LETTER AGREEMENT



 


Exhibit 10(18)


AMERADA HESS CORPORATION

1185 Avenue of the Americas

New York, New York 10036



May 17, 2001


JOHN B. HESS

Chairman of the Board

(212) 536-8514

FAX: (212) 536-8494



Mr. John Rielly

17 Sherbrook Drive

Berkeley Heights, New Jersey 07922-2345



Dear Mr. Rielly:



This letter will confirm our understanding concerning your
participation in the Amerada Hess Corporation Pension Restoration
Plan (the “PRP”) and the deferred compensation you will
receive in connection with your employment by Amerada Hess
Corporation (the “Corporation”) as Vice President and
Controller on April 2, 2001.


The Compensation Committee of the Corporation’s Board of Directors
has determined that you will receive Prior Service (as defined in
Section 4.1 of the PRP) for 16 1/2 years of related
experience with Ernst & Young LLP (“E&Y”)
acquired prior to the date of your employment by the Corporation for
the purpose of determining PRP benefits, provided, however, that the
service requirements for vesting and early retirement under the PRP
shall be based on actual service with the Corporation.


In general, PRP benefits are calculated as a life annuity based on
the formula of the Corporation’s Employees’ Pension Plan
(the “Pension Plan”) as though your Prior Service counted
under that plan, and there were no legal limits on qualified plan
benefits or annual compensation. The resulting amount is reduced as
necessary to account for any payment before age 65 or in any form
other than a life annuity based on the actuarial factors used to
determine Pension Plan benefits. Then the amount is reduced by
subtracting any benefits payable from the Pension Plan. Finally, the
PRP amount is reduced by:

	 	 
	 	“. . . the monthly benefit actually payable
to or on behalf of the Member under the qualified and nonqualified
pension plans of any prior employers derived from periods of
employment with such employers for which credit for Prior Service was
granted, or such amounts as would be payable from investments made
with the proceeds of lump sum payments received by the Member from
such other plans in a manner determined by the Committee at the time
credit for such Prior Service is
granted . . . .”




You have advised us that the only pension you are entitled to
receive as a result of your employment with E&Y is a monthly
benefit from the general employee plan, which is







 



 


		
	Mr. John Rielly	May 17, 2001




payable when you eventually retire. The life
annuity equivalent of this E&Y pension will be coordinated
with the PRP benefit at the time of your retirement as described
above.



     
Nothing contained in the Pension Plan, PRP or
this letter shall be construed as a contract of employment or as
changing the normal terms of the employment relationship.



     
To qualify for the deferred compensation payments
described above, you must sign and return the enclosed copy of
this letter by July 13, 2001. If you do not sign and return
the letter by then, the deferred compensation payments will not
be made available to you in the future.



     
The deferred compensation plan described above is
unfunded for tax purposes and for purposes of Title I of
the Employee Retirement Income Security Act of 1974. You would
have the status of a general unsecured creditor of the
Corporation with respect to plan payments. The plan constitutes
a mere promise to make benefit payments in the future. Your
rights with respect to any such payments would not be subject in
any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by
your creditors or the creditors of your beneficiaries.



     
Please indicate your acceptance of and agreement
to the foregoing by signing the enclosed copy of this letter in
the space provided below and returning it to me.






		
	 	
    Yours truly,
    
	 
	 	
    AMERADA HESS CORPORATION
    
	 
	 	
    /s/ JOHN B. HESS 

     

    
	 	
    By: John B. Hess
    





Accepted and Agreed to by:




/s/ JOHN P. RIELLY 

 





John Rielly





May 17, 2001










Date




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