rates for the three-month periods
ended March 31, 1998 and 1997, were 46 and 54 percent,
respectively.  The decrease was due mainly to a greater
proportion of domestic earnings in the current period, which are
generally taxed at a lower rate.


                                 5

<PAGE>



Note 7 -- Contingencies

In the case of all known contingencies, the company accrues an
undiscounted liability when the loss is probable and the amount
is reasonably estimable.  These liabilities are not reduced for
potential insurance recoveries.  If applicable, undiscounted
receivables are accrued for probable insurance or other third
party recoveries.  Based on currently available information, the
company believes that it is remote that future costs related to
known contingent liability exposures will exceed current accruals
by an amount that would have a material adverse impact on the
company's financial statements.

As facts concerning contingencies become known to the company,
the company reassesses its position both with respect to accrued
liabilities and other potential exposures.  Estimates that are
particularly sensitive to future change include contingent
liabilities recorded for environmental remediation, tax and legal
matters.  Estimated future environmental remediation costs are
subject to change due to such factors as the unknown magnitude of
clean-up costs, the unknown time and extent of such remedial
actions that may be required, and the determination of the
company's liability in proportion to other responsible parties.
Estimated future costs related to tax and legal matters are
subject to change as events evolve and as additional information
becomes available during the administrative and litigation
process.

Environmental -- The company is subject to federal, state and
local environmental laws and regulations.  These may result in
obligations to remove or mitigate the effects on the environment
of the placement, storage, disposal or release of certain
chemical, mineral and petroleum substances at various sites.  The
company is currently participating in environmental assessments
and clean-up under these laws at federal Superfund and comparable
state sites.  In the future, the company may be involved in
additional environmental assessments, clean-ups and proceedings.

Tax -- The company has a number of issues outstanding with the
Internal Revenue Service (IRS) related to tax years 1987 through
1992 that are expected to be resolved this year as a result of
the favorable outcome in 1996 of the Kenai LNG tax case related
to the company's sales of LNG from Kenai, Alaska.  A favorable
resolution of these issues would have a positive effect on net
income and cash flow of up to $125 million while an unfavorable
one would not impact the company's net income or cash position.
All outstanding issues with the IRS for years prior to 1987 have
been resolved.


                                 6

<PAGE>



Other Legal Proceedings -- The company is a party to a number of
other legal proceedings pending in various courts or agencies for
which, in some instances, no provision has been made.

Other Contingencies -- The company has contingent liabilities
resulting from throughput agreements with pipeline and processing
companies in which it holds stock interests.  Under these
agreements, Phillips may be required to provide any such company
with additional funds through advances against future charges for
the shipping or processing of petroleum liquids, natural gas and
refined products.


Note 8 -- Cash Flow Information

Cash payments for the three-month periods ended March 31 were as
follows:

                                              Millions of Dollars
                                              -------------------
                                              1998           1997
                                              -------------------
Cash Payments
Interest
  Debt                                         $53             50
  Taxes and other                                3              5
-----------------------------------------------------------------
                                               $56             55
=================================================================

Income taxes                                   $ 7             46
-----------------------------------------------------------------


Note 9 -- Environmental Cost Recovery

During the first quarter of 1998, as part of a comprehensive
environmental cost recovery project, the company entered binding
settlement agreements with certain of the company's historical
liability insurers in exchange for certain releases or
commutations of their liabilities to the company under its
historical liability and pollution policies.  As a result of
these settlement agreements, the company recorded a before-tax
benefit to earnings of $106 million, $69 million after-tax, and
expects to collect this amount in the second quarter of 1998.


                                 7

<PAGE>



-----------------------------------------------------------------
Management's Discussion and            Phillips Petroleum Company
Analysis of Financial Condition
and Results of Operations


Management's Discussion and Analysis contains forward-looking
statements including, without limitation, statements relating to
the company's plans, strategies, objectives, expectations,
intentions, and adequate resources, that are made pursuant to the
"safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.  The words "forecasts," "intends,"
"possible," "potential," "targeted," "believe," "expect," "may,"
"plan," or "plans," "scheduled," "would," "could," "should,"
"perceives," "anticipate," "estimate," "begin," and similar
expressions identify forward-looking statements.  The company
does not undertake to update, revise or correct any of the
forward-looking information.  Readers are cautioned that such
forward-looking statements should be read in conjunction with the
company's disclosures under the heading: "CAUTIONARY STATEMENT
FOR THE PURPOSES OF THE 'SAFE HARBOR' PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995" beginning on page 27.


RESULTS OF OPERATIONS

Unless otherwise indicated, discussion of results for the three-
month period ending March 31, 1998, is based on a comparison with
the corresponding period in 1997.

A summary of the company's consolidated net income, by business
segment, follows:

                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997*
                                              -------------------
Exploration and Production (E&P)                $ 93          202
Gas Gathering, Processing and Marketing (GPM)     19           28
Refining, Marketing and Transportation (RM&T)     29           18
Chemicals                                         75           63
Corporate and Other                               27          (84)
-----------------------------------------------------------------
Net Income                                      $243          227
=================================================================
*Restated to reflect the transfer of the company's natural gas
 liquids fractionation and marketing business from Chemicals to
 RM&T.


                                 8

<PAGE>



Consolidated Results

Net income included the following special items on an after-tax
basis:

                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------

Pending claims and settlements                   $66            -
Foreign currency gains (losses)                    6          (20)
-----------------------------------------------------------------
Total special items                              $72          (20)
=================================================================


The company's net operating income, by business segment, follows:

                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------

E&P                                             $ 98          202
GPM                                               19           28
RM&T                                              29           18
Chemicals                                         75           63
Corporate and Other                              (50)         (64)
-----------------------------------------------------------------
Net operating income                            $171          247
=================================================================


The 31 percent decrease in net operating income is primarily
attributable to lower results from the company's E&P segment, due
to significant decreases in crude oil and natural gas sales
prices.  Lower natural gas and natural gas liquids sales prices
also reduced earnings in the GPM business line.  These lower
upstream results were partially offset by improved operating
performance from the company's RM&T and Chemicals segments, whose
earnings increased 61 and 19 percent, respectively.


                                 9

<PAGE>



                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
Phillips at a Glance                          -------------------

U.S. crude oil production (MBD)                   64           67
Worldwide crude oil production (MBD)             250          214
U.S. natural gas production (MMCFD)              991        1,087
Worldwide natural gas production (MMCFD)       1,602        1,520
Worldwide natural gas liquids
  production (MBD)                               177          161
Liquefied natural gas sales (MMCFD)              143          130
Refinery utilization rate (%)                     94           83
U.S. automotive gasoline sales (MBD)             300          329
U.S. distillates sales (MBD)                     130          128
Worldwide petroleum products sales (MBD)         657          690
Natural gas liquids processed (MBD)              225          208
Ethylene production (MMlbs)*                     833          720
Polyethylene production (MMlbs)*                 563          506
Polypropylene production (MMlbs)*                113          110
Paraxylene production (MMlbs)                    188           20
-----------------------------------------------------------------
*Includes Phillips' share of equity affiliates' production.


Income Statement Analysis

Sales and other operating revenues decreased 22 percent in the
first quarter of 1998, reflecting lower sales prices for
petroleum products, crude oil and natural gas.  These same
factors also accounted for the 31 percent decrease in purchase
costs.

Equity in earnings of affiliated companies decreased 13 percent
in the first quarter of 1998, primarily as a result of lower
earnings from the company's 50 percent interest in a refinery in
Teesside, England.  Other revenues increased $115 million,
primarily due to recoveries from certain of the company's
historical liability and pollution insurers related to claims
made as a part of a comprehensive environmental cost recovery
project.

After adjustment for special items, controllable costs --
primarily production and operating expenses and selling, general
and administrative expenses -- increased 6 percent in the first
quarter of 1998.  Higher production and operating costs in the
E&P segment, due to new volumes from J-Block and Armada in the
U.K. North Sea, higher well maintenance costs in the Norwegian
North Sea, and a favorable cost adjustment related to Nigerian
operations in the first quarter of 1997, led to the overall
increase in company controllable expenses.  The increase in E&P
was partially offset by decreased costs in RM&T, which
experienced lower maintenance-turnaround and utility expenses.


                                10

<PAGE>



Exploration expenses increased 25 percent in the first quarter of
1998, reflecting increased geological and geophysical exploratory
activity, as well as higher foreign dry hole expenses.

Depreciation, depletion and amortization increased 26 percent in
the first quarter of 1998, primarily the result of full
production from J-Block, which came online in mid-1997, and the
E&P acquisition in the Zama/Virgo (Zama) area of Canada, which
was completed in late 1997.

Taxes other than income taxes decreased 12 percent in the first
quarter of 1998, as lower E&P sales prices and U.S. production
volumes resulted in a decrease in production taxes.

Interest expense decreased 15 percent in the first quarter of
1998, primarily due to higher capitalized interest associated
with the Ekofisk II development in the Norwegian North Sea.
Preferred dividend requirements were 35 percent lower, reflecting
the redemption of Phillips Gas Company's preferred stock in
December 1997.


                                11

<PAGE>



Segment Results

E&P
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------
                                              Millions of Dollars
                                              -------------------
Operating Income
Reported net income                              $93          202
Less special items                                (5)           -
-----------------------------------------------------------------
Net operating income                             $98          202
=================================================================

                                                Dollars Per Unit
                                              -------------------
Average Sales Prices
Crude oil (per barrel)
    United States                             $12.20        19.95
    Foreign                                    13.99        21.05
    Worldwide                                  13.55        20.72
Natural gas -- lease
  (per thousand cubic feet)
    United States                               1.98         2.60
    Foreign                                     2.56         2.69
    Worldwide                                   2.25         2.64
-----------------------------------------------------------------

                                              Millions of Dollars
                                              -------------------
Worldwide Exploration Expenses
Geological and geophysical                       $36           31
Leasehold impairment                               5            6
Dry holes                                          7            2
Lease rentals                                      2            1
-----------------------------------------------------------------
                                                 $50           40
=================================================================

                                                 Thousands of
                                                 Barrels Daily
                                              -------------------
Operating Statistics
Crude oil produced
  United States                                   64           67
  Norway                                         116           96
  United Kingdom                                  27            5
  Nigeria                                         22           24
  China                                           14           18
  Canada                                           7            4
-----------------------------------------------------------------
                                                 250          214
=================================================================


                                12

<PAGE>



                                              Three Months Ended
                                                    March 31
                                              -------------------
                                                1998         1997
                                              -------------------
                                                 Thousands of
                                                 Barrels Daily
                                              -------------------
Natural gas liquids produced
  United States                                    3            4
  Norway                                           8            7
  Other areas                                      6            1
-----------------------------------------------------------------
                                                  17           12
=================================================================

                                                  Millions of
                                                Cubic Feet Daily
                                              -------------------
Natural gas produced
  United States (less gas equivalent
    of liquids shown above)                      991        1,087
  Norway*                                        266          280
  United Kingdom*                                254          105
  Canada                                          91           48
-----------------------------------------------------------------
                                               1,602        1,520
=================================================================
*Dry basis.

Liquefied natural gas sales                      143          130
-----------------------------------------------------------------


E&P's net operating income in the first quarter of 1998 decreased
substantially over the corresponding quarter in 1997.  Phillips'
worldwide crude oil sales price averaged $13.55 per barrel in the
first quarter of 1998, 35 percent lower than the first quarter of
1997.  Industry crude oil prices fell sharply during the first
quarter of 1998, driven by rising OPEC production, mild winter
weather and weakening Asian economies.  In addition, the
company's worldwide natural gas sales price was 15 percent lower.
The impact of lower product sales prices was partially offset by
increased production volumes attributable to the J-Block and
Armada fields in the U.K. North Sea, higher crude oil production
from the Norwegian North Sea, and higher crude oil and natural
gas production in Canada.


                                13

<PAGE>



U.S. E&P
--------
                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------
Operating Income
Reported net income                             $ 59          126
Less special items                                (3)           -
-----------------------------------------------------------------
Net operating income                            $ 62          126
=================================================================


Net operating income decreased 51 percent in the company's U.S.
E&P operations, as a result of crude oil prices that were
$7.75 per barrel lower than the first quarter of 1997.  In
addition, natural gas sales prices were 24 percent lower.

U.S. crude oil production was 4 percent lower than the first
quarter of 1997.  Continued declines in the Prudhoe Bay, Alaska,
and Point Arguello, offshore California, fields, as well as lower
production from various fields in the Gulf of Mexico, were
partially offset by increased production from the Mahogany
subsalt field in the Gulf of Mexico.

U.S. natural gas production declined 9 percent, reflecting lower
production of coal-seam gas, and lower production from various
fields in the Gulf of Mexico.

The only special item in the first quarter of 1998 was a 
contingency accrual.


Foreign E&P
-----------
                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------
Operating Income
Reported net income                              $34           76
Less special items                                (2)           -
-----------------------------------------------------------------
Net operating income                             $36           76
=================================================================


Net operating income from the company's foreign E&P operations
decreased 53 percent in the first quarter of 1998, reflecting
significantly lower crude oil sales prices, as well as lower
natural gas sales prices.  The impact of lower prices was
partially offset by increased production in the North Sea and
Canada.


                                14

<PAGE>



Foreign crude oil production increased 27 percent in the first
quarter of 1998, driven by volumes from J-Block and Armada in the
U.K. North Sea, higher production in the Norwegian North Sea, and
higher volumes in Canada as a result of the Zama area acquisition
in late 1997.  Foreign natural gas production increased
41 percent, mainly due to J-Block, Armada and the Zama
acquisition.

Special items in the first quarter of 1998 included foreign
currency transaction losses.


GPM
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------
                                              Millions of Dollars
                                              -------------------
Operating Income
Reported net income                              $19           28
Less special items                                 -            -
-----------------------------------------------------------------
Net operating income                             $19           28
=================================================================

                                                Dollars Per Unit
                                              -------------------
Average Sales Prices
U.S. residue gas
  (per thousand cubic feet)                   $ 2.09         2.69
U.S. natural gas liquids
  (per barrel -- unfractionated)               10.12        14.34
-----------------------------------------------------------------

                                                  Millions of
                                                Cubic Feet Daily
                                              -------------------
Operating Statistics
Natural gas purchases
  Outside Phillips                             1,348        1,347
  Phillips                                       156          163
-----------------------------------------------------------------
                                               1,504        1,510
=================================================================

Raw gas throughput                             1,915        2,011
-----------------------------------------------------------------

Residue gas sales
  Outside Phillips                               981        1,004
  Phillips                                        62           58
-----------------------------------------------------------------
                                               1,043        1,062
=================================================================

                                                 Thousands of
                                                 Barrels Daily
                                              -------------------
Natural gas liquids net production
  From Phillips E&P leasehold gas                 15           15
  From gas purchased outside Phillips            145          134
-----------------------------------------------------------------
                                                 160          149
=================================================================


                                15

<PAGE>



GPM's net operating income decreased 32 percent in the first
quarter of 1998, as lower natural gas liquids and residue gas
sales prices tightened margins.  Natural gas liquids sales prices
were 29 percent lower than a year ago, while residue gas sales
prices declined 22 percent.  Industry residue gas sales prices
were lower than a year ago due to reduced demand resulting from
warmer-than-normal winter weather.

Raw gas throughput volumes declined 5 percent in the first
quarter of 1998, reflecting field production declines in the
Austin Chalk area of south central Texas.  Natural gas liquids
production increased 7 percent, as a result of an expansion of
the Spraberry plant in West Texas, and an overall improvement in
operating consistency.


                                16

<PAGE>



RM&T
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997*
                                              -------------------
                                              Millions of Dollars
                                              -------------------
Operating Income
Reported net income                              $29           18
Less special items                                 -            -
-----------------------------------------------------------------
Net operating income                             $29           18
=================================================================

                                                Dollars Per Unit
                                              -------------------
Average Sales Prices (per gallon)
Automotive gasoline -- wholesale                $.51          .70
Automotive gasoline -- retail                    .67          .84
Distillates                                      .46          .66
-----------------------------------------------------------------

                                                 Thousands of
                                                 Barrels Daily
                                              -------------------
Operating Statistics
U.S. refinery crude oil
  Capacity                                       355          345
  Crude runs                                     335          286
  Capacity utilization (percent)                  94%          83
Natural gas liquids fractionation
  Capacity                                       252          250
  Processed                                      225          208
  Capacity utilization (percent)                  89%          83
-----------------------------------------------------------------

Petroleum products outside sales
  United States
    Automotive gasoline -- wholesale             253          281
    Automotive gasoline -- retail                 37           36
    Aviation fuels                                29           25
    Distillates                                  130          128
    Natural gas liquids (fractionated)            72           97
    Other products                                30           11
-----------------------------------------------------------------
                                                 551          578
  Foreign                                         33           43
-----------------------------------------------------------------
                                                 584          621
=================================================================
*Restated to reflect the transfer of the company's natural gas
 liquids fractionation and marketing business from Chemicals to
 RM&T.


RM&T's net operating income increased 61 percent in the first
quarter of 1998, reflecting improved refinery results, due mainly
to higher gasoline and distillates margins and volumes.  In
addition, controllable costs at the company's refineries were
lower than a year ago, as a result of lower maintenance and
utility expenses.


                                17

<PAGE>



Although the rated capacity of the company's refineries was
raised from 345,000 barrels per day to 355,000 barrels per day in
the first quarter, capacity utilization increased to 94 percent,
as the refineries improved their operating consistency during the
quarter.

Results from RM&T's marketing business were lower than a year
ago, mainly the result of lower distillates margins and higher
controllable expenses, resulting from an increase in the number
of company-operated retail service stations.


Chemicals
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997*
                                              -------------------
                                              Millions of Dollars
                                              -------------------
Operating Income
Reported net income                              $75           63
Less special items                                 -            -
-----------------------------------------------------------------
Net operating income                             $75           63
=================================================================
*Restated to reflect the transfer of the company's natural gas
 liquids fractionation and marketing business from Chemicals to
 RM&T.

                                              Millions of Pounds
                                              Except as Indicated
Operating Statistics                          -------------------
Production*
  Ethylene                                       833          720
  Polyethylene                                   563          506
  Propylene                                      133          116
  Polypropylene                                  113          110
  Paraxylene                                     188           20
  Cyclohexane (millions of gallons)               48           33
-----------------------------------------------------------------
*Includes Phillips' share of equity affiliates' production.


The Chemicals segment's net operating income increased 19 percent
in the first quarter of 1998, as a result of higher aromatics
margins and volumes at the company's Puerto Rico Core
petrochemical facility, as well as higher ethylene and
polyethylene production volumes.  These items were partially
offset by lower olefins margins -- mainly ethylene.

At Core, cyclohexane margins were higher than in the first
quarter of 1997, while production volumes were much higher for
paraxylene.  The Core facility was shut-in during most of the
first quarter of 1997 due to a paraxylene expansion project.


                                18

<PAGE>



Corporate and Other
                                              Millions of Dollars
                                              -------------------
                                              Three Months Ended
                                                   March 31
                                              -------------------
                                                1998         1997
                                              -------------------
Operating Results
Reported Corporate and Other                    $ 27          (84)
Less special items                                77          (20)
-----------------------------------------------------------------
Adjusted Corporate and Other                    $(50)         (64)
=================================================================


Adjusted Corporate and Other includes:

Corporate general and
  administrative expenses                       $(25)         (18)
Net interest                                     (30)         (30)
Preferred dividend requirements                  (10)         (17)
Other                                             15            1
-----------------------------------------------------------------
Adjusted Corporate and Other                    $(50)         (64)
=================================================================


Corporate general and administrative expenses were higher than a
year ago, reflecting higher salaries, benefits and incentive
compensation costs.

Net interest represents interest income and expense, net of
capitalized interest.  Net interest was unchanged in the first
quarter of 1998, as higher capitalized interest was offset by
lower interest income resulting from lower cash balances.

Preferred dividend requirements includes dividends on the
Phillips Gas Company preferred stock and on the preferred
securities of the Phillips 66 Capital Trusts I and II.  Preferred
dividend requirements were lower in the first quarter of 1998 due
to the redemption of the Phillips Gas Company preferred stock in
late 1997.

Other consists primarily of the company's insurance operations,
along with income tax items and other items that are not directly
associated with the operating segments on a stand-alone basis.
These results were improved over the same period last year, as a
result of the receipt of dividends from certain industry
insurance companies in which Phillips has an ownership interest.

Special items in the first quarter of 1998 included insurance
recoveries related to a comprehensive environmental cost recovery
project, as well as foreign currency transaction gains.  Special
items in the first quarter of 1997 represented non-cash foreign
currency transaction losses.  These foreign currency transaction
gains and losses are due primarily to the revaluing of
intercompany receivables.


                                19

<PAGE>



CAPITAL RESOURCES AND LIQUIDITY

Financial Indicators
                                        Millions of Dollars
                                  -------------------------------
                                        At           At        At
                                  March 31  December 31  March 31
                                      1998         1997      1997
                                  -------------------------------
Current ratio                          1.1          1.1       1.2
Total debt                          $3,028        3,009     2,896
Preferred stock of subsidiary       $    -            -       345
Company-obligated mandatorily
  redeemable preferred securities   $  650          650       650
Common stockholders' equity         $4,888        4,814     4,390
Percent of total debt to capital*       35%          36        35
Percent of floating-rate debt
  to total debt                         21%          30        16
-----------------------------------------------------------------
*Capital includes total debt, preferred stock of subsidiary,
 company-obligated mandatorily redeemable preferred securities
 and common stockholders' equity.


Cash from operations for the first quarter of 1998 was
approximately the same as that for the first quarter of 1997.
Net operating income decreased $76 million, or 31 percent from
first quarter 1997 to first quarter 1998.  This decrease,
combined with an increase in inventories, was more than offset by
the sale of $150 million of receivables under the company's
receivables monetization program.

In March 1998, the company issued $300 million of 7.125%
Debentures due March 15, 2028, in the public market, leaving
$200 million available under the company's shelf registration
filed with the U.S. Securities and Exchange Commission.

The company is pursuing its previously announced stock repurchase
program to buy back up to $500 million of its common stock by
year-end 1998.  Through May 13, 1998, approximately  
$138 million worth of shares had been repurchased.  The company
also has a $150 million stock repurchase program expiring
December 31, 1999.  Under the two programs, the company has
repurchased approximately $220 million worth of shares.

During the first three months of 1998, cash increased
$31 million.  Cash provided by operating activities, combined
with the previously mentioned $300 million issuance of debentures, 
was used to retire $311 million of revolving debt, fund the 
company's capital expenditure program, and purchase $106 million 
of the company's common stock under the previously mentioned 
stock repurchase programs.


                                20

<PAGE>



At March 31, 1998, no amounts were outstanding under the
company's revolving bank credit facility or commercial paper
program.  Under the Phillips Petroleum Company Norway
$300 million revolving credit facility, $170 million was
outstanding.


Capital Expenditures and Investments

                                     Millions of Dollars
                            -------------------------------------
                                               Three Months Ended
                                                    March 31
                                               ------------------
                            Estimated 1998     1998          1997
                            --------------     ------------------

E&P                             $1,001         $268           215
GPM                                 90           13            43
RM&T                               343           63            49
Chemicals                          281           56            57
Corporate and Other                 74           16            14
-----------------------------------------------------------------
                                $1,789         $416           378
=================================================================
United States                   $1,050         $232           229
Foreign                            739          184           149
-----------------------------------------------------------------
                                $1,789         $416           378
=================================================================


E&P's capital expenditures and investments for the three months
ended March 31, 1998, increased $53 million, 25 percent, over the
same period in 1997.  This increase is primarily attributable to
the development of the Zama area in Canada and the Tyonek
prospect in the North Cook Inlet of Alaska, as well as
development projects in the Gulf of Mexico.

The Ekofisk II project to replace the majority of the facilities
in the existing Ekofisk complex was 96 percent complete at
March 31, 1998, on time and under budget.  Some of the existing
facilities that are to continue in operation after the start-up
of Ekofisk II in 1998 will be impacted by the continuing
subsidence in the Ekofisk area, and studies are in progress to
determine what future actions are necessary with regard to these
facilities.  Future costs related to subsidence of the existing
facilities are not expected to materially impact the financial
position of the company.

Offshore construction activity related to the waterflood project
for the Eldfisk field, also in the Ekofisk area of the
Norwegian North Sea, is scheduled to commence in June 1998.  The
project will involve the construction of a new unmanned platform,
modifications to existing platforms, laying of new pipelines, and
an extensive drilling program.  Development drilling is expected
to begin in mid-1999.  The platform, scheduled to start up in


                                21

<PAGE>



early 2000, would be controlled from an existing manned Eldfisk
platform.

In the United Kingdom, a development well from the Maureen
platform, drilled to extend production from the field, was a dry
hole.  It is now expected that production from Maureen will cease
in 1999 or 2000.  Phillips continues its effort to find another
user for the Maureen platform and is also reviewing other refloat
and disposal options.  The current financial provision for
decommissioning is expected to be sufficient for any option
currently being considered.

In the North Cook Inlet of Alaska, the drilling of the first of
two planned development wells for the Tyonek prospect was
recently completed.  Engineering design continues for a planned
crude oil pipeline and production facilities to be constructed on
the existing Tyonek platform, from which Phillips currently
produces gas used as feedstock at the Kenai LNG facility.
Initial crude oil production is expected in mid-1999.

An exploratory appraisal well is currently being drilled at the
Mahogany field, offshore Louisiana.  The purpose of this well is
to locate additional reserves in the northern area of existing
production zones.  A fifth development well, the Mahogany A-4,
was completed earlier in the year and more than doubled field
production to slightly under 20,000 gross barrels of oil per day.
An additional development well and recompletions of existing
producing wells are also planned this year to enhance production
from the field.  Phillips is operator and holds a 37.5 percent
working interest in Mahogany.  In addition, a sub-sea well
completion and tie-in of the Agate field to the Mahogany
production platform is under way.  Initial gross production of
3,400 barrels of oil per day and 20 million cubic feet of gas per
day are expected from Agate beginning in mid-1998.  Phillips is
operator and holds a 50 percent working interest in Agate.

GPM's capital expenditures and investments for the first quarter
of 1998 were substantially lower than those of the same period in
1997, primarily because the 1997 period included a major
gathering asset acquisition.

The company continued its retail marketing expansion during the
first quarter of 1998, with the purchase of 12 retail outlets in
the Dallas, Texas, area, and the opening of one new outlet.
Since the expansion program began, the company has acquired
36 retail outlets, opened 33 new ones, and razed and rebuilt
16 others.  Both new outlets and those that are razed and rebuilt
utilize the new Kicks 66 convenience store design.  Also during
the first quarter of 1998, the company sold six retail units in
non-strategic areas.


                                22

<PAGE>



In April, the company's Board of Directors approved the
construction of a 36,000 barrels-per-day continuous catalyst
regeneration reformer at the Sweeny, Texas, refinery and
petrochemical complex.  The new catalytic reformer will convert a
higher percentage of plant yield to higher-margin petrochemicals.
This project is now scheduled to commence in early 1999, with
completion scheduled for mid-2000.

In March, the company purchased interests in an El Paso, Texas,
terminal and pipeline system, which allows Phillips to transport
petroleum products to El Paso, and Tucson and Phoenix, Arizona.

Construction of a 148-mile pipeline to connect the Seaway
Pipeline system to the company's existing Midwest distribution
system near Wichita, Kansas, was completed in March 1998.  This
will allow the company to transport gasoline and distillates from
the Gulf Coast to the growing Midwest market.  Commercial
operation is scheduled to begin in May 1998.

In China, the design and construction of a 220 million-pounds-
per-year polyethylene plant near Shanghai is complete, and start-up
is expected in second quarter 1998.


Year 2000 Update

Phillips' company-wide Year 2000 Project is proceeding on
schedule.  The project is addressing the issue of computer
programs being unable to distinguish between the year 1900 and
the year 2000.  In 1995, Phillips began a worldwide business
systems replacement project with systems that primarily use
programs from SAP America, Inc. (SAP) and for certain E&P
operations, Oracle Corporation (Oracle).  The new systems are
expected to make most of the company's business computer systems
Year 2000 compliant and are scheduled for completion by mid-1999.
Remaining business programs are expected to be made compliant
through the Year 2000 Project, by the vendors who supply the
programs, or will be retired.  Plans detailing the tasks and
resources required to ensure process control and instrumentation
Year 2000 readiness by the end of 1998 are expected to be in
place by the end of the second quarter.  The company is
continuing the process of identifying and prioritizing critical
third parties and customers, and following up with them
concerning their plans and progress in addressing the Year 2000
problem.  The total cost associated with required modifications
to become Year 2000 compliant is not expected to be material to
the company's financial position.


                                23

<PAGE>



An unexpected failure to have corrected a Year 2000 problem could
result in an interruption in certain normal business activities
or operations.  However, with the implementation of new business
systems and completion of its Year 2000 Project, the company
believes that significant interruptions will not be encountered.


Contingencies

Legal and Tax Matters

Phillips accrues for contingencies when a loss is probable and
the amounts can be reasonably estimated.  Based on currently
available information, the company believes that the likelihood
is remote that future costs related to known contingent liability
exposures will exceed current accruals by an amount that would
have a material adverse impact on the company's financial
statements.


Environmental

Most aspects of the businesses in which the company engages are
subject to various federal, state, local and foreign
environmental laws and regulations.  Similar to other companies
in the petroleum and chemical industries, the company incurs
costs for preventive and corrective actions at facilities and
waste disposal sites.

Phillips may be obligated to take remedial action as the result
of the enactment of laws, such as the federal Superfund law, the
issuance of new regulations, or as a result of leaks and spills.
In addition, an obligation may arise when a facility is closed or
sold.  Most of the expenditures to fulfill these obligations
relate to facilities and sites where past operations followed
practices and procedures that were considered appropriate under
regulations, if any, existing at the time, but may now require
investigatory or remedial work to adequately protect the
environment or address new regulatory requirements.

At year-end 1997, Phillips reported 43 sites where it had
information indicating that it might have been identified as a
Potentially Responsible Party (PRP).  Since then, no sites have
been resolved or added.  Of these 43 sites, the company believes
it has a legal defense or its records indicate no involvement for
13 sites.  At seven sites, present information indicates that it
is probable that the company's exposure is less than $100,000 per
site.  At seven other sites, Phillips has had no communication or
activity with government agencies or other PRPs in more than two
years.  Of the 16 remaining sites, the company has provided for
any probable costs that can be reasonably estimated.


                                24

<PAGE>



Phillips does not consider the number of sites at which it has
been designated potentially responsible by state or federal
agencies as a relevant measure of liability.  Some companies may
be involved in few sites but have much larger liabilities than
companies involved in many more sites.  Although liability of
those potentially responsible is generally joint and several for
federal sites and frequently so for state sites, the company is
usually but one of many companies cited at a particular site.  It
has, to date, been successful in sharing clean-up costs with other
financially sound companies.  Many of the sites at which the
company is potentially responsible are still under investigation
by the Environmental Protection Agency (EPA) or the state
agencies concerned.  Prior to actual clean-up, those potentially
responsible normally assess site conditions, apportion
responsibility and determine the appropriate remediation.  In
some instances, Phillips may have no liability or attain a
settlement of liability.  Actual clean-up costs generally occur
after the parties obtain EPA or equivalent state agency approval.

At March 31, 1998, accruals of $6 million had been made for the
company's unresolved PRP sites.  In addition, the company has
accrued $68 million for other planned remediation activities,
including resolved state, PRP, and other federal sites, as well
as sites where no claims have been asserted, and $4 million for
other environmental contingent liabilities, for total
environmental accruals of $78 million.  No one site represents
more than 10 percent of the total.

After an assessment of environmental exposures for clean-up and
other costs, the company makes accruals on an undiscounted basis
for planned investigation and remediation activities for sites
where it is probable that future costs will be incurred and these
costs can be reasonably estimated.  These accruals have not been
reduced for possible insurance recoveries, although claims for
recovery of remediation costs have been filed with certain of the
company's insurers.

During first quarter 1998, as part of a comprehensive
environmental cost recovery project, the company entered binding
settlement agreements with certain of the company's historical
liability and pollution insurers in exchange for certain releases
or commutations of their liabilities to the company under its
historical liability and pollution policies.  As a result of
these settlement agreements, the company recorded a before-tax
benefit to earnings of $106 million and expects to collect this
amount in the second quarter of 1998.  At this time, the company
is progressing with negotiations with several other historical
insurers.  These negotiations may result in Phillips' receipt of
additional settlement amounts.  The ultimate amount, if any; the
terms of the settlements; and the timing of recoveries from these
other insurers remains uncertain.


                                25

<PAGE>



OUTLOOK

In early April 1998, the company filed legal proceedings in the
District Court of Harris County, Texas, against Union Pacific
Railroad Company alleging that Union Pacific's merger with
Southern Pacific Transportation Company has resulted in Union
Pacific's being unable to provide timely, reasonable or reliable
rail transportation service to Phillips' Houston Chemical Complex
and Sweeny refinery.

In January 1999, several European countries will begin operating
with a single currency, the Euro, starting the process of
completely replacing their national currencies during the next
three and one-half years.  This European Monetary Union will
affect many of the business and financial functions for companies
operating in these countries.  The previously mentioned worldwide
business systems replacement project is expected to position the
company for the introduction of the Euro and no significant
economic impact is anticipated.

The Ekofisk and outlying fields are expected to be closed for
approximately 20 days during third quarter 1998 for the tie-in of
the Ekofisk II development.  The downtime will result in lower
oil, gas, and NGL production, but no significant impact to third
quarter net income is expected.

Crude oil prices in second quarter 1998 are being influenced by
the level of OPEC production, the strength inherent in gasoline
markets, and the extent of Iraqi exports.  OPEC met in late March
and announced a reduction in output in response to prices falling
to levels not seen since late 1993.

Phillips operates in three countries where cutbacks in production
have been announced.  In conjunction with the OPEC-announced
reduction in output, Norway has voluntarily implemented measures
to cut back crude oil production on the Norwegian continental
shelf by 3 percent for the remainder of 1998.  The Phillips-
operated Ekofisk area fields in License PL018 will be affected,
but oil production will only be curtailed 3 percent during the
last four months of 1998.  Nigeria has agreed to cut back oil
production 6 percent, effective April 1, 1998.  This reduction
affects leases operated on behalf of the company under a joint
operating agreement with Nigerian Agip Oil Company.  However,
anticipated 1998 annual production from these leases falls within
the limits allowed under the revised production arrangements.
Venezuela, an OPEC member, has also agreed to cut back oil
production, but foreign companies operating there have not been
asked to curtail production.  The company anticipates production
from Venezuela in second quarter 1998.  Based on the above
information, the company does not expect the economic impact of


                                26

<PAGE>



the production curtailments in any of the three countries to be
significant.

The company has a number of issues outstanding with the Internal
Revenue Service (IRS) related to tax years 1987 through 1992 that
are expected to be resolved this year as a result of the
favorable outcome in 1996 of the Kenai LNG tax case related to
the company's sales of LNG from Kenai, Alaska.  A favorable
resolution of these issues would have a positive effect on net
income and cash flow of up to $125 million while an unfavorable
one would not impact the company's net income or cash position.
All outstanding issues with the IRS for years prior to 1987 have
been resolved.


CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995

Phillips is including the following cautionary statement to take
advantage of the "safe harbor" provisions of the PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 for any forward-looking
statement made by, or on behalf of, the company.  The factors
identified in this cautionary statement are important factors
(but not necessarily all important factors) that could cause
actual results to differ materially from those expressed in any
forward-looking statement made by, or on behalf of, the company.

Where any such forward-looking statement includes a statement of
the assumptions or bases underlying such forward-looking
statement, the company cautions that, while it believes such
assumptions or bases to be reasonable and makes them in good
faith, assumed facts or bases almost always vary from actual
results, and the differences between assumed facts or bases and
actual results can be material, depending on the circumstances.
Where, in any forward-looking statement, the company, or its
Management, expresses an expectation or belief as to future
results, such expectation or belief is expressed in good faith
and believed to have a reasonable basis, but there can be no
assurance that the statement of expectation or belief will
result, or be achieved or accomplished.

Taking into account the foregoing, the following are identified
as important risk factors that could cause actual results to
differ materially from those expressed in any forward-looking
statement made by, or on behalf of, the company:

  o  Plans to drill wells and develop offshore or onshore
     exploration and production properties are subject to the
     company's ability to obtain agreements from co-venturers or
     partners, and governments; engage drilling, construction and


                                27

<PAGE>



     other contractors; obtain economical and timely financing;
     as well as geological, land, or sea conditions; world prices
     for oil, natural gas and natural gas liquids; and foreign
     and United States laws, including tax laws.

  o  Plans for the construction, modernization or debottlenecking
     of domestic and foreign refineries and chemical plants, and
     the timing of production from such plants are subject to
     approval from the company's and/or subsidiaries' Boards of
     Directors; loan or project financing; the issuance by
     foreign, federal, state, and municipal governments, or
     agencies thereof, of building, environmental and other
     permits; and the availability of specialized contractors and
     work force.  Production and delivery of the company's
     products are subject to worldwide prices and demand for the
     products; availability of raw materials; and the
     availability of transportation in the form of pipelines,
     railcars, trucks or ships.

  o  The ability to meet liquidity requirements, including the
     funding of the company's capital program from operations, is
     subject to changes in the commodity prices of the company's
     basic products of oil, natural gas and natural gas liquids,
     over which Phillips has no control, and to a lesser extent
     the commodity prices for its chemical and other products;
     its ability to operate its refineries and chemical plants
     consistently; and the effect of foreign and domestic
     legislation of federal, state and municipal governments that
     have jurisdiction in regard to taxes, the environment and
     human resources.

  o  Estimates of proved reserves, raw natural gas supplies,
     project cost estimates, and planned spending for maintenance
     and environmental remediation were developed by company
     personnel using the latest available information and data,
     and recognized techniques of estimating, including those
     prescribed by the U.S. Securities and Exchange Commission,
     generally accepted accounting principles and other
     applicable requirements.

  o  The dates on which the company believes the Year 2000
     Project will be completed and the SAP and Oracle business
     computer systems will be implemented are based on
     Management's best estimates, which were derived utilizing
     numerous assumptions of future events, including the
     continued availability of certain resources, third-party
     modification plans and other factors.  However, there can be
     no guarantee that these estimates will be achieved, or that
     there will not be a delay in, or increased costs associated
     with, the implementation of the Year 2000 Project.  Specific
     factors that might cause differences between the estimates


                                28

<PAGE>



     and actual results include, but are not limited to, the
     availability and cost of personnel trained in these areas,
     the ability to locate and correct all relevant computer
     codes, timely responses by third-parties and suppliers, the
     ability to implement interfaces between the new systems and
     the systems not being replaced, and similar uncertainties.


                                29

<PAGE>



                   PART II.  OTHER INFORMATION


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
--------

12  Computation of Ratio of Earnings to Fixed Charges.

27  Financial Data Schedule.


Reports on Form 8-K
-------------------

During the three months ended March 31, 1998, the company did not
file any reports on Form 8-K.


                                30

<PAGE>



                            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.


                                   PHILLIPS PETROLEUM COMPANY




                                     /s/ Rand C. Berney
                               ----------------------------------
                                         Rand C. Berney
                                 Vice President and Controller
                                  (Chief Accounting and Duly
                                      Authorized Officer)


May 13, 1998


                                31

<PAGE>