SC 13E3

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                  SCHEDULE TO
                 TENDER OFFER STATEMENT UNDER SECTION 14(d)(1)
               OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
                                      AND
                               AMENDMENT NO. 3 TO

                                  SCHEDULE 13D
                   UNDER THE SECURITIES EXCHANGE ACT OF 1934
                             ---------------------

                        GULF INDONESIA RESOURCES LIMITED
                       (Name of Subject Company (issuer))
                             ---------------------
                        CONOCO CANADA RESOURCES LIMITED
                                  CONOCO INC.
                      (Names of Filing Persons (offerors))
                             ---------------------
                        GULF INDONESIA RESOURCES LIMITED
        (Name of Filing Person (subject company in a 13E-3 transaction))
                             ---------------------
                                 COMMON SHARES
                         (Title of Class of Securities)

                                   402284103
                     (CUSIP Number of Class of Securities)
                             ---------------------
                                 WAYNE C. BYERS
                                 SENIOR COUNSEL
                                  CONOCO INC.
                          600 NORTH DAIRY ASHFORD ROAD
                               HOUSTON, TX 77079
                                 (281) 293-1000
          (Name, Address and Telephone Numbers of Person Authorized to
        Receive Notices and Communications on Behalf of Filing Persons)

                                WITH A COPY TO:

                               RICHARD HALL, ESQ.
                            CRAVATH, SWAINE & MOORE
                                WORLDWIDE PLAZA
                               825 EIGHTH AVENUE
                               NEW YORK, NY 10019
                                 (212) 474-1000
                             ---------------------
                                 June 12, 2002
                             ---------------------
                           CALCULATION OF FILING FEE



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                 TRANSACTION VALUATION(1)                                    AMOUNT OF FILING FEE(1)(2)
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                     U.S.$349,648,182                                                U.S.$32,168
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(1) The transaction valuation is estimated solely for purposes of calculating
    the filing fee pursuant to Rule 0-11(d). The calculation assumes the
    purchase of all outstanding common shares of Gulf Indonesia Resources
    Limited, par value U.S.$0.01 (the "Shares"), not beneficially owned by
    Conoco Canada Resources Limited, at a purchase price of U.S.$13.25 per
    Share, net to the seller in cash. As of June 4, 2002, there were 26,388,542
    Shares outstanding on a fully diluted basis not beneficially owned by Conoco
    Canada Resources Limited.
(2) The amount of the filing fee is calculated in accordance with Rule 0-11 of
    the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 8
    of 2002 issued by the Securities and Exchange Commission (the "SEC") on
    January 16, 2002. Such fee is U.S.$92 per U.S.$1,000,000 of the transaction
    value.
 [ ] Check the box if any part of the fee is offset as provided by Rule
     0-11(a)(2) and identify the filing with which the offsetting fee was
     previously paid. Identify the previous filing by registration statement
     number, or the Form or Schedule and the date of its filing.

                                                           
Amount Previously Paid: N/A                                   Form or Registration No.: N/A
Filing Party: N/A                                             Date Filed: N/A



 [ ] Check the box if the filing relates solely to preliminary communications
     made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the
statement relates:

                                                            
 [X] third-party tender offer subject to Rule 14d-1.           [ ] issuer tender offer subject to Rule 13e-4.
 [X] going-private transaction subject to Rule 13e-3.          [X] amendment to Schedule 13D under Rule 13d-2.



Check the following box if the filing is a final amendment reporting the results
of the tender offer:  [ ]
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CUSIP No. 402284103

        
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    1      Names of Reporting Persons
           Identification Nos. of Above Persons (entities only)
           CONOCO INC.
           IRS# 51-0370352
           CONOCO CANADA RESOURCES LIMITED
           IRS# 98-0086499
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    2      Check the Appropriate Box if a Member of a Group (See Instructions)
           (a) [ ]
           (b) [ ]
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    3      SEC USE ONLY
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    4      Source of Funds (See Instructions)
           BK, OO
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    5      Check if Disclosure of Legal Proceedings is Required
           Pursuant to Items 2(d) or 2(e)      [ ]
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           Citizenship or Place of Organization
    6      CONOCO INC. -- DELAWARE
           CONOCO CANADA RESOURCES LIMITED -- NOVA SCOTIA
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              Number of                          Sole Voting Power
               Shares                     7      0
            Beneficially               --------------------------------------------------------------
            Owned by Each                        Shared Voting Power
                                          8
              Reporting                          63,650,000
             Person with               --------------------------------------------------------------
                                                 Sole Dispositive Power
                                          9
                                                 0
                                       --------------------------------------------------------------
                                                 Shared Dispositive Power
                                         10
                                                 63,650,000
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           Aggregate Amount Beneficially Owned by Each Reporting Person
   11      63,650,000
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           Check Box if the Aggregate Amount in Row (11) Excludes
   12      Certain Shares (See Instructions)    [ ]
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           Percent of Class Represented
           by Amount in Row (11)
   13      72.3%
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           Type of Reporting Person (See Instructions)
   14      CO
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                             ---------------------

     This Tender Offer Statement on Schedule TO (this "Schedule TO") is filed by
Conoco Inc., a Delaware corporation ("Conoco") and Conoco Canada Resources
Limited, a Nova Scotia corporation ("Conoco Canada") and a wholly owned
subsidiary of Conoco. This Schedule TO includes the Schedule 13E-3 Transaction
Statement of Conoco, Conoco Canada and Gulf Indonesia Resources Limited, a New
Brunswick corporation ("Gulf Indonesia"), in respect of the Offer (as defined
below). This Schedule TO also constitutes Amendment Number 3 to the Statement on
Schedule 13D of Conoco and Conoco Canada filed with the SEC on July 26, 2001, as
amended on May 28, 2002 and on June 10, 2002 (the "Schedule 13D").

     This Schedule TO relates to the offer by Conoco Canada to purchase all the
outstanding common shares, par value U.S.$0.01 per share (the "Shares"), of Gulf
Indonesia not owned by Conoco Canada, at a purchase


price of U.S.$13.25 per Share, net to the seller in cash, without interest
thereon. The Offer is subject to the terms and conditions set forth in Conoco
Canada's Offer to Purchase dated June 12, 2002 (the "Offer to Purchase") and the
related Letter of Transmittal ("Letter of Transmittal"), copies of which are
attached hereto as Exhibits (a)(1)(A) and (a)(1)(C), respectively. The Offer to
Purchase and Letter of Transmittal, as each may be amended or supplemented from
time to time, constitute the "Offer".

     The information set forth in the Offer to Purchase and the Letter of
Transmittal, including all schedules, exhibits and annexes thereto, is hereby
expressly incorporated herein by reference in response to all items of
information required to be included in, or covered by, a Tender Offer Statement
on Schedule TO, all items of information required by the Schedule 13E-3
Transaction Statement to be included in, or covered by, this Schedule TO and all
items of information required to be included in, or covered by, an amendment to
the Schedule 13D as a result of the Offer.

ITEM 12.  EXHIBITS

         
(a)(1)(A)   Offer to Purchase dated June 12, 2002.
(a)(1)(B)   Solicitation/Recommendation Statement on Schedule 14D-9 of
            Gulf Indonesia, dated June 12, 2002 (the "Recommendation
            Statement").
(a)(1)(C)   Letter of Transmittal.
(a)(1)(D)   Notice of Guaranteed Delivery.
(a)(1)(E)   Letter to Brokers, Dealers, Commercial Banks, Trust
            Companies and other Nominees.
(a)(1)(F)   Form of Letter to Clients for use by Brokers, Dealers,
            Commercial Banks, Trust Companies and other Nominees.
(a)(1)(G)   Guidelines for Certification of Taxpayer Identification
            Number on Substitute Form W-9.
(a)(1)(H)   Press release issued by Conoco Canada, dated June 12, 2002,
            announcing the commencement of the Offer.
(a)(1)(I)   Letter to stockholders of Gulf Indonesia from the Chairman
            of the Board of Gulf Indonesia.
(a)(1)(J)   Summary Advertisement published on June 12, 2002.
(a)(1)(K)   Gulf Indonesia's Annual Report on Form 40-F for the year
            ended December 31, 2001.
(a)(1)(L)   Gulf Indonesia's Annual Report on Form 40-F for the year
            ended December 31, 2000.
(b)         None.
(c)(1)      Valuation and Fairness Opinion of RBC Dominion Securities
            Inc. dated June 6, 2002 (included as Annex A of the
            Recommendation Statement filed herewith as Exhibit
            (a)(1)(B)).
(c)(2)      Presentation of J.P. Morgan Securities Inc. and Merrill
            Lynch & Co. to the management of Conoco and Conoco Canada
            dated May 23, 2002.
(c)(3)      Presentation of J.P. Morgan Securities Inc. and Merrill
            Lynch & Co. to the management of Conoco and Conoco Canada
            dated May 16, 2002.
(c)(4)      Presentation of J.P. Morgan Securities Inc. to the
            management of Conoco and Conoco Canada dated March, 2002.
(d)         Support Agreement dated as of June 7, 2002 by and among
            Conoco, Conoco Canada and Gulf Indonesia.
(f)         Applicable Canadian statutory provisions concerning
            appraisal and dissent rights.
(g)         None.
(h)         None.



                                        2


                                   SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.

                                          SCHEDULE TO, SCHEDULE 13D/A and
                                          SCHEDULE 13E-3

                                          CONOCO INC.

                                          by /s/ ROBERT E. MCKEE
                                            ------------------------------------
                                          Name: Robert E. McKee, III
                                          Title:   Executive Vice President,
                                                   Exploration Production

                                          CONOCO CANADA RESOURCES LIMITED

                                          by /s/ HENRY W. SYKES
                                            ------------------------------------
                                          Name: Henry W. Sykes
                                          Title:   President

                                          SCHEDULE 13E-3

                                          GULF INDONESIA RESOURCES LIMITED

                                          by /s/ ROBERT H. ALLEN
                                            ------------------------------------
                                          Name: Robert H. Allen
                                          Title:   Chairman of the Board

Dated: June 12, 2002

                                        3


                               INDEX TO EXHIBITS

                            EXHIBIT NUMBER/DOCUMENT



 EXHIBIT
 NUMBER                             DESCRIPTION
 -------                            -----------
         
(a)(1)(A)   Offer to Purchase dated June 12, 2002.
(a)(1)(B)   Solicitation/Recommendation Statement on Schedule 14D-9 of
            Gulf Indonesia, dated June 12, 2002 (the "Recommendation
            Statement").
(a)(1)(C)   Letter of Transmittal.
(a)(1)(D)   Notice of Guaranteed Delivery.
(a)(1)(E)   Letter to Brokers, Dealers, Commercial Banks, Trust
            Companies and other Nominees.
(a)(1)(F)   Form of Letter to Clients for use by Brokers, Dealers,
            Commercial Banks, Trust Companies and other Nominees.
(a)(1)(G)   Guidelines for Certification of Taxpayer Identification
            Number on Substitute Form W-9.
(a)(1)(H)   Press release issued by Conoco Canada, dated June 12, 2002,
            announcing the commencement of the Offer.
(a)(1)(I)   Letter to stockholders of Gulf Indonesia from the Chairman
            of the Board of Gulf Indonesia.
(a)(1)(J)   Summary Advertisement published on June 12, 2002.
(a)(1)(K)   Gulf Indonesia's Annual Report on Form 40-F for the year
            ended December 31, 2001.
(a)(1)(L)   Gulf Indonesia's Annual Report on Form 40-F for the year
            ended December 31, 2000.
(b)         None.
(c)(1)      Valuation and Fairness Opinion of RBC Dominion Securities
            Inc. dated June 6, 2002 (included as Annex A of the
            Recommendation Statement filed herewith as Exhibit
            (a)(1)(B)).
(c)(2)      Presentation of J.P. Morgan Securities Inc. and Merrill
            Lynch & Co. to the management of Conoco and Conoco Canada
            dated May 23, 2002.
(c)(3)      Presentation of J.P. Morgan Securities Inc. and Merrill
            Lynch & Co. to the management of Conoco and Conoco Canada
            dated May 16, 2002.
(c)(4)      Presentation of J.P. Morgan Securities Inc. to the
            management of Conoco and Conoco Canada dated March, 2002.
(d)         Support Agreement dated as of June 7, 2002 by and among
            Conoco, Conoco Canada and Gulf Indonesia.
(f)         Applicable Canadian statutory provisions concerning
            appraisal and dissent rights.
(g)         None.
(h)         None.

EX-99.A.1.A

                                                               EXHIBIT (a)(1)(A)

     This document is important and requires your immediate attention. If you
are in any doubt as to how to deal with it, you should consult your investment
advisor, stockbroker, lawyer or other professional advisor.

                           OFFER TO PURCHASE FOR CASH
                      ALL OF THE OUTSTANDING COMMON SHARES
                                       OF
                        GULF INDONESIA RESOURCES LIMITED
                                      FOR
                        U.S.$13.25 FOR EACH COMMON SHARE
                                       BY
                        CONOCO CANADA RESOURCES LIMITED,
                          A WHOLLY OWNED SUBSIDIARY OF
                                  CONOCO INC.

    THE OFFER EXPIRES AT 6:00 P.M., NEW YORK TIME, ON FRIDAY, JULY 19, 2002,
                         UNLESS THE OFFER IS EXTENDED.

     We, Conoco Canada Resources Limited ("Conoco Canada"), are offering to
purchase all of the outstanding common shares, par value U.S.$0.01 per share, of
Gulf Indonesia Resources Limited ("Gulf Indonesia"), not owned by us. We are
offering to pay U.S.$13.25 for each common share of Gulf Indonesia tendered
pursuant to this offer, net to the seller in cash.

     This offer is subject to certain conditions, including, without limitation,
there having been validly tendered and not properly withdrawn, at the expiration
of the offer, more than 50% of the common shares of Gulf Indonesia then
outstanding (calculated on a fully diluted basis) not owned by us, our directors
and executive officers, our affiliates or certain other persons. See "THE
OFFER -- Certain Conditions to the Offer". Gulf Indonesia has advised us that as
of June 4, 2002, there were approximately 90,038,542 common shares of Gulf
Indonesia outstanding on a fully diluted basis, of which we owned 63,650,000, or
approximately 70.7%. Other conditions to the offer are set forth under "THE
OFFER -- Certain Conditions to the Offer" in this Offer to Purchase. For
purposes of this Offer to Purchase and the Support Agreement (as defined below),
we calculate the fully diluted number of common shares of Gulf Indonesia by
aggregating the number of common shares of Gulf Indonesia issued and outstanding
with the number of common shares of Gulf Indonesia issuable pursuant to options
of Gulf Indonesia having an exercise price of less than U.S.$13.25.
                             ---------------------

     This offer is being made pursuant to a Support Agreement, dated as of June
7, 2002, among Conoco Inc. ("Conoco"), Conoco Canada and Gulf Indonesia (the
"Support Agreement").

     The Board of Directors of Gulf Indonesia and a committee of independent
directors of Gulf Indonesia (the "Independent Committee") have (1) approved the
offer and the Support Agreement and (2) determined that the offer is fair to the
shareholders of Gulf Indonesia (other than Conoco Canada) and in the best
interests of Gulf Indonesia and the shareholders of Gulf Indonesia (other than
Conoco Canada). The Board of Directors of Gulf Indonesia and the Independent
Committee recommend that shareholders of Gulf Indonesia accept the offer and
tender their shares in the offer. See "SUMMARY TERM SHEET," "INTRODUCTION" and
"SPECIAL FACTORS -- Fairness of the Offer".

     RBC Dominion Securities Inc., the Independent Committee's financial
advisor, has issued its opinion that, as of June 6, 2002, the U.S.$13.25 per
share in cash to be received by shareholders of Gulf Indonesia (other than
Conoco Canada) in the offer was fair, from a financial point of view, to such
shareholders. See "SPECIAL FACTORS -- Report of Financial Advisor to the
Independent Committee".

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

                     The Dealer Managers for the Offer are:

     [JP MORGAN LOGO]                                  [MERRILL LYNCH LOGO]
June 12, 2002


                                   IMPORTANT

     This offer is made only for the common shares of Gulf Indonesia and is not
made for any options or rights to acquire common shares of Gulf Indonesia. Any
holder of such options or rights to acquire common shares of Gulf Indonesia who
wishes to accept the offer should exercise the options or rights in order to
obtain common shares of Gulf Indonesia and tender such common shares of Gulf
Indonesia in the offer. Gulf Indonesia is required by the terms of the Support
Agreement to accelerate the vesting of any currently unvested Gulf Indonesia
options and accelerate the release of any shares of Gulf Indonesia held in a
Gulf Indonesia employee share purchase plan so that any entitlement pursuant
thereto to shares of Gulf Indonesia becomes exercisable or fully vested prior to
the expiration of our offer. In addition, Gulf Indonesia is permitted by the
terms of the Support Agreement to cancel Gulf Indonesia options in exchange for
a cash payment equal to the difference, if any, between the price we are
offering per share of Gulf Indonesia and the applicable option exercise price.
All options not exercised or cashed out prior to the expiration of our offer
shall cease to be exercisable thereafter.

     If you wish to tender your common shares of Gulf Indonesia in this offer,
you should either (1) complete and sign the enclosed Letter of Transmittal (or a
facsimile copy thereof) in accordance with the instructions in the Letter of
Transmittal, have your signature guaranteed (if required by Instruction 1 to the
Letter of Transmittal), mail or deliver the Letter of Transmittal (or a
facsimile copy thereof) and any other required documents to The Bank of New
York, our Depositary, and either deliver the certificates for your common shares
of Gulf Indonesia along with the Letter of Transmittal to the Depositary or
deliver your common shares of Gulf Indonesia pursuant to the procedure for
book-entry transfer set forth under "THE OFFER -- Procedure for Tendering
Shares" or (2) request your broker, dealer, commercial bank, trust company or
other nominee to tender your common shares of Gulf Indonesia.

     If you desire to tender your common shares of Gulf Indonesia and
certificates evidencing your shares are not immediately available, or if you
cannot comply with the procedure for book-entry transfer described in this Offer
to Purchase on a timely basis, or if you cannot deliver all required documents
to our Depositary prior to the expiration of the offer, you may be able to
tender your shares by following the procedure for guaranteed delivery set forth
under "THE OFFER -- Procedure for Tendering Shares".

     Copies of this Offer to Purchase, the Letter of Transmittal or other
materials related to this offer must not be mailed to or otherwise distributed
or sent in, into or from any country where such distribution or offering would
require any additional measures to be taken or would be in conflict with any law
or regulation of such country or any political subdivision thereof. This Offer
to Purchase may not be used for, or in connection with, any offer to, or
solicitation by, anyone in any jurisdiction or under any circumstances in which
such offer or solicitation is not authorized or is unlawful. However, we or our
agents may, in our or their sole discretion, take such actions as may be deemed
necessary to lawfully extend this offer to holders of common shares of Gulf
Indonesia in such jurisdiction.

     Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other materials related to this
offer may be directed to the Information Agent or the Dealer Managers at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase.

     Neither the Securities and Exchange Commission nor any U.S. state or
Canadian provincial securities commission has approved or disapproved of this
offer or any transaction described herein or passed upon the fairness or merits
of this offer or the transactions described herein or upon the accuracy or
adequacy of the information contained in this Offer to Purchase. Any
representation to the contrary is a criminal offense in the United States.

                                        2


                               TABLE OF CONTENTS



                                                              PAGE
                                                              ----
                                                           
SUMMARY TERM SHEET..........................................    5
INTRODUCTION................................................   10
SPECIAL FACTORS.............................................   12
Background of the Offer.....................................   12
Purpose and Certain Effects of the Offer and the Second-Step
  Acquisition...............................................   16
Reasons for the Offer and Plans for Gulf Indonesia..........   17
Fairness of the Offer.......................................   18
Report of Financial Advisor to the Independent Committee....   20
Valuation and Fairness Opinion..............................   20
Position of Conoco and Conoco Canada Regarding Fairness of
  the Offer.................................................   24
Summary of Certain Analyses of JPMorgan and Merrill Lynch...   25
Beneficial Ownership of Shares..............................   29
Transactions and Arrangements Concerning the Shares.........   32
Interest of Certain Persons in the Offer....................   32
Certain Related Party Transactions..........................   34
THE OFFER...................................................   36
 1. Terms of the Offer; Expiration Date.....................   36
 2. Acceptance for Payment and Payment for Shares...........   37
 3. Procedure for Tendering Shares..........................   38
 4. Rights of Withdrawal....................................   41
 5. Certain Conditions to the Offer.........................   42
 6. Certain U.S. Federal Income Tax Considerations..........   43
 7. Certain Canadian Federal Income Tax Considerations......   45
 8. Price Range of Gulf Indonesia Common Shares;
    Dividends...............................................   49
 9. Certain Information Concerning Gulf Indonesia...........   50
10. Certain Information Concerning Conoco and Conoco
    Canada..................................................   52
11. Appraisal and Dissent Rights; Rule 13e-3................   53
12. Source and Amount of Funds; Fees and Expenses...........   53
13. Certain Legal Matters...................................   54
14. Certain Effects of the Offer on the Market for the
    Shares..................................................   54
15. Miscellaneous...........................................   55
THE SECOND-STEP ACQUISITION.................................   56
General.....................................................   56
Compulsory Acquisition and Certain Appraisal Rights.........   56
Statutory Transaction and Certain Appraisal Rights..........   57
Other Alternatives..........................................   58
Judicial Developments.......................................   58
THE SUPPORT AGREEMENT.......................................   58
SHAREHOLDERS' STATUTORY RIGHTS..............................   64
DIRECTORS' APPROVAL.........................................   64
APPROVAL AND CERTIFICATE....................................   65


Schedule A -- Information Concerning the Directors and Executive Officers of
Conoco, Conoco Canada and Gulf Indonesia

Schedule B -- Transactions and Arrangements Concerning Gulf Indonesia Common
Shares

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

                                        3


                           EXCHANGE RATE INFORMATION

     ALL DOLLAR REFERENCES IN THIS OFFER TO PURCHASE ARE EXPRESSED IN U.S.
DOLLARS. The following table sets forth, for the dates indicated, certain
exchange rates (the "Noon Buy Rates"), presented as Canadian dollars per
U.S.$1.00, based on the rate quoted by the Federal Reserve Bank of New York for
Canadian dollars per U.S.$1.00.

                                                           
March 29, 2002..............................................  1.5958
December 31, 2001...........................................  1.5925
September 28, 2001..........................................  1.5797
June 29, 2001...............................................  1.5175
March 30, 2001..............................................  1.5784



     The Noon Buy Rate on June 11, 2002 was U.S.$1.00 = Cdn.$1.5383.

                                        4


                               SUMMARY TERM SHEET

     The following is only a summary of the principal provisions of the Offer to
Purchase and the Letter of Transmittal and is qualified in its entirety by the
more detailed information in the remainder of this Offer to Purchase and in the
Letter of Transmittal.

     We urge you to read carefully the remainder of this Offer to Purchase and
the Letter of Transmittal because the information in this summary term sheet may
not answer all your questions and additional important information is contained
in the remainder of this Offer to Purchase and the Letter of Transmittal.

Q: WHO IS OFFERING TO BUY MY SECURITIES?

A: Conoco Canada Resources Limited is offering to buy your common shares of Gulf
   Indonesia pursuant to the terms and conditions of this Offer to Purchase.
   Conoco Canada Resources Limited, a Nova Scotia corporation and a wholly owned
   subsidiary of Conoco, is engaged in the exploration for and the development
   and production of oil and gas. Conoco is a major, integrated, global energy
   company whose principal executive offices are located in Houston, Texas.

   On November 18, 2001, Conoco entered into an Agreement and Plan of Merger
   with Phillips Petroleum Company. Upon the closing of the merger, the new
   company, which will be named ConocoPhillips, will be the third-largest
   integrated U.S. energy company based on market capitalization and oil and gas
   reserves and production. Worldwide, it will be the sixth-largest energy
   company based on hydrocarbon reserves and the fifth-largest global refiner.
   The Conoco-Phillips merger is expected to close in the second half of 2002.
   See "THE OFFER -- Certain Information Concerning Conoco and Conoco Canada".

Q: DOES CONOCO CANADA CURRENTLY OWN ANY COMMON SHARES OF GULF INDONESIA?

A: As of June 4, 2002, we owned 63,650,000 of the outstanding common shares of
   Gulf Indonesia, or approximately 70.7% on a fully diluted basis. As a result
   of our ownership level in Gulf Indonesia, we exercise significant control
   over Gulf Indonesia.

Q: WHAT IS THE OFFER PRICE AND WHAT IS THE FORM OF PAYMENT?

A: We are offering to pay $13.25 for each common share of Gulf Indonesia
   tendered pursuant to our offer, net to the seller in cash, without interest
   thereon. As of May 24, 2002, the last trading day prior to the first public
   announcement of the offer, the closing price of a common share of Gulf
   Indonesia on the New York Stock Exchange was $10.75. Our offer represents a
   premium of approximately 23% over the closing price on that date.

   As of June 11, 2002, the last trading day prior to the commencement of the
   offer, the closing price of a common share of Gulf Indonesia on the New York
   Stock Exchange was $13.16. You should obtain a recent market quotation for
   common shares of Gulf Indonesia prior to deciding whether to tender your
   shares.

Q: WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?

A: We are offering to buy all the outstanding common shares of Gulf Indonesia
   not owned by us, including any shares which may become outstanding upon the
   exercise of options or rights to acquire common shares of Gulf Indonesia.

Q: WHAT IS THE NUMBER OF SHARES THAT MUST BE TENDERED FOR YOU TO CONSUMMATE THE
   OFFER?

A: We are only obligated to purchase any tendered shares if the total number of
   shares validly tendered and not properly withdrawn at the expiration of the
   offer is more than 50% of the common shares of Gulf Indonesia then
   outstanding (calculated on a fully diluted basis) not owned by us, our
   directors or executive officers, our affiliates or certain of their directors
   and executive officers or any person acting jointly or in concert with us in
   connection with the offer. See "THE OFFER -- Certain Conditions to the Offer"
   and "THE SUPPORT AGREEMENT". This condition is referred to herein as the
   "Minimum Tender Condition". We may not waive the Minimum Tender Condition
   without the consent of Gulf Indonesia.

                                        5


Q: IS CONOCO CANADA ATTEMPTING TO ACQUIRE ALL OF GULF INDONESIA?

A: We are making the offer in order to acquire all the outstanding common shares
   of Gulf Indonesia not owned by us. If we consummate the offer but do not then
   own 100% of Gulf Indonesia, we have agreed to use our best efforts to
   consummate a second-step transaction to acquire all remaining common shares
   of Gulf Indonesia not then owned by us if the Minimum Tender Condition has
   been satisfied and the other conditions to our obligation to effect such
   second-step transaction have been satisfied or waived. See "THE SECOND-STEP
   ACQUISITION" and "THE SUPPORT AGREEMENT.

   If more than 90% of the outstanding common shares of Gulf Indonesia not
   already owned by us, our affiliates or our associates are purchased by us in
   the offer, we have agreed to use our best efforts to execute a compulsory
   acquisition under the laws of New Brunswick, Canada if all conditions to such
   compulsory acquisition have been satisfied or waived. A compulsory
   acquisition would not require a shareholder vote of Gulf Indonesia. If a
   compulsory acquisition is not available and the Minimum Tender Condition is
   satisfied, we have agreed to use our best efforts to effect a statutory
   transaction under the laws of New Brunswick, Canada, such as an amalgamation,
   arrangement or share consolidation, if all conditions to the statutory
   transaction have been satisfied or waived. Such a statutory transaction would
   require the approval of at least 66 2/3% of the then outstanding shares of
   Gulf Indonesia voting on the transaction and the approval of a simple
   majority of the votes cast by "minority" holders of such shares. Because
   Conoco Canada may generally treat shares acquired pursuant to the offer as
   "minority" shares and vote them, approval of the statutory transaction is
   assured if the Minimum Tender Condition has been satisfied. See "THE
   SECOND-STEP ACQUISITION", "THE OFFER -- Certain Conditions to the Offer" and
   "THE SUPPORT AGREEMENT -- Certain Conditions to the Second-Step Acquisition".

   Shareholders who do not tender their shares in the offer will receive the
   same amount of cash per share in any second-step transaction that they would
   have received had they tendered their shares in the offer, subject to their
   right to pursue appraisal and dissent rights under the laws of New Brunswick,
   Canada. See "THE SECOND-STEP ACQUISITION". Therefore, if the second-step
   transaction occurs and you do not perfect your appraisal and dissent rights,
   the only differences to you between tendering your common shares of Gulf
   Indonesia and not tendering your common shares of Gulf Indonesia are that you
   will be paid earlier if you tender your common shares of Gulf Indonesia and
   different tax treatments may apply. See "THE OFFER -- Certain U.S. Federal
   Income Tax Considerations" and "THE OFFER -- Certain Canadian Federal Income
   Tax Considerations".

Q: WHAT WILL BE THE EFFECT OF THE OFFER AND THE SUBSEQUENT TRANSACTION?

A: This is a "going private" transaction under U.S. law. If the offer and
   subsequent second-step transaction are successful:

   - Conoco Canada will own all the equity interests in Gulf Indonesia and
     Conoco Canada will be entitled to all the benefits and all risks of loss
     associated with such ownership;

   - Current holders of common shares of Gulf Indonesia (other than Conoco
     Canada) will no longer have any interest in Gulf Indonesia or its assets,
     book value or future earnings or growth and Conoco Canada will hold a 100%
     interest in Gulf Indonesia's assets, book value, future earnings and
     growth;

   - Conoco Canada will have the right to appoint all directors to the board of
     directors of Gulf Indonesia;

   - Gulf Indonesia will no longer be a public company and Gulf Indonesia will
     no longer file periodic reports (including financial information) with the
     U.S. Securities and Exchange Commission or any Canadian securities
     commission; and

   - Common shares of Gulf Indonesia will no longer trade on the New York Stock
     Exchange.

     See "SPECIAL FACTORS -- Purpose and Certain Effects of the Offer and the
Second-Step Acquisition" and "THE OFFER -- Certain Effects of the Offer on the
Market for the Shares".

                                        6


Q: WHAT DO THE BOARD OF DIRECTORS OF GULF INDONESIA AND THE INDEPENDENT
   COMMITTEE THINK OF THE OFFER?

A: The Board of Directors of Gulf Indonesia and the Independent Committee have
   (1) approved the offer and the Support Agreement and (2) determined that the
   offer is fair to the shareholders of Gulf Indonesia (other than Conoco
   Canada) and in the best interests of Gulf Indonesia and the shareholders of
   Gulf Indonesia (other than Conoco Canada). The Board of Directors of Gulf
   Indonesia and the Independent Committee recommend that shareholders of Gulf
   Indonesia accept the offer and tender their shares in the offer. See "SPECIAL
   FACTORS -- Fairness of the Offer".



   In addition, RBC Dominion Securities Inc., the Independent Committee's
   financial advisor, has issued its opinion that, as of June 6, 2002, the
   $13.25 per share price in cash, to be received by shareholders of Gulf
   Indonesia (other than Conoco Canada) in the offer was fair, from a financial
   point of view, to such shareholders. See "SPECIAL FACTORS -- Report of
   Financial Advisor to the Independent Committee".

Q: WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?

A: If you are the record owner of your common shares of Gulf Indonesia and you
   tender your shares to us in the offer, you will not have to pay brokerage
   fees or similar expenses. If you own your shares through a broker, commercial
   bank or other nominee, and your broker, commercial bank or nominee tenders
   your shares on your behalf, your broker, commercial bank or nominee may
   charge you a fee for doing so. You should consult your broker, commercial
   bank or nominee to determine whether any charges will apply.

Q: DOES CONOCO CANADA HAVE THE FINANCIAL RESOURCES TO PAY FOR THE SHARES?

A: Yes. Conoco Canada will obtain funds to consummate the offer from Conoco.
   Conoco has the financial resources to fund the offer described in this Offer
   to Purchase. We do not think our financial condition is relevant to your
   decision whether to tender in the Offer because the form of payment consists
   solely of cash and the offer is not conditioned on our obtaining any
   financing. See "THE OFFER -- Source and Amount of Funds; Fees and Expenses".

Q: HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER MY SHARES IN THE OFFER?

A: You will have until 6:00 p.m., New York time, on Friday, July 19, 2002, which
   is the scheduled expiration date of the offer, to tender your common shares
   of Gulf Indonesia in the offer, unless we decide to extend the offer. See
   "THE OFFER -- Terms of the Offer; Expiration Date". Please be aware that if
   your shares are held by a broker or other nominee, the broker or nominee may
   require advance notification before the expiration date.

Q: CAN THE OFFER BE EXTENDED AND HOW WILL I BE NOTIFIED IF THE OFFER IS
   EXTENDED?

A: We may elect to extend the offer on one or more occasions, subject to the
   terms of the Support Agreement. If we extend the offer, we will make a public
   announcement of the extension no later than 9:00 a.m., New York time, on the
   next business day following the scheduled expiration date of the offer. The
   press release would state the approximate number of shares tendered as of
   that time and would announce the extended expiration date. We would also
   deliver a notice to each person to whom this Offer to Purchase was sent and
   would inform The Bank of New York, our Depositary, of the extension. See "THE
   OFFER -- Terms of the Offer; Expiration Date".

Q: HOW DO I ACCEPT THE OFFER AND TENDER MY SHARES?

A: If you hold certificates for your shares, you should complete the enclosed
   Letter of Transmittal in accordance with the instructions therein and enclose
   all documents required by it, including your share certificates, and send
   them to the Depositary at the address listed on the back cover of this
   document. If your broker holds your shares for you in "street name", you must
   instruct your broker to tender your shares on your behalf. In any case, the
   Depositary must receive all required documents before the expiration date of
   the offer, which is Friday, July 19, 2002, unless extended.

                                        7


   If you cannot comply with any of these procedures, you still may be able to
   tender your common shares of Gulf Indonesia by using the guaranteed delivery
   procedure described in this Offer to Purchase. See "THE OFFER -- Procedure
   for Tendering Shares".

Q: IF I ACCEPT THE OFFER, WHEN WILL I GET PAID?

A: If the conditions to the offer are satisfied and we consummate the offer, you
   will receive payment for the common shares of Gulf Indonesia you tendered
   promptly following the expiration of the offer. See "THE OFFER -- Acceptance
   for Payment and Payment for Shares".

Q: CAN I WITHDRAW MY PREVIOUSLY TENDERED SHARES?

A: You can properly withdraw your previously tendered shares at any time prior
   to the time we accept for payment common shares of Gulf Indonesia that have
   been validly tendered in the offer. In addition, if we have not accepted your
   shares for payment by August 11, 2002, you can withdraw them at any time on
   or after August 11, 2002 until we accept your shares for payment. Once common
   shares of Gulf Indonesia are accepted for payment, they cannot be withdrawn
   unless we have not deposited with the Depositary funds sufficient to pay for
   such shares within three business days of such shares having been accepted
   for payment. See "THE OFFER -- Rights of Withdrawal".

   In order to properly withdraw your previously tendered common shares of Gulf
   Indonesia, you, or your broker if your shares are held in "street name", must
   deliver written notice of withdrawal, by mail or facsimile, to the Depositary
   at the address or facsimile number listed on the back cover of this document
   and such delivery must be timely received by the Depositary. The notice of
   withdrawal must include the name of the shareholder that tendered the shares,
   the number of shares to be withdrawn and the name in which the tendered
   shares are registered. See "THE OFFER -- Rights of Withdrawal".

Q: WILL I HAVE THE RIGHT TO HAVE MY GULF INDONESIA SHARES APPRAISED?

A: Holders of common shares of Gulf Indonesia who do not tender in the offer
   will have the right to exercise appraisal and dissent rights only if the
   second-step transaction to acquire all common shares of Gulf Indonesia not
   tendered in the offer takes place. See "THE OFFER -- Appraisal and Dissent
   Rights; Rule 13e-3". In order to perfect appraisal and dissent rights you
   must not tender in the offer and must carefully follow the steps set forth
   under "THE SECOND-STEP ACQUISITION".

Q: HOW WILL U.S. TAXPAYERS BE TAXED FOR U.S. FEDERAL INCOME TAX PURPOSES?

A: In the case of U.S. persons, the receipt of cash for shares will be a taxable
   transaction for U.S. Federal income tax purposes, and may also be a taxable
   transaction under applicable state, local or foreign income or other tax
   laws. U.S. persons will generally recognize gain or loss in an amount equal
   to the difference between (1) the cash they receive and (2) their adjusted
   tax basis in their tendered shares. That gain or loss will be a capital gain
   or loss if the shares are a capital asset in such U.S. person's hands, and
   will be long-term capital gain or loss if the shares have been held for more
   than one year at the time the offer is completed. There may be other tax
   consequences to you if a second-step transaction occurs, depending on the
   structure of the second-step transaction. We urge you to consult your tax
   advisor as to the particular tax consequences of the offer to you. See "THE
   OFFER -- Certain U.S. Federal Income Tax Considerations".

Q: HOW WILL TAXPAYERS BE TAXED FOR CANADIAN FEDERAL INCOME TAX PURPOSES?

A: The receipt of cash for your shares will be a taxable transaction for
   Canadian federal income tax purposes, and may also be a taxable transaction
   under applicable provincial, territorial or foreign income or other tax laws.
   If you hold your shares as capital property, you will generally recognize a
   capital gain (or capital loss) to the extent that the cash you receive
   exceeds (or is less than) your adjusted cost base in your tendered shares and
   any reasonable costs of disposition. If you are a non-resident of Canada, you
   may not be subject to Canadian federal income tax on the disposition of your
   shares if you hold your shares as capital property and they do not constitute
   "taxable Canadian property" to you or if the terms of an applicable income
   tax treaty provide an exemption from such tax. There may be other tax
   consequences to
                                        8

'
   you if a second-step transaction occurs, depending on the structure of the
   second-step transaction. We urge you to consult your tax advisor as to the
   particular tax consequences of the offer to you. See "THE OFFER -- Certain
   Canadian Federal Income Tax Considerations".

Q: WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?

A: If you have questions or you need assistance, you should contact the
   Information Agent or the Dealer Managers at the following addresses and
   telephone numbers:

   INFORMATION AGENT

   INNISFREE M&A INCORPORATED
   501 Madison Avenue, 20th Floor
   New York, New York 10022
   Toll free: (888) 750-5834
   Bankers and Brokers call collect: (212) 750-5833

   DEALER MANAGERS

   J.P. MORGAN SECURITIES INC.
   277 Park Avenue, 9th Floor
   New York, NY 10172
   Toll free: (866) 262-0777
   Telephone: (212) 622-2624

   MERRILL LYNCH & CO.
   Bow Valley Square IV
   Suite 1650, 250-6th Avenue S.W.
   Calgary, Alberta
   Canada T2P 3H7
   Telephone: (403) 231-7318

                                        9


To the Shareholders of Gulf Indonesia Resources Limited:

                                  INTRODUCTION

     Conoco Canada Resources Limited, a Nova Scotia, Canada corporation ("Conoco
Canada") and a wholly owned subsidiary of Conoco Inc., a Delaware corporation
("Conoco"), is offering to purchase all the outstanding common shares, par value
$0.01 per share (the "Gulf Indonesia Common Shares" or the "Shares"), of Gulf
Indonesia Resources Limited, a New Brunswick, Canada corporation ("Gulf
Indonesia"), not already owned by Conoco Canada at a purchase price of $13.25
per Gulf Indonesia Common Share, net to the seller in cash, without interest
thereon (the "Offer Price"), on the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer").

     If you are the record owner of your Gulf Indonesia Common Shares and tender
directly to the Depositary (as defined), you will not be obligated to pay
brokerage fees or commissions or, except as otherwise described in Instruction 6
of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by
us pursuant to the Offer. If you hold your Shares through a broker, commercial
bank or other nominee, you should check with that institution as to whether it
will charge any service fees. We will pay all charges and expenses of The Bank
of New York, as Depositary (the "Depositary"), Innisfree M&A Incorporated, as
Information Agent (the "Information Agent"), and J.P. Morgan Securities Inc.
("JPMorgan") and Merrill Lynch & Co. ("Merrill Lynch"), as Dealer Managers (the
"Dealer Managers"), incurred in connection with the Offer.

     The Offer is being made pursuant to a Support Agreement, dated as of June
7, 2002, among Conoco, Conoco Canada and Gulf Indonesia (the "Support
Agreement"). The Support Agreement provides that if the Offer is consummated and
the Minimum Tender Condition has been satisfied and the other conditions to the
second-step transaction have been satisfied or waived, Conoco Canada will use
its best efforts, as soon as practicable after completion of the Offer, to
consummate a second-step transaction, pursuant to which Conoco Canada will
acquire all outstanding Gulf Indonesia Common Shares not tendered in the Offer
or otherwise owned by Conoco Canada (the "Second-Step Acquisition"). The
Second-Step Acquisition will be effected either through a compulsory acquisition
or a statutory transaction under New Brunswick law, such as an amalgamation,
arrangement or share consolidation. See "THE SECOND-STEP ACQUISITION" and "THE
SUPPORT AGREEMENT".

     If more than 90% of the outstanding Gulf Indonesia Common Shares not
already owned by Conoco Canada, its affiliates or its associates are purchased
by Conoco Canada in the Offer, Conoco Canada has agreed to use its best efforts
to execute a compulsory acquisition under New Brunswick law if all conditions to
such compulsory acquisition have been satisfied or waived. A compulsory
acquisition would not require any shareholder vote of Gulf Indonesia. If a
compulsory acquisition is not available and the Minimum Tender Condition is
satisfied, Conoco Canada has agreed to use its best efforts to effect a
statutory transaction under New Brunswick law, such as an amalgamation,
arrangement or share consolidation, if all conditions to the statutory
transaction have been satisfied or waived. Such a statutory transaction would
require the approval of at least 66 2/3% of the then outstanding Shares of Gulf
Indonesia voting on the transaction and the approval of a simple majority of the
votes cast by "minority" holders of such Shares. Because Conoco Canada may
generally treat Shares acquired pursuant to the Offer as "minority" Shares and
vote them, approval of the statutory transaction is assured if the Minimum
Tender Condition has been satisfied. See "THE SECOND-STEP ACQUISITION", "THE
OFFER -- Certain Conditions to the Offer" and "THE SUPPORT AGREEMENT -- Certain
Conditions to the Second-Step Acquisition".

     Shareholders who do not tender their Shares in the Offer will receive the
same amount of cash per Share in any such Second-Step Acquisition that they
would have received had they tendered their Shares in the Offer, subject to
their right to pursue appraisal and dissent rights under New Brunswick law.
Therefore, if the Second-Step Acquisition occurs and you do not perfect your
appraisal and dissent rights, the only differences to you between tendering your
Shares and not tendering your Shares are that you will be paid earlier if you
tender your Shares and different tax treatments may apply. See "THE SECOND-STEP
ACQUISITION",

                                        10


"THE OFFER -- Certain U.S. Federal Income Tax Considerations" and "THE
OFFER -- Certain Canadian Federal Income Tax Considerations".

     The purpose of the Offer and the Second-Step Acquisition is for Conoco
Canada and its affiliates to acquire all the outstanding shares of Gulf
Indonesia. The timing of the completion of the Offer and the Second-Step
Acquisition will depend on a variety of factors and legal requirements,
including the number of Shares acquired by Conoco Canada pursuant to the Offer
and whether the conditions to the Offer and the Second-Step Acquisition set
forth under "THE OFFER -- Certain Conditions to the Offer" and "THE SUPPORT
AGREEMENT -- Certain Conditions to the Second-Step Acquisition" have been
satisfied or waived. The Second-Step Acquisition will not occur unless the Offer
has been consummated and the conditions to the Second-Step Acquisition have been
satisfied or waived.

     THE BOARD OF DIRECTORS OF GULF INDONESIA AND A COMMITTEE OF INDEPENDENT
DIRECTORS OF GULF INDONESIA (THE "INDEPENDENT COMMITTEE") HAVE (1) APPROVED THE
OFFER AND THE SUPPORT AGREEMENT AND (2) DETERMINED THAT THE OFFER IS FAIR TO THE
SHAREHOLDERS OF GULF INDONESIA (OTHER THAN CONOCO CANADA) AND IN THE BEST
INTERESTS OF GULF INDONESIA AND THE SHAREHOLDERS OF GULF INDONESIA (OTHER THAN
CONOCO CANADA). THE BOARD OF DIRECTORS OF GULF INDONESIA AND THE INDEPENDENT
COMMITTEE RECOMMEND THAT SHAREHOLDERS OF GULF INDONESIA ACCEPT THE OFFER AND
TENDER THEIR SHARES IN THE OFFER. SEE "SPECIAL FACTORS -- FAIRNESS OF THE
OFFER".

     RBC Dominion Securities Inc. ("RBC"), the Independent Committee's financial
advisor, has issued its opinion that, as of June 6, 2002, the $13.25 per Share
price in cash to be received by shareholders of Gulf Indonesia (other than
Conoco Canada) in the Offer was fair, from a financial point of view, to such
shareholders. See "SPECIAL FACTORS -- Report of Financial Advisor to the
Independent Committee".

     THE OFFER IS CONDITIONED UPON THE SATISFACTION OR WAIVER OF THE CONDITIONS
DESCRIBED UNDER "THE OFFER -- CERTAIN CONDITIONS TO THE OFFER".

     We reserve the right, subject to the terms of the Support Agreement and
U.S. and Canadian provincial securities rules and regulations, to amend or waive
any one or more of the conditions of the Offer. See "THE OFFER -- Terms of the
Offer; Expiration Date".

     This Offer to Purchase includes certain forward-looking statements. These
statements appear throughout this Offer to Purchase and include statements
regarding our intent, belief or current expectations of, including statements
concerning our plans with respect to, the acquisition of all of the outstanding
Gulf Indonesia Common Shares. Such forward-looking statements are not guarantees
of future performance or events and involve risks and uncertainties. Actual
results may differ materially from those described in such forward-looking
statements as a result of various factors. Factors that might affect such
forward-looking statements include, among other things:

     - general economic, capital market and business conditions;

     - terrorist attacks on the United States and international targets;

     - changes in government regulation, including securities regulations and
       other laws;

     - risks associated with the political situation in Indonesia;

     - the risks and uncertainties described in Conoco's and Gulf Indonesia's
       filings with the Securities and Exchange Commission (the "SEC") pursuant
       to the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
       and with certain Canadian securities commissions pursuant to Canadian
       provincial securities legislation;

     - changes in tax law requirements, including tax rate changes, new tax laws
       and revised tax law interpretations;

     - competitive factors in the industries in which we and Gulf Indonesia
       operate; and

     - the ability to execute fully our business strategy after taking Gulf
       Indonesia private.

     THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY DECISION WITH
RESPECT TO THE OFFER.

                                        11


                                SPECIAL FACTORS

BACKGROUND OF THE OFFER

     In August 1988, Conoco Canada (formerly Gulf Canada Resources Limited
("Gulf Canada")), acquired Asamera Inc. In 1994, various assets and liabilities
of Asamera Inc., including those relating to the business in Indonesia, were
restructured under a new Canadian corporation, Asamera Canada Limited. In 1997,
Asamera Canada Limited acquired other assets relating to the Indonesian business
from Gulf Canada and transferred to Gulf Canada its interests in various
subsidiaries that were not carrying on business in Indonesia. Asamera Canada
Limited was continued under the Business Corporations Act (New Brunswick) (the
"NBCA") and changed its name to Gulf Indonesia Resources Limited. Gulf Indonesia
operated as a wholly owned subsidiary of Gulf Canada until September 1997.

     On September 29, 1997, Gulf Indonesia completed a public offering of
approximately 27.6% of its Shares, which are publicly traded on the New York
Stock Exchange. Gulf Canada retained approximately a 72.4% equity ownership
interest in Gulf Indonesia.

     On May 28, 2001, Conoco, Conoco Northern Inc., a wholly owned subsidiary of
Conoco ("Conoco Northern"), and Gulf Canada entered into a Support Agreement,
pursuant to which Conoco agreed to cause Conoco Northern to acquire all the
outstanding ordinary shares of Gulf Canada through a cash tender offer to all
the holders of ordinary shares of Gulf Canada. On June 7, 2001, Conoco Northern
commenced a cash tender offer for all the outstanding ordinary shares of Gulf
Canada. On July 16, 2001, Conoco Northern acquired all the outstanding shares of
Gulf Canada (which was subsequently renamed Conoco Canada Resources Limited),
and, as a result, Conoco acquired its indirect equity ownership interest in Gulf
Indonesia. After Conoco obtained control of Gulf Indonesia, designees of Conoco
were elected to the Board of Directors of Gulf Indonesia, including Robert W.
Goldman, Malcolm D. Griffiths, Rick A. Harrington, Francis H. James, James D.
McColgin, Paul C. Warwick and Dr. George E. Watkins.

     On July 26, 2001, Conoco and Conoco Canada filed with the SEC a Schedule
13D (the "Schedule 13D") indicating that they were considering various
alternatives with respect to Conoco Canada's ownership interest in Gulf
Indonesia.

     During late 2001 and early 2002, Conoco and Conoco Canada evaluated various
alternatives with respect to Conoco Canada's ownership interest in Gulf
Indonesia, including an asset swap whereby Gulf Indonesia and Conoco or an
affiliate of Conoco would exchange certain oil and gas producing properties,
cooperative arrangements between Gulf Indonesia and Conoco in Indonesia, the
possible combination of Gulf Indonesia with Conoco's other Indonesian operations
and the acquisition by Conoco Canada of the portion of Gulf Indonesia which it
did not own.

     At a meeting of the Board of Directors of Conoco on February 19, 2002, Mr.
Robert E. McKee, III, Executive Vice President, Exploration Production of
Conoco, indicated to the Board of Directors of Conoco that management continued
to evaluate alternatives with respect to Conoco Canada's ownership interest in
Gulf Indonesia.

     JPMorgan provided Conoco with financial advice in respect of its
acquisition of Gulf Canada and has provided Conoco and Conoco Canada with
financial advice with respect to Conoco Canada's interest in Gulf Indonesia
since the Gulf Canada acquisition. In March 2002, Conoco also requested Merrill
Lynch to provide it with additional financial advice and assistance in
connection with its exploration of various alternatives with respect to Conoco
Canada's ownership interest in Gulf Indonesia.

     On March 25, 2002, Mr. McKee called Mr. Robert H. Allen, the Chairman of
the Board of Directors of Gulf Indonesia, to indicate that Conoco was
considering various alternatives with respect to Gulf Indonesia, including the
acquisition of all of the outstanding Gulf Indonesia Common Shares not already
owned by

                                        12


Conoco Canada. In view of Conoco's ongoing internal evaluations regarding Gulf
Indonesia and the possibility of future discussions with Gulf Indonesia, Mr.
McKee suggested that an independent committee of the Board of Directors of Gulf
Indonesia be formed to ensure that Gulf Indonesia would be in a position to
review and respond to any proposal in the event Conoco or Conoco Canada decided
to make a proposal.

     Subsequent to the conversation on March 25, 2002, Mr. Allen sought legal
advice regarding the formation and the mandate of the Independent Committee.

     On April 1, 2002, the Board of Directors of Gulf Indonesia formed the
Independent Committee to take such steps as it considered necessary to be in a
position to receive, consider and make a recommendation regarding any proposal
that may be made by Conoco or Conoco Canada. Mr. Allen, Mr. John R. Sanders and
Dr. Ir. Kuntoro Mangkusubroto, each an independent director of Gulf Indonesia,
were appointed to the Independent Committee.

     On April 1, 2002, the Independent Committee met to discuss potential
advisors and determined, upon the recommendation of Mr. Allen, to retain Macleod
Dixon LLP to act as its legal counsel. At this meeting, Mr. Allen was appointed
Chairman of the Independent Committee.

     Subsequently, the Independent Committee, with the assistance of Macleod
Dixon, selected Patterson Palmer and Vinson & Elkins, in New Brunswick and the
United States, respectively, to act as counsel in respect to the laws of those
jurisdictions and considered a number of investment banks to act as the
Independent Committee's financial advisor. In addition, the Independent
Committee, with the assistance of Macleod Dixon, selected Philip Kingstone, a
legal consultant based in Indonesia, to assist its financial advisors with their
due diligence efforts in Indonesia.

     On April 9, 2002, the Independent Committee retained RBC, effective April
1, 2002, to serve as financial advisor to the Independent Committee and, if
required, to prepare and deliver a valuation and fairness opinion. The
Independent Committee satisfied itself that RBC was a qualified and independent
advisor and competent to provide the financial services required by the
Independent Committee.

     Also on April 9, 2002, the Independent Committee met with its legal and
financial advisors. At this meeting, Macleod Dixon advised the Independent
Committee of its legal duties and responsibilities in the discharge of its
duties.

     Over the next several weeks, RBC conducted a review of the business,
financial condition, results of operations, prospects, business strategy and
competitive position of Gulf Indonesia, as well as a review of the industry in
general. The purpose of RBC's review was to put it in a position to perform a
valuation analysis of Gulf Indonesia.

     On May 5, 2002, the Independent Committee met with its legal and financial
advisors and received an update on RBC's due diligence investigation of Gulf
Indonesia.

     During May 2002, representatives from RBC held a number of meetings and
conference calls with representatives of Conoco and Conoco's financial advisors,
JPMorgan and Merrill Lynch, to discuss financial and other due diligence with
respect to Gulf Indonesia. During the course of these meetings, Conoco stated
that it continued to evaluate alternatives with respect to its interest in Gulf
Indonesia and that it was not currently interested in disposing of its ownership
interest in Gulf Indonesia.

     On May 14, 2002 and May 15, 2002, meetings of the Independent Committee
were held in Indonesia, during which RBC presented to the Independent Committee
the preliminary results of its valuation analysis of Gulf Indonesia and the
management of Gulf Indonesia presented an update on Gulf Indonesia's business
plan and operations.

     On May 21, 2002, Mr. McKee discussed with the Board of Directors of Conoco
the status of Conoco's evaluation of various alternatives with respect to Conoco
Canada's ownership interest in Gulf Indonesia. The Board of Directors of Conoco
requested that a recommendation promptly be made with respect to such
alternatives to the Executive Committee of the Board of Directors of Conoco.

                                        13


     On May 22, 2002, the Independent Committee met with RBC to discuss RBC's
valuation analysis of Gulf Indonesia. At this meeting, RBC presented and
explained its valuation analysis to the Independent Committee. Also on May 22,
2002, Mr. Allen advised the Board of Directors of Gulf Indonesia that the
Independent Committee had completed its valuation analysis of Gulf Indonesia.

     On May 24, 2002, a meeting of the Executive Committee of the Board of
Directors of Conoco was held during which Mr. McKee recommended that Conoco seek
to purchase of all the Gulf Indonesia Common Shares not owned by Conoco Canada.
At this meeting, the Executive Committee of the Board of Directors of Conoco
determined it was advisable to cause Conoco Canada to submit such a proposal to
the Independent Committee. In connection therewith, on May 24, 2002, the Board
of Directors of Conoco Canada met and determined it was advisable to cause
Conoco Canada to submit a proposal to the Independent Committee for the
acquisition by Conoco Canada of all Gulf Indonesia Common Shares not owned by
Conoco Canada.

     On May 24, 2002, Mr. Wayne C. Byers, Senior Counsel of Conoco, called Mr.
Allen and indicated that Conoco Canada proposed to acquire all the Gulf
Indonesia Common Shares not owned by Conoco Canada. Mr. Byers then sent to Mr.
Allen a term sheet setting forth a proposed price of $12.50 per Share in cash
and certain other terms of the proposal. Conoco Canada also delivered to Macleod
Dixon and Bennett Jones LLP, legal counsel to Gulf Indonesia, a draft support
agreement that would give effect to the proposed transaction.

     The Independent Committee met later on May 24, 2002 with RBC and Macleod
Dixon, and with their assistance, considered Conoco Canada's initial proposal in
light of the work, including valuation analysis, it had previously conducted. At
this meeting, the Independent Committee received and reviewed advice from
Macleod Dixon regarding the duties and responsibilities of the members of the
Independent Committee under applicable law. At this meeting, the Independent
Committee determined that it was not prepared to recommend Conoco Canada's
initial proposal to the Board of Directors of Gulf Indonesia. Mr. Allen called
Mr. Byers and indicated that the Independent Committee had rejected Conoco
Canada's proposal and would await any further proposal.

     On May 25, 2002, representatives of RBC held discussions with
representatives of JPMorgan and Merrill Lynch and representatives of Macleod
Dixon held discussions with representatives of Cravath, Swaine & Moore, U.S.
counsel to Conoco and Conoco Canada, and Blake, Cassels & Graydon LLP, Canadian
counsel to Conoco and Conoco Canada, regarding Conoco Canada's proposal.

     Later in the day on May 25, 2002, the Independent Committee met with its
financial and legal advisors and received a report on the discussions such
advisors had with the financial and legal advisors of Conoco and Conoco Canada
during that day. Conoco and Conoco Canada also met with their financial and
legal advisors to receive a report on these discussions. At this meeting, Conoco
Canada determined to increase its proposed price to $12.90 per Share in cash.

     On the morning of May 26, 2002, Mr. Byers called Mr. Allen to indicate that
Conoco Canada would increase its proposed price to $12.90 per Share in cash.

     On May 26, 2002, the Independent Committee met with RBC and Macleod Dixon,
and with their assistance, considered Conoco Canada's revised proposal,
including the terms of the proposed support agreement. At this meeting, the
Independent Committee determined to reject Conoco Canada's revised proposal and
determined to provide a counter-proposal of $14.00 per Share. Mr. Allen
communicated this decision to Mr. Byers and highlighted certain aspects of the
proposed support agreement which were not agreeable to the Independent
Committee.

     On the morning of May 27, 2002, Mr. McKee called Mr. Allen and discussed
various aspects of Conoco Canada's proposal.

     Mr. Allen called Mr. McKee later in the day on May 27, 2002 for further
discussions which resulted in the suggestion by Mr. McKee that Conoco, Conoco
Canada and their representatives call the Independent Committee and its advisors
to discuss certain aspects of Conoco Canada's valuation of Gulf Indonesia. Mr.
Byers and representatives of JPMorgan and Merrill Lynch called the Independent
Committee and its

                                        14


advisors and discussed these matters. After these discussions, each side met
with its legal and financial advisors to discuss the status of negotiations
between Conoco Canada and the Independent Committee.

     After these discussions, Mr. McKee called Mr. Allen and indicated that
Conoco Canada was willing to revise its proposal to $13.25 per Share in cash and
that such revised proposal would be Conoco Canada's final and best offer. Mr.
Allen of Gulf Indonesia indicated that he would seek the recommendation of the
revised proposal by the Independent Committee, subject to satisfactory
resolution of certain terms of the proposed support agreement.

     Later in the day on May 27, 2002, the Independent Committee met and, with
the assistance and advice of its financial and legal advisors, considered Conoco
Canada's revised proposal, including the material terms and conditions of the
proposed support agreement, in light of the work of the Independent Committee,
including RBC's valuation analysis of Gulf Indonesia, and the extent, nature and
status of negotiations. During this meeting, Macleod Dixon reviewed the duties
and responsibilities of the members of the Independent Committee under
applicable law. Also at this meeting, RBC delivered an oral opinion that, as of
May 27, 2002, the $13.25 per Share in cash to be received by the shareholders of
Gulf Indonesia (other than Conoco Canada) in the Offer was fair, from a
financial point of view, to such shareholders. In addition, RBC advised the
Independent Committee that it would provide the Independent Committee with a
formal valuation of Gulf Indonesia indicating that the proposed $13.25 per Share
price in cash to be received by shareholders of Gulf Indonesia (other than
Conoco Canada) in the Offer was in the higher end of its valuation range for
Gulf Indonesia Common Shares. After receipt of such financial and legal advice,
the Independent Committee, subject to the negotiation of satisfactory terms to
the support agreement, (1) unanimously approved the Offer, (2) unanimously
determined that the Offer is fair to the shareholders of Gulf Indonesia (other
than Conoco Canada) and in the best interests of Gulf Indonesia and the
shareholders of Gulf Indonesia (other than Conoco Canada), (3) unanimously
resolved to recommend that shareholders of Gulf Indonesia accept the Offer and
tender their Shares in the Offer and (4) unanimously resolved to recommend that
the Board of Directors of Gulf Indonesia make the foregoing conclusions.

     Later on May 27, 2002, Mr. Byers and representatives of Cravath, Swaine &
Moore, Blake, Cassels & Graydon and Macleod Dixon negotiated certain aspects of
the proposed support agreement.

     On May 28, 2002, Conoco Canada and Gulf Indonesia issued a press release
announcing the proposal and the Independent Committee's recommendation thereof.
On the same day, Conoco and Conoco Canada filed with the SEC an amendment to the
Schedule 13D to indicate that a proposal had been made and accepted by the
Independent Committee, subject to the execution of definitive documentation and
approval by the full Board of Directors of Gulf Indonesia.

     Over the next several days, the respective legal advisors of Conoco, Conoco
Canada, the Independent Committee and Gulf Indonesia negotiated the definitive
Support Agreement.

     On June 7, 2002, at a meeting of the Independent Committee, RBC presented
to the Independent Committee its written valuation and fairness opinion (the
"Valuation and Fairness Opinion"), which has been attached as Annex A to Gulf
Indonesia's Solicitation/Recommendation Statement on Schedule 14D-9 and which
has been sent to the shareholders of Gulf Indonesia concurrently with this Offer
to Purchase. The Valuation and Fairness Opinion indicated that, as of June 6,
2002, (1) the fair market value for Gulf Indonesia Common Shares was in the
range of $11.50 to $14.00 per Share and (2) the $13.25 per Share in cash to be
received by shareholders of Gulf Indonesia (other than Conoco Canada) in the
Offer was fair, from a financial point of view, to such shareholders. Also at
this meeting, Macleod Dixon presented to the Independent Committee the Support
Agreement and described the material terms thereof. At this meeting, the
Independent Committee unanimously (i) approved the Offer and the Support
Agreement, (ii) determined that the Offer is fair to the shareholders of Gulf
Indonesia (other than Conoco Canada) and in the best interests of Gulf Indonesia
and the shareholders of Gulf Indonesia (other than Conoco Canada), (iii)
resolved to recommend that shareholders of Gulf Indonesia accept the Offer and
tender their shares in the Offer and (iv) resolved to recommend that the Board
of Directors of Gulf Indonesia make the foregoing conclusions.

                                        15


     On June 7, 2002, the Board of Directors of Gulf Indonesia met and received
the report of the Independent Committee, the Valuation and Fairness Opinion and
the advice of counsel as to their fiduciary duties. After considering the
foregoing, the Board of Directors of Gulf Indonesia unanimously (1) approved the
Offer and the Support Agreement, (2) determined that the Offer is fair to the
shareholders of Gulf Indonesia (other than Conoco Canada) and in the best
interests of Gulf Indonesia and the shareholders of Gulf Indonesia (other than
Conoco Canada) and (3) resolved to recommend that shareholders of Gulf Indonesia
accept the Offer and tender their shares in the Offer. Seven members of the
Board of Directors of Gulf Indonesia indicated that they were either directors,
officers or senior managers of Conoco or its affiliates (other than Gulf
Indonesia) and abstained from voting on the Offer and the Support Agreement. A
further member of the Board of Directors of Gulf Indonesia, Paul C. Warwick,
indicated that he was a designee of Conoco and also abstained from voting on the
Offer and the Support Agreement.

     Later on June 7, 2002, the Support Agreement was executed and on June 10,
2002, Conoco Canada and Gulf Indonesia issued a press release announcing the
execution of the Support Agreement.

PURPOSE AND CERTAIN EFFECTS OF THE OFFER AND THE SECOND-STEP ACQUISITION

  General

     The purpose of the Offer and the Second-Step Acquisition is for Conoco
Canada to increase its ownership of Gulf Indonesia from its current level of
approximately 70.7% on a fully diluted basis to 100%. The Support Agreement
provides that Conoco Canada will use its best efforts to consummate the Second-
Step Acquisition to acquire all remaining Gulf Indonesia Common Shares not then
owned by Conoco Canada if the Offer is consummated and the Minimum Tender
Condition has been satisfied and the other conditions to Conoco Canada effecting
such Second-Step Acquisition have been satisfied or waived. See "THE SECOND-STEP
ACQUISITION" and "THE SUPPORT AGREEMENT".

     If the Offer and the Second-Step Acquisition are successful:

     - Conoco Canada will own all of the equity interests in Gulf Indonesia and
       Conoco Canada will be entitled to all the benefits and risks of loss
       associated with such ownership;

     - Current holders of Gulf Indonesia Common Shares (other than Conoco
       Canada) will no longer have any interest in Gulf Indonesia or Gulf
       Indonesia's assets, book value or future earnings or growth and Conoco
       Canada will hold a 100% interest in such assets, book value, future
       earnings and growth;

     - Conoco Canada will have the right to appoint all directors to the Board
       of Directors of Gulf Indonesia;

     - Gulf Indonesia will no longer be a public company and Gulf Indonesia will
       no longer file periodic reports (including financial information) with
       the SEC or any Canadian securities commission; and

     - Gulf Indonesia Common Shares will no longer trade on the New York Stock
       Exchange.

  Options and Stock Based Plans

     Gulf Indonesia is required by the terms of the Support Agreement to
accelerate the vesting of any currently unvested Gulf Indonesia options and
accelerate the release of any Shares held in a Gulf Indonesia employee share
purchase plan so that any entitlement pursuant thereto to Shares becomes
exercisable or fully vested prior to the expiration of the Offer. In addition,
Gulf Indonesia is permitted by the terms of the Support Agreement to cancel Gulf
Indonesia options in exchange for a cash payment equal to the difference, if
any, between the Offer Price and the applicable option exercise price. All
options not exercised or cashed out prior to the expiration of the Offer shall
cease to be exercisable thereafter.

     Gulf Indonesia has an incentive stock option plan (the "Option Plan")
pursuant to which options to purchase Shares have been granted to directors,
officers and other employees of Gulf Indonesia. As of June 4, 2002, Gulf
Indonesia had outstanding options entitling the holders thereof to purchase
approximately 5,199,227 Shares, at exercise prices ranging from $8.06 to $20.06
per Share. The Option Plan provides that, if

                                        16


an offer is made to purchase all of the Shares, the compensation committee of
the Board of Directors of Gulf Indonesia may require that all or some of the
options be exercised on or before the effective date of such purchase. In
connection with the Offer, Gulf Indonesia may make arrangements to permit
holders of options to exercise such options on a conditional basis (conditional
on Conoco Canada accepting and paying for the Shares). Alternatively, Gulf
Indonesia may make arrangements to cancel options in exchange for a cash payment
equal to the difference, if any, between the Offer Price and the applicable
exercise price of the options.

     Gulf Indonesia also has a Restricted Share Unit/Deferred Share Unit Plan
pursuant to which restricted share units ("RSUs") have been issued to directors
and executive officers of Gulf Indonesia. Each RSU vests after four years, and
entitles the holder to one Share or a cash payment equal to the market price of
one Share on the date of exercise. Each RSU will vest as a result of the Offer,
and each holder of a RSU will be entitled to a cash payment equal to the Offer
Price for each RSU. Holders of RSUs will be entitled to an aggregate payment of
$399,780 with respect to their RSUs in connection with the Offer, of which
officers will receive $266,325, directors will receive $120,575 and a former
director will receive $12,880. Any RSU not exercised prior to the expiration of
the Offer will terminate. The Restricted Share Unit/Deferred Share Unit Plan
will terminate on the expiration of the Offer.

     Between February 2001 and May 2002, each director of Gulf Indonesia had the
option of taking all or part of the cash component of his or her annual retainer
in Shares. If the director elected to take Shares, the Shares were eligible for
participation in Gulf Indonesia's Leveraged Purchase Plan ("LPP"). The LPP
provided that for each Share acquired by the participant and held for two years,
the participant would be granted three stock appreciation rights ("SARs"). Each
SAR entitles the holder to receive the difference between the market price of
the Shares on the date the SAR is exercised and the market price on the date the
SAR was granted. The SARs acquired under the LPP will immediately vest and be
exercisable upon consummation of the Offer. Upon consummation of the Offer,
holders of SARs will receive an aggregate cash payment of $286,476 in connection
with the Offer, of which officers will receive $109,770, directors will receive
$72,861 and former officers and directors will receive $103,845.

     The Board of Directors of Gulf Indonesia has authorized and directed the
compensation committee to cause the acceleration and vesting of all options,
RSUs and SARs prior to or concurrent with the consummation of the Offer.

REASONS FOR THE OFFER AND PLANS FOR GULF INDONESIA

     Since Conoco's acquisition of Gulf Indonesia's parent, Gulf Canada, in
July, 2001, Conoco and Conoco Canada have evaluated various strategic
alternatives with respect to Conoco Canada's ownership interest in Gulf
Indonesia. These alternatives have included an asset swap whereby Gulf Indonesia
and Conoco or an affiliate of Conoco would exchange certain oil and gas
producing properties, cooperative arrangements between Gulf Indonesia and Conoco
in Indonesia, the possible combination of Gulf Indonesia with Conoco's other
Indonesian operations and the acquisition by Conoco Canada of the portion of
Gulf Indonesia which it did not own. Since Conoco's acquisition of Gulf Canada,
neither Conoco nor Conoco Canada has received any firm offers by any third party
to acquire Conoco Canada's ownership interest in Gulf Indonesia.

     Because Conoco has designated Southeast Asia as one of its core areas of
operations, Conoco decided that the acquisition of the portion of Gulf Indonesia
which Conoco Canada does not own is the most attractive alternative of those
considered. The acquisition of the portion of Gulf Indonesia that Conoco Canada
does not own will allow Conoco flexibility to integrate its Southeast Asia
and/or its Indonesian operations and to achieve a number of operational
synergies not currently available to Conoco and Gulf Indonesia, including
through rationalization of Gulf Indonesia's organizational structure, reduction
in corporate overhead expense and elimination of any potential conflicts of
interest between Conoco and Gulf Indonesia.

     Conoco and Conoco Canada also believe that causing Gulf Indonesia to be
privately held would reduce the expense involved in compiling and filing the
periodic reports required to be filed by Gulf Indonesia with the SEC and
Canadian securities commissions, would reduce Gulf Indonesia's commitment of
resources with respect to procedural and compliance requirements of a public
company and would otherwise reduce costs
                                        17


associated with Gulf Indonesia's obligations under U.S. securities laws and
Canadian provincial securities laws.

     The Offer has been structured as a cash tender offer followed by the
Second-Step Acquisition in order to effect a prompt and orderly transfer of
ownership of Gulf Indonesia from public shareholders to Conoco Canada.

     After the consummation of the Offer and the Second-Step Acquisition, Conoco
and Conoco Canada will conduct a detailed review of Gulf Indonesia and its
assets, corporate and capital structure, operations, management and personnel in
order to identify possible synergies and cost-saving opportunities. After Conoco
Canada acquires all Shares of Gulf Indonesia, it is possible that Conoco Canada
will cause Gulf Indonesia to distribute cash or other assets to Conoco Canada.

FAIRNESS OF THE OFFER

     The Independent Committee has unanimously (1) approved the Offer and the
Support Agreement and (2) determined that the Offer is fair to the shareholders
of Gulf Indonesia (other than Conoco Canada) and in the best interests of Gulf
Indonesia and the shareholders of Gulf Indonesia (other than Conoco Canada). The
Independent Committee recommends that shareholders of Gulf Indonesia accept the
Offer and tender their Shares in the Offer.

     The Independent Committee.  In reaching the conclusions described above,
the Independent Committee considered a number of factors, including but not
limited to the following:

     - The Offer provides the opportunity to the shareholders of Gulf Indonesia
       (other than Conoco Canada) to choose to realize the value of their
       investment in Gulf Indonesia for cash at a significant premium to market
       prices (a 23% premium to the closing price for a Share on May 24, 2002,
       the last trading day immediately prior to the announcement of the Offer,
       and a 21% premium to the 30-day average closing price for a Share prior
       to and including May 24, 2002);

     - The Offer Price is in the high end of the range of values of the Shares
       of $11.50 to $14.00 determined by RBC;

     - The fairness opinion provided by RBC that the $13.25 per Share in cash to
       be received by shareholders of Gulf Indonesia (other than Conoco Canada)
       in the Offer was fair, from a financial point of view, to shareholders of
       Gulf Indonesia (other than Conoco Canada);

     - The Offer Price resulted from active arm's length negotiations among the
       Independent Committee, Gulf Indonesia, Conoco and Conoco Canada with the
       assistance of independent financial and legal advisors, which the
       Independent Committee believes resulted in the Offer Price being
       increased from $12.50 per Share to $13.25 per Share;

     - The determination by the Independent Committee that the terms and
       conditions of the Offer and the Support Agreement are reasonable and
       resulted from active arm's length negotiations between the advisors of
       the Independent Committee, Gulf Indonesia, Conoco and Conoco Canada,
       which the Independent Committee believes resulted in improvements to the
       terms and conditions of the Support Agreement;

     - The Offer is an all cash offer providing shareholders of Gulf Indonesia
       with liquidity without being affected by historical limited trading
       volumes;

     - To be completed, the Offer must be accepted by a majority of Gulf
       Indonesia shareholders not affiliated with Conoco Canada;

     - If the Second-Step Acquisition occurs, shareholders who choose not to
       tender in the Offer will have the ability to perfect appraisal and
       dissent rights in connection with such Second-Step Acquisition; and

     - In light of Conoco's position that it is not prepared to sell its
       interest in Gulf Indonesia, the Independent Committee satisfied itself
       that there are no viable alternative transactions to the Offer.

                                        18


     The Board of Directors.  The Board of Directors of Gulf Indonesia has
unanimously (1) approved the Offer and the Support Agreement and (2) determined
that the Offer is fair to the shareholders of Gulf Indonesia (other than Conoco
Canada) and in the best interests of Gulf Indonesia and the shareholders of Gulf
Indonesia (other than Conoco Canada). The Board of Directors of Gulf Indonesia
recommends that shareholders of Gulf Indonesia accept the Offer and tender their
Shares in the Offer. In reaching its determinations, the Board of Directors of
Gulf Indonesia adopted the conclusions of the Independent Committee based upon
analysis of the factors considered by the Independent Committee.

     The following members of the Board of Directors of Gulf Indonesia indicated
that they were directors, officers or senior managers of Conoco or its
affiliates (other than Conoco Canada) and abstained from voting on the Offer and
the Support Agreement: Robert W. Goldman, Malcolm D. Griffiths, Rick A.
Harrington, Francis H. James, Donald F. Mazankowski, James D. McColgin and
George D. Watkins. A further member of the Board of Directors of Gulf Indonesia,
Paul C. Warwick, indicated that he was a designee of Conoco and also abstained
from voting on the Offer and the Support Agreement.

     The Board of Directors of Gulf Indonesia believes that the Offer and the
Support Agreement are also procedurally fair because, among other things: (1)
the Independent Committee consisted of solely independent directors appointed to
represent the interests of shareholders (other than Conoco Canada); (2) the
Independent Committee retained and was advised by its own independent legal
counsel experienced in advising on similar transactions; (3) the Independent
Committee retained and was advised by RBC, as its independent financial advisor,
to assist it in evaluating a potential transaction with Conoco or Conoco Canada;
(4) the nature of the deliberations pursuant to which the Independent Committee
evaluated the Offer and the Support Agreement and alternatives thereto; (5) that
the $13.25 per Share price in cash resulted from active arm's length
negotiations between representatives of the Independent Committee, on the one
hand, and representatives of Conoco and Conoco Canada, on the other; and (6)
that the independent committee is a mechanism well established in transactions
of this type.

     The Independent Committee and the Board of Directors of Gulf Indonesia also
recognized that, while consummation of the Offer will result in all shareholders
(other than Conoco Canada) being entitled to receive $13.25 in cash for each of
their Shares, it will eliminate the opportunity for current shareholders (other
than Conoco Canada) to participate in the longer term potential benefits of the
business of Gulf Indonesia, including the opportunities arising out of Gulf
Indonesia's initiatives in developing new markets for its gas reserves. The
Independent Committee also recognized that the consummation of the Offer would
result in the elimination of potential conflicts of interest of Conoco arising
out of its existing operations in Indonesia and would also result in other
operational synergies, cost savings and economic efficiencies for Conoco's
operations in Indonesia.

     During its deliberations, the Independent Committee also considered two
circumstances that could arise in the event no agreement was reached with Conoco
and Conoco Canada for the Independent Committee to provide its support of a
proposal. If the parties were unable to come to agreement and Conoco Canada
decided not to make an offer directly to shareholders, shareholders would not
have the opportunity to consider a cash offer at a premium to market and which
was above the mid point of the range of values of the Shares determined by RBC.
Conversely, if Conoco Canada were to make an offer directly to shareholders
without the recommendation of the Independent Committee, which Conoco Canada had
not expressed it intended to do, it could well be at a price less than the
Independent Committee might be able to negotiate.

     Neither the Independent Committee nor the Board of Directors of Gulf
Indonesia considered the liquidation of Gulf Indonesia's assets and neither
considered liquidation to be a viable course of action based on Conoco's desire
to retain its shareholding in Gulf Indonesia. Therefore, no appraisal of
liquidation values was sought for purposes of evaluating the Offer.

     The foregoing discussion of the information and factors considered by the
Independent Committee and the Board of Directors of Gulf Indonesia is not
intended to be exhaustive but includes all the material factors considered. In
view of the variety of factors considered in connection with the evaluation of
the Offer, the Independent Committee and the Board of Directors of Gulf
Indonesia did not find it practical to, and did not,

                                        19


quantify or otherwise assign relative weights to the specific factors considered
in reaching such determinations and recommendations.

REPORT OF FINANCIAL ADVISOR TO THE INDEPENDENT COMMITTEE

     Under the provisions of certain Canadian provincial securities laws
respecting take-over bids, where a take-over bid is an "insider bid", the
offeror is required, unless otherwise exempted, to have a valuation of the
target company prepared by a qualified and independent valuer, based on
techniques that are appropriate in the circumstances, after considering all
relevant assumptions, that arrives at an opinion as to a value or range of
values for the target company's common shares. The Independent Committee
retained RBC to prepare a written Valuation and Fairness Opinion as to the fair
market value of the Shares and as to whether the consideration to be received
under the Offer is fair, from a financial point of view, to the holders of the
Shares other than Conoco Canada.

     On May 27, 2002, RBC delivered an oral opinion that, as of May 27, 2002,
the $13.25 per Share in cash to be received by the shareholders of Gulf
Indonesia (other than Conoco Canada) in the Offer was fair, from a financial
point of view, to such shareholders. In addition, on May 27, 2002, RBC advised
the Independent Committee that it would provide the Independent Committee with a
formal valuation of Gulf Indonesia indicating that the $13.25 per Share in cash
to be received by the shareholders of Gulf Indonesia (other than Conoco Canada)
in the Offer was in the higher end of its valuation range for Gulf Indonesia
Common Shares. On June 7, 2002, RBC delivered the written Valuation and Fairness
Opinion to the Independent Committee which indicated that, as of June 6, 2002,
(1) the fair market value for Gulf Indonesia Common Shares was in the range of
$11.50 to $14.00 per Share and (2) the $13.25 per Share in cash to be received
by shareholders of Gulf Indonesia (other than Conoco Canada) in the Offer was
fair, from a financial point of view, to such shareholders.

     THE FULL TEXT OF THE VALUATION AND FAIRNESS OPINION OF RBC DATED JUNE 6,
2002, WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON
THE REVIEW UNDERTAKEN IN CONNECTION WITH THE VALUATION AND FAIRNESS OPINION, HAS
BEEN ATTACHED AS ANNEX A TO GULF INDONESIA'S SOLICITATION/RECOMMENDATION
STATEMENT ON SCHEDULE 14D-9 WHICH HAS BEEN SENT TO THE SHAREHOLDERS OF GULF
INDONESIA CONCURRENTLY WITH THIS OFFER TO PURCHASE. SHAREHOLDERS OF GULF
INDONESIA ARE URGED TO, AND SHOULD, READ THE VALUATION AND FAIRNESS OPINION IN
ITS ENTIRETY.

     A copy of the Valuation and Fairness Opinion has also been attached as
Exhibit (c)(1) to Conoco's and Conoco Canada's Tender Offer Statement on
Schedule TO filed with the SEC on the date of this Offer to Purchase. A copy
thereof is also available for inspection during business hours at the offices of
Conoco Canada at 1600, 401-9th Avenue S.W., Calgary, Alberta, T2P 3C5 and copies
may be obtained without charge upon written request to the secretary of Conoco
Canada at the same address.

VALUATION AND FAIRNESS OPINION

     The following section summarizes the Valuation and Fairness Opinion,
describing the basis of the computations utilized to determine the valuation
contained therein, the scope of the review made, the relevant factors and their
values and the key assumptions on which the valuation is based. THE FOLLOWING
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN CONJUNCTION WITH,
THE VALUATION AND FAIRNESS OPINION.

     Engagement.  The Independent Committee initially approached RBC on April 1,
2002 and RBC was formally engaged by the Independent Committee on April 9, 2002
pursuant to an engagement agreement (the "Engagement Agreement") that had an
effective date of April 1, 2002.

     The terms of the Engagement Agreement provide that RBC will receive a fee
of $1.35 million for its services and is to be reimbursed for its reasonable
out-of-pocket expenses. In accordance with the requirements of Rule 61-501 of
the Ontario Securities Commission and Policy Q-27 of the Quebec Securities
Commission, such fees and expenses will be paid by Conoco Canada. In addition,
Gulf Indonesia has agreed

                                        20


to indemnify RBC in certain circumstances. The fee payable to RBC is not
contingent in whole or in part on the success of the Offer or on the conclusions
reached in the Valuation and Fairness Opinion.

     Engagement of RBC as an Independent Valuer.  RBC is one of Canada's largest
investment banking firms, with operations in all facets of corporate and
government finance, corporate banking, mergers and acquisitions, equity and
fixed income sales and trading and investment research and was selected by Gulf
Indonesia based on its qualifications, expertise and reputation.

     Neither RBC nor any of its affiliates, is an insider, associate or
affiliate (as those terms are defined in the Securities Act (Ontario)) of Gulf
Indonesia, Conoco Canada or any of their respective affiliates (collectively,
the "Interested Parties"). Except as financial advisor to the Independent
Committee, neither RBC nor any of its affiliates is an advisor to any of the
Interested Parties with respect to the Offer. RBC has not been engaged to
provide any financial advisory services nor has it participated in any financing
(or received any fees in connection therewith) involving the Interested Parties,
within the past two years. There are no understandings, agreements or
commitments between RBC or any of the Interested Parties with respect to any
other future business dealings. RBC may, in the future, in the ordinary course
of its business, perform financial advisory or investment banking services for
the Interested Parties. Royal Bank of Canada, of which RBC is a wholly owned
subsidiary, provides banking services to the Interested Parties in the normal
course of business.

     RBC acts as a trader and dealer, both as principal and agent, in major
financial markets and, as such, may have had and may in the future have
positions in the securities of the Interested Parties and, from time to time,
may have executed or may execute transactions on behalf of such companies or
clients for which it received or may receive compensation. As an investment
dealer, RBC conducts research on securities and may, in the ordinary course of
its business, provide research reports and investment advice to its clients on
investment matters, including with respect to the Interested Parties or the
Offer.

     Scope of Review.  In preparing the Valuation and Fairness Opinion, RBC held
discussions with the Independent Committee and its legal counsel, Conoco, Conoco
Canada and their financial advisors, various members of Gulf Indonesia's
management and the auditors, legal counsel and independent reserve engineers of
Gulf Indonesia; reviewed certain publicly available information, financial
statements, projections for the years ending December 31, 2002 through 2023
prepared by Gulf Indonesia, internal oil and gas reserve estimates prepared by
Gulf Indonesia, certificates of gas reserves and reserve reports prepared by
independent reserve engineers for Gulf Indonesia, documents and non-public
information relating to Gulf Indonesia; reviewed information relating to the
business, operations, financial performance and, where applicable, stock market
data and research publications relating to Gulf Indonesia, and other selected
comparable companies; reviewed country risk rating reports for Indonesia; and
carried out other analyses and investigative exercises, all of which are more
specifically described in the Valuation and Fairness Opinion.

     Assumptions and Limitations.  With the Independent Committee's approval and
as provided for in the Engagement Agreement, RBC relied upon the completeness,
accuracy and fair presentation of all of the financial and other information,
data, advice, opinions or representations obtained by it from public sources,
senior management of Gulf Indonesia, and their consultants and advisors
(collectively, the "Information"). The Valuation and Fairness Opinion is
conditional upon such completeness, accuracy and fair presentation of the
Information. Subject to the exercise of professional judgment and except as
expressly described in the Valuation and Fairness Opinion, RBC did not attempt
to verify independently the completeness, accuracy or fair presentation of any
of the Information.

     The Valuation and Fairness Opinion was rendered on the basis of securities
markets, economic, political, financial and general business conditions
prevailing as of June 6, 2002 and the condition and prospects, financial and
otherwise, of Gulf Indonesia and its subsidiaries and affiliates, as they were
reflected in the Information and as they were presented to RBC in discussions
with management of Gulf Indonesia. In its analysis and in preparing the
Valuation and Fairness Opinion, RBC made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of RBC or any party involved in
the Offer.

                                        21


     RBC disclaims any undertaking or obligation to advise any person of any
change in any fact or matter affecting the Valuation or Fairness Opinion which
may come or be brought to RBC's attention after June 6, 2002.

     RBC believes that its analyses must be considered as a whole and that
selecting portions of the analyses or the factors considered by it, without
considering all factors and analyses together, could create a misleading view of
the process underlying the Valuation and Fairness Opinion. The preparation of a
valuation or fairness opinion is a complex process and is not necessarily
susceptible to partial analysis or summary description. Any attempt to do so
could lead to undue emphasis on any particular factor or analysis. Neither the
Valuation nor Fairness Opinion should be construed as a recommendation to any
holder of Shares as to whether to tender their Shares to the Offer.

  VALUATION

     Definition of Fair Market Value.  For purposes of the valuation portion of
the Valuation and Fairness Opinion (the "Valuation"), fair market value is
defined as the monetary consideration that, in an open and unrestricted market,
a prudent and informed buyer would pay to a prudent and informed seller, each
acting at arm's length, with the other and under no compulsion to act. RBC has
not made any downward adjustment to the value of the Shares to reflect the
liquidity of the Shares, the effect of the Offer or the fact that the Shares
held by shareholders other than Conoco Canada do not form part of a controlling
interest.

     RBC Valuation Methodologies.  RBC valued the Shares on a going concern
basis using a net asset value ("NAV") analysis and a precedent transaction
analysis. RBC also reviewed trading multiples of public companies involved in
the oil and gas industry from the perspective of whether a public market
analysis might exceed NAV or precedent transaction values for the Shares. RBC
concluded that public company multiples implied values that were at or below the
NAV and precedent transaction values. As a result, RBC did not rely on the
public market analysis in determining the value of the Shares.

  Net Asset Value Analysis

     The NAV approach used by RBC ascribed a separate value for each category of
assets and liabilities, utilizing the methodology that RBC believed was most
appropriate in each case; the sum of total assets less total liabilities yields
the NAV. This approach ascribed value to the proved and probable reserves
existing at the time of valuation on the basis of discounted future after-tax
cash flows, and takes into account the amount, timing and relative certainty of
projected cash flows. This approach is known as a "depletion" or "blow-down"
evaluation and is a common method of evaluation of petroleum interests. Capital
expenditures required to develop existing reserves are deducted from cash flows.
Provisions are made for costs associated with future well abandonment and
reclamation as provided for in Gulf Indonesia's production sharing contracts.
The NAV approach requires that certain assumptions be made regarding future cash
flows and discount rates.

     Liquids and Contracted Natural Gas.  In conducting its NAV analysis, RBC
reviewed Gulf Indonesia's production sharing contracts, technical assistance
contracts, and enhanced oil recovery contracts and management's unaudited cash
flow projections for the years ending December 31, 2002 to 2023 for Gulf
Indonesia's liquids and contracted natural gas reserves. RBC reviewed the
assumptions in management's projections and determined that material adjustments
were not necessary in preparing its base case cash flow forecasts except that
RBC applied a 5% risk discount to the cash flows projected by management
associated with one contract to reflect certain contingencies. RBC also
identified approximately $7 million of net cost savings initiatives that Gulf
Indonesia intends to pursue, regardless of whether the Offer is completed. RBC
factored 100% of this $7 million estimate into its NAV analysis beginning in
2003 and reduced this figure on a declining balance basis until 2023. RBC
projected commodity prices in its base case cash flow projection by using a
composite price forecast from several independent professional reserve engineers
and forward strip pricing.

     Natural Gas Reserves with Identified Potential Markets.  In conducting its
NAV analysis, RBC reviewed management's unaudited cash flow projections for the
years ending December 31, 2002 to 2023 for Gulf Indonesia's uncontracted natural
gas reserves for which Gulf Indonesia has identified potential markets.
                                        22


RBC reviewed the assumptions in management's projections and applied a risk
discount to the cash flows projected by management ranging from 20% to 40% of
the unrisked cash flows to reflect the progress of contract negotiations, the
proximity of commercially viable markets, the availability of natural gas
transportation systems, counter-party risk, the potential risk of timing delays
and the risk of not being able to recover booked and projected volumes. RBC
projected commodity prices in its base case cash flow projection by using a
composite price forecast from several independent professional reserve engineers
and forward strip pricing.

     Additional Reserves.  Based on certificates of gas reserves and reserve
reports prepared by an independent reserve engineering firm retained by Gulf
Indonesia and other expected reserves identified in an internal analysis
prepared by Gulf Indonesia, RBC concluded that there could exist certain oil and
gas reserves not recorded in Gulf Indonesia's proved and probable reserves
disclosed in its 2001 annual report. RBC ascribed values ranging from $0.03 per
thousand cubic feet to $0.06 per thousand cubic feet to these additional
reserves.

     TGI Investment.  Gulf Indonesia is a 35% partner in a limited liability
company established to purchase a 40% interest in an entity established by an
Indonesian state-owned enterprise to own and operate pipeline assets in
Indonesia. RBC reviewed Gulf Indonesia's cash flow projections for this limited
liability company assuming the acquisition will be completed and applied a 50%
risk discount to reflect the risks of not completing this acquisition, not
achieving projected volumes, not achieving projected transportation tolls and
the timing of incremental volumes.

     Sensitivity Analyses.  In completing its NAV analysis, RBC did not rely on
any single series of cash flows but performed a variety of sensitivity analyses.
Variables sensitized included commodity price assumptions, discount rates,
timing and risk factors. The results of these sensitivity analyses are reflected
in RBC's judgment as to the appropriate values resulting from the NAV approach.

     Discount Rates.  RBC selected appropriate discount rates to apply to its
projected unlevered free cash flows by utilizing the Capital Asset Pricing Model
approach to determine an appropriate weighted average cost of capital ("WACC").
This approach calculates WACC based on an assumed optimal capital structure for
Gulf Indonesia. This optimal capital structure was chosen based upon a review of
the capital structures of comparable companies and the risks faced by Gulf
Indonesia and the Indonesian oil and gas industry. The optimal capital structure
chosen was comprised of 25% debt and 75% equity.

     Based on its analysis RBC utilized a discount rate of 11% to 13.5% to
discount the cash flows described above. Based on the analysis described above,
and taking into account the sensitivity analyses performed, RBC selected a NAV
value range of $11.00 to $13.00 per Share.

  Precedent Transaction Analysis

     RBC reviewed certain publicly available information regarding comparable
company and asset transactions in the Indonesian oil and gas industry and other
developing regions.

     In analyzing precedent transactions, RBC reviewed a number of parameters,
including: (1) price as a multiple of forecasted discretionary cash flow per
share for the first year following the transaction; (2) price as a percentage of
NAV per share; (3) enterprise value (defined as equity value plus net debt) as a
multiple of forecasted earnings before interest, taxes, depreciation, depletion
and amortization for the first year following the transaction; (4) adjusted
enterprise value (defined as enterprise value less any value for any non-reserve
assets) as a multiple of forecasted daily barrel of oil equivalent production
for the first year following the transaction; and (5) adjusted enterprise value
as a multiple of both proved reserves and proved reserves plus probable
reserves.

     RBC's selection of precedent transactions was based primarily on
transactions in the Indonesian oil and gas industry and other developing regions
which have occurred from January 1, 2000, to the date of the Valuation and
Fairness Opinion.

     RBC's review of the precedent transactions considered various factors,
including the existence of contracted gas reserves, the location of the assets,
the hydrocarbon mix and the transaction size.

                                        23


     Based on its analysis, RBC selected a value range of $11.00 to $14.00 per
Share in its precedent transaction analysis.

  Benefits to Conoco and Affiliates

     RBC also reviewed and considered whether any distinctive material benefits
would accrue to Conoco Canada or its affiliates through the acquisition of the
Shares pursuant to the Offer. RBC concluded that there were material specific
operational and financial benefits that would accrue to Conoco Canada or its
affiliates. These consist primarily of the potential reduction of head office
and other expenses. Based on discussions with management of Gulf Indonesia and
Conoco, RBC estimated that approximately $3 to $5 million of annual cost
reductions, net of taxes and production cost sharing, would accrue to Conoco
Canada or its affiliates as a result of the Offer. RBC assumed that 100% of
these cost reductions could be achieved starting in 2003 and reduced this figure
on a declining balance basis until 2023 to reflect the reduced production levels
in its NAV analysis.

  RBC Valuation Conclusion

     Based upon and subject to the foregoing, RBC is of the opinion that, as of
June 6, 2002, the fair market value of the Shares was in the range of $11.50 to
$14.00 per Share.

  FAIRNESS OPINION

     Fairness Opinion Factors Considered.  In considering the fairness of the
Offer, from a financial point of view, to the shareholders of Gulf Indonesia
(other than Conoco Canada), RBC principally considered and relied upon the
following: (1) a comparison of the price per Share under the Offer to the range
of fair market values of the Shares under its Valuation; and (2) a comparison of
the price per Share under the Offer to the trading price of the Shares prior to
the announcement on May 28, 2002 of Conoco Canada's intention to make the Offer.

     In determining the fairness of the Offer, RBC noted that the price per
Share to be paid pursuant to the Offer is within the fair market value range for
the Shares under RBC's Valuation.

     RBC also noted that the price per Share under the Offer represents a
premium of approximately 23% to the closing price of the Shares on the New York
Stock Exchange on May 24, 2002, the trading day immediately prior to the public
announcement of the Offer, and a premium of approximately 21% to the 20-day
weighted average trading price of $10.99 prior to announcement of the Offer. RBC
determined that this premium is within the range of premiums for similar
transactions over the previous five years.

     Fairness Conclusion.  Based upon and subject to the foregoing, RBC is of
the opinion that, as of June 6, 2002, the $13.25 per Share in cash to be
received by the shareholders of Gulf Indonesia (other than Conoco Canada) in the
Offer was fair, from a financial point of view, to such shareholders.

POSITION OF CONOCO AND CONOCO CANADA REGARDING FAIRNESS OF THE OFFER

     Conoco and Conoco Canada believe that the Offer is fair to, and in the best
interests of, the shareholders of Gulf Indonesia (other than Conoco Canada).
Conoco and Conoco Canada base their belief on the following factors:

     - The conclusions and recommendations of the Independent Committee that the
       Offer is fair to, and in the best interests of, the shareholders of Gulf
       Indonesia (other than Conoco Canada);

     - The fact that the Offer Price and the terms and conditions of the Offer
       and the Support Agreement resulted from active arm's length negotiations
       among the Independent Committee, Conoco and Conoco Canada and their
       advisors;

     - The receipt by the Independent Committee of the Valuation of RBC that, as
       of June 6, 2002, the fair market value of the Shares was in the range of
       $11.50 to $14.00 per Share and the opinion of RBC that,

                                        24


as of June 6, 2002, the $13.25 per Share in cash to be received by Gulf
Indonesia shareholders (other than Conoco Canada) in the Offer was fair, from a
financial point of view, to such shareholders;

     - The fact that the Offer Price of $13.25 per Share in cash represents a
       premium of 23% over the closing sale price for a Share on May 24, 2002,
       the trading day immediately prior to the public announcement of the Offer
       and the fact that the Offer Price also represents a premium of 21% over
       the average closing price for the 30 trading days prior to and including
       May 24, 2002;

     - The historical and projected financial performance of Gulf Indonesia and
       its financial results; and

     - The fact that the Offer will provide consideration to the shareholders of
       Gulf Indonesia entirely in cash.

     Conoco and Conoco Canada did not consider the liquidation of Gulf
Indonesia's assets to be a viable course of action based on Conoco's desire to
retain its shareholding in Gulf Indonesia. Therefore, no appraisal of
liquidation value was taken into account in the above analysis.

     The foregoing discussion of the information and factors considered by
Conoco and Conoco Canada is not intended to be exhaustive but includes all the
material factors considered. In view of the variety of factors considered in
connection with the evaluation of the Offer, Conoco and Conoco Canada did not
find it practical to, and did not, quantify or otherwise assign relative weights
to the specific factors considered in reaching such determinations and
recommendations.

SUMMARY OF CERTAIN ANALYSES OF JPMORGAN AND MERRILL LYNCH

     In connection with Conoco's and Conoco Canada's consideration and
negotiation of the proposed transaction, JPMorgan and Merrill Lynch furnished
certain analyses to Conoco and Conoco Canada. These analyses were discussed with
members of the management of Conoco and Conoco Canada in order to assist their
determination of whether to make an offer to acquire the Gulf Indonesia Common
Shares not owned by Conoco or its affiliates, and if such an offer was to be
made, the price at which to make the offer. None of these analyses constitute an
opinion of JPMorgan or Merrill Lynch with respect to the fairness of the
consideration offered to the Gulf Indonesia shareholders or to be paid by Conoco
Canada. The summary set forth below does not purport to be a complete
description of the analyses presented to the management of Conoco and Conoco
Canada. The analyses summarized below have been filed as Exhibits (c)(2), (c)(3)
and (c)(4) to Conoco's and Conoco Canada's Tender Offer Statement on Schedule TO
filed with the SEC on the date of this Offer to Purchase. A copy thereof is also
available for inspection during business hours at the offices of Conoco Canada
at 1600, 401-9th Avenue S.W., Calgary, Alberta, T2P 3C5 and copies of such
analyses may be obtained without charge upon written request to the secretary of
Conoco Canada at the same address. The description of the analyses set forth
below is qualified in its entirety by reference to the text of such analyses.

  SHAREHOLDER BASE

     On May 16, 2002 and May 23, 2002, JPMorgan and Merrill Lynch provided to
the management of Conoco analyses of the Gulf Indonesia shareholder base. The
analyses were based on publicly available information. In these analyses,
JPMorgan and Merrill Lynch estimated that institutional shareholders owned more
than 80% of the Shares not owned by Conoco Canada and identified those
shareholders which public filings suggested were the largest institutional
holders of Gulf Indonesia Common Shares. JPMorgan and Merrill Lynch then
performed an analysis of the share price performance of Gulf Indonesia Common
Shares during the ownership periods of the largest 20 shareholders of Gulf
Indonesia and indicated that, depending on a number of assumptions, a
significant number of Gulf Indonesia shareholders could experience positive
returns across a range of prices for Gulf Indonesia Common Shares, including the
Offer Price. Also as part of their analyses, JPMorgan and Merrill Lynch
described the share price performance and trading patterns for Gulf Indonesia
Common Shares since January 2, 2002.

     JPMorgan and Merrill Lynch noted that the information on which they based
their analyses was publicly filed and, due to time lags between filing updates
and trading activity, would therefore not offer a definitive current view of
Gulf Indonesia's shareholder base. In this regard, JPMorgan and Merrill Lynch
indicated that
                                        25


there had recently been a number of large block trades in Gulf Indonesia Common
Shares and, as a result, shareholding positions may have changed materially.
JPMorgan and Merrill Lynch also indicated that they estimated that approximately
20% of the Shares not owned by Conoco Canada had traded since March 1, 2002,
further evidencing the recent change in the shareholder base of Gulf Indonesia.

  FINANCIAL ANALYSIS

     On March 18, 2002, JPMorgan provided management of Conoco and Conoco Canada
an illustrative value analysis with respect to the Gulf Indonesia Common Shares,
which was discussed with members of management of Conoco and Conoco Canada from
time to time. JPMorgan employed three primary methodologies in its illustrative
value analysis: (1) selected public company trading multiple analysis, (2)
selected minority interest buyout transaction analysis and (3) a net asset value
analysis. In addition to the illustrative value analysis set forth below,
JPMorgan discussed with management of Conoco and Conoco Canada certain aspects
of the shareholder base of Gulf Indonesia and trading patterns for Gulf
Indonesia Common Shares.

     Public Trading Multiples.  Using publicly available information, JPMorgan
compared selected financial data of Gulf Indonesia with similar data for groups
of selected publicly traded companies located both in and outside the United
States that have oil and gas operations in Southeast Asia. The valuation
multiples (the "Multiples") JPMorgan considered most relevant were firm value to
earnings before interest, taxes, depreciation and amortization and exploration
expenditures ("EBITDAX") and firm value to reserves. Firm value was defined as
the equity market value of the subject company plus its net indebtedness, the
value of its preferred stock and the value of any minority interest in the
applicable company.

     The following table presents the Multiples for selected companies located
outside the United States with oil and gas operations in Southeast Asia which
JPMorgan deemed relevant for its analysis:



                                          FIRM VALUE TO   FIRM VALUE TO    FIRM VALUE TO
COMPANY                                   2002E EBITDAX   2003E EBITDAX   RESERVES (MCFE)
- -------                                   -------------   -------------   ---------------
                                                                 
CNOOC Limited...........................       6.9x            6.1x            $0.65
Woodside Petroleum Ltd..................       7.7             8.8              1.13
Enterprise Oil plc......................       4.8             4.2              0.89
Santos Ltd..............................       4.8             5.2              1.20
PTT Exploration & Production Public
  Company Limited.......................       4.6             5.1              0.45
Premier Oil plc.........................       6.2             5.8              0.54
Cairn Energy plc........................       8.6             7.4              1.35
Oil Search Limited......................       6.2             7.0                NA
Novus Petroleum Limited.................       4.7             4.8              0.46
Orogen Minerals Limited.................       3.6             3.9                NA
MEDIAN..................................       5.5             5.5              0.77
MEAN....................................       5.8             5.8              0.83
Gulf Indonesia..........................       4.4             4.2              0.54


                                        26


     The following table presents the Multiples for selected companies located
in the United States with oil and gas operations in Southeast Asia which
JPMorgan deemed relevant for its analysis:



                                          FIRM VALUE TO   FIRM VALUE TO    FIRM VALUE TO
COMPANY                                   2002E EBITDAX   2003E EBITDAX   RESERVES (MCFE)
- -------                                   -------------   -------------   ---------------
                                                                 
Devon Energy Corporation................       7.2             6.1             1.18
Unocal Corporation......................       6.8             5.8             1.24
Talisman Energy Inc. ...................       5.2             4.9             1.08
Ocean Energy, Inc. .....................       7.2             5.8             1.55
Pogo Producing Company..................       6.8             5.1             1.69
MEDIAN..................................       6.8             5.8             1.24
MEAN....................................       6.7             5.6             1.35
Gulf Indonesia..........................       4.4             4.2             0.54


     The valuation ranges chosen for each Multiple were 4.5x to 6.0x for firm
value to 2002E EBITDAX, 5.0x to 6.0x for firm value to 2003E EBITDAX and $0.50
to $0.80 per Mcfe for firm value to reserves. Applying such valuation parameters
to Gulf Indonesia yielded an illustrative value range of approximately $9.35 to
$14.25 per Share.

     Selected Minority Interest Buyout Analysis.  Using publicly available
information, JPMorgan analyzed selected parent buyout transactions involving
targets that were Canadian oil and gas corporations, targets that were Canadian
corporations not engaged in the oil and gas industry and targets that were
located in the United States.

     The following table presents the high, low, average and median premiums to
market price for eight buyout transactions involving targets that were Canadian
oil and gas corporations which JPMorgan deemed relevant for its analysis. These
transactions involved parent ownership of between 19.8% and 78% of the target's
stock prior to the transaction.



                                                      HIGH     LOW    AVERAGE   MEDIAN
                                                      -----   -----   -------   ------
                                                                    
Premium to market price one day prior to
  announcement......................................  77.8%    7.3%    35.9%    35.2%
Premium to market price one month prior to
  announcement......................................  77.8%   31.2%    43.5%    42.3%


     The following table presents the high, low, average and median premiums to
market price for seven buyout transactions involving targets that were Canadian
corporations not engaged in the oil and gas industry which JPMorgan deemed
relevant for its analysis. These transactions involved parent ownership of
between 34.1% and 65.3% of the target's stock prior to the transaction.



                                                      HIGH     LOW    AVERAGE   MEDIAN
                                                      -----   -----   -------   ------
                                                                    
Premium to market price one day prior to
  announcement......................................  43.0%   (3.6%)   19.1%    19.9%
Premium to market price one month prior to
  announcement......................................  57.1%   (0.1%)   29.5%    30.6%


     The following table presents the high, low, average and median premiums to
market price for 40 buyout transactions involving targets that were corporations
located in the United States which JPMorgan deemed relevant for its analysis.
These transactions involved parent ownership of between 50.6% and 93.8% of the
target's stock prior to the transaction and only included transactions having a
value between $100 million and $500 million.



                                                       HIGH   LOW    AVERAGE   MEDIAN
                                                       ----   ----   -------   ------
                                                                   
Premium to market price one day prior to
  announcement.......................................  140%    (1%)    43%      27%
Premium to market price one month prior to
  announcement.......................................  134%   (31%)    41%      38%


     The valuation range chosen for the premium to the market price of Gulf
Indonesia Common Shares at the time of the JPMorgan analysis ($10.00) was 0% to
25%. Applying such valuation range to Gulf Indonesia yielded an illustrative
value range of approximately $10.00 to $12.50 per Share.

                                        27


     Net Asset Value.  JPMorgan conducted a net asset value per share ("NAV")
analysis of Gulf Indonesia. In performing its analysis, JPMorgan relied upon
production estimates for Gulf Indonesia properties for each year from 2002
through 2018 made by a third party provider of such information to the oil and
gas industry. JPMorgan then calculated two unlevered free cash flow scenarios
for each Gulf Indonesia property: one based upon the price of future contracts
for Brent crude oil and the other based upon JPMorgan's downside estimate of oil
prices for the period in question. JPMorgan then made certain assumptions
regarding general and administrative costs during the valuation period based
upon the historical performance of Gulf Indonesia. The unlevered free cash flows
and operating costs were then discounted to present value using a low discount
rate of 8% and a high discount rate of 14%. The present value of the unlevered
free cash flows and the general and administrative costs was then increased to
take into account Gulf Indonesia's working capital. This analysis yielded an
illustrative value range for Gulf Indonesia of between $8.39 and $13.29 per
Share.

     Analyst's Price Targets.  JPMorgan also advised the management of Conoco
and Conoco Canada that, at the time of its analysis, equity research analysts
had established 12-18 month price targets for Gulf Indonesia Common Shares
ranging from $7.45 to $14.50 per Share.

     Conoco retained JPMorgan in 2001 to provide it with financial advisory and
dealer manager services in connection with Conoco Northern's acquisition of Gulf
Canada and any subsequent acquisition by Conoco and its affiliates of the Gulf
Indonesia Common Shares not owned by Gulf Canada. JPMorgan was paid an advisory
fee of approximately $15.0 million in 2001 in connection with Conoco Northern's
acquisition of Gulf Canada. A portion of this fee would be attributable to
services to be rendered by JPMorgan in the event that Conoco and Conoco Canada
decided to pursue the Offer and the Second-Step Acquisition. In selecting
JPMorgan to represent Conoco as a financial advisor and as a Dealer Manager,
Conoco considered primarily the reputation of JPMorgan as an internationally
recognized investment banking firm that has substantial experience in
transactions similar to the Offer.

     Gulf Canada (now Conoco Canada) retained Merrill Lynch in 2001 to provide
it with financial advisory services in connection with the sale of Gulf Canada
and any acquisition by Gulf Canada of Gulf Indonesia Common Shares not owned by
Gulf Canada. Merrill Lynch was paid an advisory fee of approximately $17.4
million in 2001 in connection with the sale of Gulf Canada to Conoco Northern. A
portion of this fee would be attributable to services to be rendered by Merrill
Lynch in the event that Conoco and Conoco Canada decided to pursue the Offer and
the Second-Step Acquisition. In addition, Conoco has agreed to pay Merrill Lynch
a fee of $500,000 payable upon consummation of the Second-Step Acquisition. In
selecting Merrill Lynch to represent Gulf Canada as a financial advisor and as a
Dealer Manager, Gulf Canada considered primarily the reputation of Merrill Lynch
as an internationally recognized investment banking firm that has substantial
experience in transactions similar to the Offer.

     Conoco has agreed to reimburse JPMorgan's and Merrill Lynch's reasonable
out-of-pocket expenses, including the fees and expenses of their counsel, in
connection with the financial services they provide in connection with the Offer
and any Second-Step Acquisition and to indemnify each of JPMorgan and Merrill
Lynch against certain liabilities, including certain liabilities under U.S.
securities laws and Canadian provincial securities laws.

     Conoco has retained JP Morgan and Merrill Lynch to act as the Dealer
Managers in connection with the Offer. Conoco will reimburse the Dealer Managers
for their out-of-pocket expenses, including the fees and expenses of their
counsel. In addition, Conoco will indemnify the Dealer Managers against certain
liabilities and expenses in connection with the Offer.

     JPMorgan has provided financial advisory and financing services from time
to time to Conoco and Conoco Canada, including acting as co-lead on Conoco's
$4.5 billion 2001 debt offering and advising and arranging the financing for
Conoco's acquisition of Gulf Canada Resources Limited. In addition, one of
JPMorgan's commercial bank affiliates is the agent bank for certain outstanding
credit facilities for Conoco. During the last two years, the aggregate
consideration received by JPMorgan for services provided to Conoco and Conoco
Canada was approximately $29.2 million.

                                        28


     Merrill Lynch has provided financial advisory and financing services from
time to time to Conoco and Conoco Canada, including advising Gulf Canada in
connection with Conoco's acquisition thereof. During the last two years, the
aggregate consideration received by Merrill Lynch for services provided to
Conoco and Conoco Canada was approximately $23.5 million.

     Both JPMorgan and Merrill Lynch provide a full range of financial advisory
and securities services and each has advised Conoco and Conoco Canada that, in
the course of its normal trading activities, it may from time to time effect
transactions and hold positions in the securities, including derivative
securities, of Conoco and/or Gulf Indonesia for its own account and for the
account of customers.

     To the knowledge of Conoco and Conoco Canada, after reasonable inquiry,
there are no "prior valuations", as defined under Ontario Securities Commission
Rule 61-501 or Commission des valeurs mobilieres du Quebec Policy Q-27, required
to be disclosed.

BENEFICIAL OWNERSHIP OF SHARES

     The following table sets forth information with respect to ownership of
Shares beneficially held, or over which control or direction is exercised, by
(1) the directors and executive officers of Conoco, Conoco Canada and Gulf
Indonesia, (2) to the knowledge of such directors and executive officers, after
reasonable inquiry, any associate of any director or executive officer of
Conoco, Conoco Canada or Gulf Indonesia and (3) any person or company acting
jointly or in concert with Conoco Canada in connection with this Offer. The
following table also includes information, based on reports filed by such
persons with the SEC, with respect to beneficial ownership by persons believed
by Gulf Indonesia to be the beneficial owners of more than 5% of its outstanding
Shares. Unless otherwise indicated in a footnote to the table, each person
identified below has the sole right to vote and dispose of the shares indicated
as beneficially owned. To Conoco's knowledge, no person holds more than 10% of
any class of equity securities of Conoco.



                                                                   SHARES BENEFICIALLY OWNED
                                                             --------------------------------------
              NAME OF OWNER AND POSITION HELD                COMMON SHARES(B)   PERCENT OF CLASS(A)
              -------------------------------                ----------------   -------------------
                                                                          
5% Shareholders:
Conoco and Conoco Canada...................................     63,650,000(c)          72.3%
Directors and Executive Officers:
Richard H. Auchinleck......................................        405,970(d)             *
Director, Conoco
Kenneth M. Duberstein......................................              0                *
Director, Conoco
Archie W. Dunham...........................................              0                *
Chairman, President and Chief Executive Officer, Conoco
Ruth R. Harkin.............................................              0                *
Director, Conoco
General Charles C. Krulak..................................              0                *
Director, Conoco
Frank A. McPherson.........................................              0                *
Director, Conoco
William K. Reilly..........................................              0                *
Director, Conoco
William R. Rhodes..........................................              0                *
Director, Conoco
A. R. Sanchez, Jr..........................................              0                *
Director, Conoco
Franklin A. Thomas.........................................              0                *
Director, Conoco


                                        29




                                                                   SHARES BENEFICIALLY OWNED
                                                             --------------------------------------
              NAME OF OWNER AND POSITION HELD                COMMON SHARES(B)   PERCENT OF CLASS(A)
              -------------------------------                ----------------   -------------------
                                                                          
Philip L. Frederickson.....................................              0                *
Executive Officer, Conoco
Thomas C. Knudson..........................................              0                *
Executive Officer, Conoco
Jimmy W. Nokes.............................................              0                *
Executive Officer, Conoco
J. Michael Stinson.........................................              0                *
Executive Officer, Conoco
Robert W. Goldman..........................................              0                *
Director, Conoco Canada and Gulf Indonesia; Executive
Officer, Conoco
H. Earl Joudrie............................................         10,000(e)             *
Director, Conoco Canada
Robert E. McKee, III.......................................              0                *
Director of Conoco Canada; Executive Officer, Conoco
Donald F. Mazankowski......................................         54,550(f)             *
Director, Conoco Canada and Gulf Indonesia
Henry W. Sykes.............................................              0                *
Director and Executive Officer, Conoco Canada
Archibald W. Kennedy.......................................              0                *
Executive Officer, Conoco Canada
Murray E. Hesje............................................              0                *
Executive Officer, Conoco Canada
Robert H. Allen............................................        209,931(g)             *
Chairman of the Board, Gulf Indonesia
Malcom D. Griffiths........................................              0                *
Director, Gulf Indonesia
Rick A. Harrington.........................................              0                *
Director, Gulf Indonesia; Executive Officer, Conoco
Francis H. James...........................................              0                *
Director, Gulf Indonesia
Dr. Ir. Kuntoro Mangkusubroto..............................          8,400(h)             *
Director, Gulf Indonesia
James D. McColgin..........................................              0                *
Director, Gulf Indonesia
John R. Sanders............................................         36,429(i)             *
Director, Gulf Indonesia
Paul C. Warwick............................................         53,950(j)             *
President, Chief Executive Officer and Director, Gulf
  Indonesia
George E. Watkins..........................................              0                *
Director, Gulf Indonesia
Taufik Ahmad...............................................         21,850(k)             *
Executive Officer, Gulf Indonesia
Andrew D.R. Hastings.......................................              0                *
Executive Officer, Gulf Indonesia
Donald D. McKechnie........................................         43,200(l)             *
Executive Officer, Gulf Indonesia
Supramu Santosa............................................        214,800(m)             *
Executive Officer, Gulf Indonesia


                                        30




                                                                   SHARES BENEFICIALLY OWNED
                                                             --------------------------------------
              NAME OF OWNER AND POSITION HELD                COMMON SHARES(B)   PERCENT OF CLASS(A)
              -------------------------------                ----------------   -------------------
                                                                          
Alan P. Scott..............................................              0                *
Executive Officer, Gulf Indonesia
John K. Wearing............................................         44,050(n)             *
Executive Officer, Gulf Indonesia
Cliff W. Zeliff............................................        236,050(o)             *
Executive Officer, Gulf Indonesia
All directors and officers as a group......................      1,339,180              1.5%


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

  *  Less than 1%.

 (a) As of June 4, 2002, there were 88,014,315 Shares issued and outstanding
     and, in the aggregate, 90,038,542 Gulf Indonesia Common Shares outstanding
     on a fully diluted basis.

 (b) In connection with the Offer, all options issued by Gulf Indonesia will
     become fully vested. All options held by a director or executive officer of
     Conoco, Conoco Canada or Gulf Indonesia which vest as a result of the Offer
     have been included in the foregoing table. This table also includes Shares
     which directors and executive officers of Gulf Indonesia are entitled to
     under the Restricted Share Unit/ Deferred Share Unit Plan if they elect to
     take all units under such plan in Shares. Under the Restricted Share
     Unit/Deferred Share Unit Plan, holders may also take such units in cash.

 (c) The address for Conoco is 600 North Dairy Ashford Road, Houston, Texas
     77079. The address for Conoco Canada is 1600, 401-9th Ave. S.W., Calgary,
     Alberta T2P 3C5.

 (d) Includes 405,000 Shares issuable upon exercise of vested options and 970
     Shares issuable upon exercise of RSUs.

 (e) Includes 10,000 Shares issuable upon exercise of vested options.

 (f) Includes 52,500 Shares issuable upon exercise of vested options and 2,050
     Shares issuable upon exercise of RSUs.

 (g) Includes 3,331 Shares held directly, 202,500 Shares issuable upon exercise
     of vested options and 4,100 Shares issuable upon exercise of RSUs.

 (h) Includes 7,500 Shares issuable upon exercise of vested options and 900
     Shares issuable upon exercise of RSUs.

 (i) Includes 4,379 Shares held directly, 30,000 Shares issuable upon exercise
     of vested options and 2,050 Shares issuable upon exercise of RSUs.

 (j) Includes 50,000 Shares issuable upon exercise of vested options and 3,950
     Shares issuable upon exercise of RSUs.

 (k) Includes 20,000 Shares issuable upon exercise of vested options and 1,850
     Shares issuable upon exercise of RSUs.

 (l) Includes 41,000 Shares issuable upon exercise of vested options and 2,200
     Shares issuable upon exercise of RSUs.

(m) Includes 210,250 Shares issuable upon exercise of vested options and 4,550
    Shares issuable upon exercise of RSUs.

 (n) Includes 41,700 Shares issuable upon exercise of vested options and 2,350
     Shares issuable upon exercise of RSUs.

 (o) Includes 10,000 Shares held directly, 220,850 Shares issuable upon exercise
     of vested options and 5,200 Shares issuable upon exercise of RSUs.

     To the best knowledge of Conoco, Conoco Canada and Gulf Indonesia, after
reasonable inquiry, each of their executive officers, directors, affiliates and
subsidiaries (other than Conoco Canada) and each other person described in
clauses (1), (2) or (3) above intends to tender in the Offer all Shares, and all
Shares issued to them upon exercise of Gulf Indonesia options or other similar
rights, held of record or beneficially owned by them.

                                        31


TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES

     Except as set forth on Schedule B hereto, none of Conoco, Conoco Canada or
Gulf Indonesia or, to the knowledge of Conoco, Conoco Canada and Gulf Indonesia,
after reasonable inquiry, any of their respective directors, executive officers,
affiliates, associates or majority owned subsidiaries or any directors or
officers of any of their subsidiaries has effected any transaction in Gulf
Indonesia securities in the past six months.

     Except as set forth on Schedule B hereto, to the knowledge of Conoco,
Conoco Canada and Gulf Indonesia and their directors and executive officers,
after reasonable inquiry, no securities of Gulf Indonesia have been traded in
the past six months by any associate of any director or executive officer of
Conoco Canada or any person or company acting jointly or in concert with Conoco
Canada in connection with this Offer.

     Except as set forth in this Offer to Purchase, none of Conoco, Conoco
Canada or Gulf Indonesia has acquired any of Gulf Indonesia's securities during
the past two years. Neither Conoco nor Conoco Canada will make any market
purchases of Gulf Indonesia Common Shares during the Offer.

     Except as set forth in this Offer to Purchase, during the past two years,
no negotiations, transactions or material contracts concerning a merger,
consolidation, acquisition, tender offer for or other acquisition of any
securities of Gulf Indonesia, an election of directors of Gulf Indonesia, or a
sale or other transfer of a material amount of assets of Gulf Indonesia, has
been entered into or has occurred between any affiliate of Gulf Indonesia,
Conoco or Conoco Canada, between their respective directors or executive
officers or between Gulf Indonesia or any of its affiliates and any unaffiliated
person.

     Except as set forth in this Offer to Purchase, none of Conoco, Conoco
Canada or Gulf Indonesia or their directors or executive officers or, to the
knowledge of Gulf Indonesia, Conoco and Conoco Canada, after reasonable inquiry,
any of their affiliates, or to the knowledge of the directors and executive
officers of Conoco and Conoco Canada, after reasonable inquiry, any associate of
any director or executive officer of Conoco or Conoco Canada, or any person or
company acting jointly or in concert with Conoco or Conoco Canada in connection
with this Offer is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to, or in
connection with, the Offer with respect to any securities of Gulf Indonesia
(including, without limitation, any commitment to acquire securities of Gulf
Indonesia, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any such securities, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against loss
or the giving or withholding of proxies, consents or authorizations).

     Previous Distributions of Shares.  Gulf Indonesia has indicated that other
than as set forth in the following sentence, during the five years prior to the
date of this Offer to Purchase it did not (1) make any purchases of Shares or
(2) issue any Shares, excluding Shares issued pursuant to the exercise of
employee stock options, restricted share units, stock appreciation rights,
warrants and rights. On September 29, 1997, pursuant to its public offering,
Gulf Indonesia issued 14,500,000 Shares for net proceeds of approximately
$266,510,000 and on August 19, 1997, pursuant to a corporate reorganization in
which it acquired all of the shares of certain companies from Gulf Canada
Resources Limited, Gulf Indonesia issued seven Shares.

INTEREST OF CERTAIN PERSONS IN THE OFFER

     Treatment of Options and Other Equity Based Compensation.  As described
under "-- Purpose and Certain Effects of the Offer and the Second-Step
Acquisition", Gulf Indonesia has granted to directors, executive officers and
other employees of Gulf Indonesia options to purchase Shares under the Option
Plan, issued to certain directors and executive officers of Gulf Indonesia RSUs
under its Restricted Share Unit/ Deferred Share Unit Plan and granted to certain
directors of Gulf Indonesia SARs under the LPP. As a result of the Offer, all
unvested options, unvested RSUs and SARs will vest.

     Indemnification.  Under the Support Agreement, the directors and officers
of Gulf Indonesia are entitled to the continuation of certain rights of
indemnification currently existing in their favor and to be insured with respect
to certain matters from and after the completion of this Offer. See "THE SUPPORT
AGREEMENT -- Indemnification".

     Other Benefits.  Except as described in this Offer to Purchase, no payment
or other benefit is proposed to be made or given by Conoco or Conoco Canada to
any of the directors or executive officers of Gulf Indonesia

                                        32


by way of compensation for loss of office or as to their remaining in or
retiring from office if the Offer is successful and, to the knowledge of the
directors and executive officers of Conoco Canada, after reasonable inquiry, no
payment or other benefit is proposed to be made or given by Conoco or Conoco
Canada to any associate of the directors or executive officers of Gulf Indonesia
or to any person or company acting jointly or in concert with Gulf Indonesia in
connection with this Offer.

     Arrangements, Agreements or Understandings.  There are no contracts,
arrangements or understandings, formal or informal, between Conoco or Conoco
Canada and any shareholder of Gulf Indonesia with respect to the Offer or
between Conoco or Conoco Canada and any person or company with respect to any
securities of Gulf Indonesia in relation to the Offer, except as disclosed in
this Offer to Purchase.

     Interlocking Directors and Officers.  In considering the recommendation of
the Board of Directors of Gulf Indonesia and the Independent Committee with
respect to the Offer, shareholders should be aware that certain officers and
directors of Conoco, Conoco Canada and Gulf Indonesia have interests in the
Offer which may present them with certain potential conflicts of interest. In
particular, of the eleven directors of Gulf Indonesia, seven are either
directors, executive officers or senior managers of Conoco or Conoco Canada. In
addition, Paul C. Warwick, a director of Gulf Indonesia, has indicated that he
is a designee of Conoco. However, the Independent Committee was comprised of
three independent directors of Gulf Indonesia and each of the affiliated
directors abstained from voting on the Offer and the Support Agreement.

     Other.  Gulf Indonesia has entered into employment agreements with certain
of its senior officers. In 1998 (in respect of Supramu Santosa and Cliff W.
Zeliff, collectively the "1998 Contracts") and in 2001 (in respect of Taufik
Ahmad, Paul C. Warwick, John K. Wearing and Donald D. McKechnie, collectively
the "2001 Contracts") Gulf Indonesia entered into a series of employment
agreements. The employment contracts provide for continuing employment unless
voluntarily terminated by the employee. The employment contracts provide that
the senior officers are entitled to severance upon being terminated without
cause or upon certain other specified events of constructive dismissal and upon
certain stated events. Thus, in certain circumstances, if such senior officers
of Gulf Indonesia are terminated following the Offer or the Second-Step
Acquisition, they will be entitled to certain benefits.

     If a senior officer is entitled to receive severance under his respective
employment agreement, then he is entitled to receive, and Gulf Indonesia is
obligated to pay or provide, the following:

          1. an undiscounted cash amount equal to one month's base salary
     (including, in the 1998 Contracts, any foreign service supplement),
     multiplied by the number of years of service of such senior officer with
     Gulf Indonesia, subject to a minimum entitlement and payment equal to 24
     months' base salary and a maximum entitlement and payment equal to 30
     months' base salary;

          2. an undiscounted cash amount equal, in the case of the 1998
     Contracts and the employment agreement with Mr. Ahmad, to the value of
     certain benefit plans and programs provided to regular Canadian resident
     employees of Gulf Canada (now Conoco Canada) and equal to one month for
     every year of service with Gulf Indonesia, with a minimum entitlement and
     payment equal to 24 months of benefits value and a maximum entitlement and
     payment equal to 30 months of benefits value; in the 2001 Contracts
     (excluding the employment agreement with Mr. Ahmad), this is an
     undiscounted cash amount equal to fifteen percent (15%) of the base salary
     (excluding pension) to reflect the hypothetical value of certain benefit
     plans and programs provided to regular Canadian residents;

          3. an undiscounted amount equal to two times the target bonus under
     the cash bonus plan of Gulf Indonesia; and

          4. pension benefits under the pension plan of Gulf Indonesia treating
     such senior officer's pension rights as fully vested.

     In addition, Mr. Wearing's employment agreement provides that if after
three years employment with Gulf Indonesia Mr. Wearing decides to voluntarily
resign and return to Canada, Gulf Canada (now Conoco Canada) will make
reasonable efforts to identify, at a minimum, a director level position within
Conoco Canada to offer to Mr. Wearing. If Conoco Canada is unable to offer Mr.
Wearing a director level position, then Mr. Wearing will be entitled to receive
from Conoco Canada termination benefits equal to two times his then current base
salary. Mr. Wearing has been employed by Gulf Indonesia since June 2001.
                                        33


     The Independent Committee and the Board of Directors of Gulf Indonesia were
aware of these actual and potential conflicts of interest and considered them
along with the other matters described in "-- Fairness of the Offer".

CERTAIN RELATED PARTY TRANSACTIONS

     Gulf Indonesia has entered into a number of material transactions with
Conoco Canada and Conoco regarding services, financial matters and corporate
opportunities. Set forth below are summaries of these agreements. Each of these
agreements will terminate if the transactions contemplated in this Offer to
Purchase are consummated.

     1997 Agreements.  With respect to services, Gulf Indonesia and Gulf Canada
(now Conoco Canada) entered into a series of agreements in 1997 relating to
certain ongoing intercompany arrangements, including a technical services
agreement, an information services agreement, a registration rights agreement, a
cross-indemnification agreement and a corporate opportunity agreement.

     The technical services agreement and the information services agreement
provided that, if Gulf Indonesia was unable to provide certain technical and
information services itself, it would be required to obtain such technical and
information services from Gulf Canada as long as Gulf Canada was able to provide
such services in a timely fashion. In addition, an administrative services
agreement provided that Gulf Indonesia was required to obtain from Gulf Canada
substantially all of its required administrative services, including financial,
treasury, accounting, tax, audit, legal and other related services, human
resources services and other administrative services. All these agreements were
originally for 10-year terms beginning in 1997. Gulf Indonesia paid a fee to
Gulf Canada for such services in an amount equal to the cost of providing such
services based on industry averages for the services provided, but in any event
not greater than those fees which an unaffiliated third party would charge Gulf
Indonesia.

     The registration rights agreement provides for, among other things, the
future registration, under the United States Securities Act of 1933, as amended,
of Gulf Indonesia Common Shares owned by Gulf Canada. The registration rights
agreement provides that Gulf Canada can require Gulf Indonesia to register not
more than two public offerings and two private placements of Gulf Indonesia
Common Stock in any 12-month period, so long as each offering or placement has a
value of at least $50 million.

     The cross-indemnification agreement provides that each of Gulf Indonesia
and Gulf Canada will indemnify the other for certain claims made in connection
with the reorganization of Gulf Indonesia undertaken prior to Gulf Indonesia's
initial public offering in 1997.

     The corporate opportunity agreement provides that if Gulf Canada acquires
Indonesian oil and gas assets with a fair market value in excess of $100 million
or a majority equity or voting interest in an entity with Indonesian oil and gas
assets with a fair market value in excess of $100 million, Gulf Canada will,
subject to certain exceptions, within one year either (1) offer to Gulf
Indonesia the right to purchase such Indonesian assets at Gulf Canada's purchase
price plus the amount of any costs, including taxes, that would be incurred by
Gulf Canada in connection with such sale to Gulf Indonesia or (2) cause some or
all of its representatives to resign from Gulf Indonesia's Board of Directors so
that a majority of Gulf Indonesia's directors will have no affiliation with Gulf
Canada. In addition, if Gulf Canada elects to cause such resignations, Gulf
Indonesia will have the right to terminate the corporate opportunity agreement.
The corporate opportunity agreement also provides that Gulf Indonesia will not,
without Gulf Canada's consent, directly acquire non-Indonesian oil and gas
assets or acquire a majority equity or voting interest in any entity with
non-Indonesian oil and gas assets unless a majority of the fair market value of
such assets are located in Indonesia.

     2001 Agreement.  In November 2001, Gulf Indonesia and Conoco entered into a
technical services agreement superceding the 1997 technical services agreement
with Gulf Canada. While similar in many ways to the previous agreement, the new
technical services agreement provides for a more detailed work scope and cost
estimate, enables reciprocal assistance, and provides for the possible use of
experts on an "on call" basis. The new technical services agreement also
provides for the long-term secondment of personnel and, pursuant thereto, Gulf
Indonesia's Vice President, Gas Marketing and Business Development, is provided
by secondment arrangement with Conoco.

                                        34


     2002 Agreement.  In March 2002, Gulf Indonesia and Conoco entered into a
new administrative and information services agreement superceding the previous
information services agreement and administrative services agreement with Gulf
Canada. The new agreement with Conoco is similar to the new technical services
agreement and includes provision for the payment for services on a cost recovery
basis, potential for reciprocal services and the use of a project sheet to
describe the scope of work and estimated costs.

     In connection with financial matters, Gulf Indonesia has arranged to obtain
from Conoco Canada a $65 million credit facility for a term of up to three years
from August 2001 for a fee of 1.5% per annum of the amount undrawn and, in the
case of amounts borrowed, at a cost equal to the cost to Conoco Canada plus a
fee of 1.5% per annum. In addition, Gulf Indonesia on two occasions in 2001 has
invested surplus amounts of cash in short-term notes of Conoco on market terms.
These amounts were repaid.

                                        35


                                   THE OFFER

1.  TERMS OF THE OFFER; EXPIRATION DATE

     Upon the terms and subject to the conditions set forth in the Offer
(including the terms and conditions set forth under "-- Certain Conditions to
the Offer") and, if the Offer is extended or amended, the terms and conditions
of such extension or amendment, Conoco Canada will accept for payment, and pay
for, Gulf Indonesia Common Shares, including Gulf Indonesia Common Shares that
may become outstanding upon the exercise of options and rights to acquire Gulf
Indonesia Common Shares, validly tendered at or prior to the Expiration Date of
the Offer and not properly withdrawn as permitted under "-- Rights of
Withdrawal". The term "Expiration Date" shall mean 6:00 p.m., New York time, on
Friday, July 19, 2002, unless and until Conoco Canada shall have extended the
period for which the Offer is open, in which event the Expiration Date shall
mean the latest time and date on which the Offer, as so extended by Conoco
Canada, shall expire. The period from the date of this Offer to Purchase until
the Expiration Date is referred to as the "Offering Period".

     Subject to the terms and conditions of the Support Agreement, if by the
Expiration Date any or all of the conditions to the Offer have not been
satisfied or waived, Conoco Canada may elect to (1) terminate the Offer and
return all tendered Shares to tendering shareholders, (2) waive all of the
unsatisfied conditions (except the Minimum Tender Condition) and purchase all
Shares validly tendered by the Expiration Date and not properly withdrawn or (3)
extend the Offer. Pursuant to the terms of the Support Agreement, without the
prior written consent of Gulf Indonesia, Conoco Canada may not amend, modify or
change any term of the Offer in any manner materially adverse to the holders of
Shares or waive the Minimum Tender Condition except as set forth in the Support
Agreement. In addition, Conoco Canada has agreed to extend the Offer from time
to time for a period not to exceed 20 days past the initial Expiration Date in
the event that any governmental approval necessary to consummate the Offer has
not been obtained or certain governmental or other actions or proceedings have
been threatened or taken as of the initial Expiration Date; provided that Gulf
Indonesia is not in breach of the Support Agreement. See "-- Certain Conditions
to the Offer".

     Pursuant to the terms of the Support Agreement, Conoco Canada may, without
the consent of Gulf Indonesia, (1) extend the Expiration Date from time to time,
if immediately before the scheduled or extended Expiration Date, any of the
conditions to the Offer have not been satisfied or, to the extent permitted,
waived and (2) extend the Expiration Date for any period required by any rule,
regulation, interpretation or position of any securities authority (whether in
Canada, the United States, Indonesia or elsewhere) applicable to the Offer or as
otherwise required by law. During any such extension, all Gulf Indonesia Common
Shares previously tendered and not properly withdrawn will remain subject to the
Offer, subject to the right of a tendering shareholder to withdraw such
shareholder's Gulf Indonesia Common Shares. See "-- Rights of Withdrawal". In
addition to the foregoing rights of extension, Conoco Canada reserves the right
to make available a "subsequent offering period" in accordance with Rule 14d-11
of the Exchange Act provided that such "subsequent offering period" complies
with applicable Canadian law.

     A subsequent offering period would be an additional period of time,
following the expiration of the Offer, in which shareholders may tender Shares
not tendered during the Offering Period. Any subsequent offering period provided
in connection with the Offer would be for a period not less than 10 calendar
days and not to exceed 20 business days in compliance with both U.S. securities
laws and Canadian provincial securities laws.

     Any extension, delay, termination or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be issued no later than 9:00 a.m.,
New York time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(d), 14d-6(c)
and 14e-1 of the Exchange Act, which require that any material change in the
information published, sent or given to shareholders in connection with the
Offer be promptly disseminated to shareholders in a manner reasonably designed
to inform shareholders of such change) and, without limiting the manner in which
Conoco Canada may choose to make any public announcement, Conoco Canada shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a press release, except as may be
required by applicable law.

                                        36


     Conoco Canada confirms that if it makes a material change in the terms of
the Offer, including any increase or decrease in the consideration to be paid
for the Shares, or the information concerning the Offer, or if Conoco Canada
waives a material condition of the Offer, Conoco Canada will extend the Offer to
the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 of the Exchange Act
and Canadian provincial securities legislation. Under the Exchange Act, the
minimum period during which an Offer must remain open following a change in
price, a change in the percentage of securities being sought or a change in any
dealer's soliciting fee is generally 10 business days. Under the Exchange Act,
the minimum period during which the Offer must remain open following material
changes in the terms or information concerning the Offer, other than a change in
price, a change in the percentage of securities being sought or a change in any
dealer's soliciting fee, will depend upon the relevant facts and circumstances
then existing, including the relative materiality of the changed terms or
information. Under Canadian provincial securities legislation, except for a
waiver of a condition of the Offer, if the terms of the Offer are varied, the
Offer may not expire prior to 10 days after the notice of such variation (a
"Notice of Variation") has been given to any person to whom the Offer was
required to be delivered, unless otherwise permitted by applicable law and
subject to abridgement or elimination of that period pursuant to any orders
granted by applicable courts or Canadian securities commissions. For purposes of
the Offer, a "business day" means any day other than a Saturday, Sunday or U.S.
federal holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York time and, for purposes of Conoco Canada making payments to
the Depositary hereunder, also includes a statutory holiday in Calgary, Alberta.

     In addition, under applicable Canadian provincial securities legislation,
if at any time before or after the Expiration Date, but before the expiration of
all rights of withdrawal with respect to the Offer, a change occurs in the
information contained in this Offer to Purchase that would reasonably be
expected to affect a decision of a shareholder of Gulf Indonesia to tender
Shares pursuant to the Offer (other than a change that is not within the control
of Conoco Canada or of an affiliate of Conoco Canada), Conoco Canada may be
required to give written notice of such change (a "Notice of Change") to any
person to whom the Offer was required to be delivered other than holders of
Shares whose Shares have been accepted for payment pursuant to the Offer as of
the date of the occurrence of the change.

     Gulf Indonesia has provided Conoco Canada with Gulf Indonesia's shareholder
list and security position listings for the purpose of disseminating the Offer
to the holders of Gulf Indonesia Common Shares. This Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Gulf Indonesia
Common Shares and will be furnished to brokers, banks and similar persons whose
names, or the names of whose nominees, appear on the shareholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Gulf
Indonesia Common Shares. This Offer to Purchase will also be mailed to holders
of options to acquire Shares who appear on Gulf Indonesia's records.

2.  ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES

     Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), after the Expiration Date, Conoco Canada will accept for payment,
and will promptly (but in no event later than three business days) after
accepting such Shares for payment make payment to the Depositary for Gulf
Indonesia Common Shares validly tendered and not properly withdrawn during the
Offering Period. Subject to applicable rules of the SEC and Canadian provincial
securities legislation, Conoco Canada expressly reserves the right to delay
acceptance for payment for Shares in order to comply, in whole or in part, with
any applicable law. In all cases, payment for Gulf Indonesia Common Shares
tendered and accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of:

          (1) certificates evidencing such Shares (or receipt by the Depositary
     of a confirmation of a book-entry transfer of such Shares (a "book-entry
     confirmation")) into the Depositary's account at The Depository Trust
     Company (the "Book-Entry Transfer Facility");

                                        37


          (2) a properly completed and duly executed Letter of Transmittal (or a
     facsimile copy thereof), with any required signature guarantees or, in the
     case of a book-entry transfer, the receipt by the Depositary of an Agent's
     Message (as defined below) in lieu of the Letter of Transmittal; and

          (3) any other required documents.

     Tendering shareholders may be paid at different times depending upon when
certificates for Shares or book-entry confirmations with respect thereto are
actually received by the Depositary. For purposes of the Offer, Conoco Canada
will be deemed to have accepted for payment Shares validly tendered and not
properly withdrawn, if and when Conoco Canada gives oral or written notice to
the Depositary of its acceptance for payment of such Shares pursuant to the
Offer. Payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for the tendering shareholders for the purpose of receiving
payments from Conoco Canada and transmitting such payments to the tendering
shareholders. Upon deposit of funds with the Depositary for the purpose of
making payments to tendering shareholders, Conoco Canada's obligation to make
such payments shall be satisfied and tendering shareholders must thereafter look
solely to the Depositary for payments of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR TENDERED GULF INDONESIA COMMON SHARES BE
PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.

     If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, certificates for such unpurchased
Shares will be returned, without expense, to the tendering shareholder (or, in
the case of Shares tendered by book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedures set forth under "-- Procedure for Tendering Shares", such Shares will
be credited to an account maintained with the Book-Entry Transfer Facility), as
soon as practicable following expiration or termination of the Offer.

     Conoco Canada reserves the right to transfer or assign, in whole or in part
and from time to time, to one or more of its affiliates the right to purchase
all or any portion of the Gulf Indonesia Common Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Conoco Canada of its
obligations under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.

3.  PROCEDURE FOR TENDERING SHARES

     Valid Tender.  To validly tender Gulf Indonesia Common Shares pursuant to
the Offer,

          (1) a properly completed and duly executed Letter of Transmittal (or a
     facsimile copy thereof) with any required signature guarantees,
     certificates for Shares to be tendered and any other required documents,
     must be received by the Depositary prior to the Expiration Date at its
     address set forth on the back cover of this Offer to Purchase;

          (2) such Shares must be delivered pursuant to the procedure for
     book-entry transfer described below (and the book-entry confirmation of
     such delivery received by the Depositary, including an Agent's Message if
     the tendering shareholder has not delivered a Letter of Transmittal), prior
     to the Expiration Date; or

          (3) the tendering shareholder must comply with the guaranteed delivery
     procedures set forth below.

     The term "Agent's Message" means a message transmitted electronically by
the Book-Entry Transfer Facility to, and received by, the Depositary and forming
a part of a book-entry confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that Conoco Canada may
enforce such agreement against the participant.

     Book-Entry Delivery.  The Depositary will establish accounts with respect
to the Gulf Indonesia Common Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after
                                        38


the date of this Offer to Purchase. Any financial institution that is a
participant in the Book-Entry Transfer Facility's systems may make book-entry
transfers of Shares by causing the Book-Entry Transfer Facility to transfer such
Shares into the Depositary's account in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer, either the Letter of Transmittal
(or a facsimile copy thereof), properly completed and duly executed, together
with any required signature guarantees, or an Agent's Message in lieu of the
Letter of Transmittal, and any other required documents, must, in any case, be
transmitted to and received by the Depositary at its address set forth on the
back cover of this Offer to Purchase by the Expiration Date, or the tendering
shareholder must comply with the guaranteed delivery procedures described below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.

     Signature Guarantees.  Signatures on a Letter of Transmittal need not be
guaranteed (1) if the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in the
Book-Entry Transfer Facility's systems whose name appears on a security position
listing as the owner of the Shares) of Shares tendered therewith and such
registered holder has not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (2) if such Shares are tendered for the account of a financial
institution (which includes most commercial banks, savings and loan associations
and brokerage houses) that is a participant in the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Program or the Stock
Exchange Medallion Program or by any other "Eligible Guarantor Institution," as
such term is defined in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal. If the certificates for Gulf Indonesia Common Shares are
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made, or certificates for Shares not
tendered or not accepted for payment are to be returned, to a person other than
the registered holder of the certificates surrendered, then the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders or
owners appear on the certificates, with the signatures on the certificates or
stock powers guaranteed as described above. If the Letter of Transmittal or
stock powers are signed or any certificate is endorsed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing and, unless waived by Conoco Canada, proper evidence
satisfactory to Conoco Canada of their authority to so act must be submitted.
See Instructions 1 and 5 of the Letter of Transmittal.

     Guaranteed Delivery.  A shareholder who desires to tender Shares pursuant
to the Offer and whose certificates for Shares are not immediately available, or
who cannot comply with the procedure for book-entry transfer on a timely basis
or who cannot deliver all required documents to the Depositary prior to the
Expiration Date, may tender such Shares by following all of the procedures set
forth below:

          (1) such tender is made by or through an Eligible Institution;

          (2) a properly completed and duly executed Notice of Guaranteed
     Delivery, substantially in the form provided by Conoco Canada, is received
     by the Depositary, as provided below, prior to the Expiration Date; and

          (3) the certificates for all tendered Shares, in proper form for
     transfer (or a book-entry confirmation with respect to all such Shares),
     together with a properly completed and duly executed Letter of Transmittal
     (or a facsimile copy thereof), with any required signature guarantees (or,
     in the case of a book-entry transfer, an Agent's Message in lieu of the
     Letter of Transmittal), and any other required documents, are received by
     the Depositary within three trading days after the Expiration Date. A
     "trading day" is any day on which the New York Stock Exchange is open for
     business.

     The Notice of Guaranteed Delivery may be delivered by hand, overnight
delivery or transmitted by facsimile to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
                                        39


     THE METHOD OF DELIVERY OF THE GULF INDONESIA COMMON SHARES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
SHAREHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT THE SHAREHOLDER
USE PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

     Appointment of Proxies.  By executing a Letter of Transmittal as set forth
above, the tendering shareholder irrevocably appoints Conoco Canada's designees
as such shareholder's attorneys-in-fact and proxies, each with full power of
substitution and resubstitution, to the full extent of such shareholder's rights
with respect to the Shares tendered by such shareholder and accepted for payment
by Conoco Canada (and any and all non-cash dividends, distributions, rights,
other Shares or other securities issued or issuable in respect of such Shares on
or after the date of this Offer to Purchase). All such powers of attorney and
proxies will be considered coupled with an interest in the tendered Shares. Such
appointment is effective when, and only to the extent that, Conoco Canada
deposits the payment for such Shares with the Depositary. Upon the effectiveness
of such appointment, all prior powers of attorney, proxies and consents given by
such shareholder will be revoked, and no subsequent powers of attorney, proxies
and consents may be given (and, if given, will not be deemed effective). Conoco
Canada's designees will, with respect to the Shares for which the appointment is
effective, be empowered to exercise all voting and other rights of such
shareholder as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the shareholders of Gulf Indonesia, by written
consent in lieu of any such meeting or otherwise. Conoco Canada reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon our payment for such Shares, Conoco Canada must be able to
exercise full voting rights with respect to such Shares.

     Determination of Validity.  All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Conoco Canada in its sole discretion, which determination
will be final and binding. Conoco Canada reserves the absolute right to reject
any and all tenders determined by Conoco Canada not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of Conoco
Canada's counsel, be unlawful. Conoco Canada also reserves the absolute right to
waive any defect or irregularity in the tender of any Shares of any particular
shareholder whether or not similar defects or irregularities are waived in the
case of other shareholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities relating thereto have been
cured or waived to Conoco Canada's satisfaction. None of Conoco, Conoco Canada,
the Depositary, the Information Agent, the Dealer Managers or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.

     Backup Withholding.  In order to avoid "backup withholding" of U.S. Federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Gulf Indonesia Common Shares in the Offer must, unless an exemption applies,
provide the Depositary with such shareholder's correct taxpayer identification
number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury
that such TIN is correct and that such shareholder is not subject to backup
withholding. If a shareholder does not provide such shareholder's correct TIN or
fails to provide the certifications described above, the U.S. Internal Revenue
Service (the "IRS") may impose a penalty on such shareholder and payment of cash
to such shareholder pursuant to the Offer may be subject to backup withholding
of 30%. Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained by filing a tax return with the IRS. All shareholders who are U.S.
persons surrendering Shares pursuant to the Offer should complete and sign the
main signature form and the Substitute Form W-9 included as part of the Letter
of Transmittal to provide the information and certification necessary to avoid
backup withholding (unless an applicable exemption exists and is proved in a
manner satisfactory to Conoco Canada and the Depositary). Certain shareholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Non-corporate non-U.S.
shareholders should complete and sign the main signature form and a statement
(Form W-8BEN), signed under penalties of perjury, attesting to that

                                        40


shareholder's exempt status (such forms may be obtained from the Depositary), in
order to avoid backup withholding. See Instruction 8 of the Letter of
Transmittal.

4.  RIGHTS OF WITHDRAWAL

     Tenders of Gulf Indonesia Common Shares made pursuant to the Offer are
irrevocable except as otherwise set forth below. Except as required or permitted
by applicable law, tendered Shares may be withdrawn:

          (1) at any time prior to Conoco Canada's acceptance of Shares validly
     tendered in the Offer for payment; and

          (2) if Conoco Canada has not made payment to the Depositary in respect
     of validly tendered Shares within three business days of its acceptance of
     such Shares for payment.

     In addition, if Conoco Canada has not accepted tendered Shares for payment
by August 11, 2002, such Shares may be withdrawn at any time on or after August
11, 2002 until Conoco Canada accepts such Shares for payment.

     Canadian provincial securities law provides additional rights of withdrawal
in certain circumstances when a Notice of Change or a Notice of Variation is
delivered. In the event any such notice is delivered, any accompanying rights of
withdrawal will be discussed in such notice.

     For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify the name of the person having tendered the Shares to
be withdrawn, the number or amount of Shares to be withdrawn and the names in
which the certificate(s) evidencing the Shares to be withdrawn are registered,
if different from that of the person who tendered such Shares. The signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution,
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in "-- Procedure for Tendering Shares", any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, the name of the registered holder and the serial
numbers of the particular certificates evidencing the Shares to be withdrawn
must also be furnished to the Depositary as aforesaid prior to the physical
release of such certificates.

     All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Conoco Canada, in its sole
discretion, which determination shall be final and binding. None of Conoco,
Conoco Canada, the Depositary, the Information Agent, the Dealer Managers or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give such notification.

     Withdrawals of tender for Shares may not be rescinded, and any Shares
properly withdrawn will be deemed not to have been validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by following one of
the procedures described under "-- Procedure for Tendering Shares" at any time
prior to the Expiration Date.

     If Conoco Canada extends the Offer, is delayed in its acceptance for
payment of Shares, or is unable to accept for payment Shares pursuant to the
Offer, for any reason, then, without prejudice to Conoco Canada's rights under
the Offer, the Depositary may, nevertheless, on Conoco Canada's behalf, retain
tendered Shares, and such Shares may not be withdrawn except to the extent that
tendering shareholders are entitled to withdrawal rights as set forth in this
Section. Any such delay will be accompanied by an extension of the Offer to the
extent required by law.

     In addition to the rights of withdrawal set forth in this Section, Gulf
Indonesia shareholders in certain Canadian provinces may be entitled to
statutory rights of rescission and damages. See "SHAREHOLDERS' STATUTORY
RIGHTS".
                                        41


5.  CERTAIN CONDITIONS TO THE OFFER

     Notwithstanding any provision of the Offer to the contrary, Conoco Canada
will not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC (including Rule 14e-1(c) under the Exchange Act) or
Canadian provincial securities commissions, pay for any Shares tendered pursuant
to the Offer and may (in accordance with the Support Agreement) terminate or
extend the Offer, if the following conditions are not satisfied or waived by
Conoco Canada at or prior to the Expiration Date (provided that Conoco Canada
may not waive the Minimum Tender Condition without the prior consent of Gulf
Indonesia):

          (1) there shall have been validly tendered in the Offer and not
     properly withdrawn that number of Shares representing more than 50% of the
     Shares outstanding (calculated on a fully diluted basis) not owned by
     Conoco Canada, its directors and executive officers, its affiliates, such
     affiliates' directors and executive officers (other than the directors of
     Gulf Indonesia who are independent of Conoco Canada under Rule 61-501 of
     the Ontario Securities Commission) or any person acting jointly or in
     concert with Conoco Canada in connection with the Offer (the "Minimum
     Tender Condition");

          (2) all sanctions, rulings, exceptions, waivers, permits, orders,
     consents or approvals of any governmental entity (whether in Canada, the
     United States, Indonesia or elsewhere) which, in Conoco Canada's reasonable
     judgment, are necessary in connection with the Offer or the Second-Step
     Acquisition shall have been obtained on terms and conditions reasonably
     satisfactory to Conoco Canada;

          (3) (i) no act, action, suit, proceeding, obligation or opposition
     shall have been threatened or taken before or by any governmental entity or
     by any other person (in the case of such other person, which has a
     reasonable likelihood of success), and (ii) no law, regulation, rule,
     statute, judgment, order, injunction or policy shall have been enacted,
     promulgated, amended or applied, in either case in the reasonable judgment
     of Conoco Canada:

             (a) to (A) cease trade, enjoin, prohibit or impose limitations,
        damages or conditions on (x) the purchase by, or sale to, Conoco Canada
        of the Shares or any of them or the consummation of the transactions
        contemplated by the Support Agreement, (y) the right of Conoco Canada to
        own or exercise full rights of ownership of the Shares or any of them,
        or (z) the ability of Conoco Canada or Conoco to exercise full ownership
        rights over or operate the businesses or assets of Gulf Indonesia and
        its subsidiaries, or (B) compel Conoco Canada or Conoco (or any of their
        respective affiliates) to dispose of or to hold separate any portion of
        their business or assets or to dispose or to hold separate any portion
        of the business or assets of or any of Gulf Indonesia or its
        subsidiaries;

             (b) which has materially adversely affected or, if the Offer were
        consummated, could materially adversely affect Gulf Indonesia and its
        subsidiaries considered as a whole; or

             (c) which challenges or would prevent completion of the Offer or
        which would have a material adverse effect on the ability of Conoco
        Canada to complete a Second-Step Acquisition;

          (4) there shall not exist any prohibition at law or legal restraint
     against Conoco Canada accepting and paying for any Shares tendered in the
     Offer or completing a Second-Step Acquisition;

          (5) Conoco Canada shall have determined in its reasonable judgment
     that there does not exist and has not occurred (or, if there does exist or
     shall have previously occurred, there shall not have been disclosed prior
     to the date of the Support Agreement, generally or to Conoco or Conoco
     Canada) any material adverse change (as defined under "THE SUPPORT
     AGREEMENT -- Certain Conditions to the Second-Step Acquisition") to Gulf
     Indonesia and its subsidiaries considered as a whole;

          (6) all representations and warranties of Gulf Indonesia in the
     Support Agreement qualified as to materiality shall be true and correct and
     those not so qualified shall be true and correct in all material respects
     as of the date of the Support Agreement and as of the Expiration Date as if
     made on and as of such date (except to the extent that such representations
     and warranties speak as of an earlier date) and Gulf Indonesia shall have
     performed in all material respects all covenants to be performed by it
     under the Support Agreement;

                                        42


          (7) there shall not be in force and non-appealable any injunction,
     order or decree issued by a court or other governmental entity of competent
     jurisdiction in Canada, the United States or elsewhere restraining or
     enjoining the consummation of the Offer, a Second-Step Acquisition or any
     other transaction contemplated by the Support Agreement; and

          (8) the Support Agreement shall not have been terminated.

     Subject to the terms of the Support Agreement, the foregoing conditions are
for the sole benefit of Conoco Canada and Conoco and may be asserted by Conoco
Canada or Conoco regardless of the circumstances (including any action or
inaction by Conoco Canada or Conoco) giving rise to any such conditions or may
be waived by Conoco Canada or Conoco in whole or in part at any time and from
time to time prior to the Expiration Date (subject, in the case of any waiver,
to the requirements of the Exchange Act and Canadian provincial securities
legislation); provided that the Minimum Tender Condition may not be waived
without the prior consent of Gulf Indonesia. The failure by Conoco Canada or
Conoco at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time prior to the Expiration
Date.

     Conoco Canada has agreed to extend the Offer from time to time for a period
not to exceed 20 days past the initial Expiration Date in the event that any of
the conditions set forth under the immediately preceding clauses (2) or (3)(i)
have not been satisfied as of the initial Expiration Date; provided Gulf
Indonesia is not in breach of the Support Agreement.

6.  CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

     The following is a summary of certain U.S. Federal income tax consequences
of the Offer and the Compulsory Acquisition (as defined under "THE SECOND-STEP
ACQUISITION") to holders who are U.S. persons and whose Shares are purchased
pursuant to the Offer or the Compulsory Acquisition. The summary is based on the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable current and proposed U.S. Treasury Regulations issued thereunder,
judicial authority and administrative rulings and practice, all of which are
subject to change, possibly with retroactive effect, at any time and, therefore,
the following statements and conclusions could be altered or modified. The
discussion does not address holders of Shares in whose hands Gulf Indonesia
Common Shares are not capital assets, nor does it address persons who are
considered (pursuant to Section 1248 of the Code) as owning 10% or more of the
total combined voting power of all classes of stock entitled to vote in Gulf
Indonesia at any time during the 5-year period ending on the date of sale
pursuant to the Offer or the Compulsory Acquisition, nor does it address holders
who hold Shares as part of a hedging, "straddle," conversion or other integrated
transaction, or who received Shares upon conversion of securities or exercise of
warrants or other rights to acquire Shares or pursuant to the exercise of
employee stock options or otherwise as compensation, or to holders of restricted
Shares received as compensation or to holders of Shares who are in special tax
situations (such as insurance companies, tax-exempt organizations, financial
institutions, U.S. expatriates or non-U.S. persons). Furthermore, the discussion
does not address any aspect of state, local or foreign taxation or estate and
gift taxation. For these purposes, a U.S. person means a beneficial owner of
Gulf Indonesia Common Shares that is, for U.S. Federal income tax purposes, (i)
an individual citizen or resident alien of the United States, (ii) a corporation
or other entity taxable as a corporation created or organized under the laws of
the United States (Federal or state) or (iii) an estate or trust whose worldwide
income is subject to U.S. Federal income taxation.

     The U.S. Federal income tax consequences set forth below are included for
general informational purposes only and are based upon current law. The
following summary does not purport to consider all aspects of U.S. Federal
income taxation that might be relevant to shareholders of Gulf Indonesia.
Because individual circumstances may differ, each shareholder should consult
such shareholder's own tax advisor to determine the applicability of the rules
discussed below to such shareholder and the particular tax effects of the Offer,
the Compulsory Acquisition or the Statutory Transaction, including the
application and effect of state, local and other tax laws.

                                        43


     The receipt of cash for Gulf Indonesia Common Shares pursuant to the Offer
or the Compulsory Acquisition will be a taxable transaction for U.S. Federal
income tax purposes (and also may be a taxable transaction under applicable
state, local, foreign and other income tax laws). In general, for U.S. Federal
income tax purposes, a holder of Gulf Indonesia Common Shares that is a U.S.
person will recognize gain or loss equal to the difference between the amount of
cash received by such holder pursuant to the Offer or the Compulsory
Acquisition, as the case may be, and the holder's adjusted tax basis (determined
in U.S. dollars) in the Shares sold pursuant to the Offer or acquired pursuant
to the Compulsory Acquisition, as the case may be. Gain or loss must be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or the Compulsory
Acquisition. If the Shares exchanged constitute capital assets in the hands of
the U.S. person, gain or loss will be capital gain or loss. In general, capital
gains recognized by an individual will be subject to a maximum U.S. Federal
income tax rate of 20% if the Shares were held for more than one year on the
date of sale. Certain limitations may apply on the use of capital losses. Any
capital gain or loss recognized by a U.S. person will generally be income from
sources within the United States for foreign tax credit purposes.

     If Conoco Canada is unable to effect the Compulsory Acquisition or if
Conoco Canada elects not to proceed with the Compulsory Acquisition, then Conoco
Canada may propose a Statutory Transaction as described in "THE SECOND-STEP
ACQUISITION -- Statutory Transaction and Certain Appraisal Rights". The U.S.
Federal income tax consequences resulting therefrom will depend upon the manner
in which the transaction is carried out and may be substantially similar to or
materially different from the consequences described above. All shareholders who
are U.S. persons should consult their own income tax advisors with respect to
the income tax consequences to them of having their Shares acquired pursuant to
a Statutory Transaction. Except as described below with respect to a Statutory
Transaction that is effected by means of an amalgamation, this summary does not
describe the tax consequences of any such transaction to a U.S. person.

     A Statutory Transaction may be implemented by means of an amalgamation of
Gulf Indonesia with Conoco Canada or an affiliate of Conoco Canada pursuant to
which holders who have not tendered their Shares pursuant to the Offer would
have their Shares exchanged on the amalgamation for redeemable preference shares
of the amalgamated corporation ("Redeemable Shares") which would then be
immediately redeemed for cash. In such case, the amalgamation and subsequent
redemption will generally be treated, for U.S. Federal income tax purposes, as a
single transaction in which the Shares are exchanged for cash, and U.S. persons
will generally be taxed in the same manner and at the same rates as if they had
sold their Shares for such cash pursuant to the Offer.

     Payments in connection with the Offer or the Compulsory Acquisition may be
subject to "backup withholding" at a 30% rate. Backup withholding generally
applies if a holder (1) fails to furnish such holder's social security number or
other taxpayer identification number, (2) furnishes an incorrect taxpayer
identification number, (3) fails to properly include a reportable interest or
dividend payment on its U.S. Federal income tax return or (4) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the taxpayer identification number provided is its correct number
and that it is not subject to backup withholding. Backup withholding is not an
additional tax but merely an advance payment, which may be refunded to the
extent it results in an overpayment of tax. Certain persons generally are
entitled to exemption from backup withholding, including corporations, financial
institutions and certain non-U.S. shareholders if such non-U.S. shareholders
submit a statement, signed under penalties of perjury, attesting to their exempt
status. Certain penalties apply for failure to furnish correct information and
for failure to include reportable payments in income. Each shareholder should
consult such shareholder's own tax advisor as to its qualification for exemption
from backup withholding and the procedure for obtaining such exemption.

     All shareholders who are U.S. persons surrendering Gulf Indonesia Common
Shares pursuant to the Offer should complete and sign the main signature form
and the Substitute Form W-9 included as part of the Letter of Transmittal to
provide the information and certification necessary to avoid backup withholding
(unless an applicable exemption exists and is proved in a manner satisfactory to
us and the Depositary). Non-corporate non-U.S. shareholders should complete and
sign the main signature form and a statement
                                        44


(Form W-8BEN), signed under penalties of perjury, attesting to that
shareholder's exempt status (such forms can be obtained from the Depositary) in
order to avoid backup withholding.

     THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE TO SHAREHOLDERS IN SPECIAL SITUATIONS
SUCH AS SHAREHOLDERS WHO RECEIVED THEIR SHARES UPON THE EXERCISE OF EMPLOYEE
STOCK OPTIONS OR OTHERWISE AS COMPENSATION AND SHAREHOLDERS WHO ARE NOT U.S.
PERSONS. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER, THE COMPULSORY ACQUISITION OR
THE STATUTORY TRANSACTION, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL,
STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.

7.  CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

     In the opinion of Blake, Cassels & Graydon LLP, Canadian counsel to Conoco
Canada, the following is a summary of the principal Canadian federal income tax
considerations under the Income Tax Act (Canada) (the "Tax Act") generally
applicable to holders who tender their Shares in the Offer or otherwise dispose
of their Shares pursuant to transactions described under "THE SECOND-STEP
ACQUISITION".

     This summary is based on the current provisions and regulations of the Tax
Act and counsel's understanding of the administrative practices and assessing
policies of the Canada Customs and Revenue Agency (the "CCRA"). This summary
also takes into account all specific proposals to amend the Tax Act and the
regulations promulgated thereunder publicly announced prior to the date hereof
(the "Proposed Amendments"), although there is no certainty that such Proposed
Amendments will be enacted in the form proposed, if at all. This summary does
not otherwise take into account or anticipate any changes in law, whether by
judicial, governmental or legislative decision or action or changes in
administrative practices or assessing policies of the CCRA, nor does it take
into account provincial, territorial or foreign income tax legislation or
considerations. The provisions of provincial income tax legislation vary from
province to province in Canada and in some cases differ from federal income tax
legislation. In addition, this summary is not applicable to any shareholder that
is a "specified financial institution" or a "financial institution" as such
terms are defined under the Tax Act. Any such holders should consult their own
tax advisors.

     THE SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR
SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE OR REPRESENTATIONS TO ANY
PARTICULAR GULF INDONESIA SHAREHOLDER. ACCORDINGLY, SHAREHOLDERS SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES, INCLUDING
THE APPLICATION AND EFFECT OF THE INCOME AND OTHER TAX LAWS OF ANY COUNTRY,
PROVINCE, STATE OR LOCAL TAX AUTHORITY.

     Residents of Canada.  The following portion of the summary is generally
applicable only to a shareholder who, at all relevant times, for purposes of the
Tax Act, is, or is deemed to be, a resident of Canada, deals at arm's length
with Gulf Indonesia and Conoco Canada, is not affiliated with Gulf Indonesia or
Conoco Canada, and holds Shares as capital property. Certain shareholders whose
Shares might not otherwise qualify as capital property may, in certain
circumstances, treat Shares as capital property by making the irrevocable
election permitted by subsection 39(4) of the Tax Act.

     1. Disposition of Shares Pursuant to the Offer.  A shareholder who disposes
of Shares pursuant to the Offer will realize a capital gain (or capital loss)
equal to the amount by which the proceeds of disposition, net of any reasonable
costs of disposition, exceed (or are less than) the adjusted cost base of the
Shares to the holder.

     For purposes of computing the capital gain (or capital loss) realized upon
the disposition of Shares pursuant to the Offer, a shareholder will be
considered to have disposed of such Shares to Conoco Canada for proceeds of
disposition equal to the aggregate amount of the cash received in respect of
such Shares.

     2. Capital Gains and Capital Losses.  A shareholder is required to include
one-half of the amount of any resulting capital gain (a "taxable capital gain")
in income, and is generally entitled to deduct one-half of the amount of any
resulting capital loss (an "allowable capital loss") against taxable capital
gains realized in the year of disposition, in accordance with the detailed rules
of the Tax Act. Allowable capital losses not deducted in the taxation year in
which they are realized may be carried back and deducted in any of the three
preceding taxation years or carried forward and deducted in any following
taxation year against taxable capital gains
                                        45


realized in such taxation years, to the extent and under the circumstances
specified in the Tax Act, including certain transitional rules.

     In general, a capital loss otherwise arising upon the disposition of a
Share by a corporation may be reduced by certain dividends previously received
or deemed to have been received on such Share or on another share for which such
Share was exchanged pursuant to certain tax-deferred rollover provisions. Any
such reduction will not occur where the corporate holder owned the Share
continuously for 365 days or longer immediately before the disposition and such
holder (together with any persons with whom it did not deal at arm's length for
purposes of the Tax Act) did not own more than 5% of any class or series of
shares in the capital stock of Gulf Indonesia at the time the relevant dividends
were received or deemed to have been received. Similar rules may also apply in
other circumstances, including where a corporation, trust or partnership is a
member of a partnership or a beneficiary of a trust that owns Shares. Holders to
whom these rules may be relevant should consult their own advisors.

     Capital gains realized by an individual or trust may give rise to
alternative minimum tax under the Tax Act. The Tax Act generally imposes a
refundable tax of 6 2/3% on investment income earned by a Canadian-controlled
private corporation (other than dividends deductible in computing the
corporation's taxable income). For this purpose, investment income includes
taxable capital gains.

     3. Termination of Listing.  Conoco Canada does not believe, based on its
investigations, that as of the date hereof Gulf Indonesia is a public
corporation for purposes of the Tax Act. Accordingly, if the Shares cease to be
listed on a prescribed stock exchange for purposes of the Tax Act, holders which
are trusts governed by registered retirement savings plans, registered
retirement income funds, deferred profit sharing plans or registered education
savings plans may experience adverse income tax consequences. Such holders
should consult their own tax advisors.

     4. Compulsory Acquisition.  As described under the heading "THE SECOND-STEP
ACQUISITION -- Compulsory Acquisition and Certain Appraisal Rights", Conoco
Canada may, in certain circumstances, acquire Shares pursuant to a compulsory
acquisition under the NBCA. The tax consequences to a holder of a disposition of
Shares in such circumstances generally will be as described above under
"Residents of Canada -- Disposition of Shares Pursuant to the Offer" and
"Residents of Canada -- Capital Gains and Capital Losses", but holders whose
Shares may be so acquired should consult their own tax advisors in this regard.

     5. Statutory Transaction.  If the compulsory acquisition provisions of the
NBCA are not utilized, Conoco Canada may propose other means of acquiring the
remaining issued and outstanding Shares. The tax treatment of a Statutory
Transaction to a shareholder will depend upon the exact manner in which the
Statutory Transaction is carried out and may be materially less favorable than
the tax treatment that would apply if Shares were tendered to Conoco Canada
pursuant to the Offer. Shareholders should consult their own tax advisors for
advice with respect to the income tax consequences to them of having their
Shares acquired pursuant to a Statutory Transaction.

     A Statutory Transaction could be implemented by means of an amalgamation of
Gulf Indonesia with Conoco Canada or an affiliate of Conoco Canada pursuant to
which holders who have not tendered their Shares in the Offer would have their
Shares exchanged for Redeemable Shares which would then be immediately redeemed
for cash. A shareholder of Gulf Indonesia generally would not realize a capital
gain or capital loss as a result of such exchange, and the cost of the
Redeemable Shares received would generally be the aggregate adjusted cost base
of the Shares to the shareholder immediately before the amalgamation.

     Upon the redemption of Redeemable Shares, the holder thereof would
generally be deemed to have received a dividend (subject to the potential
application of subsection 55(2) of the Tax Act to holders of such Redeemable
Shares that are corporations as discussed below) equal to the amount by which
the redemption price of the Redeemable Shares exceeds their paid-up capital for
purposes of the Tax Act. The difference between the redemption price and the
amount of the deemed dividend would be treated as proceeds of disposition of
such Redeemable Shares for purposes of computing any capital gain or capital
loss arising on the redemption of such Redeemable Shares.

                                        46


     Subject to the potential application of subsection 55(2) discussed below,
dividends deemed to be received by a corporation as a result of the redemption
of the Redeemable Shares will be included in computing its income, but normally
will also be deductible in computing its taxable income. Subsection 55(2) of the
Tax Act provides that where a corporate shareholder is deemed to receive a
dividend under certain circumstances including those described above, all or
part of the deemed dividend may be treated as proceeds of disposition of the
Redeemable Shares for the purpose of computing the holder's capital gain or
capital loss on the redemption of such Redeemable Shares. Accordingly, corporate
shareholders should consult their tax advisors for specific advice with respect
to the potential application of this provision.

     A shareholder that is a "private corporation" or a "subject corporation"
(as such terms are defined in the Tax Act) may be liable to pay the 33 1/3%
refundable tax under Part IV of the Tax Act on dividends deemed to be received
on the Redeemable Shares to the extent that such dividends are deductible in
computing the corporation's taxable income.

     In the case of a shareholder who is an individual, dividends deemed to be
received as a result of the redemption of the Redeemable Shares will be included
in computing the holder's income, and will generally be subject to the gross-up
and dividend tax credit rules normally applicable to taxable dividends paid by a
taxable Canadian corporation.

     Under the current administrative practice of the CCRA, shareholders who
exercise their right of appraisal and dissent in respect of an amalgamation
should be considered to have disposed of their Shares for proceeds of
disposition equal to the amount paid by the amalgamated corporation to the
dissenting shareholder therefor, other than interest awarded by the court (if
any). Because of uncertainties under the relevant legislation as to whether such
amounts paid to a dissenting shareholder would be treated entirely as proceeds
of disposition, or in part as the payment of a deemed dividend, dissenting
shareholders should consult with their own tax advisors in this regard.

     Non-Residents of Canada.  The following portion of the summary is generally
applicable only to a holder who, at all relevant times, for purposes of the Tax
Act is neither resident nor deemed to be resident in Canada, deals at arm's
length with Gulf Indonesia and Conoco Canada, is not affiliated with Gulf
Indonesia or Conoco Canada, holds Shares as capital property and does not use or
hold, and is not deemed to use or hold, Shares in or in the course of carrying
on a business in Canada. Special rules which are not discussed in this summary
may apply to a non-resident holder that is an insurer for whom Shares are
"designated insurance property" under the Tax Act.

     1. Disposition of Shares Pursuant to the Offer.  A non-resident holder will
not be subject to tax under the Tax Act on any capital gain realized on a
disposition of Shares pursuant to the Offer unless those Shares constitute
"taxable Canadian property" to the holder.

     Generally, a Share will not be taxable Canadian property to a non-resident
holder at a particular time provided that such share is listed on a prescribed
stock exchange (which currently includes the New York Stock Exchange) at that
time and at no time during the 60-month period immediately preceding the
disposition of such Share did the non-resident holder, persons with whom the
non-resident holder did not deal at arm's length for purposes of the Tax Act, or
the non-resident holder together with all such persons, own 25% or more of the
issued shares of any class or series of shares in the capital stock of Gulf
Indonesia. For this purpose, a non-resident holder and a person with whom such
non-resident holder does not deal at arm's length will be considered by the CCRA
to own any share in respect of which such non-resident holder or person has an
interest or option or other acquisition right. A Share may also be deemed to be
taxable Canadian property where the holder acquired the Share in certain
circumstances.

     In the event that the Shares constitute taxable Canadian property to a
particular non-resident holder and a capital gain realized on the disposition of
such Shares pursuant to the Offer is not exempt from tax under the Tax Act by
virtue of the terms of an income tax treaty or convention between Canada and the
country in which the non-resident holder is resident, such non-resident holder
will realize a capital gain (or capital loss) generally in the circumstances and
computed in the manner described above under "Residents of Canada -- Disposition
of Shares Pursuant to the Offer" and the tax consequences described above under
"Residents of

                                        47


Canada -- Capital Gains and Capital Losses" will generally apply. Non-resident
holders whose Shares are taxable Canadian property should consult their own tax
advisors for advice having regard to their particular circumstances.

     2. Compulsory Acquisition.  As described under the heading "THE SECOND-STEP
ACQUISITION -- Compulsory Acquisition and Certain Appraisal Rights", Conoco
Canada may, in certain circumstances, acquire Shares pursuant to a compulsory
acquisition under the NBCA. Where a non-resident holder disposes of Shares that
are taxable Canadian property for purposes of the Tax Act, the disposition may
give rise to a capital gain. If the Shares are not listed on a prescribed stock
exchange at the time of disposition, they will be taxable Canadian property to a
non-resident holder. If such capital gain is not exempt from Canadian taxation
under the terms of an applicable income tax treaty or convention, the tax
consequences as described above under "Residents of Canada -- Disposition of
Shares Pursuant to the Offer" and "Residents of Canada -- Capital Gains and
Capital Losses" will generally apply. In addition, if the Shares are not listed
on a prescribed stock exchange at the time of disposition, the notification and
withholding provisions of Section 116 of the Tax Act will apply to the
non-resident holder and accordingly Conoco Canada may withhold amounts from the
proceeds of disposition payable to the non-resident holder on account of
Canadian taxes.

     NON-RESIDENT HOLDERS WHOSE SHARES ARE BEING COMPULSORILY ACQUIRED SHOULD
CONSULT THEIR OWN TAX ADVISORS FOR ADVICE HAVING REGARD TO THEIR PARTICULAR
CIRCUMSTANCES.

     3. Statutory Transaction.  As described under the heading "THE SECOND-STEP
ACQUISITION -- Statutory Transaction and Certain Appraisal Rights", if Conoco
Canada does not acquire all the Shares pursuant to the Offer or by means of a
compulsory acquisition pursuant to NBCA, it may propose other means to acquire
the remaining Shares. The tax treatment of such a transaction to a non-resident
holder will depend on the exact manner in which the transaction is carried out
and may be substantially the same as or materially different than described
above. Depending on the circumstances, a non-resident holder may realize a
capital gain or a capital loss and/or a deemed dividend. If the Statutory
Transaction is implemented by means of an amalgamation of Gulf Indonesia with
Conoco Canada or an affiliate of Conoco Canada as described above under the
heading "Residents of Canada -- Statutory Transaction", the treatment of the
amalgamation and the calculation of the deemed dividend and the capital gain or
loss arising on the redemption of the Redeemable Shares will generally be as
described under such heading except that subsection 55(2) of the Tax Act will
not apply. Dividends paid or deemed to be paid to a non-resident will be subject
to Canadian withholding tax at a rate of 25%. Such rate may be reduced under the
provisions of an applicable income tax treaty to which Canada is a party. Under
the Canada-United States Income Tax Convention (1980), the rate of Canadian
withholding tax is generally reduced to 15% in respect of dividends paid to a
person who is the beneficial owner thereof and who is a resident of the United
States for purposes of that convention. In addition, if the amalgamated
corporation is not a public corporation, within the meaning of the Tax Act, the
Redeemable Shares will be taxable Canadian property within the meaning of the
Tax Act to a non-resident holder and the notification and withholding provisions
of Section 116 of the Tax Act will also apply to the non-resident holder.

     NON-RESIDENT HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS FOR ADVICE WITH
RESPECT TO THE POTENTIAL INCOME TAX CONSEQUENCES TO THEM OF HAVING THEIR SHARES
ACQUIRED PURSUANT TO SUCH A TRANSACTION.

                                        48


8.  PRICE RANGE OF GULF INDONESIA COMMON SHARES; DIVIDENDS

     The Gulf Indonesia Common Shares are listed and principally traded on the
New York Stock Exchange under the symbol "GRL". The following table sets forth,
for the periods indicated, the high and low sales prices and the aggregate
volume of trading for the Shares on the New York Stock Exchange based upon
public sources:



                                                                        NYSE
                                                            -----------------------------
                                                              HIGH       LOW      VOLUME
                                                            --------   --------   -------
                                                            (U.S. $)   (U.S. $)   (000'S)
                                                                         
CALENDAR YEAR QUARTERS
2000:
First Quarter.............................................    9.63       6.88       4932
Second Quarter............................................    9.44       6.50       7231
Third Quarter.............................................   12.88       7.38      10104
Fourth Quarter............................................   12.50       8.13       5276
2001:
First Quarter.............................................   10.49       8.30       5805
Second Quarter............................................   12.00       7.45      10165
Third Quarter.............................................   11.90       8.40       3161
Fourth Quarter............................................    9.10       7.85       2637
2002:
First Quarter.............................................   10.48       8.45       2617
Second Quarter through June 11, 2002......................   13.50      10.43      15241
LAST TWELVE MONTHS:
2001:
June......................................................   12.00      10.00       1742
July......................................................   11.79      10.21       1088
August....................................................   11.90      10.16       1127
September.................................................   11.20       8.40        946
October...................................................    8.94       7.85        923
November..................................................    9.10       8.00        408
December..................................................    9.00       7.90       1306
2002:
January...................................................    9.41       8.60        727
February..................................................    9.30       8.45        433
March.....................................................   10.48       8.65       1457
April.....................................................   11.03      10.43        817
May.......................................................   13.50      10.65      12007
June through June 11, 2002................................   13.20      13.15       2416


     On May 24, 2002, the last trading day prior to the first public
announcement of the Offer, the closing price of a Gulf Indonesia Common Share on
the New York Stock Exchange was $10.75. On June 11, 2002, the last trading day
prior to commencement of the Offer, the closing price of a Gulf Indonesia Common
Share on the New York Stock Exchange was $13.16. SHAREHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES WHEN CONSIDERING THEIR DECISION
TO TENDER THEIR SHARES.

     Gulf Indonesia has not declared or paid dividends on its Shares in the past
two years. The Support Agreement prohibits the declaration of a dividend by Gulf
Indonesia.

                                        49


9.  CERTAIN INFORMATION CONCERNING GULF INDONESIA

     General.  Gulf Indonesia is a New Brunswick, Canada corporation with its
principal corporate offices located at 21st fl., Wisma 46, Kota BNI, Jalan
Jenderal Sudirman Kavling 1, Jakarta 10220, Indonesia (telephone number (6221)
574-2120).

     Gulf Indonesia is an oil and natural gas company engaged in the
exploration, development and production of crude oil and natural gas. All of
Gulf Indonesia's oil and gas producing properties are located in Indonesia. It
currently produces crude oil and natural gas from established fields onshore on
the island of Sumatra and from established fields offshore in the West Natuna
Sea. As of December 31, 2001, Gulf Indonesia had gross and net proved reserves
of 323 million barrels of oil equivalent ("MMBOE") and 244 MMBOE, respectively,
of which approximately 90% were natural gas. Its principal products are crude
oil and natural gas.

     Currently, Gulf Indonesia sells all of its oil production in two markets.
Approximately 79% of its oil production is sold to Pertamina, the Indonesian
state owned oil and gas company, at the Indonesian crude price, which is the
price set monthly by Pertamina based on spot prices of internationally traded
Indonesian crude oils, adjusted for quality. Approximately 21% of oil production
is sold under a marketing agreement with BP Oil International Limited.

     As of December 31, 2001, Gulf Indonesia had approximately 1,557 permanent
employees, approximately 570 of whom were located at its offices in Jakarta,
Indonesia, and the remainder of whom were located at field offices. In addition
to its permanent employees, Gulf Indonesia also engaged over 1,350 daily
contract laborers as of such date.

     The name, citizenship, business address, business telephone number, current
principal occupation (including the name, principal business and address of the
organization in which such occupation is conducted), and material positions held
during the past five years, of each of the directors and executive officers of
Gulf Indonesia are set forth in Schedule A to this Offer to Purchase.

     The authorized capital of Gulf Indonesia consists of an unlimited number of
Gulf Indonesia Common Shares and an unlimited number of preferred shares without
par value. Gulf Indonesia has advised Conoco Canada that as of June 4, 2002,
there were 90,038,542 Gulf Indonesia Common Shares outstanding on a fully
diluted basis and no preferred shares outstanding.

     Available Information.  Gulf Indonesia is subject to the information and
reporting requirements of the Exchange Act and Canadian provincial securities
legislation and in accordance therewith is obligated to furnish reports and
other information to the SEC and certain Canadian securities commissions
relating to its business, financial condition and other matters. Information, as
of particular dates, concerning Gulf Indonesia's directors and officers, their
remuneration, stock options granted to them, any material interests of such
persons in transactions with Gulf Indonesia and other matters is required to be
disclosed in reports distributed to Gulf Indonesia's shareholders and furnished
to the SEC and certain Canadian securities commissions. Such reports, and other
information, should be available for inspection in Canada at
http://www.sedar.com and in the United States at the public reference room at
the SEC's offices at 450 Fifth Street, N.W., Judiciary Plaza Washington, D.C.
20599 and certain documents can be obtained electronically on the SEC's website
at http://www.sec.gov. Copies may be obtained, by mail, upon payment of the
SEC's customary charges, by writing to its principal office at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20599.

     Conoco Canada has no information that indicates any material change in the
affairs of Gulf Indonesia since March 31, 2002 to the date of this Offer to
Purchase, other than the making of the Offer and such other material changes as
have been publicly disclosed by Gulf Indonesia. Neither Conoco nor Conoco Canada
has any knowledge of any other matter that has not previously been generally
disclosed, but which would reasonably be expected to affect the decision of
shareholders of Gulf Indonesia to accept or reject the Offer.

                                        50


  Financial Information.

     SUMMARY SELECTED FINANCIAL DATA

     The following table sets forth summary historical consolidated financial
data for Gulf Indonesia as of and for the three months ended March 31, 2002 and
March 31, 2001 and as of and for each of the years ended December 31, 2001 and
December 31, 2000.

     The data set forth below is extracted from, and should be read in
conjunction with, the audited consolidated financial statements and other
financial information of Gulf Indonesia contained in Gulf Indonesia's Annual
Report on Forms 40-F for the years ended December 31, 2001 and December 31, 2000
and the unaudited consolidated interim financial information of Gulf Indonesia
contained in Gulf Indonesia's Report to Shareholders on Form 6-K for the three
months ended March 31, 2002 and March 31, 2001. These reports are incorporated
by reference in this Offer to Purchase.

     More comprehensive financial information is included in such annual and
quarterly reports (including management's discussion and analysis of financial
condition and results of operation) and other documents filed by Gulf Indonesia
with the SEC and Canadian securities commissions, and the following summary is
qualified in its entirety by reference to such reports and other documents and
all of the financial information and notes contained therein. Gulf Indonesia's
Annual Report on Forms 40-F for the years ended December 31, 2001 and December
31, 2000 have been filed as Exhibits (a)(1)(K) and (a)(1)(L), respectively, to
Conoco's and Conoco Canada's Tender Offer Statement on Schedule TO filed with
the SEC on the date of this Offer to Purchase. Copies of Gulf Indonesia's Report
to Shareholders on Form 6-K for the three months ended March 31, 2002 and March
31, 2001 have previously been filed electronically with the SEC. These reports
may be examined at, and copies may be obtained from, the SEC or electronically
in the manner set forth above.



                                                              MILLIONS OF U.S. DOLLARS EXCEPT PER SHARE AMOUNTS
                                                              --------------------------------------------------
                                                                   THREE MONTHS
                                                                      ENDED                    YEARS ENDED
                                                                    MARCH 31,                  DECEMBER 31,
                                                              ----------------------      ----------------------
                                                                2002          2001          2001          2000
                                                              --------      --------      --------      --------
                                                                                            
Income Statement Data:
     Net oil and gas revenues...............................   $  52         $  64         $ 254         $ 345
     Other revenues.........................................       0             1             4             4
     Total costs and expenses applicable to net revenues....      42            56           226           265
     Net income.............................................      10             9            32            84
Balance Sheet Data:
     Current assets.........................................     179           274           170           298
     Noncurrent assets......................................     783           762           778           762
     Current liabilities....................................      79            87            81           112
     Noncurrent liabilities.................................     261           360           255           368
     Total shareholders' equity.............................     622           589           612           580
Weighted average number of shares outstanding (in millions):
          Basic.............................................    87.9          87.9          87.9          87.9
          Diluted...........................................    87.9          87.9          87.9          87.9


                                        51




                                                                THREE MONTHS
                                                                   ENDED              YEARS ENDED
                                                                 MARCH 31,            DECEMBER 31,
                                                              ----------------      ----------------
                                                              2002       2001       2001       2000
                                                              -----      -----      -----      -----
                                                                                   
Gulf Indonesia financial data, per common share
     Net income -- basic....................................  $0.11      $0.10      $0.36      $0.96
     Net income -- diluted..................................   0.11       0.10       0.36       0.96
     Book value at end of period............................   7.08       6.70       6.96       6.60


     The above Summary Selected Financial Data has been prepared in accordance
with generally accepted accounting principles in effect in Canada as of their
respective dates. No changes in such data would result in the event that Gulf
Indonesia prepared such data in accordance with generally accepted accounting
principles in effect in the United States as of their respective dates.

10.  CERTAIN INFORMATION CONCERNING CONOCO AND CONOCO CANADA

     General.  Conoco Canada is a Nova Scotia corporation and a wholly owned
subsidiary of Conoco. Conoco Canada's principal executive offices are located at
1600, 401-9th Avenue S.W., Calgary, Alberta T2P 3C5. All of Conoco Canada's
shares are owned, indirectly, by Conoco. Conoco Canada's principal business is
the exploration for and the development and production of oil and gas.

     Conoco is a Delaware corporation. Conoco's principal executive offices are
located at 600 North Dairy Ashford Road, Houston, Texas 77079. Conoco is a
major, integrated, global energy company. Conoco has three operating segments:
upstream, downstream and emerging businesses. Upstream operating segment
activities include exploring for, developing, producing and selling crude oil,
natural gas and natural gas liquids; and the Syncrude mining operations.
Downstream operating segment activities include refining crude oil and other
feedstocks into petroleum products; buying and selling crude oil and refined
products; and transporting, distributing and marketing petroleum products.
Emerging businesses operating segment activities include the development of new
businesses beyond Conoco's traditional operations. Emerging businesses is
currently involved in carbon fibers; natural gas refining including
gas-to-liquids; and international power. Conoco operates in over 40 countries
worldwide.

     On November 18, 2001, Conoco entered into an Agreement and Plan of Merger
with Phillips Petroleum Company. Upon the closing of the merger, the new
company, which will be named ConocoPhillips, will be the third-largest
integrated U.S. energy company based on market capitalization and oil and gas
reserves and production. Worldwide, it will be the sixth-largest energy company
based on hydrocarbon reserves and the fifth-largest global refiner. The merger
is expected to close in the second half of 2002.

     Conoco and Conoco Canada have made no arrangements in connection with the
Offer to provide holders of Gulf Indonesia Common Shares access to their
corporate files or to obtain counsel at their expense.

     The name, citizenship, business address, business telephone number, current
principal occupation (including the name, principal business and address of the
organization in which such occupation is conducted), and material positions held
during the past five years of each of the directors and executive officers of
Conoco and Conoco Canada are set forth in Schedule A to this Offer to Purchase.

     Available Information.  Conoco is subject to the information and reporting
requirements of the Exchange Act and in accordance therewith is obligated to
furnish reports and other information to the SEC. Certain information concerning
Conoco is set forth in its Annual Report on Form 10-K for the year ended
December 31, 2001, and in its Form 10-Q for the quarter ended March 31, 2002,
which may be obtained from the SEC. Such reports, and other information, should
be available for inspection at the public reference room at the SEC's offices at
450 Fifth Street, Judiciary Plaza, N.W., Washington, D.C. 20599 and can be
obtained electronically on the SEC's website at http://www.sec.gov. Copies may
be obtained, by mail, upon payment of the SEC's customary charges, by writing to
its principal office at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20599.

                                        52


11.  APPRAISAL AND DISSENT RIGHTS; RULE 13E-3

     Appraisal and Dissent Rights.  Holders of Gulf Indonesia Common Shares are
not entitled to appraisal or dissent rights as part of the Offer. However, Gulf
Indonesia shareholders who do not tender in the Offer will have appraisal and
dissent rights in connection with the Second-Step Acquisition provided that such
transaction takes place and provided further that such shareholders validly
perfect such rights. See "THE SECOND-STEP ACQUISITION".

     Rule 13e-3.  Because Conoco Canada and Conoco are affiliates of Gulf
Indonesia, the transactions contemplated herein constitute a "going private"
transaction under Rule 13e-3 under the Exchange Act. Rule 13e-3 requires, among
other things, that certain information concerning Gulf Indonesia and certain
information relating to the fairness of the Offer and the consideration offered
to public shareholders be filed with the SEC. Conoco Canada and Conoco have
provided such information in this Offer to Purchase.

12.  SOURCE AND AMOUNT OF FUNDS; FEES AND EXPENSES

     Conoco Canada estimates that the total amount of funds required to purchase
all the outstanding Gulf Indonesia Common Shares (other than those Conoco Canada
already owns) and all options of Gulf Indonesia having an exercise price of less
than $13.25 pursuant to the Offer and to pay related fees and expenses will be
approximately $353,880,350. Conoco Canada will obtain these funds from Conoco
which currently intends to obtain these funds from commercial paper facilities
and internally generated funds of Conoco and its subsidiaries. In the event that
these financing plans are unsuccessful, Conoco will utilize other debt
financing. The Offer is not subject to any financing contingency.

     The estimated fees and expenses to be incurred by Conoco Canada in
connection with the Offer are as follows:

                                                            
Financial Advisors' Fees....................................   $  500,000
Legal, Accounting and Other Professional Fees...............    2,000,000
Printing, Tender Solicitation and Mailing Costs.............      200,000
Filing Fees.................................................       32,168
Miscellaneous...............................................      100,000
                                                               ----------
Total.......................................................    2,832,168
                                                               ==========



     The estimated fees and expenses to be incurred by Gulf Indonesia in
connection with the Offer are as follows:

                                                           
Financial Advisors' Fees....................................  $1,400,000
Legal, Accounting and Other Professional Fees...............   1,250,000
Printing, Tender Solicitation and Mailing Costs.............     100,000
Filing Fees.................................................       5,000
Miscellaneous...............................................      25,000
                                                              ----------
Total.......................................................   2,780,000
                                                              ==========



     Conoco has retained JPMorgan and Merrill Lynch as financial advisors in
connection with the Offer. Conoco has agreed to reimburse JPMorgan's and Merrill
Lynch's reasonable out-of-pocket expenses, including the fees and expenses of
their counsel, in connection with the financial services they provide in
connection with the Offer and any Second-Step Acquisition and to indemnify each
of JPMorgan and Merrill Lynch against certain liabilities, including certain
liabilities under U.S. securities laws and Canadian provincial securities laws.
In addition, Merrill Lynch will be paid a fee of $500,000 upon consummation of
the Second-Step Acquisition.

     Conoco Canada will also pay all the costs incurred by Gulf Indonesia in
obtaining the Valuation and Fairness Opinion.

                                        53


     Conoco has retained JP Morgan and Merrill Lynch to act as the Dealer
Managers in connection with the Offer. The Dealer Managers may contact
shareholders by mail, telephone, telex, facsimile, telegraph and personal
interviews and may request brokers, dealers and other nominee shareholders to
forward material relating to the Offer to beneficial owners of Gulf Indonesia
Common Shares. Conoco will reimburse the Dealer Managers for their out-of-pocket
expenses, including the fees and expenses of their counsel. In addition, Conoco
will indemnify the Dealer Managers against certain liabilities and expenses in
connection with the Offer.

     Conoco has retained The Bank of New York to act as the Depositary in
connection with the Offer. Conoco will pay the Depositary reasonable and
customary compensation for its services in connection with the Offer, plus
reimbursement for out-of-pocket expenses, and will indemnify the Depositary
against certain liabilities and expenses in connection with the Offer.

     Conoco has retained Innisfree M&A Incorporated to act as Information Agent.
The Information Agent may contact shareholders by mail, telephone, telex,
facsimile, telegraph and personal interviews and may request brokers, dealers
and other nominee shareholders to forward material relating to the Offer to
beneficial owners of Gulf Indonesia Common Shares. Conoco will pay the
Information Agent reasonable and customary compensation for its services in
connection with the Offer, plus reimbursement for out-of-pocket expenses, and
will indemnify the Information Agent against certain liabilities and expenses in
connection with the Offer.

     No broker, dealer, commercial bank or trust company shall be deemed to be
the agent of Conoco, Conoco Canada or the Depositary for the purposes of the
Offer.

13.  CERTAIN LEGAL MATTERS

     Neither Conoco nor Conoco Canada are aware of any licenses or other
regulatory permits which appear to be material to the business of Gulf Indonesia
and which might be adversely affected by the acquisition of Gulf Indonesia
Common Shares by Conoco Canada pursuant to the Offer or the Second-Step
Acquisition or of any approval or other action by any governmental,
administrative or regulatory agency or authority which would be required for the
acquisition or ownership of Gulf Indonesia Common Shares by Conoco Canada
pursuant to the Offer or the Second-Step Acquisition. Should any such approval
or other action be required, the Support Agreement provides that such approval
or action would be sought or taken. There can be no assurance that any such
approval or action, if required, would be obtained or, if obtained, that it will
be obtained without substantial conditions or that adverse consequences might
not result to the business of Gulf Indonesia, Conoco or Conoco Canada, which
results in a failure of a condition to Conoco Canada closing the Offer or the
Second-Step Acquisition. See "-- Certain Conditions to the Offer" and "THE
SUPPORT AGREEMENT -- Certain Conditions to the Second-Step Acquisition".

14.  CERTAIN EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES

     Market for Gulf Indonesia Common Shares.  Conoco Canada's acquisition of
Gulf Indonesia Common Shares pursuant to the Offer will reduce the number of
holders of Shares, which could adversely affect the liquidity and market value
of the remaining Shares held by the public.

     Stock Trading.  Gulf Indonesia Common Shares are traded on the New York
Stock Exchange. Following the consummation of the Second-Step Acquisition, the
Shares will no longer be quoted on the New York Stock Exchange. Even if the
Second Step Acquisition does not occur, the consummation of the Offer will
reduce the number of Shares and, depending upon the number of Shares acquired
pursuant to the Offer, the Shares may no longer meet the standards for continued
inclusion in the New York Stock Exchange and may be delisted from that exchange.
According to the New York Stock Exchange's published guidelines, the Shares
would not be eligible to be included for listing if, among other things, the
number of Shares publicly held falls below 600,000, the number of holders of
round lots of Shares falls below 400 (or below 1,200 if the average monthly
trading volume is below 100,000 for the last twelve months) or the aggregate
market value of such publicly held Shares falls below $15,000,000. Gulf
Indonesia Common Shares held directly or indirectly by directors, officers or
beneficial owners of more than 10% of the Shares (including Conoco Canada) are
not considered as being publicly held for this purpose.
                                        54


     If the Gulf Indonesia Common Shares were to cease to be traded on the New
York Stock Exchange as a result of the Offer, the market for the Shares could be
adversely affected. The extent of the public market for the Shares and the
availability of such trading would depend upon the number of shareholders and/or
the aggregate market value of the Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms and other
factors. In addition, to the extent such Shares are delisted from the New York
Stock Exchange, certain adverse tax consequences may result to shareholders. See
"-- Certain Canadian Federal Income Tax Considerations".

     Exchange Act Registration.  The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by Gulf
Indonesia to the SEC if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders. The termination of the
registration of the Shares under the Exchange Act would reduce the information
required to be furnished by Gulf Indonesia to holders of Shares and to the SEC
and would make certain provisions of the Exchange Act no longer applicable to
the Shares. In addition, "affiliates" of Gulf Indonesia and persons holding
"restricted securities" of Gulf Indonesia may be deprived of the ability to
dispose of such securities pursuant to Rule 144 promulgated under the Securities
Act of 1933, as amended. Conoco Canada intends to seek to cause Gulf Indonesia
to terminate the registration of the Shares under the Exchange Act as soon as
practicable after the consummation of the Second-Step Acquisition.

     Margin Securities.  The Shares are currently "margin securities" as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made by brokers.

15.  MISCELLANEOUS

     The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Gulf Indonesia Common Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. Conoco Canada may, however, in Conoco
Canada's sole discretion, take such action as Conoco Canada may deem necessary
to make the Offer in any such jurisdiction and extend the Offer to holders of
Gulf Indonesia Common Shares in such jurisdiction.

     Neither Conoco Canada nor Conoco is aware of any jurisdiction in which the
making of the Offer or the acceptance of shares in connection therewith would
not be in compliance with the laws of such jurisdiction.

     Conoco Canada and Conoco have filed with the SEC a Tender Offer Statement
on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, furnishing certain additional information with respect to the
Offer, and may file amendments thereto. Such statement includes within it the
information required by the SEC's statement on Schedule 13E-3 relating to "going
private" transactions (and the portion of the Tender Offer Statement relating to
such Schedule 13E-3 has been filed by Gulf Indonesia, Conoco Canada and Conoco).
In addition, Gulf Indonesia has filed a Solicitation/ Recommendation Statement
on Schedule 14D-9 setting forth its recommendation with respect to the Offer and
the reasons therefore, and may file amendments thereto. Such schedules and any
amendments thereto, including exhibits, may be examined at, and copies may be
obtained from, the SEC or electronically in the manner set forth under
"-- Certain Information Concerning Conoco and Conoco Canada" and "-- Certain
Information Concerning Gulf Indonesia".

     No person has been authorized to give any information or make any
representation on behalf of Gulf Indonesia, Conoco Canada or Conoco not
contained in this Offer to Purchase or in the Letter of Transmittal and, if
given or made, such information or representation must not be relied upon as
having been authorized.

                                        55


                          THE SECOND-STEP ACQUISITION

     The following is a summary of alternative statutory mechanisms under New
Brunswick, Canada law that Conoco Canada may employ to effect the Second-Step
Acquisition. The following also sets forth a discussion of the appraisal and
dissent rights available to Gulf Indonesia shareholders in any such Second-Step
Acquisition. A copy of the relevant portion of the applicable appraisal and
dissent right statutes have been filed as Exhibit (f) to Conoco's and Conoco
Canada's Tender Offer Statement on Schedule TO filed with the SEC on the date of
this Offer to Purchase.

GENERAL

     The Support Agreement provides that if the Offer is consummated and the
Minimum Tender Condition is satisfied, Conoco Canada shall use its best efforts
to engage in a Second-Step Acquisition if all conditions to Conoco Canada's
obligations to effect the Second-Step Acquisition are satisfied or waived. See
"THE SUPPORT AGREEMENT -- Certain Conditions to the Second-Step Acquisition".
The Second-Step Acquisition would be consummated either through a compulsory
acquisition or a statutory transaction under New Brunswick law, as described
below.

COMPULSORY ACQUISITION AND CERTAIN APPRAISAL RIGHTS

     If, within 120 days after the date of the Offer, the Offer is accepted by
holders of not less than 90% of the Shares, other than the Shares held at the
date of the Offer to Purchase by or on behalf of Conoco Canada and its
affiliates or associates, Conoco Canada will acquire the Shares not tendered in
the Offer on the same terms as the Shares acquired pursuant to the Offer
pursuant to an acquisition utilizing the provisions of Section 133 of the NBCA
(the "Compulsory Acquisition") if all conditions to effecting such Compulsory
Acquisition have been satisfied or waived. No vote of shareholders of Gulf
Indonesia is required to complete the Compulsory Acquisition. See "THE SUPPORT
AGREEMENT -- Certain Conditions to the Second-Step Acquisition".

     To exercise such statutory right, Conoco Canada must give notice (the
"Offeror's Notice") to each holder of Shares who did not accept the Offer
(including a subsequent holder of any such Shares who acquires any such Shares
from the first mentioned holder) (in each case, an "Offeree") and to the
Director under the NBCA of such proposed acquisition on or before the earlier of
60 days after the Expiration Date and 180 days after the date of the Offer.
Within 20 days after giving the Offeror's Notice, Conoco Canada must pay or
transfer to Gulf Indonesia the consideration Conoco Canada would have had to pay
or transfer to the Offerees if they had elected to accept the Offer, to be held
in trust for the Offerees. In accordance with Section 133 of the NBCA, within 20
days after receipt of the Offeror's Notice, each Offeree must send the
certificates representing the Shares held by such Offeree to Gulf Indonesia and
will be entitled to elect either to (1) transfer such Shares to Conoco Canada on
the terms of the Offer or (2) demand payment of the fair value of such Shares
held by such holder by so notifying Conoco Canada. An Offeree who does not
within 20 days after the Offeree receives the Offeror's Notice notify Conoco
Canada that the Offeree is electing to demand payment of the fair value of his
Shares is deemed to have elected to transfer his Shares to Conoco Canada on the
same terms that Conoco Canada acquired Shares from shareholders who accepted the
Offer. If an Offeree has elected to demand payment of the fair value of such
Shares, Conoco Canada may apply to a court having jurisdiction to hear an
application to fix the fair value of such Shares of that Offeree. If Conoco
Canada fails to apply to such court within 20 days after it made the payment or
transferred the consideration to Gulf Indonesia referred to above, the Offeree
may then apply to the court within a further period of 20 days to have the court
fix the fair value. Any judicial determination of the fair value of the Shares
could be more or less than the amount paid per share pursuant to the Offer. In
order to perfect its right to have a court fix the fair value of its Shares, the
Offeree must follow the preceding steps in their entirety.

     In the event Conoco Canada does not exercise its statutory right, if
available, to complete the Compulsory Acquisition, an Offeree may, within 30
days after the last day on which the Offeror's Notice could be sent, require
Conoco Canada to acquire such Offeree's Shares, in accordance with the foregoing
procedures, as appropriately modified.

                                        56


     THE FOREGOING IS A SUMMARY ONLY OF THE RIGHT OF COMPULSORY ACQUISITION
WHICH MAY BECOME AVAILABLE TO CONOCO CANADA AND IS QUALIFIED IN ITS ENTIRETY BY
THE PROVISIONS OF SECTION 133 OF THE NBCA. SECTION 133 OF THE NBCA IS COMPLEX
AND MAY REQUIRE STRICT ADHERENCE TO NOTICE AND TIMING PROVISIONS, FAILING WHICH
AN OFFEREE'S RIGHTS MAY BE LOST OR ALTERED. SHAREHOLDERS WHO WISH TO BE BETTER
INFORMED ABOUT THESE PROVISIONS SHOULD CONSULT THEIR LEGAL ADVISORS.

     See "THE OFFER -- Certain U.S. Federal Income Tax Considerations" and "THE
OFFER -- Certain Canadian Federal Income Tax Considerations" for a discussion of
certain of the tax consequences to shareholders in the event of a Compulsory
Acquisition.

STATUTORY TRANSACTION AND CERTAIN APPRAISAL RIGHTS

     If Conoco Canada consummates the Offer and the right of Compulsory
Acquisition described above is not available or Conoco Canada elects not to
pursue such right, a special meeting of shareholders of Gulf Indonesia will be
called to consider an amalgamation, a statutory arrangement, a share
consolidation or other transaction involving Gulf Indonesia and either Conoco
Canada or an affiliate of Conoco Canada for the purpose of enabling Conoco
Canada to acquire all of the Shares not tendered in the Offer (a "Statutory
Transaction") if the conditions to effecting such Statutory Transaction have
been satisfied or waived. See "THE SUPPORT AGREEMENT -- Certain Conditions to
the Second-Step Acquisition". The timing and details of any such transaction
will necessarily depend on a variety of factors, including the number of Shares
acquired pursuant to the Offer. In the event of a Statutory Transaction,
shareholders of Gulf Indonesia, other than Conoco Canada and its affiliates,
will receive cash or preferred shares (which will be immediately redeemable for
cash) at the same cash price as the price offered under the Offer.

     Any such Statutory Transaction will also result in shareholders of Gulf
Indonesia having the right to dissent in respect thereof and demand payment of
the fair value of their Shares. The exercise of such right of dissent, if
certain procedures are complied with by the shareholder, could lead to a
judicial determination of fair value required to be paid to such dissenting
shareholder for its Shares. The fair value so determined could be more or less
than, or equal to, the amount paid per Share pursuant to the Offer.

     Each type of Statutory Transaction described above would constitute a
"going private transaction" within the meaning of Rule 61-501 of the Ontario
Securities Commission ("Rule 61-501"). In certain circumstances, the provisions
of Rule 61-501 may also deem certain types of Statutory Transactions to be
"related party transactions". However, if the Statutory Transaction is a "going
private transaction" carried out in accordance with Rule 61-501 or an exemption
therefrom, the "related party transaction" provisions of Rule 61-501 do not
apply to such transaction. Conoco Canada intends to carry out any such going
private transaction in accordance with Rule 61-501 or exemptions therefrom such
that the related party transaction provisions of Rule 61-501 will not apply to
the going private transaction.

     Rule 61-501 provides that, unless exempted, a corporation proposing to
carry out a going private transaction is required to prepare a valuation of the
Shares (and, subject to certain exemptions, any non-cash consideration being
offered therefor) and to provide to the holders of the Shares a summary of such
valuation. In connection therewith, Conoco Canada intends to rely on an
exemption available pursuant to Rule 61-501 exempting Gulf Indonesia or Conoco
Canada or their affiliates, as appropriate, from the requirement to prepare a
valuation in connection with a Statutory Transaction.

     The provisions of the NBCA require the approval of at least 66 2/3% of the
votes cast by holders of the outstanding Shares at a meeting duly called and
held for the purpose of approving a Statutory Transaction. Rule 61-501 would in
effect also require that, in addition to the foregoing shareholder approval, in
order to complete a going private transaction, the approval of a simple majority
of the votes cast by "minority" holders of the Shares must be obtained unless an
exemption is available or discretionary relief is granted by the Ontario
Securities Commission.

     In relation to any Statutory Transaction, the "minority" holders will be
all shareholders of Gulf Indonesia other than Conoco Canada, Conoco Canada's
directors and executive officers, Conoco Canada's affiliates or such affiliates'
directors or executive officers (other than directors of Gulf Indonesia who are
independent of

                                        57


Conoco Canada under Rule 61-501 of the Ontario Securities Commission) or any
person or company acting jointly or in concert with Conoco Canada in connection
with the Offer. Rule 61-501 also provides that Conoco Canada may treat Shares
acquired pursuant to the Offer as "minority" shares and to vote them, or to
consider them voted, in favor of a Statutory Transaction that is a going private
transaction if the consideration for each security in the Statutory Transaction
is at least equal in value to and in the same form as the consideration paid
pursuant to the Offer. If the Minimum Tender Condition is satisfied, approval of
a Second-Step Acquisition is assured.

     In addition, under Rule 61-501, if, following the Offer, Conoco Canada and
its affiliates are the registered holders of 90% or more of the Shares at the
time the Statutory Transaction is initiated, the requirement for minority
approval would not apply to the transaction if an enforceable right to dissent
and seek fair value or a substantially equivalent right is made available to the
minority shareholders.

     See "THE OFFER -- Certain U.S. Federal Income Tax Considerations" and "THE
OFFER -- Certain Canadian Federal Income Tax Considerations" for a discussion of
certain of the tax consequences to shareholders in the event of a Statutory
Transaction.

     Shareholders should consult their legal advisors for a determination of
their legal rights with respect to a Statutory Transaction if and when proposed.

OTHER ALTERNATIVES

     If Conoco Canada proposes a Second-Step Acquisition but cannot promptly
obtain any required approval or exemption, or otherwise does not complete a
Second-Step Acquisition, Conoco Canada will evaluate its other alternatives.
Such alternatives could include, to the extent permitted by applicable law,
purchasing additional Gulf Indonesia Common Shares in the open market, in
privately negotiated transactions, in another take-over bid or exchange offer or
otherwise, or from Gulf Indonesia or taking no further action to acquire
additional Gulf Indonesia Common Shares. Any additional purchase of Gulf
Indonesia Common Shares could be at prices greater than, equal to or less than
the value of the consideration to be paid for the Gulf Indonesia Common Shares
under the Offer and could be for cash and/or securities or other consideration.
Alternatively, Conoco Canada may sell or otherwise dispose of any or all Gulf
Indonesia Common Shares acquired pursuant to the Offer or otherwise. Such
transactions may be effected on terms and at prices then determined by Conoco
Canada, which may vary from the value of the consideration paid for Gulf
Indonesia Common Shares under the Offer.

JUDICIAL DEVELOPMENTS

     Prior to the adoption of Rule 61-501, Canadian courts had, in a few
instances, granted preliminary injunctions to prohibit transactions involving
going private transactions. Conoco Canada has been advised that, based upon more
recent legislative enactments, "going private transactions" may proceed subject
to compliance with requirements intended to ensure procedural and substantive
fairness to the minority shareholders.

                             THE SUPPORT AGREEMENT

     The following is a summary of material provisions of the Support Agreement,
which has been filed as Exhibit (d) to Conoco's and Conoco Canada's Tender Offer
Statement on Schedule TO filed with the SEC on the date of this Offer to
Purchase. Such summary is not a complete description and is qualified in its
entirety by reference to the Support Agreement. Capitalized terms not otherwise
defined in the following summary shall have the meanings set forth in the
Support Agreement. We urge you to read carefully the Support Agreement.

     The Offer.  The Support Agreement provides that, following the satisfaction
or waiver of the conditions to the Offer, Conoco Canada shall accept for payment
and pay for, in accordance with the terms of the Offer and the Support
Agreement, all Gulf Indonesia Common Shares which have been validly tendered and
not properly withdrawn pursuant to the Offer promptly after the Expiration Date.
The obligations of Conoco
                                        58


Canada to accept for payment and to pay for any Gulf Indonesia Common Shares
tendered pursuant to the Offer is subject to the conditions specified in "THE
OFFER -- Certain Conditions to the Offer".

     The Second-Step Acquisition.  The Support Agreement provides that if the
Minimum Tender Condition has been satisfied and the other conditions to the
Second-Step Acquisition have been satisfied or waived, Conoco Canada will use
its best efforts to, as soon as practicable after completion of the Offer,
complete the Second-Step Acquisition, pursuant to which Conoco Canada will
acquire all outstanding Gulf Indonesia Common Shares not tendered in the Offer
or otherwise owned by Conoco Canada or its affiliates at a price in cash equal
to the Offer Price.

     Gulf Indonesia has agreed that if Conoco Canada is required under the
Support Agreement to use its best efforts to effect a Second-Step Acquisition,
Gulf Indonesia will use its best efforts to assist Conoco Canada in connection
therewith, including (1) taking all action necessary in accordance with the
securities laws, other applicable laws, Gulf Indonesia's constating documents,
the requirements of the New York Stock Exchange or the requirements of any
governmental entity to duly call, give notice of, convene and hold a meeting of
shareholders of Gulf Indonesia as promptly as practicable to consider and vote
upon the Second-Step Acquisition, if necessary, and (2) filing with the
applicable securities commissions and mailing to shareholders of Gulf Indonesia
a management proxy circular, or if requested by Conoco Canada, an information
statement relating to the meeting of shareholders.

     Certain Conditions to the Second-Step Acquisition.  The Support Agreement
provides that the obligation of Conoco Canada to commence and complete the
Second-Step Acquisition is subject to the satisfaction (or waiver by Conoco
Canada), immediately prior to the time the Second-Step Acquisition is commenced
and immediately prior to the time the Second-Step Acquisition is completed, of
each of the following conditions:

          (1) all sanctions, rulings, exceptions, waivers, permits, orders,
     consents or approvals of any governmental entity (whether in Canada, the
     United States, Indonesia or elsewhere) which, in Conoco Canada's reasonable
     judgment, are necessary in connection with the Second-Step Acquisition
     shall have been obtained on terms and conditions reasonably satisfactory to
     Conoco Canada;

          (2) (i) no act, action, suit, proceeding, obligation or opposition
     shall have been threatened or taken before or by any governmental entity or
     by any other person (in the case of such other person, which has a
     reasonable likelihood of success), and (ii) no law, regulation, rule,
     statute, judgment, order, injunction or policy shall have been enacted,
     promulgated, amended or applied, in either case in the reasonable judgment
     of Conoco Canada:

             (a) to (A) cease trade, enjoin, prohibit or impose limitations,
        damages or conditions on (x) the purchase by, or sale to, Conoco Canada
        of the Shares or any of them or the consummation of the transactions
        contemplated by the Support Agreement, (y) the right of Conoco Canada to
        own or exercise full rights of ownership of the Shares or any of them,
        or (z) the ability of Conoco Canada or Conoco to exercise full ownership
        rights over or operate the businesses or assets of Gulf Indonesia and
        its subsidiaries, or (B) compel Conoco Canada or Conoco (or any of their
        respective affiliates) to dispose of or to hold separate any portion of
        their business or assets or to dispose or to hold separate any portion
        of the business or assets of or any of Gulf Indonesia or its
        subsidiaries;

             (b) which has materially adversely affected or, if the Second-Step
        Acquisition were consummated, could materially adversely affect Gulf
        Indonesia and its subsidiaries considered as a whole; or

             (c) which challenges or would prevent completion of the Second-Step
        Acquisition or which would have a material adverse effect on the ability
        of Conoco Canada to complete a Second-Step Acquisition;

          (3) there shall not exist any prohibition at law or legal restraint
     against Conoco Canada making or completing a Second-Step Acquisition;

          (4) Conoco Canada shall have determined in its reasonable judgment
     that there does not exist and has not occurred (or, if there does exist or
     shall have previously occurred, there shall not have been

                                        59


     disclosed prior to the date of the Support Agreement, generally or to
     Conoco or Conoco Canada) any material adverse change to Gulf Indonesia and
     its subsidiaries considered as a whole;

          (5) all representations and warranties of Gulf Indonesia in the
     Support Agreement qualified as to materiality shall be true and correct and
     those not so qualified shall be true and correct in all material respects
     as of the date of the Support Agreement and as of the effective date of the
     Second-Step Acquisition as if made on and as of such date (except to the
     extent that such representations and warranties speak as of an earlier
     date) and Gulf Indonesia shall have performed in all material respects all
     covenants to be performed by it under the Support Agreement;

          (6) there shall not be in force and non-appealable any injunction,
     order or decree issued by a court or other governmental entity of competent
     jurisdiction in Canada, the United States or elsewhere restraining or
     enjoining the consummation of the Second-Step Acquisition or any other
     transaction contemplated by the Support Agreement;

          (7) the Support Agreement shall not have been terminated; and

          (8) the Minimum Tender Condition shall have been satisfied.

     Subject to the terms of the Support Agreement, the foregoing conditions are
for the sole benefit of Conoco Canada and Conoco and may be asserted by Conoco
Canada or Conoco regardless of the circumstances (including any action or
inaction by Conoco Canada or Conoco) giving rise to any such conditions or may
be waived by Conoco Canada or Conoco in whole or in part at any time and from
time to time prior to the effective time of the Second-Step Acquisition
(subject, in the case of any waiver, to the requirements of the Exchange Act and
Canadian provincial securities legislation). The failure by Conoco Canada or
Conoco at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time prior to the effective
time of the Second-Step Acquisition.

     For purposes of the Support Agreement the terms "material adverse change"
and "material adverse effect" mean, when used in connection with a person, any
change, effect, event, occurrence or state of facts (or any effect, development,
occurrence or state of facts involving a prospective change) that is, or could
reasonably be expected to be, material and adverse to the business, assets,
rights, liabilities, capitalization, operations, prospects or financial
condition of that person and its subsidiaries taken as a whole, other than any
change, effect, event, occurrence or state of facts (or any effect, development,
occurrence or state of fact involving a prospective change); (i) resulting from
changes affecting the worldwide oil and gas industry, including without
limitation changes in crude oil, natural gas, gas liquids or other commodity
prices on a current or forward basis; (ii) resulting from changes in general
economic, political, civil, financial, banking, regulatory, currency exchange,
securities market or commodity market conditions in Canada or the United States;
(iii) which prior to the date of the Support Agreement has been publicly
disclosed by Gulf Indonesia or otherwise disclosed in writing by Gulf Indonesia
to Conoco or Conoco Canada; (iv) resulting from the negotiation, announcement,
execution, delivery, consummation or anticipation of the transactions
contemplated by, or compliance with, the Support Agreement; or (v) resulting
from any change in law of any Canadian or U.S. governmental entity.

     Termination.  The Support Agreement may be terminated:

          (1) by Conoco, Conoco Canada or Gulf Indonesia (in the case of Gulf
     Indonesia, as determined by the Independent Committee) if there shall be in
     force and non-appealable any injunction, order or decree issued by a court
     or other governmental entity of competent jurisdiction in Canada, the
     United States or elsewhere restraining or enjoining the consummation of the
     Offer, the Second-Step Acquisition or any other transaction contemplated by
     the Support Agreement; provided that the party so terminating is not then
     in material breach of the Support Agreement (or in the case of Conoco or
     Conoco Canada, neither is so in breach);

          (2) by Conoco or Conoco Canada if the conditions to Conoco Canada
     consummating the Offer have not been satisfied (or waived by Conoco or
     Conoco Canada) by the date specified in the condition

                                        60


     or the Expiration Date, as applicable; provided that neither Conoco nor
     Conoco Canada is then in material breach of the Support Agreement;

          (3) by Conoco or Conoco Canada if the conditions to Conoco Canada
     consummating the Second-Step Acquisition have not been satisfied (or waived
     by Conoco or Conoco Canada) both immediately prior to the time the
     Second-Step Acquisition is commenced and immediately prior to the time the
     Second-Step Acquisition is completed; provided that neither Conoco nor
     Conoco Canada is then in material breach of the Support Agreement;

          (4) by the mutual agreement of Conoco, Conoco Canada and Gulf
     Indonesia (as determined by the Independent Committee);

          (5) by Conoco and Conoco Canada if the Board of Directors of Gulf
     Indonesia or the Independent Committee shall have (i) withdrawn or
     modified, or proposed to withdraw or modify in a manner adverse to Conoco
     or Conoco Canada, the approval or recommendation of the Board of Directors
     of Gulf Indonesia or the Independent Committee of the Support Agreement or
     the Offer or (ii) approved or recommended, or proposed publicly to approve
     or recommend, any proposal by any person to acquire, directly or
     indirectly, more than 10% of the Shares (other than the Offer) (an
     "Acquisition Proposal");

          (6) by Gulf Indonesia (as determined by the Independent Committee) if
     (i) any representation or warranty of Conoco Canada or Conoco in the
     Support Agreement which is qualified as to materiality is not true and
     correct and any representation and warranty in the Support Agreement not so
     qualified is not true and correct in all material respects (except to the
     extent that such representations and warranties speak to an earlier date)
     or (ii) Conoco Canada or Conoco is in breach in a material respect of any
     of their respective covenants under the Support Agreement; provided, in
     each case that (A) Conoco or Conoco Canada, as applicable, has not cured
     such breach within 20 business days of Gulf Indonesia notifying Conoco or
     Conoco Canada of such breach and (B) Gulf Indonesia is not then in material
     breach of the Support Agreement;

          (7) by Gulf Indonesia in order for it to concurrently enter into a
     bona fide written unsolicited Acquisition Proposal that in the good faith
     determination of the Independent Committee (i) is reasonably capable of
     being completed, taking into account all legal, financial, regulatory and
     other aspects of such proposal and the person making such proposal and (ii)
     would, if consummated, result in a more favorable transaction from a
     financial point of view to shareholders of Gulf Indonesia (other than
     Conoco Canada) than the transactions contemplated by the Support Agreement;
     and

          (8) by Conoco, Conoco Canada or Gulf Indonesia (as determined by the
     Independent Committee) in the event that Conoco Canada does not complete
     the Second-Step Acquisition on or prior to January 1, 2003; provided that a
     party may not terminate the Support Agreement pursuant to this clause if
     such party's breach (or in the case of Conoco or Conoco Canada, the breach
     by either of Conoco or Conoco Canada) of the Support Agreement resulted in
     the Second-Step Acquisition not being completed on or prior to such date.

     In the event of such termination, except as provided in the Support
Agreement, the Support Agreement will become void and have no effect, and there
will be no liability on the part of Conoco, Conoco Canada or Gulf Indonesia.
However, the Support Agreement provides that the termination of the Support
Agreement will not relieve any party from liability for any wilful and knowing
breach of a representation or warranty in the Support Agreement or a material
breach of a covenant contained therein.

     Change in Recommendation.  Both the Board of Directors of Gulf Indonesia
and the Independent Committee have agreed not to withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Conoco or Conoco Canada, its
approval or recommendation of the Offer or the Support Agreement, or approve or
recommend or propose publicly to approve or recommend any Acquisition Proposal,
unless the Board of Directors of Gulf Indonesia, or the Independent Committee,
determines in good faith, after consultation with outside counsel, that it is
necessary to do so in order to comply with its fiduciary duties to the
shareholders of Gulf Indonesia (other than Conoco Canada) under applicable law.

                                        61


     Interim Operations.  Gulf Indonesia has agreed that, prior to consummation
of the Second-Step Acquisition, except as otherwise expressly contemplated by
the Support Agreement or unless Conoco otherwise agrees in writing:

          (1) Gulf Indonesia and its subsidiaries will conduct their businesses
     only in, and not take any action except in, the usual and ordinary course
     of business and consistent with past practice, and Gulf Indonesia shall use
     all commercially reasonable efforts to maintain and preserve its and their
     business organization, assets, employees, advantageous business
     relationships and the attendant goodwill of Gulf Indonesia and its
     subsidiaries and to contribute to retention of that goodwill to and after
     the date of the consummation of the Second-Step Acquisition;

          (2) Gulf Indonesia will not, and will not permit any of its
     subsidiaries to, directly or indirectly: (i) issue, grant, sell or pledge
     or agree to issue, grant, sell or pledge any shares of Gulf Indonesia or
     its subsidiaries or other equity interests of Gulf Indonesia or its
     subsidiaries, or options, warrants, rights or units to acquire any such
     shares or interests, securities convertible into or exchangeable or
     exercisable for, or otherwise evidencing a right to acquire, shares of Gulf
     Indonesia or its subsidiaries or other equity interests of Gulf Indonesia
     or its subsidiaries, other than (A) the issuance of Gulf Indonesia Common
     Shares issuable pursuant to the terms of certain options, (B) the granting
     of options in the ordinary course consistent with past practice, (C) in
     transactions between two or more Gulf Indonesia wholly owned subsidiaries
     or between Gulf Indonesia and a Gulf Indonesia wholly owned subsidiary, (D)
     pursuant to certain pledge commitments and (E) as required under law or
     existing contracts; (ii) redeem, purchase or otherwise acquire any of its
     outstanding securities unless otherwise required by the terms of such
     securities and other than in transactions between two or more Gulf
     Indonesia wholly owned subsidiaries or between Gulf Indonesia and a Gulf
     Indonesia wholly owned subsidiary; (iii) adopt a plan of liquidation, or
     resolution providing for the liquidation, dissolution, merger,
     consolidation, spin-off, demerger or reorganization of Gulf Indonesia or
     any of its subsidiaries; or (iv) enter into, modify or terminate any
     contract or agreement with respect to any of the foregoing;

          (3) Gulf Indonesia will conduct itself so as to keep Conoco informed
     as to the material decisions or actions required to be made or taken by
     Gulf Indonesia's Board of Directors with respect to the operation of its
     business, except in respect of disclosure prohibited by reason of a
     confidentiality obligation owed to any person or otherwise prevented by
     applicable law;

          (4) Gulf Indonesia will not, and will not permit its subsidiaries,
     directly or indirectly, to: (i) sell, pledge, lease, dispose of or encumber
     any assets of Gulf Indonesia or its subsidiaries, except in the ordinary
     course of business consistent with past practice; (ii) subject to certain
     exceptions, acquire any corporation, partnership or other person or other
     business organization or division thereof, make any investment either by
     the purchase of securities, contributions of capital, property transfer or
     purchase of any property or assets of any other person, if any of the
     foregoing would be material to the business or financial condition of Gulf
     Indonesia and its subsidiaries taken as a whole; (iii) commence or
     undertake a substantial expansion of its business facilities or operations
     or an expansion that is out of the ordinary and regular course of business
     consistent with past practice in light of current market and economic
     conditions; (iv) incur any indebtedness for borrowed money or any other
     liability or obligation or issue any debt securities or assume, guarantee,
     endorse or otherwise as an accommodation become responsible for the
     obligations of any other person, or make any loans or advances, except (A)
     in the ordinary course of business consistent with past practice, (B) for
     refinancing of existing debt on substantially the same or more favorable
     terms and (C) for daylight employee assistance loans in connection with the
     exercise of options; (v) pay, discharge or satisfy any claims, liabilities
     or obligations other than the payment, discharge or satisfaction, in the
     ordinary course of business consistent with past practice, of liabilities
     reflected or reserved against in certain Gulf Indonesia financial
     statements or incurred in the ordinary course of business consistent with
     past practice; (vi) authorize, recommend or propose any release or
     relinquishment of any contractual right, other than in the ordinary course
     of business consistent with past practice; (vii) waive, release, grant or
     transfer any rights of material value or modify or change any existing
     material licence, lease, contract or other document, other than in the
     ordinary course of business consistent with past practice; (viii) except in
     the ordinary course of business consistent with past practice
                                        62


     or as required by applicable law, enter into or modify in any material
     respect any contract, agreement, commitment or arrangement which new
     contract or series of related existing contracts could reasonably be
     expected to have a material adverse effect on Gulf Indonesia and its
     subsidiaries taken as a whole; or (ix) authorize or propose any of the
     foregoing or enter into or modify any contract, agreement, commitment or
     arrangement to do any of the foregoing; provided, however, that the
     foregoing does not apply to any action, expenditure, transaction or
     agreement (including a series of transactions) included in the Gulf
     Indonesia 2002 budget approved by the Board of Directors of Gulf Indonesia
     prior to December 10, 2001 (including amendments thereto made prior to June
     1, 2002) or with a value of less than $5 million individually or $10
     million in the aggregate;

          (5) Gulf Indonesia will not, and will not permit any of its
     subsidiaries to, (i) grant or promise to grant to any officer or director
     an increase or improvement in compensation or benefits in any form; (ii)
     other than in the ordinary course of business consistent with past
     practice, grant or promise to grant to any other employee any increase in
     compensation or benefits in any form other than to the extent required
     under any existing collective bargaining agreements or union contracts;
     (iii) make any loan to any officer or director except for daylight employee
     assistance loans in connection with the exercise of options; (iv) except as
     provided in the Support Agreement, take any action with respect to the
     grant or increase of any severance or termination pay to, or the entering
     into or amendment of any employment or consulting agreement with, any
     employee of Gulf Indonesia or any of its subsidiaries, or with respect to
     any increase of benefits payable under its current severance or termination
     pay policies; (v) except as otherwise set forth in the Support Agreement,
     take any action to accelerate any rights or benefits, or make any material
     determinations not in the ordinary course of business consistent with past
     practice under any certain Gulf Indonesia benefit plans, collective
     bargaining agreements or union contracts; or (vi) except as required by
     law, establish, adopt, enter into or amend any collective bargaining
     agreement;

          (6) Gulf Indonesia shall not take, and shall not permit any of its
     subsidiaries to take, any action, if such action could reasonably be
     expected to prevent, materially impede or make more difficult or burdensome
     in any material respect, the obtainment of regulatory approvals that are
     necessary or desirable in connection with the Offer, the Second Step
     Acquisition or any of the other transactions contemplated by the Support
     Agreement;

          (7) Gulf Indonesia will not, and will not permit its subsidiaries to
     (i) declare, set aside or pay any dividends on, or make any other
     distributions in respect of, any of its capital stock, other than dividends
     and distributions by a direct or indirect wholly owned subsidiary of Gulf
     Indonesia to Gulf Indonesia or (ii) split, combine or reclassify any of its
     capital stock or issue or authorize the issuance of any other securities in
     respect of, in lieu of or in substitution for shares of its capital stock;

          (8) Gulf Indonesia will not, and will not permit its subsidiaries to,
     make or revoke any material tax election, other than consistent with past
     practice, unless required by applicable law, or resolve any tax audit or
     other similar proceeding in respect of material taxes payable by Gulf
     Indonesia or its subsidiaries; and

          (9) Gulf Indonesia will not, and will not permit its subsidiaries to,
     make any change in any method of accounting or accounting practice or
     policies or financial accounting policies other than those required by
     generally accepted accounting principles or required by applicable law or
     applicable securities commissions.

     Fees and Expenses.  All fees and expenses incurred in connection with the
Support Agreement and the Offer and the transactions contemplated by the Support
Agreement will be paid by the party incurring such fees or expenses, whether or
not the Offer is consummated, except that Conoco Canada will pay all the costs
incurred by Gulf Indonesia in obtaining the Valuation and Fairness Opinion.

     Indemnification.  Conoco has agreed that it will, or will cause Gulf
Indonesia to, maintain in effect without any reduction in scope or coverage for
ten years from the later of the Expiration Date and the date a Second-Step
Acquisition is completed, customary policies of directors' and officers'
liability insurance providing protection comparable to the protection provided
by the policies maintained by Gulf Indonesia in

                                        63


effect immediately prior to the Expiration Date. In addition, Conoco has agreed
that all rights to indemnification or exculpation existing as of the date of the
Support Agreement or authorized prior to the date of the Support Agreement in
favor of present and former officers and directors of Gulf Indonesia shall
survive the completion of the Offer and Conoco has agreed to cause Gulf
Indonesia to fulfill its obligations under such rights or, failing that, to
fulfill such obligations itself.

     Efforts.  Conoco, Conoco Canada and Gulf Indonesia have each agreed in the
Support Agreement, subject to the terms and conditions thereof, to use their
commercially reasonable efforts to take and cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by the Offer, the Second-Step Acquisition and the Support
Agreement, and to cooperate with each other in connection with the foregoing,
including using commercially reasonable efforts to (1) obtain all necessary
waivers, consents, permits, orders and approvals required under applicable law
or otherwise and (2) obtain all necessary or desirable regulatory approvals. In
addition, Conoco, Conoco Canada and Gulf Indonesia have agreed to challenge all
lawsuits or proceedings challenging or affecting the Support Agreement or the
making or completion of the Offer.

     Representations and Warranties.  The Support Agreement contains various
customary representations and warranties of the parties thereto including among
others, representations as to due organization and qualification; in the case of
Gulf Indonesia, capitalization; corporate authority; no violation of charter or
by-laws, debt instruments or material agreements or applicable law; and, in the
case of Gulf Indonesia, accuracy of Gulf Indonesia's public filings, including
financial statements.

     Amendments; Waivers.  The Support Agreement may be amended at any time
prior to consummation of the Second-Step Acquisition by mutual agreement of
Conoco, Conoco Canada and Gulf Indonesia, except that the Support Agreement may
not be amended in a way that adversely affects the shareholders of Gulf
Indonesia (other than Conoco Canada) without the approval of the Independent
Committee. Conoco Canada and Conoco and Gulf Indonesia may (1) extend the time
for the performance of any of the obligations or other acts of the other
contained in the Support Agreement, (2) waive any inaccuracies in the
representations and warranties of the other contained in the Support Agreement
or in any document delivered pursuant to the Support Agreement or (3) subject to
the restrictions described under "THE OFFER -- Terms of the Offer; Expiration
Date", waive compliance with any of the agreements of any other party or with
any conditions to its own obligations, except that any extension or waiver that
adversely affects the rights of shareholders of Gulf Indonesia (other than
Conoco Canada) requires the approval of the Independent Committee. Any agreement
on the part of a party to the Support Agreement to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party by a duly authorized officer.

                         SHAREHOLDERS' STATUTORY RIGHTS

     Securities legislation in certain of the provinces and territories of
Canada provides shareholders of Gulf Indonesia with, in addition to any other
rights they may have at law, rights of rescission or to damages, or both, if
there is a misrepresentation in this Offer to Purchase or a notice that is
required to be delivered to such shareholders. However, such rights must be
exercised within prescribed time limits. Shareholders should refer to the
applicable provisions of the securities legislation of their province or
territory for the particulars of those rights or consult with a lawyer.

                              DIRECTORS' APPROVAL

     The contents of this Offer have been approved, and the sending thereof to
the holders of Gulf Indonesia Common Shares has been authorized, by the Board of
Directors of Conoco Canada.

                                        64


                            APPROVAL AND CERTIFICATE

Dated: June 12, 2002

     The contents of the Offer to Purchase have been approved, and the sending
thereof to the holders of Shares has been authorized, by the Board of Directors
of Conoco Canada Resources Limited. The foregoing contains no untrue statement
of a material fact and does not omit to state a material fact that is required
to be stated or that is necessary to make a statement not misleading in the
light of the circumstances in which it was made. The Offer to Purchase does not
contain any misrepresentation likely to affect the value or market price of the
securities subject to the bid.

                        CONOCO CANADA RESOURCES LIMITED

                                                         

/s/ Henry W. Sykes                                          /s/ Murray E. Hesje
President (as Chief Executive Officer)                      Senior Vice-President Finance
                                                            (as Chief Financial Officer)

                           On behalf of the Board of Directors

/s/ Robert E. McKee                                         /s/ H. Earl Joudrie
Director                                                    Director



                                        65


                                                                      SCHEDULE A

         INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF
                    CONOCO, CONOCO CANADA AND GULF INDONESIA

CONOCO

     The following table sets forth the name, citizenship, business address,
business telephone number, current principal occupation (including the name,
principal business and address of the organization in which such occupation is
conducted), and material positions held during the past five years of each of
the directors and executive officers of Conoco. Unless otherwise indicated, the
current business addresses of each person is 600 North Dairy Ashford Road,
Houston, Texas 77079 and such person's telephone number is (281) 293-1000.
Unless otherwise indicated, each such person is a citizen of the United States.

     None of the persons listed below has been (1) convicted in a criminal
proceeding during the past five years (excluding traffic violations or similar
misdemeanors) or (2) been a party to any judicial or administrative proceeding
during the past five years (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.



                                        PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
DIRECTORS AND EXECUTIVE OFFICERS                 FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------        ----------------------------------------------
                               
Directors:
Richard H. Auchinleck
(Citizen of Canada)............   Richard H. Auchinleck has been a director of Conoco since
                                  October 2001. He served as President and Chief Executive
                                  Officer of Gulf Canada from February 1998 to June 2001. Mr.
                                  Auchinleck joined Gulf Canada in 1976. In July 1997, he was
                                  appointed Chief Operating Officer of Gulf Canada, and in
                                  September of the same year he was given the additional role
                                  of Chief Executive Officer for Gulf Indonesia, which he
                                  held until February 1998. Mr. Auchinleck received a
                                  bachelor of applied science degree in chemical engineering
                                  from the University of British Columbia in 1976. He is a
                                  director of Sonic Mobility, a Founding Director and
                                  Lifetime Member of the Canadian Heavy Oil Association and a
                                  member of the Association of Professional Engineers,
                                  Geologists and Geophysicists of Alberta.
Kenneth M. Duberstein..........   Kenneth M. Duberstein has been a director of Conoco since
                                  May 2000. He has been Chairman and CEO of The Duberstein
                                  Group, a strategic planning and consulting company, since
                                  1989. Mr. Duberstein served as White House Chief of Staff
                                  and Deputy Chief of Staff to President Ronald Reagan and
                                  Deputy Under Secretary of Labor during the Ford
                                  Administration. He serves on the boards of the Boeing
                                  Company, Fannie Mae, Fleming Co. and the St. Paul
                                  Companies, and is on the Board of Governors for the NASD
                                  and the American Stock Exchange. He also is a trustee of
                                  Franklin & Marshall College and Johns Hopkins University
                                  and serves on a wide range of commissions, tasks forces and
                                  cultural, educational and volunteer boards: Vice Chairman
                                  of the Kennedy Center for Performing Arts, Harvard
                                  University/Kennedy School's Institute of Politics Senior
                                  Advisory Committee, the Reagan Institute of Emergency
                                  Medicine and the National Alliance to End Homelessness. Mr.
                                  Duberstein is a Director of the Council on Foreign
                                  Relations and Chairman of the Ethics Committee for the U.S.
                                  Olympics Committee. Mr. Duberstein's business address is
                                  The Duberstein Group, Inc., 2100 Pennsylvania Ave. N.W.,
                                  Suite 500, Washington, D.C. 20037.


                                       A-1





                            
Archie W. Dunham.............  Archie W. Dunham is currently Chairman, President and Chief
                               Executive Officer of Conoco. He has been Chairman of the
                               Board of Conoco since August 12, 1999 and the President and
                               Chief Executive Officer of Conoco since 1996. He joined
                               Conoco in 1966 and subsequently held a number of commercial
                               and managerial positions within Conoco and DuPont. Mr.
                               Dunham is also a member of the boards of directors of
                               Louisiana-Pacific Corporation, Phelps Dodge Corporation and
                               Union Pacific Corporation. Mr. Dunham is a former Executive
                               Vice President, Exploration Production and Executive Vice
                               President, Refining, Marketing, Supply and Transportation
                               for Conoco. He was also a Senior Vice President, Polymers
                               and an Executive Vice President of DuPont. He is a director
                               of the American Petroleum Institute, the U.S.-Russia
                               Business Council and the Greater Houston Partnership. He is
                               a past Chairman of both the United States Energy
                               Association and the National Petroleum Council and a member
                               of The Business Council and The Business Roundtable. Mr.
                               Dunham is also a member of the board of visitors at the
                               University of Oklahoma. He serves on the board of the
                               Memorial Hermann Healthcare System in Houston, the board of
                               visitors of M.D. Anderson Cancer Center and the board of
                               trustees of the Houston Symphony, the George Bush
                               Presidential Library and the Smithsonian Institution. Mr.
                               Dunham is the Chairman and a trustee of the Houston Grand
                               Opera.
Ruth R. Harkin...............  Ruth R. Harkin has been a director of Conoco since October
                               1998. She has been Senior Vice President, International
                               Affairs and Government Relations Chair of United
                               Technologies Corporation and Chair of United Technologies
                               International, UTC's international representation arm,
                               since June 1997. Prior to serving in her current position,
                               Ms. Harkin was the President and Chief Executive Officer of
                               the Overseas Private Investment Corporation in the Clinton
                               administration from 1993 to 1997. Ms. Harkin was elected as
                               a prosecutor in the office of the County Attorney of Story
                               County, Iowa in 1973. She also served as Deputy General
                               Counsel at the U.S. Department of Agriculture and was Of
                               Counsel at the law firm of Akin, Gump, Strauss, Hauer &
                               Feld. Ms. Harkin is a member of the Board of Visitors of
                               the College of Business Administration, University of Iowa.
                               She also sits on the boards of the National Association of
                               Manufacturers, the Korea Society and the U.S.-Russia
                               Business Council and was the Year 2000 U.S. Working Chair
                               of the TransAtlantic Business Dialogue. Ms. Harkin's
                               business address is United Technologies Corporation, 1401
                               Eye Street N.W. Suite 600, Washington, D.C. 20005.


                                       A-2





                            
General Charles C. Krulak....  General Charles C. Krulak has been a director of Conoco
                               since May 2000. He has been Chairman and Chief Executive
                               Officer of MBNA Europe since January 2001. Prior to serving
                               in his current position, General Krulak served as Senior
                               Vice Chairman of MBNA America from September 1999 through
                               January 2001. During his 35-year career in the Marine
                               Corps, General Krulak served two tours of duty in Vietnam
                               and rose through several command and staff positions to the
                               position of Commandant of the Marine Corps and member of
                               the Joint Chiefs of Staff from June 1995 to September 1999.
                               Among many decorations, he holds the Defense Distinguished
                               Service Medal, the Silver Star Medal, the Bronze Star Medal
                               with Combat "V" and two gold stars, the Purple Heart with
                               gold star and the Meritorious Service Medal. Mr. Krulak's
                               business address is MBNA Europe Bank Ltd., Stansfield
                               House, Chester Business Park, Chester, CH49QQ, United
                               Kingdom.
Frank A. McPherson...........  Frank A. McPherson has been a director of Conoco since
                               October 1998. He served as Chairman and Chief Executive
                               Officer of Kerr-McGee Corporation from 1983 until
                               retirement in February 1997. He joined Kerr-McGee in 1957
                               and held many technical, operational and managerial
                               positions, including President from 1980 to 1983. He is a
                               past director of the Federal Reserve Bank of Kansas City
                               and the Oklahoma State University Foundation Board of
                               Trustees. Mr. McPherson serves on the boards of directors
                               of Kimberly-Clark Corp., BOK Financial Corporation,
                               Tri-Continental Corporation, Seligman Quality Fund, Inc.,
                               Seligman Select Municipal Fund, Inc. and the Seligman Group
                               of Mutual Funds. He is also a member of the boards of the
                               American Petroleum Institute, Integris Health, Oklahoma
                               Chapter of Nature Conservancy, Oklahoma City Chamber of
                               Commerce, Oklahoma City Public School Foundation, Oklahoma
                               Medical Research Foundation and Oklahoma Foundation for
                               Excellence in Education. Mr. McPherson's business address
                               is Oil Center, 2601 Northwest Expressway, 805E, Oklahoma
                               City, Oklahoma 73112.
William K. Reilly
(Also citizen of Ireland)....  William K. Reilly has been a director of Conoco since
                               October 1998. He has been President and Chief Executive
                               Officer of Aqua International Partners, an investment group
                               which finances water improvements in developing countries,
                               since June 1997. Prior to serving in his current position,
                               Mr. Reilly was a consultant to the Texas Pacific Group from
                               December 1994 to June 1997. Formerly, Mr. Reilly was a
                               visiting professor at the Institute of International
                               Studies at Stanford University and served as Administrator
                               of the U.S. Environmental Protection Agency from February
                               1989 to January 1993. Mr. Reilly was president of the
                               Conservation Foundation from 1973 to 1989 and, after its
                               affiliation with World Wildlife Fund in 1985, served as
                               President of both groups. He also serves on the boards of
                               the American Academy in Rome, DuPont, Ionics, Incorporated,
                               National Geographic Society, The Presidio Trust and Royal
                               Caribbean International. Mr. Reilly also is Chairman of the
                               Board of the World Wildlife Fund. Mr. Reilly's business
                               address is Aqua International Partners L.P., 345 California
                               Street, Suite 1770, San Francisco, California 94101.


                                       A-3





                            
William R. Rhodes............  William R. Rhodes has been a director of Conoco since
                               October 1998. He has been a Senior Vice Chairman of
                               Citigroup, Inc. since December 2001 and was Vice Chairman
                               of Citigroup, Inc. from May 1999 to December 2001 and Vice
                               Chairman of Citicorp/Citibank from July 1991 to May 1999.
                               Mr. Rhodes is Chairman of the Americas Society and Council
                               of the Americas, Vice Chairman of the Institute of
                               International Finance, Chairman of CHIPCo, a Director of
                               the Private Export Funding Corporation and a member of
                               South African President Thabo Mbeki's International
                               Advisory Board. He also serves on many Boards including:
                               The Group of Thirty, The Africa-America Institute, and the
                               U.S.-Egypt Presidents' Council. He is also a member of the
                               Council on Foreign Relations and the Foreign Policy
                               Association. Mr. Rhodes is a past Chairman of the U.S.
                               Advisory Committee of the Export-Import Bank of the United
                               States, past Chairman of the U.S. Section of the Venezuela-
                               U.S. Business Council, past President of the
                               Venezuela-American Chamber of Commerce and past President
                               of the Bankers Association for Foreign Trade. He is a
                               Governor and Trustee of The New York Presbyterian Hospital
                               and a Director of the New York City Partnership and Chamber
                               of Commerce, a Vice Chairman of the Metropolitan Museum of
                               Art Business Committee and Chairman's Committee. He is a
                               member of the Board of Overseers of the Watson Institute
                               for International Studies at Brown University and Chairman
                               of the Board of Trustees of the Northfield Mount Hermon
                               School. Mr. Rhodes' business address is Citigroup, Inc.,
                               399 Park Avenue, New York, New York 10022.
A.R. "Tony" Sanchez, Jr......  A.R. "Tony" Sanchez, Jr. has been a director of Conoco
                               since August 1999. He has been active in the oil and gas
                               industry since 1973. Mr. Sanchez has been the Chief
                               Executive Officer and Chairman of the Board for Sanchez Oil
                               & Gas Corp. since 1974. A member of the University of Texas
                               System Board of Regents, Mr. Sanchez is on the boards of
                               directors of International BancShares Corporation, ZixIt
                               Corporation, the University of Texas Investment Management
                               Company, the University of Texas Foundation for
                               Entrepreneurial Excellence, the Texas Water Foundation, the
                               Smithsonian Institution, the LBJ Foundation, the American
                               Petroleum Institute, the Independent Petroleum Institute of
                               America, the National Petroleum Council, the InterState Oil
                               and Gas Compact Commission, and Little League Baseball. Mr.
                               Sanchez's business address is Sanchez Oil & Gas Corp., P.O.
                               Box 2986, Laredo, Texas 78044-2986.
Franklin A. Thomas...........  Franklin A. Thomas has been a director of Conoco since
                               October 1998. He has been a consultant to the The Ford
                               Foundation Study Group, a non-profit initiative assisting
                               development in southern Africa, since April 1996. Mr.
                               Thomas was President and Chief Executive Officer of The
                               Ford Foundation from 1979 to 1996. He also serves as a
                               director of Alcoa, Inc., Avaya Inc., Citigroup Inc.,
                               Cummins, Inc., Lucent Technologies, Inc. and PepsiCo, Inc.
                               Mr. Thomas' business address is The Ford Foundation Study
                               Group, 595 Madison Avenue, 33rd Floor, New York, New York
                               10022.


                                       A-4





                            
Executive Officers:
Archie W. Dunham.............  See above.
Phillip L. Frederickson......  Phillip L. Frederickson is currently Senior Vice President,
                               Corporate Strategy and Business Development of Conoco. He
                               has been Senior Vice President of Corporate Strategy and
                               Business Development since November 2001. He joined Conoco
                               in 1978 and held a series of positions supporting the
                               company's U.S. transportation operations and its natural
                               gas business. In 1987 he was named Manager of Planning and
                               Administration for the company's North American Petroleum
                               Products Department. Mr. Frederickson transferred to London
                               in 1989 as General Manager for the European refining and
                               marketing operations. He then became President and Managing
                               Director of Conoco Ireland, headquartered in Dublin. He
                               returned to Houston in 1990 and served in assignments in
                               U.S. retail and global downstream operations. In 1994 he
                               was named General Manager of Refining and Marketing
                               Operations in the Rocky Mountain region. He returned to
                               Houston in 1997 to become General Manager of Strategy and
                               Portfolio Management for Conoco's upstream segment and
                               became Vice President of Business Development in 1998. Mr.
                               Frederickson is a member of the Texas Tech University
                               Industrial Engineering Academy. He serves on the Board of
                               Directors of Theatre Under the Stars.
Robert W. Goldman............  Robert W. Goldman is currently Senior Vice President,
                               Finance, and Chief Financial Officer of Conoco. He has been
                               Senior Vice President, Finance, and Chief Financial Officer
                               of Conoco since 1998 and was its Vice President, Finance
                               from 1991 to 1998. Mr. Goldman began his career with DuPont
                               in 1965 and subsequently held many technical and managerial
                               positions within the finance, tax and treasury functions
                               both in the United States and internationally. He is the
                               former Treasurer, DuPont (Puerto Rico, Inc.), Vice
                               President-Finance of DuPont (Mexico), and Vice President,
                               Remington Arms Company; and served as Director and
                               Comptroller of several operating departments of DuPont in
                               Wilmington, Delaware. Mr. Goldman transferred to Conoco in
                               1988 as Vice President and Controller. He currently serves
                               on the Board of Directors and Audit Committees of Conoco
                               Canada Resources Limited and Gulf Indonesia Resources
                               Limited. He is co-chairman of Conoco's Risk Management
                               Committee and is a member of the American Petroleum
                               Institute, a former chairman of its Accounting Committee
                               and currently serves on its Executive Committee of the
                               General Committee on Finance. Mr. Goldman is on the
                               Advisory Board of the Center for Finance Education and
                               Research of the McCombs School of Business at the
                               University of Texas at Austin. He is also a member of the
                               Financial Executives Institute and the Executive Committee
                               of the Board of Directors of the Alley Theatre in Houston,
                               Texas.


                                       A-5





                            
Rick A. Harrington...........  Rick A. Harrington is currently Senior Vice President,
                               Legal, and General Counsel of Conoco. He has been Senior
                               Vice President, Legal and General Counsel of Conoco since
                               1998. He was named Vice President and General Counsel for
                               Conoco in 1994. Mr. Harrington joined DuPont in 1979 as a
                               senior litigation attorney and subsequently held the
                               positions of Managing Counsel, Special Litigation, and Vice
                               President and General Counsel of Consolidation Coal
                               Company. Prior to joining DuPont, he was a partner in the
                               firm of Arent, Fox, Kintner, Plotkin and Kahn in
                               Washington, D.C. where he specialized in antitrust
                               litigation. Mr. Harrington is a member of the bar of the
                               District of Columbia, the District of Columbia Court of
                               Appeals and the Fifth Circuit Court of Appeals. He is past
                               Chairman of the American Petroleum Institute General
                               Committee on Law and served on the American Corporate
                               Counsel Board of Directors. Currently, Mr. Harrington
                               serves on the Conoco Executive Committee and the Conoco
                               Management Committee. He is also a Director of Gulf
                               Indonesia and the Minority Corporate Counsel Association.
Thomas C. Knudson............  Thomas C. Knudson is currently Senior Vice President, Human
                               Resources, Information Management and Corporate
                               Communications of Conoco. He has been Senior Vice
                               President, Human Resources, Information Management and
                               Corporate Communications since November 2001. Prior to his
                               current position, he was Vice President, Human Resources
                               since July 2000. He is a graduate of the U.S. Naval Academy
                               and served as a naval aviator before joining Conoco's
                               natural gas and gas products division in Houston in 1975.
                               His career includes assignments as Chief Executive Officer
                               of DuPont Scandinavia, General Manager of External Affairs
                               and Communications, General Manager of Business Development
                               for Conoco's upstream business. He was Vice President and
                               General Manager for Natural Gas and Gas Products from June
                               1995 to June 1997. From June 1997 to July 2000, he was
                               Chairman of Conoco Exploration Production Europe Limited,
                               based in London, where he was responsible for developing
                               and executing the company's upstream strategy throughout
                               Europe and the former Soviet Union. Mr. Knudson was the
                               founding president of the Business Council for Sustainable
                               Development (BCSD) in the Gulf of Mexico and most recently
                               was the founding Chairman of the BCSD in the North Sea
                               Region. He currently serves on the boards of the Houston
                               Museum of Natural Science, Covenant House Texas, and Alpha
                               Houston.


                                       A-6





                            
Robert E. McKee, III.........  Robert E. McKee, III is currently Executive Vice President,
                               Exploration Production of Conoco. He has been an Executive
                               Vice President for Conoco since 1992, and was a Senior Vice
                               President of DuPont until October 27, 1998, with
                               responsibility for worldwide exploration and production. He
                               was formerly Conoco's Executive Vice President for
                               Corporate Strategy and Development, Senior Vice President
                               for Administration, Vice President of North American
                               Refining and Marketing and Vice President, Chairman and
                               Managing Director of Conoco (U.K.) Limited. Since he joined
                               Conoco in 1967, Mr. McKee has worked at various locations
                               and held numerous managerial, operating, administrative and
                               technology positions both in the U.S. and overseas. He
                               currently serves on the Board of Directors of the American
                               Petroleum Institute and is a former director of Consol
                               Energy Inc. and Consol Inc. In addition, he is a past
                               Chairman of the Southern Regional Advisory Board of the
                               Institute of International Education and a member of the
                               advisory committee of the University of Texas Engineering
                               Department. Mr. McKee also serves as Chairman of the
                               President's Council of the Colorado School of Mines.
Jimmy W. Nokes...............  Jimmy W. Nokes is currently Executive Vice President,
                               Refining, Marketing, Supply and Transportation of Conoco.
                               He has been Executive Vice President for Conoco since
                               November 1999, with responsibility for worldwide refining,
                               marketing, supply and transportation, and was President of
                               North American Refining and Marketing from 1998 until 1999.
                               Mr. Nokes was Vice President of North American Refining and
                               Marketing from 1994 until 1998. Since he joined Conoco in
                               1970, Mr. Nokes has held various administrative, planning
                               and operating management positions with Conoco's gas and
                               natural gas processing departments and a pipeline
                               subsidiary. In 1989, he transferred to London to serve as
                               Director and General Manager of Business Development for
                               Conoco's exploration and production affiliate, returning to
                               the U.S. in 1991 to become Vice President and General
                               Manager for North American Marketing.
J. Michael Stinson...........  J. Michael Stinson is currently Senior Vice President,
                               Government Affairs of Conoco. He has been Senior Vice
                               President, Government Affairs since November 2001. He
                               joined Conoco in 1965. He held a number of positions in the
                               U.S. before being named a Director and General Manager for
                               Conoco (U.K.) Limited in 1982. He has served as President
                               of Conoco Norway Inc. and as the Chairman and Managing
                               Director of Conoco (U.K.) Limited. He became Vice President
                               of Business Development in 1993. In 1998 he was named
                               Senior Vice President, Government Affairs, Corporate
                               Strategy and Communications. Mr. Stinson is a fellow of the
                               Institute of Petroleum and a member of the American
                               Petroleum Institute, the Society of Petroleum Engineers and
                               the American Association of Petroleum Geologists. He is
                               past Chairman of the American Heart Association's Houston
                               Division.


                                       A-7


CONOCO CANADA

     The following table sets forth the name, citizenship, business address,
business telephone number, current principal occupation (including the name,
principal business and address of the organization in which such occupation is
conducted), and material positions held during the past five years of each of
the directors and executive officers of Conoco Canada. Unless otherwise
indicated, the current business addresses of each person is 1600, 401-9th Avenue
S.W., Calgary, Alberta T2P 3C5 and such person's telephone number is
(403)233-4000. The address and telephone number of Conoco is as set forth above.
Unless otherwise indicated, each such person is a citizen of Canada.

     None of the persons listed below has been (1) convicted in a criminal
proceeding during the past five years (excluding traffic violations or similar
misdemeanors) or (2) been a party to any judicial or administrative proceeding
during the past five years (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.



                                          PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
DIRECTORS AND EXECUTIVE OFFICERS                   FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------          ----------------------------------------------
                                   
Directors:
Robert W. Goldman...................  See above.
(Citizen of the United States)
H. Earl Joudrie.....................  H. Earl Joudrie has been a director of Conoco Canada
                                      since 1993. He was also a director of Algoma Steel
                                      Inc. from 1992 to January 2002. Mr. Joudrie currently
                                      serves on the boards of Abitibi Consolidated Inc.,
                                      ATCO Ltd., Consolidated Carma Corporation, Canadian
                                      Tire Corporation Limited, Trenton Works Ltd. and
                                      Zargon Oil & Gas Ltd. Mr. Joudrie's business address
                                      is 1 Palace Pier Court, Suite 4106, Toronto, Ontario
                                      M8V 3W9.
Donald F. Mazankowski...............  Donald F. Mazankowski has been a director of Conoco
                                      Canada since 1993. Prior to serving in his current
                                      position, he held various Cabinet positions with the
                                      federal government of Canada. Mr. Mazankowski has also
                                      been a director of Gulf Indonesia since 1997. Mr.
                                      Mazankowski is currently self-employed as a business
                                      consultant and corporate director of ATCO Group in
                                      Calgary, Alberta. Mr. Mazankowski also sits on the
                                      boards of the Power Group of Companies, ATCO Ltd.,
                                      Shaw Communications Incorporated, Weyerhauser Company,
                                      IMC Global Inc., Great West Life Assurance and
                                      Investors Group. Mr. Mazankowski's business address is
                                      Box 1350, 5238 45 B Avenue, Vegreville, Alberta T9C
                                      155.
Robert E. McKee, III................  See above.
(Citizen of the United States)
Henry W. Sykes......................  Henry W. Sykes is currently President of Conoco
                                      Canada. Prior to his current position, he was
                                      Executive Vice President of Business Development of
                                      Conoco Canada, a position he held until July 2001. Mr.
                                      Sykes was Senior Vice President of Business
                                      Development and General Counsel from 1998 to 2000.
                                      Prior to his employment at Conoco Canada, Mr. Sykes
                                      was an associate and subsequently a partner at the law
                                      firm of Bennett Jones from 1983 to 1998.


                                       A-8


                                            
Executive Officers:
Archibald W. Kennedy.........................  Archibald W. Kennedy is currently Senior Vice President of Conoco
(Citizen of the United Kingdom)                Canada. He was President and General Manager of Conoco Canada
                                               Limited from 2000 to 2001. Prior to joining Conoco Canada Limited,
                                               Mr. Kennedy was employed with Conoco as a Business Unit Manager from
                                               1998 to 2000 and as Executive Assistant to the Vice President from
                                               1997 to 1998.
Murray E. Hesje..............................  Murray E. Hesje is currently Senior Vice President, Finance of
                                               Conoco Canada. Prior to obtaining his current position in August
                                               2001, he held the position of Vice President and Controller of Gulf
                                               Canada from February 2001 to July 2001. Mr. Hesje was
                                               Director -- North America, Accounting from September 1977 to March
                                               1998 and Assistant Controller from April 1998 to October 1999. Mr.
                                               Hesje was employed with Gulf Indonesia as Finance Manager from June
                                               1994 to September 1997 and as Vice President, Finance from November
                                               1999 to January 2001.
Henry W. Sykes...............................  See above.



GULF INDONESIA

     The following table sets forth the name, citizenship, business address,
business telephone number, current principal occupation (including the name,
principal business and address of the organization in which such occupation is
conducted), and material positions held during the past five years of each of
the directors and executive officers of Gulf Indonesia. Unless otherwise
indicated, the current business address of each person is 21st fl., Wisma 46,
Kota BNI, Jalan Jenderal Sudirman Kavling 1, Jakarta 10220, Indonesia and such
person's telephone number is (6221) 574-2120. The addresses and telephone
numbers of Conoco and Conoco Canada are as set forth above. Unless otherwise
indicated, each such person is a citizen of the United States.

     None of the persons listed below has been (1) convicted in a criminal
proceeding during the past five years (excluding traffic violations or similar
misdemeanors) or (2) been a party to any judicial or administrative proceeding
during the past five years (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.



                                          PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
DIRECTORS AND EXECUTIVE OFFICERS                   FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------          ----------------------------------------------
                                   
Directors:
Robert H. Allen.....................  Robert H. Allen has been a director of Gulf Indonesia
                                      since 1997 and is currently the Chairman of the Board.
                                      He has been the Managing Partner of Challenge
                                      Investment Partners, a private investment company
                                      focused on mining-related investments for more than
                                      five years. Challenge Investment Partners is located
                                      at 1200 Smith Street, Suite 1111, Houston, Texas
                                      77002.
Robert W. Goldman...................  See above.
Malcolm D. Griffiths................  Malcolm D. Griffiths has been a director of Gulf
(Citizen of the United Kingdom)       Indonesia since 2001. Since February 1995, he has held
                                      the positions of Managing Director of Conoco European
                                      Gas Ltd. and Director of Conoco (UK) Ltd., each of
                                      which is engaged in the oil and gas business. Conoco
                                      European Gas Ltd. and Conoco (UK) Ltd. are each
                                      located at Park House, 116 Park Street, London,
                                      England, United Kingdom WIY 4NN.
Rick A. Harrington..................  See above.


                                       A-9





                                   
Francis H. James....................  Francis H. James has been a Director of Gulf Indonesia
                                      since July 2001. Since August 1998, he has served as
                                      General Manager -- Upstream Finance for Conoco. From
                                      January 1997 to August 1998, Mr. James served as
                                      Business Development Manager, Mid-Continent Region
                                      Exploration Production for Conoco, located at 10 Desta
                                      Drive, Suite 416 West, Midland, Texas 79705.
Dr. Ir Kuntoro Mangkusubroto........  Dr. Ir Kuntoro Mangkusubroto has been a director of
(Citizen of Indonesia)                Gulf Indonesia since July 2001. Since May 2001, Mr.
                                      Mangkusubroto has been a professor at Bandung
                                      Institute of Technology, located at JL, Ganesha 10,
                                      Bandung, 40132, Indonesia. Mr. Mangkusubroto's primary
                                      business address is Kesemek No. 1, Kalibata Indah,
                                      Jakarta, 12740, Indonesia. From January 2000 until
                                      March 2001, Mr. Mangkusubroto served as President and
                                      Chief Executive Officer for the Indonesia State
                                      Electricity Company. The address of the Indonesia
                                      State Electricity Company is Jalan Trunojoyo, Black M
                                      11135 Kebayoran Baru, Jakarta Selatan 12160,
                                      Indonesia. Mr. Mangkusubroto served as Minister of
                                      Mines and Energy for the Indonesian government from
                                      March 1998 until November 1999. The address of the
                                      Ministry of Mines and Energy is Jalan Merdeka Selatan
                                      No. 18 Jakarta Pusat 10110, Indonesia. From May 1997
                                      until March 1998, Mr. Mangkusubroto was a Deputy on
                                      the Board of Investment for the government of
                                      Indonesia. The address of the Board of Investments is
                                      Jalan Jendral Gatot Subroto Kavling 44, Jakarta
                                      Selatan 12190, Indonesia.

Donald F. Mazankowski...............  See above.
(Citizen of Canada)
James D. McColgin...................  James D. McColgin has been a director of Gulf
                                      Indonesia since 2001. He is currently President,
                                      Exploration Production -- Africa, Asia Pacific, Middle
                                      East of Conoco. He has held this position since July
                                      2000. Mr. McColgin was the President & General Manager
                                      of Conoco Indonesia Inc. from July 1997 to July 2000.
                                      Conoco Indonesia Inc.'s address is Menara Mulia, JL.
                                      Jenderal Gatot Subroto Kav. 9-11, Jakarta 12930,
                                      Indonesia. Prior to July 1997, Mr. McColgin was the
                                      General Manager, Strategy & Portfolio Management,
                                      Exploration Production of Conoco.
John R. Sanders.....................  John R. Sanders has been a Director of Gulf Indonesia
(Citizen of the United Kingdom)       since May 1999. He is currently retired. From July
                                      1993 to February 1998, Mr. Sanders served as Managing
                                      Director of Natwest Markets, located at 99
                                      Bishopsgate, London, England. Natwest Markets provides
                                      financial and advisory services.


                                       A-10





                                   
Paul C. Warwick.....................  Paul C. Warwick has been President and Chief Executive
(Citizen of the United Kingdom)       Officer of Gulf Indonesia since July 2001. Prior to
                                      July 2001, he held several positions with companies
                                      involved in the exploration, development and
                                      production of crude oil and natural gas. From December
                                      1999 to July 2001, Mr. Warwick served as the President
                                      and Managing Director of Conoco Energy Nigeria
                                      Limited, located in Lagos Nigeria. From May 1999 to
                                      November 1999, Mr. Warwick served as Director,
                                      President and Chief Executive Officer of Gulfstream
                                      Resources Limited, located in Nicosia, Cyprus. From
                                      March 1997 to April 1999, Mr. Warwick served as
                                      President of Conoco Trinidad, Inc., located in Point
                                      Lisas, Trinidad, West Indies.
George E. Watkins...................  George E. Watkins has been a Director of Gulf
(Citizen of the United Kingdom)       Indonesia since 2001. Since October 1993, he has
                                      served as Chairman and Managing Director for Conoco
                                      (UK) Ltd., which is engaged in the oil and gas
                                      business. Conoco (UK) Ltd. is located at Rubislaw
                                      House, Anderson Drive, Aberdeen AB15 6FZ, Scotland.
Executive Officers
Taufik Ahmad........................  Taufik Ahmad is currently Vice President
(Citizen of Indonesia)                Administration of Gulf Indonesia. He has held this
                                      position since February 2001. From July 2000 to
                                      February 2001, he was Finance Manager of Gulf
                                      Indonesia. From November 1999 to June 2000, Mr. Ahmad
                                      was Controller of Arco Indonesia, an upstream oil and
                                      gas company which has been acquired by British
                                      Petroleum. From January 1997 to October 1999, Mr.
                                      Ahmad was the Accounting Manager of Gulf Indonesia.
Andrew D. Hastings..................  Andrew D. Hastings has been Vice President Business
(Citizen of the United Kingdom)       Development & Marketing of Gulf Indonesia since
                                      January 2002. From November 1997 to December 2001, he
                                      served as Business Development Manager of Conoco
                                      Power, a power development company. From January 1997
                                      to November 1997, Mr. Hastings served as Senior
                                      Commercial Coordinator of Conoco Europe Gas, a company
                                      engaged in the gas business. Conoco Europe Gas is
                                      located at Park House, 116 Park Street, London,
                                      England WIK6NN. From January 1997 to November 1997,
                                      Mr. Hastings served as a Director of UK-Continent Gas
                                      Interconnect Company, a gas transportation business.
Donald D. McKechnie.................  Donald D. McKechnie has been Vice President, Finance
(Citizen of Canada)                   of Gulf Indonesia since June 2001. From September 1997
                                      to June 2001, he served as Vice President, Finance and
                                      Corporate Secretary of Momentum Energy International
                                      Inc., an oil and gas exploration and development
                                      company located at 416 Scarboro Avenue S.W., Calgary,
                                      Alberta T3C 2F6. From May 1997 to September 1997, Mr.
                                      McKechnie was self-employed. From January 1997 to May
                                      1997, Mr. McKechnie served as Vice President Finance
                                      of Transwest Energy Inc. Transwest is located at 4th
                                      Floor, Bow Valley Square III, 255 -- 5th Avenue S.W.,
                                      Calgary, Alberta T2P 3G6.
Supramu Santosa.....................  Supramu Santosa is currently Vice President, Corporate
(Citizen of Indonesia)                Strategy & Government Relations of Gulf Indonesia. He
                                      has held this position since January 2001. From July
                                      1989 to December 2000, Mr. Santosa was Vice President,
                                      Administration with Gulf Indonesia.


                                       A-11





                                   
Alan P. Scott.......................  Alan P. Scott is currently Corporate Secretary of Gulf
(Citizen of Canada)                   Indonesia and Corporate Secretary of Conoco Canada. He
                                      has held this position since November 2000. He also
                                      currently serves as Assistant General Counsel of
                                      Conoco Canada. Mr. Scott has been employed by Conoco
                                      Canada or its predecessor, Gulf Canada Resources
                                      Limited, since 1978.
John K. Wearing.....................  John K. Wearing has been Vice President Operations of
(Citizen of Canada)                   Gulf Indonesia since June 2001. From June 2000 to May
                                      2001, he served as Coordinator Asset Management of
                                      Maxx Petroleum Ltd., an oil and gas exploration,
                                      production and development company located in Calgary,
                                      Alberta. From January 1999 to May 2001, Mr. Wearing
                                      served as President and a Director of Wearing
                                      Petroleum Management Ltd., a company that provided
                                      management and consulting services for the petroleum
                                      industry. Wearing Petroleum was located in Calgary,
                                      Alberta. From May 1997 to December 1998, Mr. Wearing
                                      served as Vice President Operations of Maxx Petroleum
                                      Ltd. From February 1996 to May 1997, Mr. Wearing
                                      served as Operations Manager of Maxx Petroleum Ltd.
Paul C. Warwick.....................  See above.
(Citizen of the United Kingdom)
Clifford W. Zeliff III..............  Clifford W. Zeliff III is currently Vice
                                      President -- Exploration of Gulf Indonesia. He has
                                      held this position since November 1997. From January
                                      to November 1997, Mr. Zeliff was Vice President of
                                      Exploration of Asamera Oil, a predecessor of Gulf
                                      Indonesia having the same address.


                                       A-12


                                                                      SCHEDULE B

                    TRANSACTIONS AND ARRANGEMENTS CONCERNING
                          GULF INDONESIA COMMON SHARES

     The following options to purchase Shares were issued by Gulf Indonesia to
the directors or executive officers of Gulf Indonesia during the six months
prior to the date of this Offer to Purchase:



                                                                       NUMBER OF   EXERCISE
NAME                                                           DATE     SHARES      PRICE
- ----                                                          ------   ---------   --------
                                                                          
Taufik Ahmad................................................  5/6/02     5,000      $11.25
Robert H. Allen.............................................  5/6/02     7,500       11.25
Dr. Ir Kuntoro Mangkusubroto................................  5/6/02     7,500       11.25
Donald F. Mazankowski.......................................  5/6/02     7,500       11.25
Donald D. McKechnie.........................................  5/6/02    11,000       11.25
John R. Sanders.............................................  5/6/02     7,500       11.25
Supramu Santosa.............................................  5/6/02    11,250       11.25
Paul C. Warwick.............................................  5/6/02    20,000       11.25
John K. Wearing.............................................  5/6/02    11,700       11.25
Clifford W. Zeliff..........................................  5/6/02    12,850       11.25


     The following restricted share units were issued by Gulf Indonesia to the
directors or executive officers of Gulf Indonesia during the six months prior to
the date of this Offer to Purchase:



                                                                       NUMBER OF
NAME                                                           DATE     SHARES
- ----                                                          ------   ---------
                                                                 
Taufik Ahmad................................................  5/6/02       950
Robert H. Allen.............................................  5/6/02     1,800
Dr. Ir Kuntoro Mangkusubroto................................  5/6/02       900
Donald F. Mazankowski.......................................  5/6/02       900
Donald D. McKechnie.........................................  5/6/02     2,200
John R. Sanders.............................................  5/6/02       900
Supramu Santosa.............................................  5/6/02     2,250
Paul C. Warwick.............................................  5/6/02     3,950
John K. Wearing.............................................  5/6/02     2,350
Clifford W. Zeliff..........................................  5/6/02     2,600


     On January 10, 2002, Gulf Indonesia purchased for John R. Sanders, a
director of Gulf Indonesia, 1,067 Shares, at a price of $8.85 per Share, in lieu
of director's fees. In addition, on April 9, 2002, Gulf Indonesia purchased for
Mr. Sanders 803 Shares, at a price of $10.70 per Share, in lieu of director's
fees.

     On April 9, 2002, Gulf Indonesia purchased for Mr. Allen, Chairman of the
Board of Gulf Indonesia, 584 Shares, at a price of $10.70 per Share, in lieu of
director's fees.

     On December 14, 2001, Murray E. Hesje, an executive officer of Conoco
Canada, sold 5,600 Shares for $8.21 per Share. On May 29, 2002, Henry W. Sykes,
a director and executive officer of Conoco Canada, sold 72,500 Shares for $13.17
per Share.

                                       B-1


                               CONSENT OF COUNSEL

To: The Directors of Conoco Canada

     We hereby consent to the reference to our name and opinion contained under
"THE OFFER -- Certain Canadian Federal Income Tax Considerations" in the Offer
to Purchase dated June 12, 2002 of Conoco Canada.

                                             /s/ Blake, Cassels & Graydon LLP
                                               BLAKE, CASSELS & GRAYDON LLP

Toronto, Canada
June 12, 2002

                                       C-1


                    CONSENT OF RBC DOMINION SECURITIES INC.

To: The Directors of Conoco Canada

     We hereby consent to the inclusion of a summary of the valuation and
fairness opinion provided by this firm to the independent members of the Board
of Directors of Gulf Indonesia and addressed to the Independent Committee and
the Board of Directors of Gulf Indonesia, dated June 6, 2002 (the "Valuation and
Fairness Opinion") and the summary thereof and other references thereto in the
Offer to Purchase dated June 12, 2002, of Conoco Canada. We also consent to the
filing of the Valuation and Fairness Opinion with the applicable securities
regulatory authorities in the United States and Canada.

                                          /s/ RBC DOMINION SECURITIES, INC.

                                               RBC DOMINION SECURITIES INC.

Toronto, Canada
June 12, 2002

                                       C-2


                        CONSENT OF CHARTERED ACCOUNTANTS

To: The Directors of Conoco Canada

     We consent to the use of our report dated February 19, 2002 to the
shareholders of Gulf Indonesia Resources Limited on the consolidated statements
of financial position of Gulf Indonesia Resources Limited as at December 31,
2001 and December 31, 2000 and the consolidated statements of earnings and
retained earnings (deficit) and cash flows for each of the years in the three
year period ended December 31, 2001 incorporated by reference in the Offer to
Purchase all of the outstanding common shares of Gulf Indonesia Resources
Limited by Conoco Canada Resources Limited dated June 12, 2002.

                                                  /s/ Ernst & Young LLP
                                                    ERNST & YOUNG LLP

Calgary, Alberta
June 12, 2002

                                       C-3


                     CONSENT OF J.P. MORGAN SECURITIES INC.

     We hereby consent to the reference to our name and the inclusion of a
summary of the illustrative value analysis contained under "SPECIAL
FACTORS -- Summary of Certain Analyses of JPMorgan and Merrill Lynch" in the
Offer to Purchase dated June 12, 2002, of Conoco Canada. In giving such consent,
we do not admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder, nor do we
admit that we are experts with respect to any part of such Offer to Purchase
within the meaning of the term "experts" as used in the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.

                                          /s/ J.P. Morgan Securities Inc.
                                               J.P. MORGAN SECURITIES INC.

June 12, 2002

                                       C-4


     Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of Gulf
Indonesia or such shareholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of their addresses as set forth below.

                        The Depositary for the Offer is:

                              THE BANK OF NEW YORK
                            REORGANIZATION SERVICES

                                                          
           By Mail:                      By Facsimile:          By Hand or Overnight Delivery:
        P.O. Box 11248                  (973) 247-4077                  One Wall Street
     Church Street Station        For confirmation telephone:             Third Floor
    New York, NY 10286-1248             (973) 247-4075                New York, NY 10286



     Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or the Dealer Managers at
their respective telephone numbers and locations listed below. You may also
contact your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.

                    The Information Agent for the Offer is:

                                [INNISFREE LOGO]

                         501 Madison Avenue, 20th Floor
                            New York, New York 10022
                 Banks and Brokers Call Collect: (212) 750-5833
                   All Others Call Toll-Free: (888) 750-5834

                     The Dealer Managers for the Offer are:

                                [JP MORGAN LOGO]
                           277 Park Avenue, 9th Floor
                               New York, NY 10172
                           Toll free: (866) 262-0777
                           Telephone: (212) 622-2624

                              [MERRILL LYNCH LOGO]
                              Bow Valley Square IV
                        Suite 1650, 250-6th Avenue S.W.
                                Calgary, Alberta
                                 Canada T2P 3H7
                           Telephone: (403) 231-7318

EX-99.A.1.B

                              DIRECTORS' CIRCULAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                 SCHEDULE 14D-9
                  SOLICITATION/RECOMMENDATION STATEMENT UNDER
            SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

                        GULF INDONESIA RESOURCES LIMITED
                           (Name of Subject Company)
                             ---------------------

                        GULF INDONESIA RESOURCES LIMITED
                       (Names of Person Filing Statement)
                             ---------------------

                                 COMMON SHARES
                         (Title of Class of Securities)

                                   402284103
                     (CUSIP Number of Class of Securities)
                             ---------------------

                                 JASON DOUGHTY
                        GULF INDONESIA RESOURCES LIMITED
                         21ST FLOOR, WISMA 46, KOTA BNI
                       JALAN JENDERAL SUDIRMAN KAVLING 1
                           JAKARTA, 10220, INDONESIA
                             PHONE (6221) 574-2120
                              FAX (6221) 575-4015
          (Name, address and telephone number of person authorized to
 receive notices and communications on behalf of the persons filing statement)
                             ---------------------

                                WITH COPIES TO:

                                             
             George G. Young III                              Robert R. Rooney
            Haynes and Boone, LLP                             Bennett Jones LLP
            1000 Louisiana Street                          4500 Bankers Hall East
                 Suite 4300                                 855 - 2nd Street S.W.
          Houston, Texas 77002-5012                       Calgary, Alberta T2P 4K7
            Phone (713) 547-2081                                   Canada
             Fax (713) 236-5699                             Phone (403) 298-3420
                                                             Fax (403) 265-7219



[ ]  Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                 June 12, 2002


ITEM 1.  SUBJECT COMPANY INFORMATION.

     The name of the subject company is Gulf Indonesia Resources Limited, a
corporation organized under the laws of the Province of New Brunswick, Canada
("Gulf Indonesia"). The principal executive offices of Gulf Indonesia are
located at 21st Floor, Wisma 46, Kota BNI, Jalan Jenderal Sudirman Kavling 1,
Jakarta, 10220, Indonesia and Gulf Indonesia's telephone number at this address
is (6221) 574-2120.

     The class and title of equity securities to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement")
relates is Gulf Indonesia's common shares, with a nominal or par value of
U.S.$0.01 per share (the "Shares" or the "Gulf Indonesia Common Shares").

     As of June 4, 2002, there were 90,038,542 Shares outstanding on a fully
diluted basis. For the purposes of this Statement and the Support Agreement (as
defined below), the fully diluted number of Shares is calculated by aggregating
the number of Shares issued and outstanding with the number of Shares issuable
pursuant to options of Gulf Indonesia having an exercise price less than
U.S.$13.25.

     NOTICE TO CANADIAN SHAREHOLDERS. This Statement, including the Annexes
provided to shareholders, constitutes the Directors' Circular of Gulf Indonesia,
as required by applicable securities laws in Canada.

     All dollar references in this Statement are expressed in United States
dollars except where otherwise indicated.

ITEM 2.  IDENTITY AND BACKGROUND OF FILING PERSON.

     The person filing this statement is Gulf Indonesia, which is the subject
company. The name, business address and business telephone number of Gulf
Indonesia are set forth in Item 1 above.

     This Statement relates to the tender offer by Conoco Canada Resources
Limited ("Conoco Canada"), a Nova Scotia corporation and wholly owned subsidiary
of Conoco Inc. ("Conoco"), a Delaware corporation, described in the Tender Offer
Statement on Schedule TO (which includes information required to be reported
under Rule 13e-3 of the Securities Exchange Act of 1934) dated June 12, 2002
(the "Schedule TO"), which was filed by Conoco and Conoco Canada with the
Securities and Exchange Commission on June 12, 2002. Conoco Canada is offering
to purchase all the outstanding Shares not owned by Conoco Canada at a purchase
price of $13.25 per Share in cash (the "Offer Price"), on the terms and upon the
conditions set forth in the Offer to Purchase dated June 12, 2002 (the "Offer to
Purchase"), and the related Letter of Transmittal (the "Letter of Transmittal")
(which, together with any amendments or supplements thereto, collectively
constitute "the Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2)
herewith, respectively, and are incorporated herein by reference in their
entirety. As of June 4, 2002, Conoco Canada owned 63,650,000 of the outstanding
Shares of Gulf Indonesia, or approximately 70.7% of the Shares on a fully
diluted basis.

     The Offer is described in the Offer to Purchase. The Offer is being made
pursuant to a Support Agreement, dated as of June 7, 2002, among Conoco, Conoco
Canada and Gulf Indonesia (the "Support Agreement"). The Support Agreement
provides that if the Offer is consummated and the Minimum Tender Condition (as
defined in the Support Agreement) has been satisfied and the other conditions to
the second-step transaction have been satisfied or waived, Conoco Canada will
use its best efforts, as soon as practicable after completion of the Offer, to
consummate a second-step transaction, pursuant to which Conoco Canada will
acquire all outstanding Shares not tendered in the Offer or otherwise owned by
Conoco Canada (the "Second-Step Acquisition"). The Second-Step Acquisition will
be effected either through a compulsory acquisition or a statutory transaction
under New Brunswick law, such as an amalgamation, arrangement or share
consolidation.

     The Offer to Purchase states that the principal executive offices of Conoco
Canada are located at 1600, 401 - 9th Avenue S.W., Calgary, Alberta, T2P 3C5,
Canada and the principal executive offices of Conoco are located at 600 North
Dairy Ashford Road, Houston, Texas 77079, United States.


ITEM 3.  PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

     Except as described herein (including the Annexes hereto) or incorporated
herein by reference, to the knowledge of Gulf Indonesia, there are no material
agreements, arrangements or understandings or any actual or potential conflicts
of interest between Gulf Indonesia or the affiliates it controls and (1) their
respective executive officers, directors or affiliates or (2) Conoco, Conoco
Canada and their respective executive officers, directors or affiliates.

     Certain Arrangements between Gulf Indonesia and its Executive Officers,
Directors and Affiliates.  The information regarding agreements, arrangements or
understandings between Gulf Indonesia and its executive officers, directors or
affiliates is described on pages 3-11 under "ELECTION OF DIRECTORS", "EXECUTIVE
COMPENSATION", "SUMMARY COMPENSATION TABLE", "OPTIONS/SAR GRANTS DURING THE MOST
RECENTLY COMPLETED FINANCIAL YEAR" and "AGGREGATED OPTIONS/SAR EXERCISES DURING
THE MOST RECENTLY COMPLETED FINANCIAL YEAR AND THE FINANCIAL YEAR END
OPTIONS/SAR VALUES" in Gulf Indonesia's Management Proxy Circular relating to
the Annual Meeting of Gulf Indonesia's shareholders on May 6, 2002 (the "Proxy
Circular"). The Proxy Circular is filed herewith as Exhibit (e)(2) and
incorporated herein by reference. In addition, the information set forth under
"SPECIAL FACTORS -- Beneficial Ownership of Shares", "SPECIAL
FACTORS -- Transactions and Arrangements Concerning the Shares", "SPECIAL
FACTORS -- Interest of Certain Persons in the Offer" and "SPECIAL
FACTORS -- Purpose and Certain Effects of the Offer and the Second-Step
Acquisition" in the Offer to Purchase is incorporated herein by reference.

     Certain Arrangements between Gulf Indonesia, Conoco Canada and Conoco.  The
information set forth under "SPECIAL FACTORS -- Certain Related Party
Transactions" in the Offer to Purchase is incorporated herein by reference.

ITEM 4.  THE SOLICITATION OR RECOMMENDATION.

BACKGROUND TO THE OFFER

     In August 1988, Conoco Canada (formerly Gulf Canada Resources Limited
("Gulf Canada")), acquired Asamera Inc. In 1994, various assets and liabilities
of Asamera Inc., including all those relating to the business in Indonesia, were
restructured under a new Canadian corporation, Asamera Canada Limited. In 1997,
Asamera Canada Limited acquired other assets relating to the Indonesian business
from Gulf Canada and transferred to Gulf Canada its interests in various
subsidiaries that were not carrying on business in Indonesia. Asamera Canada
Limited was continued under the Business Corporations Act (New Brunswick) and
changed its name to Gulf Indonesia Resources Limited. Gulf Indonesia operated as
a wholly owned subsidiary of Gulf Canada until September 1997.

     On September 29, 1997, Gulf Indonesia completed a public offering of
approximately 27.6% of its Shares, which are publicly traded on the New York
Stock Exchange. Gulf Canada retained approximately a 72.4% equity ownership
interest in Gulf Indonesia.

     On May 28, 2001, Conoco, Conoco Northern Inc., a wholly owned subsidiary of
Conoco ("Conoco Northern"), and Gulf Canada entered into a Support Agreement,
pursuant to which Conoco agreed to cause Conoco Northern to acquire all the
outstanding ordinary shares of Gulf Canada through a cash tender offer to all
the holders of ordinary shares of Gulf Canada. On June 7, 2001, Conoco Northern
commenced a cash tender offer for all the outstanding ordinary shares of Gulf
Canada. On July 16, 2001, Conoco Northern acquired all the outstanding shares of
Gulf Canada (which was subsequently renamed Conoco Canada Resources Limited),
and, as a result, Conoco acquired its indirect equity ownership interest in Gulf
Indonesia. After Conoco obtained control of Gulf Indonesia, designees of Conoco
were elected to the Board of Directors of Gulf Indonesia, including Robert W.
Goldman, Malcolm D. Griffiths, Rick A. Harrington, Francis H. James, James D.
McColgin, Paul C. Warwick and Dr. George E. Watkins.

     On July 26, 2001, Conoco and Conoco Canada filed with the SEC a Schedule
13D (the "Schedule 13D") indicating that they were considering various
alternatives with respect to Conoco Canada's ownership interest in Gulf
Indonesia.

                                        2


     On March 25, 2002, Mr. Robert E. McKee, III, Executive Vice President,
Exploration Production of Conoco, called Mr. Robert H. Allen, the Chairman of
the Board of Directors of Gulf Indonesia, to indicate that Conoco was
considering various alternatives with respect to Gulf Indonesia, including the
acquisition of all of the outstanding Gulf Indonesia Common Shares not already
owned by Conoco Canada. In view of Conoco's ongoing internal evaluations
regarding Gulf Indonesia and the possibility of future discussions with Gulf
Indonesia, Mr. McKee suggested that an independent committee of the Board of
Directors of Gulf Indonesia (the "Independent Committee") be formed to ensure
that Gulf Indonesia would be in a position to review and respond to any proposal
in the event Conoco or Conoco Canada decided to make a proposal.

     Subsequent to the conversation on March 25, 2002, Mr. Allen sought legal
advice regarding the formation and the mandate of the Independent Committee.

     On April 1, 2002, the Board of Directors of Gulf Indonesia formed the
Independent Committee to take such steps as it considered necessary to be in a
position to receive, consider and make a recommendation regarding any proposal
that may be made by Conoco or Conoco Canada. Mr. Allen, Mr. John R. Sanders and
Dr. Ir. Kuntoro Mangkusubroto, each an independent director of Gulf Indonesia,
were appointed to the Independent Committee.

     On April 1, 2002, the Independent Committee met to discuss potential
advisors and determined, upon the recommendation of Mr. Allen, to retain Macleod
Dixon LLP to act as its legal counsel. At this meeting, Mr. Allen was appointed
Chairman of the Independent Committee.

     Subsequently, the Independent Committee, with the assistance of Macleod
Dixon, selected Patterson Palmer and Vinson & Elkins, in New Brunswick and the
United States, respectively, to act as counsel in respect to the laws of those
jurisdictions and considered a number of investment banks to act as the
Independent Committee's financial advisor. In addition, the Independent
Committee, with the assistance of Macleod Dixon, selected Philip Kingstone, a
legal consultant based in Indonesia, to assist its financial advisors with their
due diligence efforts in Indonesia.

     On April 9, 2002, the Independent Committee retained RBC Dominion
Securities Inc. ("RBC"), effective April 1, 2002, to serve as financial advisor
to the Independent Committee and, if required, to prepare and deliver a
valuation and fairness opinion. The Independent Committee satisfied itself that
RBC was a qualified and independent advisor and competent to provide the
financial services required by the Independent Committee.

     Also on April 9, 2002, the Independent Committee met with its legal and
financial advisors. At this meeting, Macleod Dixon advised the Independent
Committee of its legal duties and responsibilities in the discharge of its
duties.

     Over the next several weeks, RBC conducted a review of the business,
financial condition, results of operations, prospects, business strategy and
competitive position of Gulf Indonesia, as well as a review of the industry in
general. The purpose of RBC's review was to put it in a position to perform a
valuation analysis of Gulf Indonesia.

     On May 5, 2002, the Independent Committee met with its legal and financial
advisors and received an update on RBC's due diligence investigation of Gulf
Indonesia.

     During May 2002, representatives from RBC held a number of meetings and
conference calls with representatives of Conoco and Conoco's financial advisors,
JPMorgan and Merrill Lynch, to discuss financial and other due diligence with
respect to Gulf Indonesia. During the course of these meetings, Conoco stated
that it continued to evaluate alternatives with respect to its interest in Gulf
Indonesia and that it was not currently interested in disposing of its ownership
interest in Gulf Indonesia.

     On May 14, 2002 and May 15, 2002, meetings of the Independent Committee
were held in Indonesia, during which RBC presented to the Independent Committee
the preliminary results of its valuation analysis of Gulf Indonesia and the
management of Gulf Indonesia presented an update on Gulf Indonesia's business
plan and operations.

                                        3


     On May 22, 2002, the Independent Committee met with RBC to discuss RBC's
valuation analysis of Gulf Indonesia. At this meeting, RBC presented and
explained its valuation analysis to the Independent Committee. Also on May 22,
2002, Mr. Allen advised the Board of Directors of Gulf Indonesia that the
Independent Committee had completed its valuation analysis of Gulf Indonesia.

     On May 24, 2002, Mr. Wayne C. Byers, Senior Counsel of Conoco, called Mr.
Allen and indicated that Conoco Canada proposed to acquire all the Gulf
Indonesia Common Shares not owned by Conoco Canada. Mr. Byers then sent to Mr.
Allen a term sheet setting forth a proposed price of $12.50 per Share in cash
and certain other terms of the proposal. Conoco Canada also delivered to Macleod
Dixon and Bennett Jones LLP, legal counsel to Gulf Indonesia, a draft support
agreement that would give effect to the proposed transaction.

     The Independent Committee met later on May 24, 2002 with RBC and Macleod
Dixon, and with their assistance, considered Conoco Canada's initial proposal in
light of the work, including valuation analysis, it had previously conducted. At
this meeting, the Independent Committee received and reviewed advice from
Macleod Dixon regarding the duties and responsibilities of the members of the
Independent Committee under applicable law. At this meeting, the Independent
Committee determined that it was not prepared to recommend Conoco Canada's
initial proposal to the Board of Directors of Gulf Indonesia. Mr. Allen called
Mr. Byers and indicated that the Independent Committee had rejected Conoco
Canada's proposal and would await any further proposal.

     On May 25, 2002, representatives of RBC held discussions with
representatives of JPMorgan and Merrill Lynch and representatives of Macleod
Dixon held discussions with representatives of Cravath, Swaine & Moore, U.S.
counsel to Conoco and Conoco Canada, and Blake, Cassels & Graydon LLP, Canadian
counsel to Conoco and Conoco Canada, regarding Conoco Canada's proposal.

     Later in the day on May 25, 2002, the Independent Committee met with its
financial and legal advisors and received a report on the discussions such
advisors had with the financial and legal advisors of Conoco and Conoco Canada
during that day.

     On the morning of May 26, 2002, Mr. Byers called Mr. Allen to indicate that
Conoco Canada would increase its proposed price to $12.90 per Share in cash.

     On May 26, 2002, the Independent Committee met with RBC and Macleod Dixon,
and with their assistance, considered Conoco Canada's revised proposal,
including the terms of the proposed support agreement. At this meeting, the
Independent Committee determined to reject Conoco Canada's revised proposal and
determined to provide a counter-proposal of $14.00 per Share. Mr. Allen
communicated this decision to Mr. Byers and highlighted certain aspects of the
proposed support agreement which were not agreeable to the Independent
Committee.

     On the morning of May 27, 2002, Mr. McKee called Mr. Allen and discussed
various aspects of Conoco Canada's proposal.

     Mr. Allen called Mr. McKee later in the day on May 27, 2002 for further
discussions which resulted in the suggestion by Mr. McKee that Conoco, Conoco
Canada and their representatives call the Independent Committee and its advisors
to discuss certain aspects of Conoco Canada's valuation of Gulf Indonesia. Mr.
Byers and representatives of JPMorgan and Merrill Lynch called the Independent
Committee and its advisors and discussed these matters. After these discussions,
representatives of the Independent Committee met with its legal and financial
advisors to discuss the status of negotiations between Conoco Canada and the
Independent Committee.

     After these discussions, Mr. McKee called Mr. Allen and indicated that
Conoco Canada was willing to revise its proposal to $13.25 per Share in cash and
that such revised proposal would be Conoco Canada's final and best offer. Mr.
Allen of Gulf Indonesia indicated that he would seek the recommendation of the
revised proposal by the Independent Committee, subject to satisfactory
resolution of certain terms of the proposed support agreement.

     Later in the day on May 27, 2002, the Independent Committee met and, with
the assistance and advice of its financial and legal advisors, considered Conoco
Canada's revised proposal, including the material terms and

                                        4


conditions of the proposed support agreement, in light of the work of the
Independent Committee, including RBC's valuation analysis of Gulf Indonesia, and
the extent, nature and status of negotiations. During this meeting, Macleod
Dixon reviewed the duties and responsibilities of the members of the Independent
Committee under applicable law. Also at this meeting, RBC delivered an oral
opinion that, as of May 27, 2002, the $13.25 per Share in cash to be received by
the shareholders of Gulf Indonesia (other than Conoco Canada) in the Offer was
fair, from a financial point of view, to such shareholders. In addition, RBC
advised the Independent Committee that it would provide the Independent
Committee with a formal valuation of Gulf Indonesia indicating that the proposed
$13.25 per Share price in cash to be received by shareholders of Gulf Indonesia
(other than Conoco Canada) in the Offer was in the higher end of its valuation
range for Gulf Indonesia Common Shares. After receipt of such financial and
legal advice, the Independent Committee, subject to the negotiation of
satisfactory terms to the support agreement, (1) unanimously approved the Offer,
(2) unanimously determined that the Offer is fair to the shareholders of Gulf
Indonesia (other than Conoco Canada) and in the best interests of Gulf Indonesia
and the shareholders of Gulf Indonesia (other than Conoco Canada), (3)
unanimously resolved to recommend that shareholders of Gulf Indonesia accept the
Offer and tender their Shares in the Offer and (4) unanimously resolved to
recommend that the Board of Directors of Gulf Indonesia make the foregoing
conclusions.

     Later on May 27, 2002, Mr. Byers and representatives of Cravath, Swaine &
Moore, Blake, Cassels & Graydon and Macleod Dixon negotiated certain aspects of
the proposed support agreement.

     On May 28, 2002, Conoco Canada and Gulf Indonesia issued a press release
announcing the proposal and the Independent Committee's recommendation thereof.
On the same day, Conoco and Conoco Canada filed with the SEC an amendment to the
Schedule 13D to indicate that a proposal had been made and accepted by the
Independent Committee, subject to the execution of definitive documentation and
approval by the full Board of Directors of Gulf Indonesia.

     Over the next several days, the respective legal advisors of Conoco, Conoco
Canada, the Independent Committee and Gulf Indonesia negotiated the definitive
Support Agreement.

     On June 7, 2002, at a meeting of the Independent Committee, RBC presented
to the Independent Committee its written valuation and fairness opinion (the
"Valuation and Fairness Opinion"), which has been attached as Annex A. The
Valuation and Fairness Opinion indicated that, as of June 6, 2002, (1) the fair
market value for Gulf Indonesia Common Shares was in the range of $11.50 to
$14.00 per Share and (2) the $13.25 per Share in cash to be received by
shareholders of Gulf Indonesia (other than Conoco Canada) in the Offer was fair,
from a financial point of view, to such shareholders. Also at this meeting,
Macleod Dixon presented to the Independent Committee the Support Agreement and
described the material terms thereof. At this meeting, the Independent Committee
unanimously (i) approved the Offer and the Support Agreement, (ii) determined
that the Offer is fair to the shareholders of Gulf Indonesia (other than Conoco
Canada) and in the best interests of Gulf Indonesia and the shareholders of Gulf
Indonesia (other than Conoco Canada), (iii) resolved to recommend that
shareholders of Gulf Indonesia accept the Offer and tender their shares in the
Offer and (iv) resolved to recommend that the Board of Directors of Gulf
Indonesia make the foregoing conclusions.

     On June 7, 2002, the Board of Directors of Gulf Indonesia met and received
the report of the Independent Committee, the Valuation and Fairness Opinion and
the advice of counsel as to their fiduciary duties. After considering the
foregoing, the Board of Directors of Gulf Indonesia unanimously (1) approved the
Offer and the Support Agreement, (2) determined that the Offer is fair to the
shareholders of Gulf Indonesia (other than Conoco Canada) and in the best
interests of Gulf Indonesia and the shareholders of Gulf Indonesia (other than
Conoco Canada) and (3) resolved to recommend that shareholders of Gulf Indonesia
accept the Offer and tender their shares in the Offer. Seven members of the
Board of Directors of Gulf Indonesia indicated that they were either directors,
officers or senior managers of Conoco or its affiliates (other than Gulf
Indonesia) and abstained from voting on the Offer and the Support Agreement. A
further member of the Board of Directors of Gulf Indonesia, Paul C. Warwick,
indicated that he was a designee of Conoco and also abstained from voting on the
Offer and the Support Agreement.

     Later on June 7, 2002, the Support Agreement was executed and on June 10,
2002, Conoco Canada and Gulf Indonesia issued a press release announcing the
execution of the Support Agreement.

                                        5


REPORT OF FINANCIAL ADVISOR TO THE INDEPENDENT COMMITTEE

     Under the provisions of certain Canadian provincial securities laws
respecting take-over bids, where a take-over bid is an "insider bid", the
offeror is required, unless otherwise exempted, to have a valuation of the
target company prepared by a qualified and independent valuer, based on
techniques that are appropriate in the circumstances, after considering all
relevant assumptions, that arrives at an opinion as to a value or range of
values for the target company's common shares. The Independent Committee
retained RBC to prepare a written Valuation and Fairness Opinion as to the fair
market value of the Shares and as to whether the consideration to be received
under the Offer is fair, from a financial point of view, to the holders of the
Shares other than Conoco Canada.

     On May 27, 2002, RBC delivered an oral opinion that, as of May 27, 2002,
the $13.25 per Share in cash to be received by the shareholders of Gulf
Indonesia (other than Conoco Canada) in the Offer was fair, from a financial
point of view, to such shareholders. In addition, on May 27, 2002, RBC advised
the Independent Committee that it would provide the Independent Committee with a
formal valuation of Gulf Indonesia indicating that the $13.25 per Share in cash
to be received by the shareholders of Gulf Indonesia (other than Conoco Canada)
in the Offer was in the higher end of its valuation range for Gulf Indonesia
Common Shares. On June 7, 2002, RBC delivered the written Valuation and Fairness
Opinion to the Independent Committee which indicated that, as of June 6, 2002,
(1) the fair market value for Gulf Indonesia Common Shares was in the range of
$11.50 to $14.00 per Share and (2) the $13.25 per Share in cash to be received
by shareholders of Gulf Indonesia (other than Conoco Canada) in the Offer was
fair, from a financial point of view, to such shareholders.

     THE FULL TEXT OF THE VALUATION AND FAIRNESS OPINION OF RBC DATED JUNE 6,
2002, WHICH SETS FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON
THE REVIEW UNDERTAKEN IN CONNECTION WITH THE VALUATION AND FAIRNESS OPINION, HAS
BEEN ATTACHED AS ANNEX A HERETO. SHAREHOLDERS OF GULF INDONESIA ARE URGED TO,
AND SHOULD, READ THE VALUATION AND FAIRNESS OPINION IN ITS ENTIRETY.

REASONS AND RECOMMENDATION OF THE INDEPENDENT COMMITTEE AND THE BOARD OF
DIRECTORS

     The Independent Committee has unanimously (1) approved the Offer and the
Support Agreement and (2) determined that the Offer is fair to the shareholders
of Gulf Indonesia (other than Conoco Canada) and in the best interests of Gulf
Indonesia and the shareholders of Gulf Indonesia (other than Conoco Canada). The
Independent Committee recommends that shareholders of Gulf Indonesia accept the
Offer and tender their Shares in the Offer.

     The Independent Committee.  In reaching the conclusions described above,
the Independent Committee considered a number of factors, including but not
limited to the following:

     - The Offer provides the opportunity to the shareholders of Gulf Indonesia
       (other than Conoco Canada) to choose to realize the value of their
       investment in Gulf Indonesia for cash at a significant premium to market
       prices (a 23% premium to the closing price for a Share on May 24, 2002,
       the last trading day immediately prior to the announcement of the Offer,
       and a 21% premium to the 30-day average closing price for a Share prior
       to and including May 24, 2002;

     - The Offer Price is in the high end of the range of values of the Shares
       of $11.50 to $14.00 determined by RBC;

     - The fairness opinion provided by RBC that the $13.25 per Share in cash to
       be received by shareholders of Gulf Indonesia (other than Conoco Canada)
       in the Offer was fair, from a financial point of view, to shareholders of
       Gulf Indonesia (other than Conoco Canada);

     - The Offer Price resulted from active arm's length negotiations among the
       Independent Committee, Gulf Indonesia, Conoco and Conoco Canada with the
       assistance of independent financial and legal

                                        6


       advisors, which the Independent Committee believes resulted in the Offer
       Price being increased from $12.50 per Share to $13.25 per Share;

     - The determination by the Independent Committee that the terms and
       conditions of the Offer and the Support Agreement are reasonable and
       resulted from active arm's length negotiations between the advisors of
       the Independent Committee, Gulf Indonesia, Conoco and Conoco Canada,
       which the Independent Committee believes resulted in improvements to the
       terms and conditions of the Support Agreement;

     - The Offer is an all cash offer providing shareholders of Gulf Indonesia
       with liquidity without being affected by historical limited trading
       volumes;

     - To be completed, the Offer must be accepted by a majority of Gulf
       Indonesia shareholders not affiliated with Conoco Canada;

     - If the Second-Step Acquisition occurs, shareholders who choose not to
       tender in the Offer will have the ability to perfect appraisal and
       dissent rights in connection with such Second-Step Acquisition; and

     - In light of Conoco's position that it is not prepared to sell its
       interest in Gulf Indonesia, the Independent Committee satisfied itself
       that there are no viable alternative transactions to the Offer.

     The Board of Directors.  The Board of Directors of Gulf Indonesia has
unanimously (1) approved the Offer and the Support Agreement and (2) determined
that the Offer is fair to the shareholders of Gulf Indonesia (other than Conoco
Canada) and in the best interests of Gulf Indonesia and the shareholders of Gulf
Indonesia (other than Conoco Canada). The Board of Directors of Gulf Indonesia
recommends that shareholders of Gulf Indonesia accept the Offer and tender their
Shares in the Offer. In reaching its determinations, the Board of Directors of
Gulf Indonesia adopted the conclusions of the Independent Committee based upon
analysis of the factors considered by the Independent Committee.

     The following members of the Board of Directors of Gulf Indonesia indicated
that they were directors, officers or senior managers of Conoco or its
affiliates (other than Gulf Indonesia) and abstained from voting on the Offer
and the Support Agreement: Robert W. Goldman, Malcolm D. Griffiths, Rick A.
Harrington, Francis H. James, Donald F. Mazankowski, James D. McColgin and
George D. Watkins. A further member of the Board of Directors of Gulf Indonesia,
Paul C. Warwick, indicated that he was a designee of Conoco and also abstained
from voting on the Offer and the Support Agreement.

     The Board of Directors of Gulf Indonesia believes that the Offer and the
Support Agreement are also procedurally fair because, among other things: (1)
the Independent Committee consisted of solely independent directors appointed to
represent the interests of shareholders (other than Conoco Canada); (2) the
Independent Committee retained and was advised by its own independent legal
counsel experienced in advising on similar transactions; (3) the Independent
Committee retained and was advised by RBC, as its independent financial advisor,
to assist it in evaluating a potential transaction with Conoco or Conoco Canada;
(4) the nature of the deliberations pursuant to which the Independent Committee
evaluated the Offer and the Support Agreement and alternatives thereto; (5) that
the $13.25 per Share price in cash resulted from active arm's length
negotiations between representatives of the Independent Committee, on the one
hand, and representatives of Conoco and Conoco Canada, on the other; and (6)
that the independent committee is a mechanism well established in transactions
of this type.

     The Independent Committee and the Board of Directors of Gulf Indonesia also
recognized that, while consummation of the Offer will result in all shareholders
(other than Conoco Canada) being entitled to receive $13.25 in cash for each of
their Shares, it will eliminate the opportunity for current shareholders (other
than Conoco Canada) to participate in the longer term potential benefits of the
business of Gulf Indonesia, including the opportunities arising out of Gulf
Indonesia's initiatives in developing new markets for its gas reserves. The
Independent Committee also recognized that the consummation of the Offer would
result in the elimination of potential conflicts of interest of Conoco arising
out of its existing operations in Indonesia and would also result in other
operational synergies, cost savings and economic efficiencies for Conoco's
operations in Indonesia.

                                        7


     During its deliberations, the Independent Committee also considered two
circumstances that could arise in the event no agreement was reached with Conoco
and Conoco Canada for the Independent Committee to provide its support of a
proposal. If the parties were unable to come to agreement and Conoco Canada
decided not to make an offer directly to shareholders, shareholders would not
have the opportunity to consider a cash offer at a premium to market and which
was above the mid-point of the range of values of the Shares determined by RBC.
Conversely, if Conoco Canada were to make an offer directly to shareholders
without the recommendation of the Independent Committee, which Conoco Canada had
not expressed it intended to do, it could well be at a price less than the
Independent Committee might be able to negotiate.

     Neither the Independent Committee nor the Board of Directors of Gulf
Indonesia considered the liquidation of Gulf Indonesia's assets and neither
considered liquidation to be a viable course of action based on Conoco's desire
to retain its shareholding in Gulf Indonesia. Therefore, no appraisal of
liquidation values was sought for purposes of evaluating the Offer.

     The foregoing discussion of the information and factors considered by the
Independent Committee and the Board of Directors of Gulf Indonesia is not
intended to be exhaustive but includes all the material factors considered. In
view of the variety of factors considered in connection with the evaluation of
the Offer, the Independent Committee and the Board of Directors of Gulf
Indonesia did not find it practical to, and did not, quantify or otherwise
assign relative weights to the specific factors considered in reaching such
determinations and recommendations.

     A letter to the shareholders of Gulf Indonesia from the Chairman of the
Board of Directors of Gulf Indonesia; a letter to brokers, dealers, commercial
banks, trust companies and other nominees; and a form letter to clients for use
by brokers, dealers, commercial banks, trust companies and other nominees; are
filed herewith as Exhibits (a)(5), (a)(3) and (a)(4), respectively, and are
incorporated herein by reference.

INTENT TO TENDER

     To Gulf Indonesia's knowledge, after reasonable inquiry, all its senior
officers, directors, affiliates and subsidiaries of Gulf Indonesia (other than
Conoco Canada) intend to tender in the Offer all Shares, and all Shares issued
to them upon exercise of Gulf Indonesia options or acquired by them upon
exercise of RSUs (as defined below), held of record or beneficially owned by
them.

ITEM 5.  PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

     The information contained in Annex A hereto and under "SPECIAL
FACTORS -- Summary of Certain Analysis of JP Morgan and Merrill Lynch", and "THE
OFFER -- Source and Amount of Funds; Fees and Expenses" in the Offer to Purchase
is incorporated herein by reference.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

     No transactions in the Shares have been effected during the last six months
by Gulf Indonesia or any subsidiary of Gulf Indonesia or, to the knowledge of
Gulf Indonesia, by any executive officer, director, associate or affiliate of
Gulf Indonesia or any director or executive officer of its subsidiaries except
as set forth under "Annex B -- Information Pursuant to Canadian Securities
Laws -- Trading by Directors and Senior Officers in Securities of Gulf
Indonesia -- Issue of Securities of Gulf Indonesia" and in Schedule B of the
Offer to Purchase.

ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

     Except as set forth in this Statement, Gulf Indonesia is not undertaking or
engaged in any negotiations in response to the Offer that relate to or would
result in: (i) a tender offer or other acquisition of Gulf Indonesia's
securities by Gulf Indonesia, any of its subsidiaries or any other person; (ii)
any extraordinary transaction, such as a merger, reorganization or liquidation,
involving Gulf Indonesia or any of its subsidiaries; (iii) any purchase, sale or
transfer of a material amount of assets of Gulf Indonesia or any of its
subsidiaries; or (iv) any material change in the present dividend rate or
policy, indebtedness or capitalization of Gulf Indonesia.

                                        8


     Except as set forth in this Statement, there are no transactions, board
resolutions, agreements in principle or signed contracts entered into in
response to the Offer that relate to one or more of the matters referred to in
the preceding paragraph.

     The information set forth under "SPECIAL FACTORS -- Reasons for the Offer
and Plans for Gulf Indonesia" and "SPECIAL FACTORS -- Purpose and Certain
Effects of the Offer and the Second-Step Acquisition" in the Offer to Purchase
are incorporated herein by reference.

ITEM 8. ADDITIONAL INFORMATION.

     The Information Pursuant to Canadian Securities Laws attached as Annex B to
this Statement and the Offer to Purchase filed herewith as Exhibit (a)(1) are
incorporated herein by reference.

ITEM 9. EXHIBITS. EXHIBIT NO.

          
(a)(1)       Offer to Purchase dated June 12, 2002.+*
(a)(2)       Letter of Transmittal.+*
(a)(3)       Letter to Brokers, Dealers, Commercial Banks, Trust
             Companies and other Nominees.+
(a)(4)       Form of Letter to Clients for use by Brokers, Dealers,
             Commercial Banks, Trust Companies and Other Nominees.+
(a)(5)       Letter to shareholders of Gulf Indonesia from the Chairman
             of the Board of Gulf Indonesia.+*
(a)(6)       Guidelines for Certification of Taxpayer Identification
             Number on Substitute Form W-9.+*
(a)(7)       Valuation and Fairness Opinion of RBC Dominion Securities
             Inc. dated June 6, 2002 (included as Annex A hereto).*
(a)(8)       Summary Advertisement published on June 12, 2002.+
(a)(9)       Press release issued by Conoco Canada, dated June 12, 2002,
             announcing the commencement of the Offer.+
(a)(10)      Employee Notice issued by Gulf Indonesia on May 30, 2002.
(a)(11)      Notice of Guaranteed Delivery.+
(e)(1)       Support Agreement dated as of June 7, 2002, by and among
             Conoco, Conoco Canada and Gulf Indonesia.+
(e)(2)       Gulf Indonesia's Proxy Circular relating to the Annual
             Meeting of Shareholders held on May 6, 2002 (incorporated by
             reference from Gulf Indonesia's 6-K for the month ended
             March 2002 filed with the SEC on June 10, 2002).
(e)(3)       Information Services Agreement between Gulf Indonesia and
             Gulf Canada Resources Limited ("Gulf Canada").
(e)(4)       Administrative Services Agreement between Gulf Indonesia and
             Gulf Canada.
(e)(5)       Administrative and Information Services Agreement between
             Gulf Indonesia and Conoco.
(e)(6)       Cross Indemnification Agreement between Gulf Indonesia and
             Gulf Canada.
(e)(7)       Corporate Opportunity Agreement between Gulf Indonesia and
             Gulf Canada.
(e)(8)       Technical Services Agreement between Gulf Indonesia and Gulf
             Canada.
(e)(9)       Trade-mark Sublicense and Name Use Agreement between Gulf
             Indonesia and Gulf Canada.
(e)(10)      Registration Rights Agreement between Gulf Indonesia and
             Gulf Canada.
(e)(11)      Technical Services Agreement between Gulf Indonesia and
             Conoco.



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

+ Incorporated by reference to the Schedule TO filed by Conoco and Conoco Canada
  on June 12, 2002.

* Mailed to shareholders.

                                        9


                                   SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.

                                          GULF INDONESIA RESOURCES LIMITED

                                          /s/ PAUL C. WARWICK
                                          PAUL C. WARWICK
                                          President and Chief Executive Officer

                                  CERTIFICATE

     The foregoing (including Annexes A and B) contains no untrue statement of a
material fact and does not omit to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in the light of
the circumstances in which it was made. The foregoing does not contain any
misrepresentation likely to affect the value or the market price of the
securities subject to the Offer within the meaning of the Securities Act
(Quebec).

                      On behalf of the Board of Directors

                                                
            /s/ ROBERT H. ALLEN                                /s/ PAUL C. WARWICK
              ROBERT H. ALLEN                                    PAUL C. WARWICK
                  Director                                           Director



Date: June 12, 2002

                                        10


                                                                         ANNEX A

                    CONSENT OF RBC DOMINION SECURITIES INC.

To: The Board of Directors of Gulf Indonesia Resources Limited

     We hereby consent to the reference to our name, the contents of the summary
of our valuation and fairness opinion (the "Valuation and Fairness Opinion")
dated June 6, 2002 and the inclusion of the full text of such Valuation and
Fairness Opinion in the Statement dated the date hereof regarding the offer
dated June 12, 2002 made by Conoco Canada Resources Limited to purchase all of
the issued and outstanding common shares of Gulf Indonesia Resources Limited. We
also consent to the filing of the Valuation and Fairness Opinion with the
applicable securities regulatory authorities in the United States and Canada and
its distribution to shareholders and certain other persons as provided in this
Statement.

                                          /s/ RBC DOMINION SECURITIES INC.

                                               RBC DOMINION SECURITIES INC.

Calgary, Alberta, Canada
June 12, 2002


                         VALUATION AND FAIRNESS OPINION

                                (RBC LETTERHEAD)

                                                                    June 6, 2002

The Board of Directors and Independent Committee of the Board of Directors
Gulf Indonesia Resources Limited
Box 2858
Jalan Jenderal Sudirman, Kavling 1
Jakarta, Indonesia
10270

To the Board of Directors and Independent Committee of the Board of Directors:

     RBC Dominion Securities Inc. ("RBC"), a member company of RBC Capital
Markets, understands that Conoco Canada Resources Limited (the "Controlling
Shareholder"), an indirect wholly-owned subsidiary of Conoco Inc. ("Conoco"), is
proposing to acquire all of the issued and outstanding common shares (the
"Common Shares") of Gulf Indonesia Resources Limited (the "Company") that are
not owned by the Controlling Shareholder or its affiliates for consideration of
US$13.25 per Common Share in cash (the "Offer"). The terms of the Offer will be
more fully described in a take-over bid circular (the "Circular"), which will be
mailed to holders of the Common Shares in connection with the Offer.

     RBC also understands that a committee (the "Independent Committee") of the
board of directors (the "Board of Directors") of the Company who are independent
of the Controlling Shareholder has been constituted to consider the Offer and
make recommendations thereon to the Board of Directors. RBC was instructed by
the Independent Committee that the Offer is an "insider bid" within the meaning
of Rule 61-501 of the Ontario Securities Commission and Quebec Securities
Commission Policy Statement Q-27 (collectively, the "Policies"). The Independent
Committee has retained RBC to provide advice and assistance to the Independent
Committee in evaluating the Offer, including the preparation and delivery to the
Independent Committee of a formal valuation of the Common Shares (the
"Valuation") in accordance with the requirements of the Policies and its opinion
(the "Fairness Opinion") as to the fairness, from a financial point of view, of
the consideration under the Offer to the holders of Common Shares other than the
Controlling Shareholder or its affiliates (the "Minority Shareholders"). The
Valuation and Fairness Opinion have been prepared in accordance with the
guidelines of the Investment Dealers Association of Canada.

ENGAGEMENT

     The Independent Committee initially contacted RBC regarding a potential
advisory assignment on April 1, 2002, and RBC was formally engaged by the
Independent Committee through an agreement between the Company and RBC (the
"Engagement Agreement") dated as of April 1, 2002. The terms of the Engagement
Agreement provide that RBC is to be paid US$1,350,000 for the Valuation,
Fairness Opinion and financial advisory services. In addition, RBC is to be
reimbursed for its reasonable out-of-pocket expenses and to be indemnified by
the Company in certain circumstances. RBC consents to the inclusion of the
Valuation and Fairness Opinion in their entirety and a summary thereof in the
Circular and to the filing thereof, as necessary, by the Controlling Shareholder
with the securities commissions or similar regulatory authorities in Canada and
the United States.

                                       A-2


RELATIONSHIP WITH INTERESTED PARTIES

     Neither RBC nor any of its affiliates is an insider, associate or affiliate
(as those terms are defined in the Securities Act (Ontario)) of the Company, the
Controlling Shareholder or any of their respective affiliates. RBC has not been
engaged to provide any financial advisory services nor has it participated in
any financing involving the Company, the Controlling Shareholder or any of their
respective affiliates within the past two years. There are no understandings,
agreements or commitments between RBC and the Company, the Controlling
Shareholder or any of their respective affiliates with respect to any future
business dealings. RBC may, in the future, in the ordinary course of its
business, perform financial advisory or investment banking services for the
Company, the Controlling Shareholder or any of their respective affiliates. The
compensation of RBC under the Engagement Agreement does not depend in whole or
in part on the conclusions reached in the Valuation or the Fairness Opinion or
the successful outcome of the Offer. Royal Bank of Canada, of which RBC is a
wholly-owned subsidiary, provides banking services to the Company, the
Controlling Shareholder and their affiliates in the normal course of business.

     RBC acts as a trader and dealer, both as principal and agent, in major
financial markets and, as such, may have had and may in the future have
positions in the securities of the Company, the Controlling Shareholder or any
of their respective affiliates and, from time to time, may have executed or may
execute transactions on behalf of such companies or clients for which it
received or may receive compensation. As an investment dealer, RBC conducts
research on securities and may, in the ordinary course of its business, provide
research reports and investment advice to its clients on investment matters,
including with respect to the Company, the Controlling Shareholder or any of
their respective affiliates or the Offer.

CREDENTIALS OF RBC CAPITAL MARKETS

     RBC is one of Canada's largest investment banking firms, with operations in
all facets of corporate and government finance, corporate banking, mergers and
acquisitions, equity and fixed income sales and trading and investment research.
RBC Capital Markets also has significant operations in the United States and
internationally. The Valuation and the Fairness Opinion expressed herein
represent the opinions of RBC and the form and content herein have been approved
for release by a committee of its directors, each of whom is experienced in
merger, acquisition, divestiture and valuation matters.

SCOPE OF REVIEW

     In connection with our Valuation and Fairness Opinion, we have reviewed and
relied upon or carried out, among other things, the following:

          1. the most recent draft, dated June 6, 2002, of the Circular (the
     "Draft Circular");

          2. the most recent draft, dated June 6, 2002, of the Directors'
     Circular (the "Draft Directors' Circular");

          3. audited financial statements of the Company for each of the five
     years ended December 31, 2001;

          4. the unaudited interim report of the Company for the quarter ended
     March 31, 2002;

          5. annual reports of the Company for each of the two years ended
     December 31, 2001;

          6. the Notice of Annual Meeting of Shareholders and Management Proxy
     Circular of the Company for each of the two years ended December 31, 2001;

          7. Annual Information Form of the Company for each of the two years
     ended December 31, 2001;

          8. historical segmented financial statements of the Company for each
     of five years ended December 31, 2001;

                               (RBC RUNNING FOOT)

                                       A-3


          9. the internal management budget of the Company prepared on a
     consolidated and segmented basis for the year ending December 31, 2002;

          10. unaudited cash flow projections for the Company prepared by
     management on a consolidated and segmented basis for the years ending
     December 31, 2002 through 2023;

          11. the Conoco take-over bid circular regarding the offer (the "Gulf
     Canada Offer") by an indirect wholly-owned subsidiary of Conoco, for all of
     the outstanding ordinary shares of Gulf Canada Resources Limited, dated
     June 7, 2001;

          12. the Gulf Canada Resources Limited Directors' Circular, dated June
     7, 2001, responding to the Gulf Canada Offer;

          13. the Form 10-K of Conoco for the year ended December 31, 2001;

          14. the Form 10-Q of Conoco for the quarter ended March 31, 2002;

          15. discussions with and memoranda prepared by senior management of
     the Company;

          16. discussions with senior management of Conoco;

          17. discussions with the Company's auditors, legal counsel and
     independent reserve engineers;

          18. discussions with the Controlling Shareholder's financial advisors;

          19. public information relating to the business, operations, financial
     performance and stock trading history of the Company and other public
     companies considered by us to be relevant;

          20. public information with respect to other transactions of a
     comparable nature considered by us to be relevant;

          21. public information regarding Indonesia and the Indonesian oil and
     gas industry;

          22. country risk rating reports for Indonesia prepared by independent
     rating agencies;

          23. internal oil and gas reserve estimates prepared by the Company;

          24. Certificates of Gas Reserves and Reserve Reports prepared by
     independent reserve engineer, DeGolyer and MacNaughton, including:

           -- Reserve Report as of March 31, 2002 estimating the proved and
              probable natural gas and condensate reserves of the Suban field
              located in the Corridor PSC;

           -- Certificates of Gas Reserves as of January 31, 2001 estimating the
              proved and probable natural gas reserves of the Ujung Pangkah
              field located in the Pangkah PSC, Java Sea, offshore Indonesia;

           -- Reserve Report as of June 30, 2000 estimating the proved and
              probable crude oil, condensate and natural gas reserves in the
              Corridor PSC, Kakap PSC and Corridor TAC;

           -- Certificates of Gas Reserves as of May 31, 1999 estimating the
              proved and probable natural gas reserves of the Bungin, Bungkal,
              Geger, Hari, Rayun and Teluk Rendah fields located in the South
              Jambi "B" Block contract area in Sumatra, Indonesia;

           -- Certificates of Gas Reserves as of December 31, 1998 estimating
              the probable natural gas reserves of the Alur Siwah field located
              in the Block "A" PSC in Aceh Province, North Sumatra, Indonesia;
              and

           -- Reserve Report as of June 30, 1997 estimating the probable natural
              gas reserves in the Block "A" PSC in Aceh Province, North Sumatra,
              Indonesia;

                               (RBC RUNNING FOOT)

                                       A-4


          25. representations contained in certificates addressed to us, dated
     as of the date hereof, from senior officers of the Company as to the
     completeness and accuracy of the information upon which the Valuation and
     Fairness Opinion are based; and

          26. such other corporate, industry, country and financial market
     information, investigations and analyses as RBC considered necessary or
     appropriate in the circumstances.

     RBC has not, to the best of its knowledge, been denied access by the
Company to any information requested by RBC.

PRIOR VALUATIONS

     The Company has represented to RBC that to the best of its knowledge,
information and belief after due inquiry, there are no independent appraisals or
valuations or material non-independent appraisals or valuations relating to the
Company or any of its subsidiaries or any of their respective material assets or
liabilities which have been prepared as of a date within the two years preceding
the date hereof and which have not been provided to RBC. RBC has been advised by
the Company that none of the materials provided to RBC by the Company constitute
a prior valuation (as defined in Ontario Securities Commission Rule 61-501) of
the Company, its subsidiaries or their material assets or securities.

ASSUMPTIONS AND LIMITATIONS

     With the Independent Committee's approval and as provided for in the
Engagement Agreement, RBC has relied upon the completeness, accuracy and fair
presentation of all of the financial and other information, data, advice,
opinions or representations obtained by it from public sources, senior
management of the Company, and their consultants and advisors (collectively, the
"Information"). The Valuation and Fairness Opinion are conditional upon such
completeness, accuracy and fair presentation of such Information. Subject to the
exercise of professional judgment and except as expressly described herein, we
have not attempted to verify independently the completeness, accuracy or fair
presentation of any of the Information.

     Senior officers of the Company have represented to RBC in a certificate
delivered as of the date hereof, among other things, that (i) the Information
(as defined above) provided orally by, or in the presence of, an officer or
employee of the Company or in writing by the Company or any of its subsidiaries
or their respective agents to RBC relating to the Company, its subsidiaries or
the Offer for the purpose of preparing the Valuation and Fairness Opinion was,
at the date the Information was provided to RBC, and is complete, true and
correct in all material respects, and did not and does not contain any untrue
statement of a material fact in respect of the Company, its subsidiaries or the
Offer and did not and does not omit to state a material fact in respect of the
Company, its subsidiaries or the Offer necessary to make the Information or any
statement contained therein not misleading in light of the circumstances under
which the Information was made or provided or any statement was made; and that
(ii) since the dates on which the Information was provided to RBC, except as
disclosed in writing to RBC, there has been no material change, financial or
otherwise, in the financial condition, assets, liabilities (contingent or
otherwise), business, operations or prospects of the Company or any of its
subsidiaries and no material change has occurred in the Information or any part
thereof which would have or which would reasonably be expected to have a
material effect on the Valuation or Fairness Opinion.

     In preparing the Valuation and Fairness Opinion, RBC has made several
assumptions, including that all of the conditions required to implement the
Offer will be met and that the disclosure provided or incorporated by reference
in the Draft Circular and the Draft Directors' Circular with respect to the
Company, its subsidiaries and affiliates and the Offer is accurate in all
material respects.

     The Valuation and Fairness Opinion are rendered on the basis of securities
markets, economic, political, financial and general business conditions
prevailing as at the date hereof and the condition and prospects, financial and
otherwise, of the Company and its subsidiaries and affiliates, as they were
reflected in the Information and as they have been represented to RBC in
discussions with management of the Company. In

                               (RBC RUNNING FOOT)

                                       A-5


its analyses and in preparing the Valuation and Fairness Opinion, RBC made
numerous assumptions with respect to industry performance, general business and
economic conditions and other matters, many of which are beyond the control of
RBC or any party involved in the Offer.

     The Valuation and Fairness Opinion have been provided for the use of the
Independent Committee and the Board of Directors and, except for inclusion in
its entirety in the Circulars and related documents, may not be used by any
other person or relied upon by any other person other than the Independent
Committee and the Board of Directors without the express prior written consent
of RBC. The Valuation and Fairness Opinion are given as of the date hereof and
RBC disclaims any undertaking or obligation to advise any person of any change
in any fact or matter affecting the Valuation or Fairness Opinion which may come
or be brought to RBC's attention after the date hereof. Without limiting the
foregoing, in the event that there is any material change in any fact or matter
affecting the Valuation or Fairness Opinion after the date hereof, RBC reserves
the right to change, modify or withdraw the Valuation or Fairness Opinion.

     RBC believes that its analyses must be considered as a whole and that
selecting portions of the analyses or the factors considered by it, without
considering all factors and analyses together, could create a misleading view of
the process underlying the Valuation or Fairness Opinion. The preparation of a
valuation or fairness opinion is a complex process and is not necessarily
susceptible to partial analysis or summary description. Any attempt to do so
could lead to undue emphasis on any particular factor or analysis. Neither the
Valuation nor the Fairness Opinion is to be construed as a recommendation to any
holder of Common Shares as to whether to tender their Shares to the Offer.

OVERVIEW OF THE COMPANY

     The Company is engaged in the exploration, development and production of
crude oil and natural gas onshore and offshore Indonesia. As of December 31,
2001, the Company had gross and net proved reserves of 323 million barrels of
oil equivalent ("mmboe") and 244 mmboe, respectively, of which approximately 90
percent are natural gas.

     The Indonesian government owns all of Indonesia's petroleum resources. The
Indonesian state-owned oil and gas company, Perusahaan Pertambangan Minyak dan
Gas Bumi Negara ("Pertamina"), manages all of Indonesia's petroleum resources on
behalf of the Indonesian government and, in certain cases, enters into
production sharing arrangements with private energy companies entitling such
private energy companies to a portion of the production from the fields in the
applicable production sharing area. The contractor is responsible to Pertamina
for the execution of the operation and has an economic interest in the
hydrocarbon reserves. All references to "reserves" relate to the economic
interest that the Company is entitled to under Production Sharing Contracts
("PSC"), Technical Assistance Contracts and Enhanced Oil Recovery contracts
(collectively, the "Production Contracts") with Pertamina. The Company currently
has interests in 12 contract areas in Indonesia.

DEFINITION OF FAIR MARKET VALUE

     For purposes of the Valuation, fair market value means the monetary
consideration that, in an open and unrestricted market, a prudent and informed
buyer would pay to a prudent and informed seller, each acting at arm's length
with the other and under no compulsion to act. RBC has not made any downward
adjustment to the value of the Common Shares to reflect the liquidity of the
Common Shares, the effect of the Offer or the fact that the Common Shares held
by Minority Shareholders do not form part of a controlling interest.

VALUATION OF THE COMMON SHARES

  VALUATION METHODS

     RBC valued the Common Shares on a going concern basis using a net asset
value ("NAV") analysis and a precedent transaction analysis. RBC also reviewed
trading multiples of public companies involved in the oil

                               (RBC RUNNING FOOT)

                                       A-6


and gas industry from the perspective of whether a public market analysis might
exceed NAV or precedent transaction values for the Common Shares. However, RBC
concluded that public company multiples implied values that were at or below our
NAV and precedent transaction values. Given the foregoing, and that public
company values generally reflect minority discount values rather than "en bloc"
values, RBC did not rely on this methodology in determining the value of the
Common Shares.

  NET ASSET VALUE ANALYSIS

     The NAV approach ascribes a separate value for each category of assets and
liabilities, utilizing the methodology most appropriate in each case; the sum of
total assets less total liabilities yields the NAV. This approach ascribes value
to the proved and probable reserves existing at the time of valuation on the
basis of discounted future after-tax cash flows, and takes into account the
amount, timing and relative certainty of projected cash flows. This approach is
known as a "depletion" or "blow-down" evaluation and is a common method of
evaluation of petroleum interests (reserves and related production facilities)
in the oil and gas industry. As in the case of a typical discounted cash flow
analysis, capital expenditures required to develop existing reserves are
deducted from cash flows. Provisions are made for costs associated with future
well abandonment and reclamation as provided for in the Company's PSCs. The NAV
approach requires that certain assumptions be made regarding, among other
things, future cash flows and discount rates. The possibility that some of the
assumptions will prove to be inaccurate is one factor involved in the
determination of the discount rates to be used in establishing a range of
values.

  Liquids (Oil and Condensate) and Contracted Natural Gas Reserves

     For the first quarter of 2002, the Company reported gross sales volumes of
approximately 14,400 barrels per day ("bbls/d") of liquids (10,600 bbls/d net)
and approximately 163 million cubic feet per day ("mmcf/d") of natural gas (156
mmcf/d net) from several fields in South Sumatra and the West Natuna Sea. The
liquids are sold at market prices and have a readily available market. The
natural gas is currently being sold under two long-term supply contracts. The
prices established in these contracts are based on an energy equivalent basis
with oil. The Company also expects to start delivery of additional natural gas
later this year and in 2003 on two other signed contracts. Delivery is subject
to capacity expansion on one pipeline and construction of a second pipeline. The
Company has informed RBC that it expects both pipeline projects to be completed
by the required delivery dates.

     In conducting our NAV analysis, RBC reviewed the Company's Production
Contracts and management's unaudited cash flow projections for the years ending
December 31, 2002 to 2023 for the Company's liquids and contracted natural gas
reserves. RBC reviewed the assumptions in management's projections and
determined that material adjustments were not necessary in preparing our base
case cash flow forecasts other than as described below. RBC applied a 5% risk
discount to the cash flows projected by management from the Sumatra Gas to
Singapore agreement to reflect the availability of a natural gas transportation
system, the potential risk of timing delays and the risk of not being able to
deliver the contracted volumes. In addition, based on discussions with
management of the Company, RBC identified approximately US$7 million of net cost
saving initiatives that the Company intends to pursue, regardless of whether the
Offer is completed. We have factored 100% of the US$7 million estimate into our
NAV analysis beginning in 2003, and have reduced this figure on a declining
balance basis until 2023 to reflect the reduced production levels in our NAV
blow-down scenario. RBC projected commodity prices in its base case cash flow
projection by using a composite price forecast from several independent
professional reserve engineers and forward strip pricing (see Exhibit 1 for
RBC's base case commodity price forecast). Due to the use of strip pricing in
2002 and 2003, RBC's base case commodity price forecast is higher than the
Company's internal forecast by approximately US$2.00 to US$3.00 per barrel of
oil for these years. Beginning in 2004, using the composite of selected
independent professional reserve engineers' forecast, RBC's base case commodity
price forecast averages approximately US$2.00 per barrel of oil less than the
Company's internal forecast. RBC's base case risked free cash flows for
contracted reserves are summarized in Exhibit 1.

                               (RBC RUNNING FOOT)

                                       A-7


 Uncontracted Reserves

    I) UNCONTRACTED NATURAL GAS RESERVES WITH IDENTIFIED POTENTIAL MARKETS

     Certain of the Company's probable natural gas reserves, as disclosed in its
2001 annual report, are currently not dedicated to long-term supply contracts.
The Company has informed RBC that it has identified potential markets for this
natural gas and has signed, or is negotiating, memorandums of understanding to
produce and sell certain of this natural gas.

     In conducting our NAV analysis, RBC reviewed management's unaudited cash
flow projections for the years ending December 31, 2002 to 2023 for the
Company's uncontracted natural gas reserves that have identified potential
markets. RBC reviewed the assumptions in management's projections and determined
that material adjustments were not necessary in preparing our base case cash
flow forecasts other than as described below. RBC applied a risk discount to the
cash flows projected by management ranging from 20% to 40% of the unrisked cash
flows to reflect the progress of contract negotiations, the proximity of
commercially viable markets, the availability of natural gas transportation
systems, counterparty risk, the potential risk of timing delays and the risk of
not being able to recover booked and projected volumes. RBC projected commodity
prices in its base case cash flow projections for uncontracted natural gas
reserves with identified potential markets on the same basis as described above
under the heading Liquids (Oil and Condensate) and Contracted Natural Gas
Reserves. RBC's base case risked free cash flows for uncontracted natural gas
reserves that have identified potential markets are summarized in Exhibit 1.

    II) ADDITIONAL RESERVES

     There exist certain differences in the assessed reserves of DeGolyer and
MacNaughton, the independent reserve engineering firm, and the Company. The
differences arise from the employed reserve assessment techniques of each
reviewer. Additionally, the Company has identified other expected reserves
associated with certain exploration initiatives. Taken together, there could
exist certain other reserves not recorded in the Company's proved and probable
reserves as disclosed in its 2001 annual report.

     RBC reviewed a number of precedent transactions in South East Asia in order
to estimate a value for the additional reserves. RBC considered the areas in
which the precedent transactions occurred, the availability of transportation
systems and commercially viable markets, the nature of the hydrocarbon reserves,
the level of current development and existence of a development plan and the
risk associated with recovering the projected volumes, among other things. In
selecting our ascribed net asset value range for the Company's additional
reserves, RBC considered that the recovery of these reserves was less certain
than the reserves related to precedent transactions and therefore assessed a
lower value per mcf than what is implied by the precedent transactions. Based on
this analysis, RBC ascribed values ranging from US$0.03 per thousand cubic feet
("mcf") to US$0.06/mcf to the Company's additional reserves.

  TGI Investment

     The Company is a 35% shareholder in a limited liability company ("PGST")
established to purchase a 40% interest in PT Transportasi Gas Indonesia ("TGI")
(net 14% interest in TGI). TGI has been established by the Indonesian
state-owned enterprise PT Perusahaan Gas Negara ("PGN") and will own and operate
pipeline assets transferred from PGN. PGST is in negotiations to complete this
acquisition.

     RBC reviewed the Company's cash flow projections for PGST assuming that the
acquisition will be completed and determined that material adjustments were not
necessary, except for the application of a 50% risk discount to reflect the
risks of not completing the acquisition of TGI, not achieving projected volumes,
not achieving projected transportation tolls and the timing of incremental
volumes.

                               (RBC RUNNING FOOT)

                                       A-8


  Sensitivity Analysis

     In completing our NAV analysis, RBC did not rely on any single series of
cash flows but performed a variety of sensitivity analyses. Variables sensitized
included commodity price assumptions, discount rates, timing and risk factors.
The results of these sensitivity analyses are reflected in our judgment as to
the appropriate values resulting from the NAV approach.

  Discount Rates

     RBC selected appropriate discount rates to apply to our projected unlevered
free cash flows by utilizing the Capital Asset Pricing Model ("CAPM") approach
to determine an appropriate weighted average cost of capital ("WACC"). This
approach calculates WACC based on an assumed optimal capital structure for the
Company. The Company's optimal capital structure was chosen based upon a review
of the capital structures of comparable companies and the risks faced by the
Company and the Indonesian oil and gas industry. The CAPM approach calculates
the cost of equity capital as a function of the risk-free rate of return, the
volatility of equity prices in relationship to a benchmark ("beta") and a
premium for equity and country specific risk. The CAPM approach calculates the
cost of debt as a function of the risk-free rate of return plus an appropriate
borrowing spread to reflect credit risk, assuming an optimal capital structure.
The assumptions used by RBC in estimating WACC for the Company are provided
below:

                                                           
COST OF DEBT
Risk-free rate (10 year US Treasury bonds)..................                4.98%
Borrowing spread............................................                1.50%
Country risk premium........................................                3.25%
Pre-tax cost of debt........................................                9.73%
Tax rate (1)................................................               41.00%
After tax cost of debt......................................                5.74%
                                                              -------------------
COST OF EQUITY
Risk-free rate (10 year US Treasury bonds)..................                4.98%
Equity risk premium.........................................                5.00%
Unlevered beta..............................................                 1.05
Levered beta (2)............................................                 1.26
Country Risk Premium........................................                3.25%
After tax cost of equity....................................               14.51%
                                                              -------------------
Optimal Capital Structure...................................  25% debt/75% equity
                                                              -------------------
WACC Calculated From Above..................................               12.32%
                                                              -------------------



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

(1) RBC estimate of expected Canadian tax rate.

(2) Assuming 25% debt/75% equity.

     Based on the foregoing analysis, taking into account sensitivity analyses
on the variables selected above, RBC utilized a discount rate of 11.0% to 13.5%.

  Results of NAV Analysis

     Based on the foregoing analysis, taking into account the various
sensitivity analyses performed, RBC selected a value range of US$11.00 to
US$13.00 per Common Share in our NAV analysis. This analysis is summarized in
Exhibit 2.

                               (RBC RUNNING FOOT)

                                       A-9


  PRECEDENT TRANSACTION ANALYSIS

     RBC reviewed certain publicly available information regarding comparable
company and asset transactions in the Indonesian oil and gas industry and other
developing regions.

     In analyzing precedent transactions, RBC reviewed a number of parameters,
including:

          i) price as a multiple of forecasted discretionary cash flow ("DCF")
     per share for the first year following the transaction;

          ii) price as a percentage of NAV per share;

          iii) enterprise value ("EV"), defined as equity value plus net debt,
     as a multiple of forecasted earnings before interest, taxes, depreciation,
     depletion and amortization ("EBITDA") for the first year following the
     transaction;

          iv) adjusted enterprise value ("AEV"), defined as enterprise value
     less any value for non-reserve assets, as a multiple of forecasted daily
     barrel of oil equivalent ("boe") production for the first year following
     the transaction; and

          v) AEV as a multiple of boe proved and proved plus probable reserves.

     RBC's selection of precedent transactions was based primarily on
transactions in the Indonesian oil and gas industry and other developing regions
which have occurred during the period 2000 to present. The following table
summarizes selected precedent transactions and indicates the implied multiples
under the Offer:


                                                                                                          EV/            AEV/
                                                                                 P/DCF(1)              EBITDA(1)         NET
                                                                                 --------              ---------    PRODUCTION(1)
                                                                    ENTERPRISE    1 YR.                  1 YR.     ----------------
DATE                 ACQUIROR                     TARGET              VALUE        FWD      P/NAV(1)      FWD         1 YR. FWD
- ----       ----------------------------  -------------------------  ----------   --------   --------   ---------   ----------------
                                                                     (US$ MM)      (X)        (%)         (X)        (US$/BOE/D)
                                                                                              
15-Apr-02  PetroChina                    Devon                         $262.0      6.8 x        n/a        n/a          $21,475
22-Mar-02  Medco Energi                  EEX Corporation                $34.5        n/a        n/a        n/a              n/a
18-Jan-02  CNOOC Ltd.                    Repsol-YPF                    $585.0        n/a        n/a        n/a              n/a
8-Oct-01   PTT Exploration and Prod.     Medco Energi (34.1%)          $225.0      6.7 x     149.5%      3.5 x          $11,091
10-Jul-01  Amerada Hess Corp.            Triton Energy Ltd.          $3,143.3      8.4 x     111.1%      7.8 x          $36,967
21-Jun-01  Talisman Energy Inc.          Lundin Oil AB (Malaysia)      $243.9        n/a        n/a        n/a          $46,422
29-May-01  Conoco Inc.                   Gulf Canada Resources       $6,338.0      4.5 x     111.1%      6.0 x          $21,951
21-Dec-00  ENI SpA (Agip plc)            LASMO plc                   $5,641.1      5.4 x     110.6%      6.1 x              n/a
           MEAN                                                      $2,059.1      6.3 X     120.6%      5.8 X          $27,581
           MEAN (EXCL. HIGH AND LOW)                                 $1,683.4      6.3 X     111.1%      6.1 X          $26,798
           MEDIAN                                                      $423.5      6.7 X     111.1%      6.1 X          $21,951
27-May-02  Conoco Canada                 Gulf Indonesia              $1,072.8      8.8 x     103.5%      6.7 x          $29,805



              AEV/NET RESERVES(1)
           -------------------------
DATE         PROVED       PRV + PRB
- ----       -----------   -----------
           (US$/MMBOE)   (US$/MMBOE)
                   
15-Apr-02      $3.28        $2.06
22-Mar-02      $3.45          n/a
18-Jan-02      $3.18        $2.30
8-Oct-01       $3.26        $1.42
10-Jul-01     $10.46        $5.77
21-Jun-01      $5.29        $1.21
29-May-01      $5.14        $2.35
21-Dec-00      $5.54          n/a
               $4.95        $2.52
               $4.33        $2.03
               $4.30        $2.18
27-May-02      $4.40        $2.66


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

Notes:

(1) Based on street research estimates.

     RBC's review of the precedent transactions considered various factors,
including the existence of contracted gas reserves, the location of the assets,
the hydrocarbon mix and the transaction size.

     Based on the foregoing analysis, RBC selected a value range of US$11.00 to
US$14.00 per Common Share in our precedent transaction analysis.

                               (RBC RUNNING FOOT)

                                       A-10


 BENEFITS TO THE CONTROLLING SHAREHOLDER OF ACQUIRING THE COMMON SHARES HELD BY
 MINORITY SHAREHOLDERS

     In arriving at our opinion of the value of the Common Shares, we reviewed
and considered whether any distinctive material benefits will accrue to the
Controlling Shareholder or its affiliates through the acquisition of all the
Common Shares held by Minority Shareholders as contemplated in the Offer. We
concluded that there were material specific operational and financial benefits
that would accrue to the Controlling Shareholder or its affiliates. These
consist primarily of the potential reduction of head office and other expenses.
Based on discussions with management of the Company and Conoco, RBC has
estimated that approximately US$3 to US$5 million of annual cost reductions
would accrue to the Controlling Shareholder or its affiliates as a result of the
Offer. This estimate is net of taxes and the Production Contracts' cost sharing
provisions under which the Company operates. For purposes of the Valuation, RBC
included that portion of the benefits in its NAV analysis that it estimated the
Controlling Shareholder might pay for if an open auction of the Company were
undertaken. RBC believes that several potential purchasers could emerge in a
competitive auction process for the Company, primarily oil and gas companies
with similar operations in or near Indonesia or a desire to enter the South East
Asian market. RBC estimated that several of such potential purchasers would be
able to achieve benefits comparable to, or possibly greater than, the benefits
achievable by the Controlling Shareholder. As a result, we included 100% of the
US$3 to US$5 million of annual benefits in our NAV analysis. We assumed that
100% of these benefits could be achieved starting in 2003 and reduced this
figure on a declining balance basis until 2023 to reflect the reduced production
levels in our NAV blow-down scenario. Based on discussions with Conoco, the
Controlling Shareholder and tax counsel, RBC understands that there would be no
material tax benefits to Conoco or the Controlling Shareholder if the Offer is
completed.

 VALUATION CONCLUSION

     Based upon and subject to the foregoing, RBC is of the opinion that, as of
the date hereof, the fair market value of the Common Shares is in the range of
US$11.50 to US$14.00 per Common Share.

FAIRNESS OPINION

 FACTORS CONSIDERED

     In considering the fairness of the Offer, from a financial point of view,
to the Minority Shareholders, we principally considered and relied upon the
following:

          i) a comparison of the price per Common Share under the Offer to the
     range of fair market values of the Common Shares under our Valuation; and

          ii) a comparison of the price per Common Share under the Offer to the
     trading price of the Common Shares prior to the announcement (the
     "Announcement") on May 28, 2002 of the Controlling Shareholder's intention
     to make the Offer.

 COMPARISON OF PRICE PER COMMON SHARE UNDER THE OFFER TO VALUATION

     The price per Common Share to be paid to Minority Shareholders under the
Offer is within the fair market value range for the Common Shares under our
Valuation.

 COMPARABLE TRANSACTION PREMIUMS

     Our review of other transactions in the Canadian equity market where
controlling shareholders successfully acquired publicly traded minority
interests identified 46 such transactions with a value over $10 million in the
past five years. Success was defined as acquiring at least one-half of the
minority shares outstanding at the time of the transaction. Defining the premium
for this purpose as the amount by which the value per share offered under the
relevant transaction exceeded the closing price of the shares on the principal

                               (RBC RUNNING FOOT)

                                       A-11


trading exchange on the day immediately prior to announcement of the transaction
resulted in premiums as follows:

                   CANADIAN PRECEDENT GOING-PRIVATE PREMIUMS



    1 DAY PRIOR TO ANNOUNCEMENT
- -----------------------------------
HIGHEST    LOWEST    MEAN    MEDIAN
- -------    ------    ----    ------
                    
  97%        (5)%    31%      27%


     The range of premiums paid in the above transactions is very wide. Although
every transaction has its own particular circumstances and direct comparison of
any single transaction to the Offer is difficult, we believe that the
transactions reviewed, in the aggregate, provide a useful comparison benchmark.

     The price per Common Share under the Offer of US$13.25 represents a premium
of approximately 23% to the US$10.75 closing price of the Common Shares on the
New York Stock Exchange on May 24, 2002, the last trading day immediately prior
to the Announcement, and a premium of approximately 21% to the 20-day weighted
average trading price prior to announcement of US$10.99. This premium is within
the range of premiums for similar transactions over the past five years.

 FAIRNESS CONCLUSION

     Based upon and subject to the foregoing, RBC is of the opinion that, as of
the date hereof, the consideration under the Offer is fair from a financial
point of view to the Minority Shareholders.

Yours very truly,

(RBC SIGNATURE)

RBC DOMINION SECURITIES INC.


                               (RBC RUNNING FOOT)
                                       A-12


                                   EXHIBIT 1
      RBC BASE CASE COMMODITY PRICE FORECAST AND BASE CASE FREE CASH FLOWS


                                                                    YEAR ENDING DECEMBER 31,
                                     ---------------------------------------------------------------------------------------
                                      2002     2003     2004     2005     2006     2007     2008     2009     2010     2011
                                     ------   ------   ------   ------   ------   ------   ------   ------   ------   ------
                                                                                        
RBC BASE CASE WTI FORECAST (US$)...  $25.08   $25.07   $21.42   $21.55   $21.79   $22.14   $22.59   $22.95   $23.31   $23.68
RISKED CONTRACTED RESERVES (US$ MM)
 EBITDA............................  $  185   $  210   $  181   $  156   $  155   $  161   $  176   $  178   $  146   $  132
   Capital expenditures............     (71)     (28)     (13)     (48)     (26)      (9)     (24)     (43)     (12)      (0)
   Tax.............................     (73)     (51)     (53)     (48)     (51)     (56)     (59)     (58)     (47)     (45)
                                     ------   ------   ------   ------   ------   ------   ------   ------   ------   ------
UNLEVERED AFTER-TAX FREE CASH
 FLOW..............................  $   41   $  131   $  115   $   59   $   79   $   96   $   93   $   76   $   87   $   87
                                     ======   ======   ======   ======   ======   ======   ======   ======   ======   ======
RISKED UNCONTRACTED RESERVES (US$
 MM)
 EBITDA............................  $   (0)  $   10   $   24   $   36   $   84   $   69   $   69   $   70   $   71   $   68
   Capital expenditures............      (6)     (26)     (24)     (40)     (13)      (4)      (0)      (1)      (3)       0
   Tax.............................       0       (6)      (6)     (14)     (16)     (25)     (26)     (27)     (28)     (28)
                                     ------   ------   ------   ------   ------   ------   ------   ------   ------   ------
UNLEVERED AFTER-TAX FREE CASH
 FLOW..............................  $   (6)  $  (21)  $   (5)  $  (17)  $   55   $   40   $   43   $   41   $   39   $   41
                                     ======   ======   ======   ======   ======   ======   ======   ======   ======   ======


                                                                    YEAR ENDING DECEMBER 31,
                                     ---------------------------------------------------------------------------------------
                                      2012     2013     2014     2015     2016     2017     2018     2019     2020     2021
                                     ------   ------   ------   ------   ------   ------   ------   ------   ------   ------
                                                                                        
RBC BASE CASE WTI FORECAST (US$)...  $24.13   $24.50   $24.90   $25.31   $25.72   $26.14   $26.56   $26.99   $27.43   $27.88
RISKED CONTRACTED RESERVES (US$ MM)
 EBITDA............................  $  119   $  129   $  112   $  114   $   94   $   83   $   84   $   83   $   75   $   64
   Capital expenditures............      (1)     (29)       0        0        0        0        0        0        0        0
   Tax.............................     (41)     (54)     (41)     (43)     (38)     (35)     (35)     (36)     (33)     (27)
                                     ------   ------   ------   ------   ------   ------   ------   ------   ------   ------
UNLEVERED AFTER-TAX FREE CASH
 FLOW..............................  $   78   $   46   $   71   $   71   $   56   $   48   $   49   $   47   $   42   $   37
                                     ======   ======   ======   ======   ======   ======   ======   ======   ======   ======
RISKED UNCONTRACTED RESERVES (US$
 MM)
 EBITDA............................  $   68   $   63   $   60   $   59   $   59   $   60   $   61   $   62   $   64   $   65
   Capital expenditures............       0        0        0        0        0        0        0        0        0        0
   Tax.............................     (28)     (27)     (25)     (25)     (26)     (26)     (27)     (27)     (28)     (28)
                                     ------   ------   ------   ------   ------   ------   ------   ------   ------   ------
UNLEVERED AFTER-TAX FREE CASH
 FLOW..............................  $   40   $   37   $   34   $   34   $   34   $   34   $   35   $   35   $   36   $   37
                                     ======   ======   ======   ======   ======   ======   ======   ======   ======   ======


                                     YEAR ENDING DECEMBER 31,
                                     ---------------
                                      2022     2023
                                     ------   ------
                                        
RBC BASE CASE WTI FORECAST (US$)...  $28.33   $27.88
RISKED CONTRACTED RESERVES (US$ MM)
 EBITDA............................  $   49   $   43
   Capital expenditures............       0        0
   Tax.............................     (21)     (18)
                                     ------   ------
UNLEVERED AFTER-TAX FREE CASH
 FLOW..............................  $   28   $   25
                                     ======   ======
RISKED UNCONTRACTED RESERVES (US$
 MM)
 EBITDA............................  $   66   $   65
   Capital expenditures............       0        0
   Tax.............................     (29)     (29)
                                     ------   ------
UNLEVERED AFTER-TAX FREE CASH
 FLOW..............................  $   37   $   37
                                     ======   ======


                               (RBC RUNNING FOOT)

                                       A-13


                                   EXHIBIT 2
                       RBC BASE CASE NET ASSET VALUATION



                                                                GROSS VALUE
                                                              ----------------
                                                               LOW       HIGH
                                                              ------    ------
                                                               (US$ MILLIONS)
                                                                  
Liquids and Contracted Gas Reserves.........................     585       680
Uncontracted Gas Reserves with Identified Potential
  Markets...................................................     135       175
Additional Reserves and TGI Investment......................     130       180
                                                              ------    ------
TOTAL ASSETS................................................     850     1,035
Net Working Capital (Including Cash)........................     100       100
                                                              ------    ------
NET ASSETS..................................................     950     1,135
Capitalized Cost Synergies..................................      15        25
Option Proceeds.............................................      11        19
                                                              ------    ------
DILUTED SHAREHOLDERS' EQUITY................................     976     1,179
Diluted Shares Outstanding (mm).............................    89.3      90.0
NET ASSET VALUE (PER DILUTED COMMON SHARE)..................  $10.93    $13.11


                               (RBC RUNNING FOOT)
                                       A-14


                                                                         ANNEX B

                INFORMATION PURSUANT TO CANADIAN SECURITIES LAWS

     The information contained in this Annex is stated as of June 12, 2002,
unless otherwise indicated. All capitalized terms used and not otherwise defined
herein shall have their defined meanings ascribed to them in the Statement to
which this Annex B is attached.

                           EXCHANGE RATE INFORMATION

     ALL DOLLAR REFERENCES IN THIS STATEMENT ARE EXPRESSED IN U.S. DOLLARS. The
following table sets forth, for the dates indicated, certain exchange rates (the
"Noon Buy Rates"), presented as Canadian dollars per U.S.$1.00, based on the
rate quoted by the Federal Reserve Bank of New York for Canadian dollars per
U.S.$1.00.

                                                           
March 29, 2002..............................................  1.5958
December 31, 2001...........................................  1.5925
September 28, 2001..........................................  1.5797
June 29, 2001...............................................  1.5175
March 30, 2001..............................................  1.5784



     The Noon Buy Rate on June 11, 2002 was U.S.$1.00 = Cdn.$1.5383.

                               SUPPORT AGREEMENT

     The following is a summary of material provisions of the Support Agreement,
which has been filed as Exhibit (d) to Conoco's and Conoco Canada's Tender Offer
Statement on Schedule TO filed with the SEC on the date hereof. Such summary is
not a complete description and is qualified in its entirety by reference to the
Support Agreement. Capitalized terms not otherwise defined in the following
summary shall have the meanings set forth in the Support Agreement. We urge you
to read carefully the Support Agreement.

     The Offer.  The Support Agreement provides that, following the satisfaction
or waiver of the conditions to the Offer, Conoco Canada shall accept for payment
and pay for, in accordance with the terms of the Offer and the Support
Agreement, all Gulf Indonesia Common Shares which have been validly tendered and
not properly withdrawn pursuant to the Offer promptly after the Expiration Date.
The obligations of Conoco Canada to accept for payment and to pay for any Gulf
Indonesia Common Shares tendered pursuant to the Offer is subject to the
conditions specified in "THE OFFER -- Certain Conditions to the Offer" in the
Offer to Purchase.

     The Second-Step Acquisition.  The Support Agreement provides that if the
Minimum Tender Condition has been satisfied and the other conditions to the
Second-Step Acquisition have been satisfied or waived, Conoco Canada will use
its best efforts to, as soon as practicable after completion of the Offer,
complete the Second-Step Acquisition, pursuant to which Conoco Canada will
acquire all outstanding Gulf Indonesia Common Shares not tendered in the Offer
or otherwise owned by Conoco Canada or its affiliates at a price in cash equal
to the Offer Price.

     Gulf Indonesia has agreed that if Conoco Canada is required under the
Support Agreement to use its best efforts to effect a Second-Step Acquisition,
Gulf Indonesia will use its best efforts to assist Conoco Canada in connection
therewith, including (1) taking all action necessary in accordance with the
securities laws, other applicable laws, Gulf Indonesia's constating documents,
the requirements of the New York Stock Exchange or the requirements of any
governmental entity to duly call, give notice of, convene and hold a meeting of
shareholders of Gulf Indonesia as promptly as practicable to consider and vote
upon the Second-Step Acquisition, if necessary, and (2) filing with the
applicable securities commissions and mailing to shareholders


of Gulf Indonesia a management proxy circular, or if requested by Conoco Canada,
an information statement relating to the meeting of shareholders.

     Certain Conditions to the Second-Step Acquisition.  The Support Agreement
provides that the obligation of Conoco Canada to commence and complete the
Second-Step Acquisition is subject to the satisfaction (or waiver by Conoco
Canada), immediately prior to the time the Second-Step Acquisition is commenced
and immediately prior to the time the Second-Step Acquisition is completed, of
each of the following conditions:

          (1) all sanctions, rulings, exceptions, waivers, permits, orders,
     consents or approvals of any governmental entity (whether in Canada, the
     United States, Indonesia or elsewhere) which, in Conoco Canada's reasonable
     judgment, are necessary in connection with the Second-Step Acquisition
     shall have been obtained on terms and conditions reasonably satisfactory to
     Conoco Canada;

          (2) (i) no act, action, suit, proceeding, obligation or opposition
     shall have been threatened or taken before or by any governmental entity or
     by any other person (in the case of such other person, which has a
     reasonable likelihood of success), and (ii) no law, regulation, rule,
     statute, judgment, order, injunction or policy shall have been enacted,
     promulgated, amended or applied, in either case in the reasonable judgment
     of Conoco Canada:

             (a) to (A) cease trade, enjoin, prohibit or impose limitations,
        damages or conditions on (x) the purchase by, or sale to, Conoco Canada
        of the Shares or any of them or the consummation of the transactions
        contemplated by the Support Agreement, (y) the right of Conoco Canada to
        own or exercise full rights of ownership of the Shares or any of them,
        or (z) the ability of Conoco Canada or Conoco to exercise full ownership
        rights over or operate the businesses or assets of Gulf Indonesia and
        its subsidiaries, or (B) compel Conoco Canada or Conoco (or any of their
        respective affiliates) to dispose of or to hold separate any portion of
        their business or assets or to dispose or to hold separate any portion
        of the business or assets of or any of Gulf Indonesia or its
        subsidiaries;

             (b) which has materially adversely affected or, if the Second-Step
        Acquisition were consummated, could materially adversely affect Gulf
        Indonesia and its subsidiaries considered as a whole; or

             (c) which challenges or would prevent completion of the Second-Step
        Acquisition or which would have a material adverse effect on the ability
        of Conoco Canada to complete a Second-Step Acquisition;

          (3) there shall not exist any prohibition at law or legal restraint
     against Conoco Canada making or completing a Second-Step Acquisition;

          (4) Conoco Canada shall have determined in its reasonable judgment
     that there does not exist and has not occurred (or, if there does exist or
     shall have previously occurred, there shall not have been disclosed prior
     to the date of the Support Agreement, generally or to Conoco or Conoco
     Canada) any material adverse change to Gulf Indonesia and its subsidiaries
     considered as a whole;

          (5) all representations and warranties of Gulf Indonesia in the
     Support Agreement qualified as to materiality shall be true and correct and
     those not so qualified shall be true and correct in all material respects
     as of the date of the Support Agreement and as of the effective date of the
     Second-Step Acquisition as if made on and as of such date (except to the
     extent that such representations and warranties speak as of an earlier
     date) and Gulf Indonesia shall have performed in all material respects all
     covenants to be performed by it under the Support Agreement;

          (6) there shall not be in force and non-appealable any injunction,
     order or decree issued by a court or other governmental entity of competent
     jurisdiction in Canada, the United States or elsewhere restraining or
     enjoining the consummation of the Second-Step Acquisition or any other
     transaction contemplated by the Support Agreement;

          (7) the Support Agreement shall not have been terminated; and

          (8) the Minimum Tender Condition shall have been satisfied.

                                       B-2


     Subject to the terms of the Support Agreement, the foregoing conditions are
for the sole benefit of Conoco Canada and Conoco and may be asserted by Conoco
Canada or Conoco regardless of the circumstances (including any action or
inaction by Conoco Canada or Conoco) giving rise to any such conditions or may
be waived by Conoco Canada or Conoco in whole or in part at any time and from
time to time prior to the effective time of the Second-Step Acquisition
(subject, in the case of any waiver, to the requirements of the Exchange Act and
Canadian provincial securities legislation). The failure by Conoco Canada or
Conoco at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time prior to the effective
time of the Second-Step Acquisition.

     For purposes of the Support Agreement the terms "material adverse change"
and "material adverse effect" mean, when used in connection with a person, any
change, effect, event, occurrence or state of facts (or any effect, development,
occurrence or state of facts involving a prospective change) that is, or could
reasonably be expected to be, material and adverse to the business, assets,
rights, liabilities, capitalization, operations, prospects or financial
condition of that person and its subsidiaries taken as a whole, other than any
change, effect, event, occurrence or state of facts (or any effect, development,
occurrence or state of fact involving a prospective change); (i) resulting from
changes affecting the worldwide oil and gas industry, including without
limitation changes in crude oil, natural gas, gas liquids or other commodity
prices on a current or forward basis; (ii) resulting from changes in general
economic, political, civil, financial, banking, regulatory, currency exchange,
securities market or commodity market conditions in Canada or the United States;
(iii) which prior to the date of the Support Agreement has been publicly
disclosed by Gulf Indonesia or otherwise disclosed in writing by Gulf Indonesia
to Conoco or Conoco Canada; (iv) resulting from the negotiation, announcement,
execution, delivery, consummation or anticipation of the transactions
contemplated by, or compliance with, the Support Agreement; or (v) resulting
from any change in law of any Canadian or U.S. governmental entity.

     Termination.  The Support Agreement may be terminated:

          (1) by Conoco, Conoco Canada or Gulf Indonesia (in the case of Gulf
     Indonesia, as determined by the Independent Committee) if there shall be in
     force and non-appealable any injunction, order or decree issued by a court
     or other governmental entity of competent jurisdiction in Canada, the
     United States or elsewhere restraining or enjoining the consummation of the
     Offer, the Second-Step Acquisition or any other transaction contemplated by
     the Support Agreement; provided that the party so terminating is not then
     in material breach of the Support Agreement (or in the case of Conoco or
     Conoco Canada, neither is so in breach);

          (2) by Conoco or Conoco Canada if the conditions to Conoco Canada
     consummating the Offer have not been satisfied (or waived by Conoco or
     Conoco Canada) by the date specified in the condition or the Expiration
     Date, as applicable; provided that neither Conoco nor Conoco Canada is then
     in material breach of the Support Agreement;

          (3) by Conoco or Conoco Canada if the conditions to Conoco Canada
     consummating the Second-Step Acquisition have not been satisfied (or waived
     by Conoco or Conoco Canada) both immediately prior to the time the
     Second-Step Acquisition is commenced and immediately prior to the time the
     Second-Step Acquisition is completed; provided that neither Conoco nor
     Conoco Canada is then in material breach of the Support Agreement;

          (4) by the mutual agreement of Conoco, Conoco Canada and Gulf
     Indonesia (as determined by the Independent Committee);

          (5) by Conoco and Conoco Canada if the Board of Directors of Gulf
     Indonesia or the Independent Committee shall have (i) withdrawn or
     modified, or proposed to withdraw or modify in a manner adverse to Conoco
     or Conoco Canada, the approval or recommendation of the Board of Directors
     of Gulf Indonesia or the Independent Committee of the Support Agreement or
     the Offer or (ii) approved or recommended, or proposed publicly to approve
     or recommend, any proposal by any person to acquire, directly or
     indirectly, more than 10% of the Shares (other than the Offer) (an
     "Acquisition Proposal");

                                       B-3


          (6) by Gulf Indonesia (as determined by the Independent Committee) if
     (i) any representation or warranty of Conoco Canada or Conoco in the
     Support Agreement which is qualified as to materiality is not true and
     correct and any representation and warranty in the Support Agreement not so
     qualified is not true and correct in all material respects (except to the
     extent that such representations and warranties speak to an earlier date)
     or (ii) Conoco Canada or Conoco is in breach in a material respect of any
     of their respective covenants under the Support Agreement; provided, in
     each case that (A) Conoco or Conoco Canada, as applicable, has not cured
     such breach within 20 business days of Gulf Indonesia notifying Conoco or
     Conoco Canada of such breach and (B) Gulf Indonesia is not then in material
     breach of the Support Agreement;

          (7) by Gulf Indonesia in order for it to concurrently enter into a
     bona fide written unsolicited Acquisition Proposal that in the good faith
     determination of the Independent Committee (i) is reasonably capable of
     being completed, taking into account all legal, financial, regulatory and
     other aspects of such proposal and the person making such proposal and (ii)
     would, if consummated, result in a more favorable transaction from a
     financial point of view to shareholders of Gulf Indonesia (other than
     Conoco Canada) than the transactions contemplated by the Support Agreement;
     and

          (8) by Conoco, Conoco Canada or Gulf Indonesia (as determined by the
     Independent Committee) in the event that Conoco Canada does not complete
     the Second-Step Acquisition on or prior to January 1, 2003; provided that a
     party may not terminate the Support Agreement pursuant to this clause if
     such party's breach (or in the case of Conoco or Conoco Canada, the breach
     by either of Conoco or Conoco Canada) of the Support Agreement resulted in
     the Second-Step Acquisition not being completed on or prior to such date.

     In the event of such termination, except as provided in the Support
Agreement, the Support Agreement will become void and have no effect, and there
will be no liability on the part of Conoco, Conoco Canada or Gulf Indonesia.
However, the Support Agreement provides that the termination of the Support
Agreement will not relieve any party from liability for any wilful and knowing
breach of a representation or warranty in the Support Agreement or a material
breach of a covenant contained therein.

     Change in Recommendation.  Both the Board of Directors of Gulf Indonesia
and the Independent Committee have agreed not to withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Conoco or Conoco Canada, its
approval or recommendation of the Offer or the Support Agreement, or approve or
recommend or propose publicly to approve or recommend any Acquisition Proposal,
unless the Board of Directors of Gulf Indonesia, or the Independent Committee,
determines in good faith, after consultation with outside counsel, that it is
necessary to do so in order to comply with its fiduciary duties to the
shareholders of Gulf Indonesia (other than Conoco Canada) under applicable law.

     Interim Operations.  Gulf Indonesia has agreed that, prior to consummation
of the Second-Step Acquisition, except as otherwise expressly contemplated by
the Support Agreement or unless Conoco otherwise agrees in writing:

          (1) Gulf Indonesia and its subsidiaries will conduct their businesses
     only in, and not take any action except in, the usual and ordinary course
     of business and consistent with past practice, and Gulf Indonesia shall use
     all commercially reasonable efforts to maintain and preserve its and their
     business organization, assets, employees, advantageous business
     relationships and the attendant goodwill of Gulf Indonesia and its
     subsidiaries and to contribute to retention of that goodwill to and after
     the date of the consummation of the Second-Step Acquisition;

          (2) Gulf Indonesia will not, and will not permit any of its
     subsidiaries to, directly or indirectly: (i) issue, grant, sell or pledge
     or agree to issue, grant, sell or pledge any shares of Gulf Indonesia or
     its subsidiaries or other equity interests of Gulf Indonesia or its
     subsidiaries, or options, warrants, rights or units to acquire any such
     shares or interests, securities convertible into or exchangeable or
     exercisable for, or otherwise evidencing a right to acquire, shares of Gulf
     Indonesia or its subsidiaries or other equity interests of Gulf Indonesia
     or its subsidiaries, other than (A) the issuance of Gulf Indonesia Common
     Shares issuable pursuant to the terms of certain options, (B) the granting
     of options in the ordinary

                                       B-4


     course consistent with past practice, (C) in transactions between two or
     more Gulf Indonesia wholly owned subsidiaries or between Gulf Indonesia and
     a Gulf Indonesia wholly owned subsidiary, (D) pursuant to certain pledge
     commitments and (E) as required under law or existing contracts; (ii)
     redeem, purchase or otherwise acquire any of its outstanding securities
     unless otherwise required by the terms of such securities and other than in
     transactions between two or more Gulf Indonesia wholly owned subsidiaries
     or between Gulf Indonesia and a Gulf Indonesia wholly owned subsidiary;
     (iii) adopt a plan of liquidation, or resolution providing for the
     liquidation, dissolution, merger, consolidation, spin-off, demerger or
     reorganization of Gulf Indonesia or any of its subsidiaries; or (iv) enter
     into, modify or terminate any contract or agreement with respect to any of
     the foregoing;

          (3) Gulf Indonesia will conduct itself so as to keep Conoco informed
     as to the material decisions or actions required to be made or taken by
     Gulf Indonesia's Board of Directors with respect to the operation of its
     business, except in respect of disclosure prohibited by reason of a
     confidentiality obligation owed to any person or otherwise prevented by
     applicable law;

          (4) Gulf Indonesia will not, and will not permit its subsidiaries,
     directly or indirectly, to: (i) sell, pledge, lease, dispose of or encumber
     any assets of Gulf Indonesia or its subsidiaries, except in the ordinary
     course of business consistent with past practice; (ii) subject to certain
     exceptions, acquire any corporation, partnership or other person or other
     business organization or division thereof, make any investment either by
     the purchase of securities, contributions of capital, property transfer or
     purchase of any property or assets of any other person, if any of the
     foregoing would be material to the business or financial condition of Gulf
     Indonesia and its subsidiaries taken as a whole; (iii) commence or
     undertake a substantial expansion of its business facilities or operations
     or an expansion that is out of the ordinary and regular course of business
     consistent with past practice in light of current market and economic
     conditions; (iv) incur any indebtedness for borrowed money or any other
     liability or obligation or issue any debt securities or assume, guarantee,
     endorse or otherwise as an accommodation become responsible for the
     obligations of any other person, or make any loans or advances, except (A)
     in the ordinary course of business consistent with past practice, (B) for
     refinancing of existing debt on substantially the same or more favorable
     terms and (C) for daylight employee assistance loans in connection with the
     exercise of options; (v) pay, discharge or satisfy any claims, liabilities
     or obligations other than the payment, discharge or satisfaction, in the
     ordinary course of business consistent with past practice, of liabilities
     reflected or reserved against in certain Gulf Indonesia financial
     statements or incurred in the ordinary course of business consistent with
     past practice; (vi) authorize, recommend or propose any release or
     relinquishment of any contractual right, other than in the ordinary course
     of business consistent with past practice; (vii) waive, release, grant or
     transfer any rights of material value or modify or change any existing
     material licence, lease, contract or other document, other than in the
     ordinary course of business consistent with past practice; (viii) except in
     the ordinary course of business consistent with past practice or as
     required by applicable law, enter into or modify in any material respect
     any contract, agreement, commitment or arrangement which new contract or
     series of related existing contracts could reasonably be expected to have a
     material adverse effect on Gulf Indonesia and its subsidiaries taken as a
     whole; or (ix) authorize or propose any of the foregoing or enter into or
     modify any contract, agreement, commitment or arrangement to do any of the
     foregoing; provided, however, that the foregoing does not apply to any
     action, expenditure, transaction or agreement (including a series of
     transactions) included in the Gulf Indonesia 2002 budget approved by the
     Board of Directors of Gulf Indonesia prior to December 10, 2001 (including
     amendments thereto made prior to June 1, 2002) or with a value of less than
     $5 million individually or $10 million in the aggregate;

          (5) Gulf Indonesia will not, and will not permit any of its
     subsidiaries to, (i) grant or promise to grant to any officer or director
     an increase or improvement in compensation or benefits in any form; (ii)
     other than in the ordinary course of business consistent with past
     practice, grant or promise to grant to any other employee any increase in
     compensation or benefits in any form other than to the extent required
     under any existing collective bargaining agreements or union contracts;
     (iii) make any loan to any officer or director except for daylight employee
     assistance loans in connection with the exercise of options; (iv) except as
     provided in the Support Agreement, take any action with respect to the
     grant or

                                       B-5


     increase of any severance or termination pay to, or the entering into or
     amendment of any employment or consulting agreement with, any employee of
     Gulf Indonesia or any of its subsidiaries, or with respect to any increase
     of benefits payable under its current severance or termination pay
     policies; (v) except as otherwise set forth in the Support Agreement, take
     any action to accelerate any rights or benefits, or make any material
     determinations not in the ordinary course of business consistent with past
     practice under any certain Gulf Indonesia benefit plans, collective
     bargaining agreements or union contracts; or (vi) except as required by
     law, establish, adopt, enter into or amend any collective bargaining
     agreement;

          (6) Gulf Indonesia shall not take, and shall not permit any of its
     subsidiaries to take, any action, if such action could reasonably be
     expected to prevent, materially impede or make more difficult or burdensome
     in any material respect, the obtainment of regulatory approvals that are
     necessary or desirable in connection with the Offer, the Second Step
     Acquisition or any of the other transactions contemplated by the Support
     Agreement;

          (7) Gulf Indonesia will not, and will not permit its subsidiaries to
     (i) declare, set aside or pay any dividends on, or make any other
     distributions in respect of, any of its capital stock, other than dividends
     and distributions by a direct or indirect wholly owned subsidiary of Gulf
     Indonesia to Gulf Indonesia or (ii) split, combine or reclassify any of its
     capital stock or issue or authorize the issuance of any other securities in
     respect of, in lieu of or in substitution for shares of its capital stock;

          (8) Gulf Indonesia will not, and will not permit its subsidiaries to,
     make or revoke any material tax election, other than consistent with past
     practice, unless required by applicable law, or resolve any tax audit or
     other similar proceeding in respect of material taxes payable by Gulf
     Indonesia or its subsidiaries; and

          (9) Gulf Indonesia will not, and will not permit its subsidiaries to,
     make any change in any method of accounting or accounting practice or
     policies or financial accounting policies other than those required by
     generally accepted accounting principles or required by applicable law or
     applicable securities commissions.

     Fees and Expenses.  All fees and expenses incurred in connection with the
Support Agreement and the Offer and the transactions contemplated by the Support
Agreement will be paid by the party incurring such fees or expenses, whether or
not the Offer is consummated, except that Conoco Canada will pay all the costs
incurred by Gulf Indonesia in obtaining the Valuation and Fairness Option.

     Indemnification.  Conoco has agreed that it will, or will cause Gulf
Indonesia to, maintain in effect without any reduction in scope or coverage for
ten years from the later of the Expiration Date (as defined in the Offer to
Purchase) and the date a Second-Step Acquisition is completed, customary
policies of directors' and officers' liability insurance providing protection
comparable to the protection provided by the policies maintained by Gulf
Indonesia in effect immediately prior to the Expiration Date. In addition,
Conoco has agreed that all rights to indemnification or exculpation existing as
of the date of the Support Agreement or authorized prior to the date of the
Support Agreement in favor of present and former officers and directors of Gulf
Indonesia shall survive the completion of the Offer and Conoco has agreed to
cause Gulf Indonesia to fulfill its obligations under such rights or, failing
that, to fulfill such obligations itself.

     Efforts.  Conoco, Conoco Canada and Gulf Indonesia have each agreed in the
Support Agreement, subject to the terms and conditions thereof, to use their
commercially reasonable efforts to take and cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by the Offer, the Second-Step Acquisition and the Support
Agreement, and to cooperate with each other in connection with the foregoing,
including using commercially reasonable efforts to (1) obtain all necessary
waivers, consents, permits, orders and approvals required under applicable law
or otherwise and (2) obtain all necessary or desirable regulatory approvals. In
addition, Conoco, Conoco Canada and Gulf Indonesia have agreed to challenge all
lawsuits or proceedings challenging or affecting the Support Agreement or the
making or completion of the Offer.

     Representations and Warranties.  The Support Agreement contains various
customary representations and warranties of the parties thereto including among
others, representations as to due organization and
                                       B-6


qualification; in the case of Gulf Indonesia, capitalization; corporate
authority; no violation of charter or by-laws, debt instruments or material
agreements or applicable law; and, in the case of Gulf Indonesia, accuracy of
Gulf Indonesia's public filings, including financial statements.

     Amendments; Waivers.  The Support Agreement may be amended at any time
prior to consummation of the Second-Step Acquisition by mutual agreement of
Conoco, Conoco Canada and Gulf Indonesia, except that the Support Agreement may
not be amended in a way that adversely affects the shareholders of Gulf
Indonesia (other than Conoco Canada) without the approval of the Independent
Committee. Conoco Canada and Conoco and Gulf Indonesia may (1) extend the time
for the performance of any of the obligations or other acts of the other
contained in the Support Agreement, (2) waive any inaccuracies in the
representations and warranties of the other contained in the Support Agreement
or in any document delivered pursuant to the Support Agreement or (3) subject to
the restrictions described under "THE OFFER -- Terms of the Offer; Expiration
Date" in the Offer to Purchase, waive compliance with any of the agreements of
any other party or with any conditions to its own obligations, except that any
extension or waiver that adversely affects the rights of shareholders of Gulf
Indonesia (other than Conoco Canada) requires the approval of the Independent
Committee. Any agreement on the part of a party to the Support Agreement to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party by a duly authorized officer.

          INTENTIONS OF DIRECTORS, SENIOR OFFICERS AND SHAREHOLDERS OF
                    GULF INDONESIA WITH RESPECT TO THE OFFER

     Each of the directors and senior officers of Gulf Indonesia has indicated
that at the date hereof he intends to accept the Offer, both with respect to
Shares currently owned by him, directly or indirectly, and Shares issuable upon
the exercise of options held by such persons as indicated in "Ownership of
Securities of Gulf Indonesia". The Support Agreement provides that Gulf
Indonesia may make arrangements to permit holders of options to exercise such
options on a conditional basis (conditional on Conoco Canada accepting and
paying for the Shares). Alternatively, Gulf Indonesia may make arrangements to
cancel options in exchange for a cash payment equal to the difference, if any,
between the Offer Price and the applicable exercise price of the options. The
directors and senior officers of Gulf Indonesia have also indicated that, to
their knowledge, after reasonable inquiry, at the date hereof, the Shares held
by their associates or under their control or direction will also be tendered
pursuant to the Offer. Gulf Indonesia has no knowledge as to the intentions of
any other shareholder to accept or reject the Offer.

                   OWNERSHIP OF SECURITIES OF GULF INDONESIA

     The names of the directors and senior officers of Gulf Indonesia and the
respective numbers of securities of Gulf Indonesia owned or over which control
or direction is exercised, as at the date hereof, by each director and senior
officer of Gulf Indonesia and, to the knowledge of the directors and senior
officers of Gulf Indonesia, after reasonable inquiry, each associate of a
director or senior officer of Gulf Indonesia, and any person or company acting
jointly or in concert with Gulf Indonesia, are as follows:



                                                                PERCENTAGE OF   NUMBER OF    PERCENTAGE OF
NAME AND POSITION HELD                 NUMBER OF SHARES(1)(2)      SHARES       OPTIONS(1)      OPTIONS
- ----------------------                 ----------------------   -------------   ----------   -------------
                                                                                 
Robert H. Allen......................           7,431                  *         202,500         3.9%
Chairman of the Board of Directors
Paul C. Warwick......................           3,950                  *          50,000            *
President, Chief Executive Officer
and Director
Taufik Ahmad.........................           1,850                  *          20,000            *
Vice President, Administration
Andrew D.R. Hastings.................               0                  *               0            *
Vice President, Gas Marketing and
Business Development


                                       B-7




                                                                PERCENTAGE OF   NUMBER OF    PERCENTAGE OF
NAME AND POSITION HELD                 NUMBER OF SHARES(1)(2)      SHARES       OPTIONS(1)      OPTIONS
- ----------------------                 ----------------------   -------------   ----------   -------------
                                                                                 
Donald D. McKechnie..................           2,200                  *          41,000            *
Vice President, Finance
Supramu Santosa......................           4,550                  *         210,250         4.0%
Vice President, Corporate Strategy
and Government Relations
John K. Wearing......................           2,350                  *          41,700            *
Vice President, Operations
Cliff W. Zeliff......................          15,200                  *         220,850         4.2%
Vice President, Exploration
Alan P. Scott........................               0                  *               0            *
Corporate Secretary
Robert W. Goldman....................               0                  *               0            *
Director
Malcolm D. Griffiths.................               0                  *               0            *
Director
Rick A. Harrington...................               0                  *               0            *
Director
Francis H. (Mim) James...............               0                  *               0            *
Director
Dr. Ir. Kuntoro Mangkusubroto........             900                  *           7,500            *
Director
Donald F. Mazankowski................           2,050                  *          52,500         1.0%
Director
James D. McColgin....................               0                  *               0            *
Director
John R. Sanders......................           6,429                  *          30,000            *
Director
Dr. George E. Watkins................               0                  *               0            *
Director


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

Notes:

* means less than one percent

(1) The information as to Shares and Gulf Indonesia options beneficially owned,
    directly or indirectly, or over which control or direction is exercised by
    each director and senior officer of Gulf Indonesia and by their respective
    associates, not being within the knowledge of Gulf Indonesia, has been
    furnished by the respective directors and senior officers individually.

(2) Includes Shares which directors and senior officers are entitled to under
    the Restricted Share Unit/Deferred Share Unit Plan if they elect to take all
    units under such plan in Shares. Under the Restricted Share Unit/Deferred
    Share Unit Plan, holders of RSU's or DSU's may elect to take such units in
    cash. See "Agreements Between Gulf Indonesia and its Directors and Senior
    Officers -- Options and Stock Based Plans".

     As at the date hereof, the directors and senior officers of Gulf Indonesia
and, to the knowledge of the directors and senior officers of Gulf Indonesia,
after reasonable inquiry, their respective associates, as a group, beneficially
own, directly or indirectly, or exercise control or direction over 46,910 Shares
(including Shares which directors and senior officers are entitled to under the
Restricted Share Unit/Deferred Share Unit Plan) and 876,300 Gulf Indonesia
options. As of June 4, 2002, Conoco Canada owned 63,650,000 Shares representing
approximately 72.3% of the outstanding Shares or approximately 70.7% of the
Shares on a fully diluted basis. To the knowledge of the directors and senior
officers of Gulf Indonesia, after reasonable inquiry, other than Conoco Canada,
no person or company, at the date hereof, beneficially owns, directly or
indirectly, or exercises control or direction over, more than 10% of the
outstanding Shares.

                                       B-8


    TRADING BY DIRECTORS AND SENIOR OFFICERS IN SECURITIES OF GULF INDONESIA

     Except as disclosed in the following sentences and under "Issue of
Securities of Gulf Indonesia" below, neither Gulf Indonesia nor any of the
directors or senior officers of Gulf Indonesia nor, to the knowledge of the
directors and senior officers of Gulf Indonesia, after reasonable inquiry, any
associate of a director or senior officer of Gulf Indonesia, any person or
company who owns more than 10% of any class of equity securities of Gulf
Indonesia, or any person or company acting jointly or in concert with Gulf
Indonesia has traded in securities of Gulf Indonesia during the six-month period
preceding the date hereof. On January 10, 2002, Gulf Indonesia purchased 1,067
Shares for John R. Sanders, at a price of $8.85 per Share, in lieu of director's
fees. In addition, on April 9, 2002, Gulf Indonesia purchased 803 Shares for
John R. Sanders and 584 Shares for Robert H. Allen, all at a price of $10.70 per
Share, in lieu of director's fees.

                     ISSUE OF SECURITIES OF GULF INDONESIA

     No Shares or securities convertible into Shares have been issued to any
director or senior officer of Gulf Indonesia during the two-year period
preceding the date hereof, other than as follows:



                                                                                            PRICE PER
NAME                                     DATE OF ISSUANCE    SECURITIES ISSUED   NUMBER    SECURITY(1)
- ----                                     -----------------   -----------------   -------   -----------
                                                                               
Robert H. Allen........................  December 18, 2000     Options             5,000     $ 9.06
                                            May 7, 2001        Options            10,000     $ 8.18
                                            May 7, 2001          RSUs              2,300     $ 8.18
                                            May 6, 2002        Options             7,500     $11.25
                                            May 6, 2002          RSUs              1,800     $11.25
Paul C. Warwick........................    July 24, 2001       Options            30,000     $11.40
                                            May 6, 2002        Options            20,000     $11.25
                                            May 6, 2002          RSUs              3,950     $11.25
Taufik Ahmad...........................  February 15, 2001     Options             5,000     $ 9.05
                                         February 15, 2001       RSUs                900     $ 9.05
                                            May 7, 2001        Options            10,000     $ 8.18
                                            May 6, 2002        Options             5,000     $11.25
                                            May 6, 2002          RSUs                950     $11.25
Donald D. McKechnie....................    June 18, 2001       Options            30,000     $10.70
                                            May 6, 2002        Options            11,000     $11.25
                                            May 6, 2002          RSUs              2,200     $11.25
Supramu Santosa........................   August 10, 2000      Options            12,000     $ 8.25
                                         February 15, 2001       RSUs              2,300     $ 9.05
                                            May 7, 2001        Options            25,000     $ 8.18
                                            May 6, 2002        Options            11,250     $11.25
                                            May 6, 2002          RSUs              2,250     $11.25
John K. Wearing........................    June 1, 2001        Options            30,000     $10.80
                                            May 6, 2002        Options            11,700     $11.25
                                            May 6, 2002          RSUs              2,350     $11.25
Cliff W. Zeliff........................   August 10, 2000      Options            16,000     $ 8.25
                                         February 15, 2001       RSUs              2,600     $ 9.05
                                            May 7, 2001        Options            30,000     $ 8.18
                                            May 6, 2002        Options            12,850     $11.25
                                            May 6, 2002          RSUs              2,600     $11.25


                                       B-9




                                                                                            PRICE PER
NAME                                     DATE OF ISSUANCE    SECURITIES ISSUED   NUMBER    SECURITY(1)
- ----                                     -----------------   -----------------   -------   -----------
                                                                               
Dr. Ir. Kuntoro Mangkusubroto..........     May 6, 2002        Options             7,500     $11.25
                                            May 6, 2002          RSUs                900     $11.25
Donald F Mazankowski...................  December 18, 2000     Options             5,000     $ 9.06
                                            May 7, 2001        Options            10,000     $ 8.18
                                            May 7, 2001          RSUs              1,150     $ 8.18
                                            May 6, 2002        Options             7,500     $11.25
                                            May 6, 2002          RSUs                900     $11.25
John R. Sanders........................  December 18, 2000     Options             5,000     $ 9.06
                                            May 7, 2001        Options            10,000     $ 8.18
                                            May 7, 2001          RSUs              1,150     $ 8.18
                                            May 6, 2002        Options             7,500     $11.25
                                            May 6, 2002          RSUs                900     $11.25


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

Notes:

(1) Represents the exercise price per Share in the case of a grant of Gulf
    Indonesia options.

               OWNERSHIP OF SECURITIES OF CONOCO OR CONOCO CANADA

     Neither Gulf Indonesia nor any director or senior officer of Gulf Indonesia
nor, to the knowledge of the directors and senior officers of Gulf Indonesia
after reasonable inquiry, any associate of a director or senior officer of Gulf
Indonesia, any person or company holding more than 10% of any class of equity
securities of Gulf Indonesia or any person or company acting jointly or in
concert with Gulf Indonesia, at the date hereof, owns, directly or indirectly,
or exercises control or direction over, any securities of any class of Conoco or
Conoco Canada other than as follows:



                              NUMBER OF SHARES OF    PERCENTAGE OF
                                COMMON STOCK OF     SHARES OF COMMON       NUMBER OF        PERCENTAGE OF
NAME                              CONOCO (1)        STOCK OF CONOCO    CONOCO OPTIONS (1)   CONOCO OPTIONS
- ----                          -------------------   ----------------   ------------------   --------------
                                                                                
Paul C. Warwick.............         2,469(2)               *                     0              nil
Andrew D.R. Hastings........         2,077                  *                 6,600                *
Alan P. Scott...............             0                  *                 2,242                *
Robert W. Goldman...........        43,538(3)               *               632,153                *
Malcolm D. Griffiths........         4,000                  *                51,000                *
Rick A. Harrington..........        51,762                  *               549,191                *
Francis H. (Mim) James......         4,728                  *                57,470                *
James D. McColgin...........        22,815                  *               297,143                *
Dr. George E. Watkins.......        11,867                  *               342,691                *


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

Notes:

* means less than one percent

(1) The information as to the number of shares of common stock of Conoco and
    Conoco options beneficially owned, directly or indirectly, or over which
    control or direction is exercised by each director and senior officer of
    Gulf Indonesia and by their respective associates, not being within the
    knowledge of Gulf Indonesia, has been furnished by the respective directors
    and senior officers individually.

(2) Includes 930 shares of common stock of Conoco held by an associate.

(3) Includes 1,716 shares of common stock of Conoco held by two associates.

                                       B-10


RELATIONSHIP BETWEEN CONOCO, CONOCO CANADA AND THE DIRECTORS AND SENIOR OFFICERS
                               OF GULF INDONESIA

     To the knowledge of the directors and senior officers of Gulf Indonesia,
there are no arrangements or agreements made or proposed to be made between
Conoco or Conoco Canada and any of the directors or senior officers of Gulf
Indonesia, including arrangements or agreements pursuant to which a payment or
other benefit is to be made or given by way of compensation for loss of office
or as to their remaining in or retiring from office if the Offer is successful.
The following directors or senior officers of Gulf Indonesia are also directors
or senior officers of Conoco, Conoco Canada or a subsidiary of Conoco or Conoco
Canada (other than Gulf Indonesia and its subsidiaries): Robert W. Goldman,
Malcolm D. Griffiths, Rick A. Harrington, Francis H. (Mim) James, Donald F.
Mazankowski, James D. McColgin, Alan P. Scott and Dr. George E. Watkins. A
further member of the Board of Directors of Gulf Indonesia, Paul C. Warwick, has
indicated that he is a designee of Conoco.

                   CERTAIN AGREEMENTS BETWEEN GULF INDONESIA
                          AND CONOCO OR CONOCO CANADA

     Gulf Indonesia has entered into a number of material transactions with
Conoco Canada and Conoco regarding services, financial matters and corporate
opportunities. Set forth below are summaries of these agreements. Each of these
agreements will terminate if the transactions contemplated in this Offer to
Purchase are consummated.

     1997 Agreements.  With respect to services, Gulf Indonesia and Gulf Canada
(now Conoco Canada) entered into a series of agreements in 1997 relating to
certain ongoing intercompany arrangements, including a technical services
agreement, an information services agreement, a registration rights agreement, a
cross-indemnification agreement and a corporate opportunity agreement.

     The technical services agreement and the information services agreement
provided that, if Gulf Indonesia was unable to provide certain technical and
information services itself, it would be required to obtain such technical and
information services from Gulf Canada as long as Gulf Canada was able to provide
such services in a timely fashion. In addition, an administrative services
agreement provided that Gulf Indonesia was required to obtain from Gulf Canada
substantially all of its required administrative services, including financial,
treasury, accounting, tax, audit, legal and other related services, human
resources services and other administrative services. All these agreements were
originally for 10-year terms beginning in 1997. Gulf Indonesia paid a fee to
Gulf Canada for such services in an amount equal to the cost of providing such
services based on industry averages for the services provided, but in any event
not greater than those fees which an unaffiliated third party would charge Gulf
Indonesia.

     The registration rights agreement provides for, among other things, the
future registration, under the United States Securities Act of 1933, as amended,
of Gulf Indonesia Common Shares owned by Gulf Canada. The registration rights
agreement provides that Gulf Canada can require Gulf Indonesia to register not
more than two public offerings and two private placements of Gulf Indonesia
Common Stock in any 12-month period, so long as each offering or placement has a
value of at least $50 million.

     The cross-indemnification agreement provides that each of Gulf Indonesia
and Gulf Canada will indemnify the other for certain claims made in connection
with the reorganization of Gulf Indonesia undertaken prior to Gulf Indonesia's
initial public offering in 1997.

     The corporate opportunity agreement provides that if Gulf Canada acquires
Indonesian oil and gas assets with a fair market value in excess of $100 million
or a majority equity or voting interest in an entity with Indonesian oil and gas
assets with a fair market value in excess of $100 million, Gulf Canada will,
subject to certain exceptions, within one year either (1) offer to Gulf
Indonesia the right to purchase such Indonesian assets at Gulf Canada's purchase
price plus the amount of any costs, including taxes, that would be incurred by
Gulf Canada in connection with such sale to Gulf Indonesia or (2) cause some or
all of its representatives to resign from Gulf Indonesia's Board of Directors so
that a majority of Gulf Indonesia's directors will have no affiliation with Gulf
Canada. In addition, if Gulf Canada elects to cause such resignations, Gulf
Indonesia will
                                       B-11


have the right to terminate the corporate opportunity agreement. The corporate
opportunity agreement also provides that Gulf Indonesia will not, without Gulf
Canada's consent, directly acquire non-Indonesian oil and gas assets or acquire
a majority equity or voting interest in any entity with non-Indonesian oil and
gas assets unless a majority of the fair market value of such assets are located
in Indonesia.

     2001 Agreement.  In November 2001, Gulf Indonesia and Conoco entered into a
technical services agreement superceding the 1997 technical services agreement
with Gulf Canada. While similar in many ways to the previous agreement, the new
technical services agreement provides for a more detailed work scope and cost
estimate, enables reciprocal assistance, and provides for the possible use of
experts on an "on call" basis. The new technical services agreement also
provides for the long-term secondment of personnel and, pursuant thereto, Gulf
Indonesia's Vice President, Gas Marketing and Business Development, is provided
by secondment arrangement with Conoco.

     2002 Agreement.  In March 2002, Gulf Indonesia and Conoco entered into a
new administrative and information services agreement superceding the previous
information services agreement and administrative services agreement with Gulf
Canada. The new agreement with Conoco is similar to the new technical services
agreement and includes provision for the payment for services on a cost recovery
basis, potential for reciprocal services and the use of a project sheet to
describe the scope of work and estimated costs.

     In connection with financial matters, Gulf Indonesia has arranged to obtain
from Conoco Canada a $65 million credit facility for a term of up to three years
from August 2001 for a fee of 1.5% per annum of the amount undrawn and, in the
case of amounts borrowed, at a cost equal to the cost to Conoco Canada plus a
fee of 1.5% per annum. In addition, Gulf Indonesia on two occasions in 2001 has
invested surplus amounts of cash in short-term notes of Conoco on market terms.
These amounts were repaid.

              AGREEMENTS BETWEEN GULF INDONESIA AND ITS DIRECTORS
                              AND SENIOR OFFICERS

     There are no arrangements or agreements made or proposed to be made between
Gulf Indonesia and any of the directors or senior officers of Gulf Indonesia
pursuant to which a payment or other benefit is to be made or given by way of
compensation for loss of office or as to their remaining in or retiring from
office if the Offer is successful, except as described below.

     Gulf Indonesia has entered into employment agreements with certain of its
senior officers. In 1998 (in respect of Supramu Santosa and Cliff W. Zeliff,
collectively the "1998 Contracts") and in 2001 (in respect of Taufik Ahmad, Paul
C. Warwick, John K. Wearing and Donald D. McKechnie, collectively the "2001
Contracts") Gulf Indonesia entered into a series of employment agreements. The
employment contracts provide for continuing employment unless voluntarily
terminated by the employee. The employment contracts provide that the senior
officers are entitled to severance upon being terminated without cause or upon
certain other specified events of constructive dismissal and upon certain stated
events. Thus, in certain circumstances, if such senior officers of Gulf
Indonesia are terminated following the Offer or the Second-Step Acquisition,
they will be entitled to certain benefits.

     If a senior officer is entitled to receive severance under his respective
employment agreement, then he is entitled to receive, and Gulf Indonesia is
obligated to pay or provide, the following:

          1. an undiscounted cash amount equal to one month's base salary
     (including, in the 1998 Contracts, any foreign service supplement),
     multiplied by the number of years of service of such senior officer with
     Gulf Indonesia, subject to a minimum entitlement and payment equal to 24
     months' base salary and a maximum entitlement and payment equal to 30
     months' base salary;

          2. an undiscounted cash amount equal, in the case of the 1998
     Contracts and the employment agreement with Mr. Ahmad, to the value of
     certain benefit plans and programs provided to regular Canadian resident
     employees of Gulf Canada (now Conoco Canada) and equal to one month for
     every year of service with Gulf Indonesia, with a minimum entitlement and
     payment equal to 24 months of benefits value and a maximum entitlement and
     payment equal to 30 months of benefits value; in the 2001

                                       B-12


     Contracts and excluding the employment agreement with Mr. Ahmad, this is an
     undiscounted cash amount equal to fifteen percent (15%) of the base salary
     (excluding pension) to reflect the hypothetical value of certain benefit
     plans and programs provided to regular Canadian residents;

          3. an undiscounted amount equal to two times the target bonus under
     the cash bonus plan of Gulf Indonesia; and

          4. pension benefits under the pension plan of Gulf Indonesia treating
     such senior officer's pension rights as fully vested.

     In addition, Mr. Wearing's employment agreement provides that if after
three years employment with Gulf Indonesia, Mr. Wearing decides to voluntarily
resign and return to Canada, Gulf Canada (now Conoco Canada) will make
reasonable efforts to identify, at a minimum, a Director level position within
Conoco Canada to offer to Mr. Wearing. If Conoco Canada is unable to offer Mr.
Wearing a Director level position, then Mr. Wearing will be entitled to receive
from Conoco Canada termination benefits equal to two times his then current base
salary. Mr. Wearing has been employed by Gulf Indonesia since June 2001.

OPTIONS AND STOCK BASED PLANS

     Gulf Indonesia is required by the terms of the Support Agreement to
accelerate the vesting of any currently unvested Gulf Indonesia options and
accelerate the release of any Shares held in a Gulf Indonesia employee share
purchase plan so that any entitlement pursuant thereto to Shares becomes
exercisable or fully vested prior to the expiration of the Offer. In addition,
Gulf Indonesia is permitted by the terms of the Support Agreement to cancel Gulf
Indonesia options in exchange for a cash payment equal to the difference, if
any, between the Offer Price and the applicable option exercise price. All
options not exercised or cashed out prior to the expiration of the Offer shall
cease to be exercisable thereafter.

     Gulf Indonesia has an incentive stock option plan (the "Option Plan")
pursuant to which options to purchase Shares have been granted to directors,
officers and other employees of Gulf Indonesia. As of June 4, 2002, Gulf
Indonesia had outstanding options entitling the holders thereof to purchase
approximately 5,199,227 Shares, at exercise prices ranging from $8.06 to $20.06
per Share. The Option Plan provides that, if an offer is made to purchase all of
the Shares, the compensation committee of the Board of Directors of Gulf
Indonesia may require that all or some of the options be exercised on or before
the effective date of such purchase. In connection with the Offer, Gulf
Indonesia may make arrangements to permit holders of options to exercise such
options on a conditional basis (conditional on Conoco Canada accepting and
paying for the Shares). Alternatively, Gulf Indonesia may make arrangements to
cancel options in exchange for a cash payment equal to the difference, if any,
between the Offer Price and the applicable exercise price of the options.

     Gulf Indonesia also has a Restricted Share Unit/Deferred Share Unit Plan
pursuant to which restricted share units ("RSUs") have been issued to directors
and executive officers of Gulf Indonesia. Each RSU vests after four years, and
entitles the holder to one Share or a cash payment equal to the market price of
one Share on the date of exercise. Each RSU will vest as a result of the Offer,
and each holder of a RSU will be entitled to a cash payment equal to the Offer
Price for each RSU. Holders of RSUs will be entitled to an aggregate payment of
$399,780 with respect to their RSUs in connection with the Offer, of which
officers will receive $266,325, directors will receive $120,575 and a former
director will receive $12,880. Any RSU not exercised prior to the expiration of
the Offer will terminate. The Restricted Share Unit/Deferred Share Unit Plan
will terminate on the expiration of the Offer.

     Between February 2001 and May 2002, each director of Gulf Indonesia had the
option of taking all or part of the cash component of his or her annual retainer
in Shares. If the director elected to take Shares, the Shares were eligible for
participation in Gulf Indonesia's Leveraged Purchase Plan ("LPP"). The LPP
provided that for each Share acquired by the participant and held for two years,
the participant would be granted three stock appreciation rights ("SARs"). Each
SAR entitles the holder to receive the difference between the market price of
the Shares on the date the SAR is exercised and the market price on the date the
SAR was granted. The SARs acquired under the LPP will immediately vest and be
exercisable upon

                                       B-13


consummation of the Offer. Upon consummation of the Offer, holders of SARs will
receive an aggregate cash payment of $286,476 in connection with the Offer, of
which officers will receive $109,770, directors will receive $72,861 and former
officers and directors will receive $103,845.

     The Board of Directors of Gulf Indonesia has authorized and directed the
compensation committee to cause the acceleration and vesting of all options,
RSUs and SARs prior to or concurrent with the consummation of the Offer.

          INTERESTS OF DIRECTORS AND SENIOR OFFICERS OF GULF INDONESIA
                    IN MATERIAL CONTRACTS WITH CONOCO CANADA

     None of the directors or senior officers of Gulf Indonesia nor any of their
associates nor, to the knowledge of the directors or senior officers after
reasonable inquiry, any person or company who owns more than 10% of any class of
equity securities of Gulf Indonesia, has any interest in any material contract
to which Conoco Canada is a party.

                              RECENT DEVELOPMENTS

     In October 1998, Gulf Indonesia commenced deliveries of natural gas under a
long-term agreement to the Duri Steamflood operated by PT Caltex Pacific
Indonesia ("Caltex"). During the first two years of this agreement, gas takes by
Caltex were above the take-or-pay levels specified in the agreement. In 2001,
gas takes by Caltex fell below the contracted take-or-pay quantities, with Gulf
Indonesia's share of gas sales averaging 137 mmcf/day (million cubic feet per
day) for the first three quarters of 2001 (approximately seven per cent below
the take-or-pay quantity). When sales fall below take-or-pay quantities, Gulf
Indonesia receives, as payment, oil volumes equivalent to the take-or-pay
quantities of gas, and is to deliver the make-up gas when the requirements of
Caltex increase to above take-or-pay levels. In September 2001, Caltex increased
its gas takes significantly and sales averaged 149 mmcf/day for the fourth
quarter of 2001. This trend continued into the first quarter of 2002 with sales
averaging 153 mmcf/day. However, for the second quarter of 2002 to date, gas
takes by Caltex have declined substantially, with Gulf Indonesia's share of gas
sales averaging 134 mmcf/day for the first two months of the quarter
(approximately ten per cent below the take-or-pay quantity). Caltex has recently
nominated gas volumes at levels below the contracted take-or-pay quantities for
the remainder of the second quarter of 2002.

     In December 2000, Gulf Indonesia and Pertamina signed agreements for
additional gas deliveries to the Duri Steamflood. Gas for this contract is to be
supplied primarily from the Suban field where construction of the field
facilities is scheduled to be completed in late 2002.

     Gulf Indonesia is unable to predict, at this time, with certainty the level
of future takes by Caltex under these long term agreements.

                         VALUATION AND FAIRNESS OPINION

     The Valuation and Fairness Opinion of RBC is set out in full at Annex A
hereto and is summarized in the Schedule TO filed by Conoco and Conoco Canada
under the heading "Valuation and Fairness Opinion". Gulf Indonesia believes
there are no "prior valuations", as defined under Ontario Securities Commission
Rule 61-501 or Commission des valeurs mobilieres du Quebec Policy Q-27, required
to be disclosed.

                                       B-14


                               OTHER INFORMATION

     There is no other information not disclosed herein but known to the Board
of Directors of Gulf Indonesia which would reasonably be expected to affect the
decision of the holders of Shares to accept or reject the Offer.

                                MATERIAL CHANGES

     The directors and senior officers of Gulf Indonesia are not aware of any
information that indicates any material change in the affairs of Gulf Indonesia
since March 31, 2002, the date of the last published interim financial
statements of Gulf Indonesia.

                                STATUTORY RIGHTS

     Securities legislation in certain of the provinces and territories of
Canada provides security holders of Gulf Indonesia with, in addition to any
other rights they may have at law, rights of rescission or to damages, or both,
if there is a misrepresentation in a circular or notice that is required to be
delivered to such security holders. However, such rights must be exercised
within prescribed time limits. Security holders should refer to the applicable
provisions of the securities legislation of their province or territory for
particulars of those rights or consult with a lawyer.

                                    APPROVAL

     The contents of the Statement have been approved and the delivery thereof
authorized by the Board of Directors of Gulf Indonesia.

                                       B-15

EX-99.A.1.C

                                                               EXHIBIT (a)(1)(C)

                             LETTER OF TRANSMITTAL

                            TO TENDER COMMON SHARES

                                       OF

                        GULF INDONESIA RESOURCES LIMITED

             PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 12, 2002

                                       OF

                        CONOCO CANADA RESOURCES LIMITED

                          A WHOLLY OWNED SUBSIDIARY OF

                                  CONOCO INC.

    THE OFFER EXPIRES AT 6:00 P.M., NEW YORK TIME, ON FRIDAY, JULY 19, 2002,
                         UNLESS THE OFFER IS EXTENDED.

                        The Depositary for the Offer is:

                              THE BANK OF NEW YORK
                            REORGANIZATION SERVICES

                                                                
             By Mail:                        By Facsimile:              By Hand or Overnight Delivery:
          P.O. Box 11248                     (973) 247-4077                    One Wall Street
      Church Street Station           For confirmation telephone:                Third Floor
     New York, NY 10286-1248                 (973) 247-4075                   New York, NY 10286





- --------------------------------------------------------------------------------------------------------------------------------
                                                 DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------------------------------------------------------
             NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)                                  SHARES TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S))    (ATTACH AND SIGN ADDITIONAL LIST AS NECESSARY)
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                             NUMBER OF SHARES
                                                                              CERTIFICATE     REPRESENTED BY   NUMBER OF SHARES
                                                                             NUMBER(S)(1)    CERTIFICATE(S)(1)    TENDERED(2)
                                                                           -----------------------------------------------------
                                                                                                      

                                                                            --------------------------------------------------
                                                                            --------------------------------------------------
                                                                            --------------------------------------------------
                                                                            --------------------------------------------------
                                                                            --------------------------------------------------
                                                                            --------------------------------------------------
                                                                            TOTAL SHARES
                                                                            TENDERED:
- --------------------------------------------------------------------------------------------------------------------------------
  (1) Need not be completed by book-entry shareholders.
  (2) Unless otherwise indicated, all Shares represented by share certificates delivered to the Depositary will be deemed to
      have been tendered. See Instruction 4.
- --------------------------------------------------------------------------------------------------------------------------------



     DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS BY FACSIMILE TO A NUMBER OTHER THAN THAT SET FORTH
ABOVE WILL NOT CONSTITUTE VALID DELIVERY TO THE DEPOSITARY.

     YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED
BELOW AND IF YOU ARE A U.S. SHAREHOLDER, YOU MUST ALSO COMPLETE THE SUBSTITUTE
FORM W-9 SET FORTH BELOW.

     THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. THE DEPOSITARY, THE
INFORMATION AGENT, THE DEALER MANAGERS OR YOUR BROKER OR OTHER FINANCIAL
ADVISORS MAY ASSIST YOU IN COMPLETING THIS LETTER OF TRANSMITTAL.

     This Letter of Transmittal is to be used by shareholders of Gulf Indonesia
if certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in Instruction 2 below) is utilized, if
delivery of Shares is to be made by book-entry transfer to an account maintained
by The Bank of New York (the "Depositary") at the Book-Entry Transfer Facility
(as defined under "THE OFFER -- Acceptance for Payment and Payment for Shares"
in the Offer to Purchase (as defined below)) pursuant to the procedures under
"THE OFFER -- Procedure for Tendering Shares" in the Offer to Purchase. Holders
who deliver Shares by book-entry transfer are referred to herein as "book-entry
shareholders" and other shareholders who deliver Shares are referred to herein
as "certificate shareholders".

     Shareholders (i) whose certificates for Shares are not immediately
available, (ii) who cannot comply with the procedure for book-entry transfer set
forth under "THE OFFER -- Procedure for Tendering Shares" in the Offer to
Purchase on a timely basis or (iii) who cannot deliver all other required
documents to the Depositary prior to the Expiration Date (as defined under "THE
OFFER -- Terms of the Offer; Expiration Date" in the Offer to Purchase) must
tender their Shares pursuant to the guaranteed delivery procedures set forth
under "THE OFFER -- Procedure for Tendering Shares" in the Offer to Purchase.
See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

                                        2


[ ]  CHECK HERE IF CERTIFICATE(S) HAVE BEEN LOST, DESTROYED OR STOLEN. SEE
     INSTRUCTION 11.

     Number of Shares represented by lost, destroyed or stolen certificates:
     --------------------------------------.

[ ]  CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
     TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY
     AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
     FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

     Name of Tendering Institution:

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

     Account Number:

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

     Transaction Code Number:

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

[ ]  CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A
     NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
     COMPLETE THE FOLLOWING:

     Name(s) of Registered Owner(s):

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

     Window Ticket Number (if any):

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

     Date of Execution of Notice of Guaranteed Delivery:

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

     Name of Institution which Guaranteed Delivery:

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

     If delivery is by book-entry transfer, check box (and provide the
     following):  [ ]

     Account Number:

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

     Transaction Code Number:

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

                                        3


                    NOTE: SIGNATURES MUST BE PROVIDED BELOW.
                 PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
                        LETTER OF TRANSMITTAL CAREFULLY.

Ladies and Gentlemen:

     The undersigned hereby tenders to Conoco Canada Resources Limited, a Nova
Scotia corporation ("Conoco Canada") and a wholly owned subsidiary of Conoco
Inc., a Delaware corporation ("Conoco"), the above described common shares, par
value U.S.$0.01 per share (the "Shares"), of Gulf Indonesia Resources Limited, a
New Brunswick corporation ("Gulf Indonesia"), at a purchase price of U.S.$13.25
per Share, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in Conoco
Canada's Offer to Purchase dated June 12, 2002 (the "Offer to Purchase") and in
this related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer"). The
undersigned understands that Conoco Canada reserves the right to transfer or
assign, in whole or in part, from time to time, to one or more of its affiliates
the right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Conoco Canada of its
obligations under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer. Receipt of the Offer is hereby acknowledged.

     Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), and
subject to, and effective upon, acceptance for payment of the Shares tendered
herewith in accordance with the terms of the Offer, the undersigned hereby, or
upon the order of Conoco Canada, sells, assigns and transfers to Conoco Canada,
all right, title and interest in and to all the Shares that are being tendered
hereby (and any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect thereof on or after the date
of the Offer to Purchase (collectively, "Distributions")) and irrevocably
constitutes and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and all
Distributions), with full power of substitution and resubstitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver certificates for such Shares (and any and all Distributions) or
transfer ownership of such Shares (and any and all Distributions) on the account
books maintained by the Book-Entry Transfer Facility, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Conoco Canada upon receipt by the Depositary of the Offer Price,
(ii) present such Shares (and any and all Distributions) for transfer on the
books of Gulf Indonesia and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares (and any and all
Distributions), all in accordance with the terms of the Offer.

     By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints each officer or director of Conoco Canada, and any other designee of
Conoco Canada, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution and resubstitution to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder and
any and all Distributions (i) to vote at any annual or special meeting of Gulf
Indonesia's shareholders or any adjournment or postponement thereof or otherwise
in such manner as each such attorney-in-fact and proxy or his or her substitute
shall in his or her sole discretion deem proper with respect to, (ii) to execute
any written consent concerning any matter as each such attorney-in-fact and
proxy or his or her substitute shall in his or her sole discretion deem proper
with respect to and (iii) to otherwise act as each such attorney-in-fact and
proxy or his or her substitute shall in his or her sole discretion deem proper
with respect to, all Shares (and any and all Distributions) tendered hereby and
accepted for payment by Conoco Canada. All such powers of attorney and proxies
will be considered coupled with an interest in the tendered Shares. This
appointment will be effective if and when, and only to the extent that, Conoco
Canada deposits payment for such Shares with the Depositary. This power of
attorney and proxy are irrevocable and are granted in consideration for payment
of such Shares in accordance with the terms of the Offer. Upon the effectiveness
of such appointment, all prior powers of attorney, proxies and consents given by
the undersigned at any time with respect to such Shares (and any and all
Distributions) will be revoked, and no subsequent powers of attorney, proxies or
consents may be given by the undersigned with

                                        4


respect thereto (and, if given, will not be deemed effective). Conoco Canada
reserves the right to require that, in order for the Shares to be deemed validly
tendered, immediately upon Conoco Canada's acceptance for payment of such
Shares, Conoco Canada must be able to exercise full voting rights with respect
to such Shares (and any and all Distributions).

     The undersigned hereby represents and warrants that (i) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, (ii) the tender of such Shares and all
Distributions complies with applicable laws and (iii) when the same are accepted
for payment by Conoco Canada, Conoco Canada will acquire good, marketable
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges, encumbrances and choses in action and the same
will not be subject to any adverse claims. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Depositary or Conoco
Canada to be necessary or desirable to complete the sale, assignment and
transfer of the Shares tendered hereby and all Distributions. In addition, the
undersigned shall remit and transfer promptly to the Depositary for the account
of Conoco Canada all Distributions in respect of the Shares tendered hereby,
accompanied by the appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Conoco Canada shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby or deduct from
such purchase price the amount or value of such Distribution as determined by
Conoco Canada in its sole discretion.

     The undersigned agrees that by virtue of the execution by the undersigned
of an English language form of this Letter of Transmittal, the undersigned shall
be deemed to have required that any contract evidenced by the Offer as accepted
through this Letter of Transmittal as well as all documents relating thereto, be
drawn up exclusively in the English language. En signant une version anglaise de
la presente lettre d'envoi, convient d'etre repute avoir demande que tous les
contrats decoulant de l'offre acceptee au moyen de cette lettre d'envoi, et tous
les documents s'y rapportant soient rediges exclusivement en anglais.

     All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
successors and assigns of the undersigned. This tender is irrevocable, provided
that the Shares tendered pursuant to the Offer may be withdrawn at any time
prior to Conoco Canada's acceptance for payment of Shares validly tendered in
the Offer. Such Shares may also be withdrawn if Conoco Canada has not deposited
with the Depositary funds sufficient to pay for such Shares within three
business days of such Shares having been accepted for payment. In addition, if
Conoco Canada has not accepted tendered Shares for payment by August 11, 2002,
such Shares may be withdrawn on or after August 11, 2002 until Conoco Canada
accepts such Shares for payment.

     The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described under "THE OFFER -- Procedure for Tendering
Shares" in the Offer to Purchase and in the instructions hereto will constitute
a binding agreement between the undersigned and Conoco Canada upon the terms and
subject to the conditions of the Offer (and if the Offer is extended or amended,
the terms or conditions of any such extension or amendment). Without limiting
the foregoing, if the price to be paid in the Offer is amended in accordance
with the terms of the Offer to Purchase, the price to be paid to the undersigned
will be the amended price notwithstanding the fact that a different price is
stated in this Letter of Transmittal. The undersigned recognizes that under
certain circumstances set forth in the Offer to Purchase, Conoco Canada may not
be required to accept for payment any of the Shares tendered hereby.

     Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Shares purchased and/or issue any
certificates for any Shares not tendered or accepted for payment in the name(s)
of the registered holder(s) appearing above under "Description of Shares
Tendered". Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of all Shares
purchased and/or return any certificates for any Shares not tendered or not
accepted for payment to the address(es) of the registered holder(s) appearing
above under "Description of Shares Tendered". In the event that the boxes
entitled "Special Payment Instructions" and "Special Delivery Instructions" are
both completed, please issue the check for the purchase price of all Shares
purchased and/or

                                        5


return any certificates evidencing Shares not tendered or not accepted for
payment to the person(s) so indicated. Unless otherwise indicated herein in the
box entitled "Special Payment Instructions", please credit any Shares tendered
herewith by book-entry transfer that are not accepted for payment by crediting
the account at the Book-Entry Transfer Facility designated above. The
undersigned recognizes that Conoco Canada has no obligation pursuant to the
"Special Payment Instructions" to transfer any Shares from the name of the
registered holder(s) thereof if Conoco Canada does not accept for payment any of
the Shares so tendered.

                                        6


                          SPECIAL PAYMENT INSTRUCTIONS
                        (SEE INSTRUCTIONS 1, 5, 6 AND 7)

     To be completed ONLY if the check for the purchase price of the Shares
accepted for payment is to be issued in the name of someone other than the
undersigned, if certificates for any Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned or if
any Shares tendered hereby and delivered by book-entry transfer that are not
accepted for payment are to be returned by credit to an account maintained at a
Book-Entry Transfer Facility other than the account indicated above.

Issue check and/or stock certificates to:

Name:
      --------------------------------------------------------------------------
                                 (PLEASE PRINT)

- -------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Address:
         -----------------------------------------------------------------------

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

- -------------------------------------------------------------------------------
                         (INCLUDE ZIP CODE/POSTAL CODE)

- -------------------------------------------------------------------------------
                   (TAXPAYER IDENTIFICATION, SOCIAL SECURITY
                          OR SOCIAL INSURANCE NUMBER)

                  (U.S. Shareholders see Substitute Form W-9)

[ ] Credit Shares delivered by book-entry transfer and not purchased to the
    Book-Entry Transfer Facility account:
- -------------------------------------------------------------------------------
                                (ACCOUNT NUMBER)

                         SPECIAL DELIVERY INSTRUCTIONS
                         (SEE INSTRUCTIONS 1, 5 AND 7)

     To be completed ONLY if certificates for any Shares not tendered or not
accepted for payment and/or the check for the purchase price of any Shares
accepted for payment is to be sent to someone other than the undersigned or to
the undersigned at an address other than that shown under "Description of Shares
Tendered".

Mail check and/or stock certificates to:

Name:
      --------------------------------------------------------------------------
                                 (PLEASE PRINT)

- -------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Address:
         -----------------------------------------------------------------------

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

- -------------------------------------------------------------------------------
                         (INCLUDE ZIP CODE/POSTAL CODE)

- -------------------------------------------------------------------------------
                   (TAXPAYER IDENTIFICATION, SOCIAL SECURITY
                          OR SOCIAL INSURANCE NUMBER)

                  (U.S. Shareholders see Substitute Form W-9)

                                        7


                                   IMPORTANT
                          SHAREHOLDER PLEASE SIGN HERE
        (IF A U.S. SHAREHOLDER, ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)

X
- --------------------------------------------------------------------------------

X
- --------------------------------------------------------------------------------
                           Signature(s) of Holder(s)

Dated:
- --------------------------------------------------------------------------------
     (Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please provide the following
information and see Instruction 5.)

Name(s): -----------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Name of
Firm: --------------------------------------------------------------------

Capacity (full title): -------------------------------------------------------
                              (SEE INSTRUCTION 5)

Address: -----------------------------------------------------------------------
                         (INCLUDE ZIP CODE/POSTAL CODE)

Area Code and Telephone Number: -----------------------------------------------

Taxpayer Identification, Social Security or Social Insurance
Number: ----------------------------------------

                  (U.S. Shareholders See Substitute Form W-9)

Dated:
- -------------------------------------------, 2002

                           GUARANTEE OF SIGNATURE(S)
                           (SEE INSTRUCTIONS 1 AND 5)
                     FOR USE BY FINANCIAL INSTITUTIONS ONLY
                   PLACE MEDALLION GUARANTEE IN SPACE BELOW.

Authorized Signature(s):--------------------------------------------------------

Name(s): -----------------------------------------------------------------------

Name of
Firm: -------------------------------------------------------------------
                                 (PLEASE PRINT)

Address: -----------------------------------------------------------------------
                         (INCLUDE ZIP CODE/POSTAL CODE)

 Area Code and Telephone Number: -----------------------------------------------

Dated:
- -------------------------------------------, 2002

                                        8


                                  INSTRUCTIONS

             FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

     1. Guarantee of Signatures.  No signature guarantee is required on this
Letter of Transmittal if (1) this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this section, includes any
participant in the Book-Entry Transfer Facility's systems whose name appears on
a security position listing as the owner of the Shares) of Shares tendered
herewith and such registered holder(s) has not completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (2) such Shares are tendered for
the account of a financial institution (which includes most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Program or the Stock Exchange Medallion Program or by any other
"Eligible Guarantor Institution", as such term is defined in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended (an "Eligible Institution"). In
all other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5.

     2. Requirements of Tender.  This Letter of Transmittal is to be completed
by shareholders of Gulf Indonesia either if certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if delivery of the Shares is
to be made by book-entry transfer pursuant to the procedure set forth herein and
under "THE OFFER -- Procedure for Tendering Shares" in the Offer to Purchase.
For a shareholder validly to tender Shares pursuant to the Offer, (1) a properly
completed and duly executed Letter of Transmittal (or a facsimile copy hereof)
with any required signature guarantees, certificates for Shares to be tendered
and any other required document must be received by the Depositary prior to the
Expiration Date at its address set forth herein; (2) such Shares must be
delivered pursuant to the procedures for book-entry transfer set forth herein
and under "THE OFFER -- Procedure for Tendering Shares" in the Offer to Purchase
(and the book-entry confirmation (as defined under "THE OFFER -- Acceptance for
Payment and Payment for Shares" in the Offer to Purchase) must be received by
the Depositary, including an Agent's Message if the tendering shareholder has
not delivered this Letter of Transmittal), prior to the Expiration Date; or (3)
the tendering shareholder must comply with the guaranteed delivery procedures
set forth herein and under "THE OFFER -- Procedure for Tendering Shares" in the
Offer to Purchase.

     Shareholders whose certificates for Shares are not immediately available,
who cannot comply with the procedures for book-entry transfer on a timely basis
or who cannot deliver all required documents to the Depositary prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth herein and under "THE OFFER -- Procedure for Tendering
Shares" in the Offer to Purchase.

     Pursuant to such guaranteed delivery procedures, (1) such tender must be
made by or through an Eligible Institution, (2) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Conoco Canada, must be received by the Depositary prior to the Expiration Date
and (3) the certificates for all tendered Shares, in proper form for transfer
(or a book-entry confirmation with respect to all such Shares), together with a
properly completed and duly executed Letter of Transmittal (or a facsimile copy
hereof), with any required signature guarantees (or, in the case-of a book-entry
transfer, an Agent's Message in lieu of a Letter of Transmittal), and any other
required documents must be received by the Depositary within three trading days
after the Expiration Date. A "trading day" is any day on which the New York
Stock Exchange is open for business.

     The term "Agent's Message" means a message transmitted electronically by
the Book-Entry Transfer Facility to, and received by, the Depositary and forming
a part of a book-entry confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of this Letter of Transmittal and that Conoco Canada may
enforce such agreement against the participant.

                                        9


     THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL
BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, IT IS RECOMMENDED THAT THE SHAREHOLDER USE PROPERLY INSURED REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.

     No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering shareholders, by executing
this Letter of Transmittal (or a manually signed facsimile copy), waive any
right to receive any notice of acceptance of their Shares for payment.

     3. Inadequate Space.  If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.

     4. Partial Tenders (Not Applicable to Shareholders Who Tender by Book-Entry
Transfer).  If fewer than all the Shares evidenced by any certificate delivered
to the Depositary herewith are to be tendered hereby, fill in the number of
Shares that are to be tendered in the box entitled "Number of Shares Tendered".
In any such case, new certificates for the remainder of the Shares that were
evidenced by the old certificates will be sent to the registered holder, unless
otherwise provided in the appropriate box on this Letter of Transmittal, as soon
as practicable after the Expiration Date or the termination of the Offer. All
Shares represented by certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.

     5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.  If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.

     If any of the Shares tendered hereby are held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.

     If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.

     If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the certificates. Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution.

     If this Letter of Transmittal or any stock certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Conoco Canada of the authority of such person to so act must be
submitted.

     If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for any Shares
not tendered or not accepted for payment are to be issued in the name of a
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution.

     6. Stock Transfer Taxes.  Except as otherwise provided in this Instruction
6, Conoco Canada will pay all stock transfer taxes with respect to the transfer
and sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for any Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the
                                        10


registered holder(s) or such other person) payable on account of the transfer to
such other person will be deducted from the purchase price of such Shares
purchased unless evidence satisfactory to Conoco Canada of the payment of such
taxes, or exemption therefrom, is submitted.

     Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates evidencing the Shares
tendered hereby.

     7. Special Payment and Delivery Instructions.  If a check for the purchase
price of any Shares accepted for payment is to be issued in the name of, and/or
certificates for any Shares not accepted for payment or not tendered are to be
issued in the name of, a person other than the signer of this Letter of
Transmittal or if a check is to be sent, and/or such certificates are to be
returned, to a person other than the signer of this Letter of Transmittal, or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Any shareholder(s) delivering Shares by
book-entry transfer may request that Shares not purchased be credited to such
account maintained at the Book-Entry Transfer Facility as such shareholder(s)
may designate in the box entitled "Special Payment Instructions". If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above as
the account from which such Shares were delivered.

     8. Backup Withholding.  Under U.S. Federal income tax law, a shareholder
whose tendered Shares are accepted for payment is required, unless an exemption
applies, to provide the Depositary (as payer) with such shareholder's correct
taxpayer identification number ("TIN") on the Substitute Form W-9 below in order
to avoid "backup withholding" of U.S. Federal income tax on payments of cash
pursuant to the Offer. In addition, the shareholder must certify under penalties
of perjury that such TIN is correct and that such shareholder is not subject to
backup withholding. If a tendering shareholder is subject to backup withholding,
such shareholder must cross out item (2) of the Certification box on the
Substitute Form W-9. If such shareholder is an individual, the taxpayer
identification number is such shareholder's social security number.

     The tendering shareholder should indicate in Part III of the Substitute
Form W-9 if the tendering shareholder has not been issued a TIN and has applied
for or intends to apply for a TIN in the near future, in which case the
tendering shareholder should complete the Certificate of Awaiting Taxpayer
Identification Number below. Notwithstanding that the shareholder has indicated
in Part III that a TIN has been applied for and has completed the Certificate of
Awaiting Taxpayer Identification Number, the Depositary will withhold 30% of all
cash payments, if any, made pursuant to the Offer until a TIN is provided to the
Depositary. However, such amounts will be refunded to such shareholder if a TIN
is provided to the Depositary within 60 days.

     If the Depositary is not provided with the correct taxpayer identification
number or the certifications described above, the shareholder may be subject to
a $50 penalty imposed by the Internal Revenue Service. In addition, payments of
cash to such shareholder with respect to Shares purchased pursuant to the Offer
may be subject to backup withholding of 30%.

     Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the U.S. Federal income tax
liability of the person subject to the backup withholding, provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of taxes, a refund can be obtained by filing an income tax return
with the IRS.

     The shareholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.

     Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Non-corporate non-U.S. shareholders should complete and sign the main signature
form and a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for
United States Tax Withholding, signed under penalties of perjury, attesting to
that shareholder's exempt status, in order to avoid backup withholding. A copy
of Form W-8BEN may be obtained from the Information Agent. Exempt shareholders,
other than non-U.S. shareholders, should furnish their TIN, write "Exempt" in
                                        11


Part II of the Substitute Form W-9 below, and sign, date and return the
Substitute Form W-9 to the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for more
instructions.

     9. Requests for Assistance or Additional Copies.  Questions and requests
for assistance and requests for additional copies of the Offer to Purchase, this
Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Managers at their addresses and
phone numbers set forth below. You may also contact your broker, dealer,
commercial bank or trust company or other nominee for assistance concerning the
Offer.

     10. Waiver of Conditions.  Subject to the Offer to Purchase and the terms
of the Support Agreement (as described under "THE SUPPORT AGREEMENT" in the
Offer to Purchase), Conoco Canada reserves the right in its sole discretion to
waive, at any time or from time to time prior to the Expiration Date, any of the
specified conditions of the Offer, in whole or in part.

     11. Lost, Destroyed or Stolen Certificates.  If any certificate
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary by checking the appropriate box and indicating
the number of Shares lost, destroyed or stolen. The shareholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
certificates have been followed.

     IMPORTANT:  TO TENDER SHARES PURSUANT TO THE OFFER, THIS LETTER OF
TRANSMITTAL (OR A FACSIMILE COPY HEREOF) TOGETHER WITH ANY REQUIRED SIGNATURE
GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, ANY AGENT'S MESSAGE IN
LIEU OF A LETTER OF TRANSMITTAL, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE
RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES
FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE
DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR
TO THE EXPIRATION DATE, OR THE TENDERING SHAREHOLDERS MUST COMPLY WITH THE
PROCEDURES FOR GUARANTEED DELIVERY.

                IMPORTANT TAX INFORMATION FOR U.S. SHAREHOLDERS

     Purpose of Substitute Form W-9.  All shareholders who are U.S. persons
surrendering Shares pursuant to the Offer should complete and sign the main
signature form and the Substitute Form W-9 to provide information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to Conoco Canada and the
Depositary). The shareholder is required to notify the Depositary of such
shareholder's correct taxpayer identification number by completing the form
contained herein certifying that the taxpayer identification number provided on
Substitute Form W-9 is correct (or that such shareholder is awaiting a taxpayer
identification number).

     What Number to Give the Depositary.  The shareholder is required to give
the Depositary the social security number or employer identification number of
the record owner of the Shares. If the Shares are in more than one name or are
not in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report.

                                        12


      CERTIFICATE OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
               TO BE COMPLETED BY ALL TENDERING U.S. SHAREHOLDERS
                              (SEE INSTRUCTION 8)

                       PAYER'S NAME: THE BANK OF NEW YORK

                                                                     
- ------------------------------------------------------------------------------------------------------------------
  SUBSTITUTE               PART I: Taxpayer Identification Number -- For
  FORM W-9                 all accounts, enter your Taxpayer                       Social Security Number
                           Identification Number in the box at right. (For
  DEPARTMENT OF THE        most individuals, this is your social security                    OR
  TREASURY INTERNAL        number. If you do not have a number, see
  REVENUE SERVICE          Obtaining a Number in the enclosed Guidelines    Other Taxpayer Identification Number
                           for Certification of Taxpayer Identification     -------------------------------------
  PAYER'S REQUEST FOR      Number (TIN) on Substitute Form W-9 (the        (If awaiting TIN, write "Applied For")
  TAXPAYER IDENTIFICATION  "Guidelines")). Certify by signing and dating
  NUMBER ("TIN") AND       below.
  CERTIFICATION
                           Note: If the account is in more than one name,
                           check in the enclosed Guidelines to determine
                           which number to give the payer.
                          ----------------------------------------------------------------------------------------
  PLEASE FILL IN YOUR      PART II: For Payees exempt from backup withholding, see the enclosed Guidelines for
  NAME AND ADDRESS BELOW.  Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
                           instructed therein.
                          ----------------------------------------------------------------------------------------

  -----------------------  PART III: Certification -- Under penalties of perjury, I certify that:
  NAME
- -----------------------    (1) The number shown on this form is my correct Taxpayer Identification Number (or I am
  ADDRESS (NUMBER AND          waiting for a number to be issued to me);
  STREET)
- -----------------------    (2) I am not subject to backup withholding because (a) I am exempt from backup
  CITY, STATE AND ZIP          withholding, or (b) I have not been notified by the Internal Revenue Service (the
  CODE                         "IRS") that I am subject to backup withholding as a result of a failure to report
                               all interest or dividends or (c) the IRS has notified me that I am no longer
                               subject to backup withholding; and
                           (3) I am a U.S. Person (including a U.S. Resident Alien).
                           Certification Instructions -- You must cross out item (2) in Part III if you have been
                           notified by the IRS that you are subject to backup withholding because of
                           underreporting interest or dividends on you tax returns. However, if after being
                           notified by the IRS that you were subject to backup withholding, you received another
                           notification from the IRS that you were no longer subject to backup withholding, do not
                           cross out Item (2). (Also see instructions in the enclosed Guidelines.)
- ------------------------------------------------------------------------------------------------------------------
 THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
 CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.

  -----------------------------------------------------------------------   -------------------------------------
  SIGNATURE                                                                DATE
- ------------------------------------------------------------------------------------------------------------------



NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
      BACKUP WITHHOLDING OF 30% OF ANY PAYMENTS MADE TO SUCH U.S. SHAREHOLDERS.
      U.S. SHAREHOLDERS SHOULD REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
      OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
      DETAILS. U.S. SHAREHOLDERS MUST COMPLETE THE FOLLOWING CERTIFICATION IF
      SUCH SHAREHOLDERS ARE AWAITING THEIR TIN.

                                        13


             CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

     I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate IRS
Center or Social Security Administration Office or (2) I intend to mail or
deliver an application in the near future. I understand that if I do not provide
a Taxpayer Identification Number by the time of payment, 30% of all payments to
be made to me thereafter will be withheld until I provide a number.

Signature:
- ------------------------------------------------------                     Date:
- ------------------------

                                        14


     Questions and requests for assistance may be directed to the Information
Agent and requests for additional copies of the Offer to Purchase, this Letter
of Transmittal, the Notice of Guaranteed Delivery, the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 and other
tender offer materials may be directed to the Information Agent or the Dealer
Managers at their telephone numbers and addresses set forth below and will be
furnished promptly at Conoco Canada's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.

                                [INNISFREE LOGO]

                         501 Madison Avenue, 20th Floor
                            New York, New York 10022
                 Banks and Brokers Call Collect: (212) 750-5833
                   All Others Call Toll-Free: (888) 750-5834

                     The Dealer Managers for the Offer are:

                                [JP MORGAN LOGO]
                           277 Park Avenue, 9th Floor
                               New York, NY 10172
                           Toll free: (866) 262-0777
                           Telephone: (212) 622-2624

                              [MERRILL LYNCH LOGO]
                              Bow Valley Square IV
                        Suite 1650, 250-6th Avenue S.W.
                                Calgary, Alberta
                                 Canada T2P 3H7
                           Telephone: (403) 231-7318

EX-99.A.1.D

                                                               EXHIBIT (a)(1)(D)

                         NOTICE OF GUARANTEED DELIVERY

                                      FOR

                            TENDER OF COMMON SHARES

                                       OF

                        GULF INDONESIA RESOURCES LIMITED

    THE OFFER EXPIRES AT 6:00 P.M., NEW YORK TIME, ON FRIDAY, JULY 19, 2002,
                         UNLESS THE OFFER IS EXTENDED.

     As set forth under "THE OFFER -- Procedure for Tendering Shares" in Conoco
Canada's Offer to Purchase dated June 12, 2002 (the "Offer to Purchase"), this
form must be used to accept the Offer (as defined below) if and to the extent
that (i) certificates representing the common shares, par value U.S.$0.01 per
share (the "Shares"), of Gulf Indonesia Resources Limited, a New Brunswick
corporation, are not immediately available, (ii) the procedure for book-entry
transfer set forth under "THE OFFER -- Procedure for Tendering Shares" in the
Offer to Purchase cannot be complied with on a timely basis or (iii) time will
not permit all required documents to be delivered to The Bank of New York (the
"Depositary") prior to the Expiration Date (as defined under "THE OFFER -- Terms
of the Offer; Expiration Date" in the Offer to Purchase). To be effective, this
form must be properly completed, duly executed and delivered by hand, overnight
delivery or mail or transmitted by facsimile to the Depositary, at the
addresses/numbers set forth below, prior to the Expiration Date and must include
a guarantee by an Eligible Institution (as defined under "THE OFFER -- Procedure
for Tendering Shares" in the Offer to Purchase). See "THE OFFER -- Procedure for
Tendering Shares" in the Offer to Purchase.

                        The Depositary for the Offer is:

                              THE BANK OF NEW YORK
                            REORGANIZATION SERVICES

                                                          
           By Mail:                      By Facsimile:          By Hand or Overnight Delivery:
        P.O. Box 11248                  (973) 247-4077                  One Wall Street
     Church Street Station        For confirmation telephone:             Third Floor
    New York, NY 10286-1248             (973) 247-4075                New York, NY 10286



     DELIVERY OF THIS FORM TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSIONS BY FACSIMILE TO A NUMBER OTHER THAN THAT SET FORTH ABOVE WILL NOT
CONSTITUTE VALID DELIVERY TO THE DEPOSITARY.

     THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.


Ladies and Gentlemen:

     The undersigned hereby tenders to Conoco Canada Resources Limited, a Nova
Scotia corporation and a wholly owned subsidiary of Conoco Inc., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"), receipt
of which is hereby acknowledged, the number of Shares set forth below, all
pursuant to the guaranteed delivery procedures set forth under "THE
OFFER -- Procedure for Tendering Shares" in the Offer to Purchase.

Name(s) of Record Holder(s)

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

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

- -------------------------------------------------------------------------------
                                  PLEASE PRINT

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

- -------------------------------------------------------------------------------
                                  ADDRESS(ES)

- -------------------------------------------------------------------------------
                              ZIP CODE/POSTAL CODE

- -------------------------------------------------------------------------------
                     DAYTIME AREA CODE AND TELEPHONE NUMBER

- -------------------------------------------------------------------------------
                           SIGNATURE(S) OF HOLDER(S)

Number of Shares

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

Certificate Nos. (if available)

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

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

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

(Check box if Shares will be tendered by book-entry transfer)

[ ] The Depository Trust Company

Account Number:
                  --------------------------------------------------------------

Dated:
       --------------------------------------------------------------

                                        2


                                   GUARANTEE
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     The undersigned, an Eligible Institution (as defined under "THE
OFFER -- Procedure for Tendering Shares" in the Offer to Purchase), hereby
guarantees delivery to the Depositary of the certificates representing the
Shares tendered hereby, in proper form for transfer, or a book-entry
confirmation (as defined under "THE OFFER -- Acceptance for Payment and Payment
for Shares" in the Offer to Purchase) with respect to such Shares, together with
a properly completed and duly executed Letter of Transmittal (or a facsimile
copy thereof), together with any required signature guarantees (or, in the case
of a book entry transfer, an Agent's Message (as defined under "THE
OFFER -- Procedure for Tendering Shares" in the Offer to Purchase) in lieu of
the Letter of Transmittal), and any other required documents, all within three
trading days after the Expiration Date. A "trading day" is a day on which the
New York Stock Exchange is open for business.

     Failure to comply with the foregoing could result in a financial loss to
such Eligible Institution.

Name of Firm:

Address:
                                                            ZIP CODE/POSTAL CODE

Area Code and Telephone Number:
                              AUTHORIZED SIGNATURE

Name:
                              PLEASE TYPE OR PRINT

Title:

Dated:

NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM. CERTIFICATES FOR
      SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

                                        3

EX-99.A.1.E

                                                               EXHIBIT (a)(1)(E)

                           OFFER TO PURCHASE FOR CASH

                      ALL OF THE OUTSTANDING COMMON SHARES

                                       OF

                        GULF INDONESIA RESOURCES LIMITED

                                      FOR

                        U.S.$13.25 FOR EACH COMMON SHARE

                                       BY

                        CONOCO CANADA RESOURCES LIMITED,

                          A WHOLLY OWNED SUBSIDIARY OF

                                  CONOCO INC.

    THE OFFER EXPIRES AT 6:00 P.M., NEW YORK TIME, ON FRIDAY, JULY 19, 2002,
                         UNLESS THE OFFER IS EXTENDED.

                                                                   June 12, 2002

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

     We have been engaged by Conoco Canada Resources Limited, a Nova Scotia
corporation ("Conoco Canada") and a wholly owned subsidiary of Conoco Inc., a
Delaware corporation ("Conoco"), in connection with Conoco Canada's offer to
purchase all of the outstanding common shares, par value U.S.$0.01 per share
(the "Shares"), of Gulf Indonesia Resources Limited, a New Brunswick corporation
("Gulf Indonesia"), not owned by Conoco Canada. The offer to purchase is being
made at a price of U.S.$13.25 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (each as defined below and which, together with any amendments or
supplements thereto, collectively constitute the "Offer").

     Please furnish copies of the enclosed materials to those of your clients
for whom you hold Shares registered in your name or in the name of your nominee.

     Enclosed herewith are copies of the following documents:

          1. The Offer to Purchase dated June 12, 2002 (the "Offer to
     Purchase");

          2. The Letter of Transmittal to be used by shareholders of Gulf
     Indonesia accepting the Offer and tendering Shares, including a
     Certification of Taxpayer Identification Number on Substitute Form W-9, to
     be used by U.S. shareholders of Gulf Indonesia in accepting the Offer (the
     "Letter of Transmittal");

          3. A letter to shareholders of Gulf Indonesia from the Chairman of the
     Board of Directors of Gulf Indonesia (the "Chairman's Letter") accompanied
     by Gulf Indonesia's Solicitation/Recommendation Statement on Schedule 14D-9
     ("the Schedule 14D-9");

          4. A printed form of a letter that may be sent to your clients for
     whose accounts you hold Shares in your name or in the name of a nominee,
     with space provided for obtaining such client's instructions with regard to
     the Offer;

          5. A Notice of Guaranteed Delivery to be used to accept the Offer, if
     and to the extent that Shares and all other required documents are not
     immediately available or cannot be delivered to The Bank of New York (the
     "Depositary") by the Expiration Date (as defined in the Offer to Purchase)
     or if the


     procedure for book-entry transfer set forth in the Offer to Purchase cannot
     be completed by the Expiration Date;

          6. Guidelines for Certification of Taxpayer Identification Number on
     Substitute Form W-9;

          7. A return envelope addressed to the Depositary; and

          8. A French translation of the Offer to Purchase, the Letter of
     Transmittal, the Schedule 14D-9, the Chairman's Letter and the Notice of
     Guaranteed Delivery, each of which should be disseminated to your clients
     having an address in the province of Quebec, Canada.

     Should you require any additional copies of the foregoing documents please
contact either Innisfree M&A Incorporated, the Information Agent, or us at the
respective addresses and telephone numbers set forth on the back cover of the
enclosed Offer to Purchase.

     WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY.  PLEASE NOTE THAT THE OFFER
WILL EXPIRE AT 6:00 P.M., NEW YORK TIME, ON FRIDAY, JULY 19, 2002, UNLESS THE
OFFER IS EXTENDED.

     THE OFFER IS BEING MADE PURSUANT TO THE SUPPORT AGREEMENT DATED AS OF JUNE
7, 2002 (THE "SUPPORT AGREEMENT"), AMONG CONOCO, CONOCO CANADA AND GULF
INDONESIA. THE BOARD OF DIRECTORS OF GULF INDONESIA AND A COMMITTEE OF
INDEPENDENT DIRECTORS OF GULF INDONESIA (THE "INDEPENDENT COMMITTEE") HAVE (1)
APPROVED THE OFFER AND THE SUPPORT AGREEMENT AND (2) DETERMINED THAT THE OFFER
IS FAIR TO THE SHAREHOLDERS OF GULF INDONESIA (OTHER THAN CONOCO CANADA) AND IN
THE BEST INTERESTS OF GULF INDONESIA AND THE SHAREHOLDERS OF GULF INDONESIA
(OTHER THAN CONOCO CANADA). THE BOARD OF DIRECTORS OF GULF INDONESIA AND THE
INDEPENDENT COMMITTEE RECOMMEND THAT SHAREHOLDERS OF GULF INDONESIA ACCEPT THE
OFFER AND TENDER THEIR SHARES IN THE OFFER.

     In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt of (a) certificates evidencing such
Shares (or receipt by the Depositary of a book-entry confirmation (as defined in
the Offer to Purchase) with respect to such Shares), (b) a properly completed
and duly executed Letter of Transmittal (or a facsimile copy thereof), with any
required signature guarantees (or, in the case of a book-entry transfer effected
pursuant to the procedure set forth under "THE OFFER -- Procedure for Tendering
Shares" in the Offer to Purchase, an Agent's Message (as defined in the Offer to
Purchase) in lieu of the Letter of Transmittal) and (c) any other required
documents. Accordingly, tendering shareholders may be paid at different times
depending upon when certificates for Shares or book-entry confirmations with
respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID BY CONOCO
CANADA, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.

     Neither Conoco Canada nor Conoco will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent, as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. You will be reimbursed upon request for customary
mailing and handling expenses incurred by you in forwarding the enclosed
offering materials to your customers.

     Conoco Canada will pay or cause to be paid any transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.

     If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under "THE OFFER -- Procedure for Tendering Shares" in the
Offer to Purchase.

                                        2


     Questions and requests for additional copies of the enclosed materials may
be directed to Innisfree M&A Incorporated or to J.P. Morgan Securities Inc. or
Merrill Lynch & Co., the Dealer Managers, at the respective addresses and
telephone numbers set forth on the back cover of the enclosed Offer to Purchase.

                                          Very truly yours,

                                          J.P. MORGAN SECURITIES INC.

                                          MERRILL LYNCH & CO.

     NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF CONOCO CANADA, CONOCO, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGERS OR AUTHORIZE YOU OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF
TRANSMITTAL.

                                        3

EX-99.A.1.F

                                                               EXHIBIT (a)(1)(F)

                           OFFER TO PURCHASE FOR CASH

                      ALL OF THE OUTSTANDING COMMON SHARES

                                       OF

                        GULF INDONESIA RESOURCES LIMITED

                                      FOR

                        U.S.$13.25 FOR EACH COMMON SHARE

                                       BY

                        CONOCO CANADA RESOURCES LIMITED,

                          A WHOLLY OWNED SUBSIDIARY OF

                                  CONOCO INC.

THE OFFER EXPIRES AT 6:00 P.M., NEW YORK TIME, ON FRIDAY, JULY 19, 2002, UNLESS
                             THE OFFER IS EXTENDED.

                                                                   June 12, 2002

To Our Clients:

     Enclosed for your consideration is an Offer to Purchase dated June 12, 2002
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by Conoco Canada Resources Limited, a Nova Scotia
corporation ("Conoco Canada") and a wholly owned subsidiary of Conoco Inc., a
Delaware corporation ("Conoco"), to purchase all of the outstanding common
shares, par value U.S.$0.01 per share (the "Shares"), of Gulf Indonesia
Resources Limited, a New Brunswick corporation ("Gulf Indonesia"), not owned by
Conoco Canada. The Offer is being made at a price of U.S.$13.25 per Share, net
to the seller in cash, without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal. Also enclosed is a letter to shareholders of
Gulf Indonesia from the Chairman of the Board of Directors of Gulf Indonesia
accompanied by Gulf Indonesia's Solicitation/Recommendation Statement on
Schedule 14D-9 in respect of the Offer.

     We or our nominees are the holder of record of Shares held for your
account. A tender of such Shares can be made only by us as the holder of record
and pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used to tender Shares held by us for
your account.

     We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account pursuant to the terms and conditions set
forth in the Offer.

     Your attention is directed to the following:

          1. The Offer Price is U.S.$13.25 per Share, net to the seller in cash,
     without interest thereon, upon the terms and subject to the conditions of
     the Offer.

          2. The Offer is being made for all of the outstanding Shares not owned
     by Conoco Canada.

          3. The Offer is being made pursuant to the Support Agreement dated as
     of June 7, 2002 (the "Support Agreement"), among Conoco, Conoco Canada and
     Gulf Indonesia.

          4. The Board of Directors of Gulf Indonesia and a committee of
     independent directors of Gulf Indonesia (the "Independent Committee") have
     (i) approved the Offer and the Support Agreement and


     (ii) determined that the Offer is fair to the shareholders of Gulf
     Indonesia (other than Conoco Canada) and in the best interests of Gulf
     Indonesia and the shareholders of Gulf Indonesia (other than Conoco
     Canada). THE BOARD OF DIRECTORS OF GULF INDONESIA AND THE INDEPENDENT
     COMMITTEE RECOMMEND THAT SHAREHOLDERS OF GULF INDONESIA ACCEPT THE OFFER
     AND TENDER THEIR SHARES IN THE OFFER.

          5. As of the date hereof, Conoco Canada owns approximately 70.7% of
     Gulf Indonesia on a fully diluted basis. After the consummation of the
     Offer and any Second-Step Acquisition (as defined in the Offer to
     Purchase), Conoco Canada will own all of Gulf Indonesia.

          6. The Offer expires at 6:00 p.m., New York time, on Friday, July 19,
     2002 (the "Expiration Date"), unless the Offer is extended, in which event
     the term "Expiration Date" shall mean the latest time at which the Offer,
     as so extended, will expire.

          7. Tendering shareholders will not be obligated to pay brokerage fees
     or commissions to the Dealer Managers, the Depositary or the Information
     Agent or, except as set forth in Instruction 6 of the Letter of
     Transmittal, transfer taxes on the purchase of Shares by Conoco Canada
     pursuant to the Offer. However, U.S. Federal income tax backup withholding
     at a rate of 30% may be required, unless an exemption is provided or unless
     the required taxpayer identification information is provided. See
     Instruction 8 of the Letter of Transmittal.

     If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope to return
your instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the detachable
part hereof. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT
US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE.

     The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Conoco Canada may, however, in its sole discretion, take such
action as it deems necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of Conoco Canada by
J.P. Morgan Securities Inc. and Merrill Lynch & Co., the Dealer Managers for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.

                                        2


TO:
    -----------------------------------------

     INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OF THE
         OUTSTANDING COMMON SHARES OF GULF INDONESIA RESOURCES LIMITED

     The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase dated June 12, 2002 (the "Offer to Purchase"), and the related Letter
of Transmittal relating to the offer by Conoco Canada Resources Limited, a Nova
Scotia corporation ("Conoco Canada") and a wholly owned subsidiary of Conoco
Inc., a Delaware corporation, to purchase all of the outstanding common shares,
par value U.S.$0.01 per share (the "Shares"), of Gulf Indonesia Resources
Limited, a New Brunswick corporation, not owned by Conoco Canada at a price of
U.S.$13.25 per Share, net to the seller in cash, without interest thereon.

     This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in the Offer to Purchase and related Letter of Transmittal.
  Number of Shares to be Tendered:*

                                          SIGN HERE
                                      ------------------------------------------
                                          Signature(s)
                                      ------------------------------------------
                                          Please Type or Print Name(s)
                                      ------------------------------------------
                                          Please Type or Print Address(es)
                                      ------------------------------------------
                                          Area Code and Telephone Number
                                      ------------------------------------------
                                          Taxpayer Identification, Social
                                          Security
                                          or Social Insurance Number
                                          Dated:
                                      ------------------------------------------

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

* Unless otherwise indicated, it will be assumed that all your Shares are to be
  tendered.
                                        3

EX-99.A.1.G

                                                               EXHIBIT (a)(1)(G)
            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER TAXPAYER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.



- ------------------------------------------------------------
                                              GIVE THE
                                           SOCIAL SECURITY
       FOR THIS TYPE OF ACCOUNT:             NUMBER OF--
- ------------------------------------------------------------
                                   
 1.  An individual's account             The individual
 2.  Two or more individuals (joint      The actual owner of
     account)                            the account or, if
                                         combined funds, the
                                         first individual on
                                         the account(1)
 3.  Husband and wife (joint account)    The actual owner of
                                         the account or, if
                                         joint funds, either
                                         person(1)
 4.  Custodian account of a minor        The minor(2)
     (Uniform Gift to Minors Act)
 5.  Adult and minor (joint account)     The adult or, if
                                         the minor is the
                                         only contributor,
                                         the minor(1)
 6.  Account in the name of guardian or  The ward, minor or
     committee for a designated ward,    incompetent
     minor or incompetent person         person(3)
 7.  a. The usual revocable savings      The grantor-
        trust account (grantor is also   trustee(1)
        trustee)
     b. So-called trust account that is  The actual owner(1)
        not a legal or valid trust
        under State law
 8.  Sole proprietorship account         The owner(4)




- ------------------------------------------------------------
                                          GIVE THE EMPLOYER
                                           IDENTIFICATION
       FOR THIS TYPE OF ACCOUNT:             NUMBER OF--
- ------------------------------------------------------------
                                   
 9.  A valid trust, estate, or pension   The legal entity
     trust                               (Do not furnish the
                                         identifying number
                                         of the personal
                                         representative or
                                         trustee, unless the
                                         legal entity itself
                                         is not designated
                                         in the account
                                         title.)(5)
10.  Corporate accounts                  The corporation
11.  Association, club, religious,       The organization
     charitable, or educational, or
     other tax exempt organization
12.  Partnership account held in the     The partnership
     name of the business
13.  A broker or registered nominee      The broker or
                                         nominee
14.  Account with the Department of      The public entity
     Agriculture in the name of a
     public entity (such as a State or
     local government, school district,
     or prison) that receives
     agricultural program payments


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

(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
    person's social security number.
(4) You must show your individual name, but may enter your business or "doing
    business as" name. You may use either your Social Security Number or
    Employer Identification Number (if you have one).
(5) List first and circle the name of the legal trust, estate, or pension trust.
    (Do not furnish the taxpayer identification of the personal representative
    or trustee unless the legal entity itself is not designated in the account
    title.)

NOTE: If no name is circled when there is more than one name listed, the number
      will be considered to be that of the first name listed.


            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9

OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.

PAYEES THAT MAY BE EXEMPT FROM BACKUP WITHHOLDING
Payees that may be exempted from backup withholding on ALL payments include the
following:
  - A corporation.
  - A financial institution.
  - An organization exempt from tax under section 501(a)*, an individual
    retirement plan or a custodial account under section 403(b)(7) if the
    account satisfies the requirements of Section 401(f)(2).
  - The United States or any agency or instrumentality thereof.
  - A State, the District of Columbia, a possession of the United States, or any
    subdivision or instrumentality thereof.
  - A foreign government, a political subdivision of a foreign government, or
    any agency or instrumentality thereof.
  - An international organization or any agency or instrumentality thereof.
  - A dealer in securities or commodities required to register in the U.S., the
    District of Columbia or a possession of the U.S.
  - A real estate investment trust.
  - A common trust fund operated by a bank under section 584(a).
  - A trust exempt from tax under section 664, or described in section
    4947(a)(1).
  - An entity registered at all times under the Investment Company Act of 1940.
  - A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
  - Payments to nonresident aliens subject to withholding under section 1441.
  - Payments to partnerships not engaged in a trade or business in the U.S. and
    which have at least one nonresident alien partner.
  - Payments of patronage dividends where the amount renewed is not paid in
    money.
  - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding includes the
following:
  - Payments of interest on obligations issued by individuals. Note: You may be
    subject to backup withholding if this interest is $600 or more and is paid
    in the course of the payer's trade or business and you have not provided
    your correct taxpayer identification number to the payer.
  - Payments of tax-exempt interest (including exempt-interest dividends under
    section 852).
  - Payments described in section 6049(b)(5) to non-resident aliens.
  - Payments on tax-free covenant bonds under section 1451.
  - Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.

Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A and 6050N, and their regulations.

PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest,
or other payments to give their correct taxpayer identification numbers to
payers who must report the payments to IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of tax returns. The IRS
may also provide this information to the Department of Justice for civil and
criminal litigation and to cities, states and the District of Columbia to carry
out their tax laws. Payers must be given the numbers whether or not recipients
are required to file tax returns. Payers must generally withhold federal income
tax on taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain penalties
may also apply.

PENALTIES
(1)  PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2)  CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3)  CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties, including
fines and/or imprisonment.
(4)  MISUSE OF TAXPAYER IDENTIFICATION NUMBERS.--If the requester discloses or
uses taxpayer identification numbers in violation of federal law, the requester
may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.

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

* Unless otherwise indicated, all section references are to the Internal Revenue
  Code of 1986, as amended.

EX-99.A.1.H

                                                               EXHIBIT (a)(1)(H)

FOR IMMEDIATE RELEASE

               CONOCO CANADA RESOURCES COMMENCES TENDER OFFER FOR
                                 GULF INDONESIA

                          OFFER TO EXPIRE JULY 19, 2002

Calgary, Canada and Jakarta, Indonesia, June 12, 2002 -- Conoco Canada Resources
Limited, a wholly owned subsidiary of Conoco Inc. (NYSE: COC), and Gulf
Indonesia Resources Limited (NYSE: GRL) announced today that Conoco Canada has
commenced a takeover bid ("the Offer") for all of the outstanding shares of Gulf
Indonesia not owned by Conoco Canada at a price of U.S.$13.25 per common share
in cash pursuant to the definitive Support Agreement entered into by Conoco,
Conoco Canada and Gulf Indonesia and announced on June 10, 2002.

The Board of Directors of Gulf Indonesia and a committee of independent
directors of Gulf Indonesia (the "Independent Committee") have (i) approved the
Offer and the Support Agreement and (ii) determined that the Offer is fair to
the shareholders of Gulf Indonesia (other than Conoco Canada). The Board of
Directors of Gulf Indonesia and the Independent Committee recommend that
shareholders of Gulf Indonesia accept the Offer and tender their shares in the
Offer.

The Offer represents a 23 percent premium to the closing price of Gulf Indonesia
common shares on May 24, 2002, the last trading day prior to the announcement of
the Offer, and a 21 percent premium over Gulf Indonesia's average closing price
for the 30 days prior to, and including, May 24, 2002. The Offer also represents
a 74 percent premium over Gulf Indonesia's closing price on May 25, 2001, one
day prior to the date Conoco publicly announced its acquisition of Gulf
Indonesia's parent, Conoco Canada, formerly Gulf Canada Resources Limited, which
at that point held approximately 72 percent of the outstanding common shares of
Gulf Indonesia.

The Offer is scheduled to expire at 6:00 p.m. New York time, July 19, 2002,
unless the Offer is extended.

The Offer will be governed by U.S. and Canadian securities laws. Copies of the
offer to purchase and other offering documents filed with the U.S. Securities
and Exchange Commission and the appropriate Canadian provincial securities
commissions will be mailed to Gulf Indonesia shareholders.

The tender offer is subject to customary terms and conditions, including the
tender of a majority of the minority of Gulf Indonesia shares.

JPMorgan and Merrill Lynch & Co. acted as financial advisors to Conoco and
Conoco Canada in connection with this transaction.

                                    - more -

                                     - 2 -

Gulf Indonesia Resources Limited, headquartered in Jakarta, Indonesia, is an
upstream oil and gas company that is traded publicly on the New York Stock
Exchange under the ticker symbol GRL.

Conoco Canada Resources Limited is a Canadian based exploration and production
company with primary operations in Western Canada, Indonesia, the Netherlands
and Ecuador.

Conoco Inc. is a major, integrated energy company active in more than 40
countries.

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

This press release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations and
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements contained in this
press release include statements about the acquisition of Gulf Indonesia common
shares. These statements are not guarantees of future performance, involve
certain risks, uncertainties, and assumptions that are difficult to predict, and
are based upon assumptions as to future events that may not prove accurate.
Therefore, actual outcomes and results may differ materially from what is
expressed herein.

CONTACTS FOR CONOCO CANADA                CONTACTS FOR GULF INDONESIA

Investors:                                Glen Valk
Joele Frank / Jeremy Jacobs               Gulf Indonesia
Joele Frank, Wilkinson Brimmer Katcher    +62 21 575-4146
(212) 355-4449
                                          James Brown
Media:                                    Gulf Indonesia
Peter Hunt                                +65 9782-3323
Conoco Canada
(403) 233-3040

                                     # # #

EX-99.A.1.I

                                                               EXHIBIT (a)(1)(I)

                          [GULF INDONESIA LETTERHEAD]

June 12, 2002

Dear Shareholder:

     I am pleased to inform you that on June 7, 2002, Gulf Indonesia Resources
Limited, Conoco Inc. and Conoco Canada Resources Limited, a wholly owned
subsidiary of Conoco and the holder of approximately 70.7% of Gulf Indonesia's
outstanding common shares (calculated on a fully diluted basis), entered into a
Support Agreement providing for the tender offer by Conoco Canada for all of the
outstanding common shares of Gulf Indonesia not owned by Conoco Canada at a
price of U.S.$13.25 per share, net to the seller in cash, without interest
thereon (the "Offer").

     Conoco Canada has now commenced the Offer. Following the consummation of
the Offer, Conoco Canada has agreed to use its best efforts to consummate a
second-step transaction to acquire all remaining shares of Gulf Indonesia not
tendered in the Offer at a price of U.S.$13.25 per share in cash if the
conditions to such second-step transaction have been satisfied or waived. The
second-step transaction would be effected under the laws of New Brunswick,
Canada pursuant to a compulsory acquisition or a statutory transaction such as
an amalgamation, arrangement or share consolidation.

     The Board of Directors of Gulf Indonesia and a committee of independent
directors of Gulf Indonesia have (1) approved the Offer and the Support
Agreement and (2) determined that the Offer is fair to the shareholders of Gulf
Indonesia (other than Conoco Canada) and in the best interests of Gulf Indonesia
and the shareholders of Gulf Indonesia (other than Conoco Canada). THE BOARD OF
DIRECTORS OF GULF INDONESIA AND THE INDEPENDENT COMMITTEE RECOMMEND THAT
SHAREHOLDERS OF GULF INDONESIA ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE
OFFER.

     In arriving at their recommendations, the Board of Directors of Gulf
Indonesia and the independent committee gave careful consideration to the
factors described in the enclosed tender offer materials and Gulf Indonesia's
Solicitation/Recommendation Statement on Schedule 14D-9. Included as Annex A to
the Schedule 14D-9 is the written Valuation and Fairness Opinion of RBC Dominion
Securities Inc. that, as of June 6, 2002, (1) the fair market value for the
shares of Gulf Indonesia was in the range of U.S.$11.50 to U.S.$14.00 per share
and (2) the U.S.$13.25 per share in cash to be received by shareholders of Gulf
Indonesia (other than Conoco Canada) in the Offer was fair, from a financial
point of view, to such shareholders.

     Enclosed for your consideration are copies of the Offer to Purchase and
other tender offer materials and Gulf Indonesia's Schedule 14D-9, which are
being filed today with the U.S. Securities and Exchange Commission and
applicable Canadian securities commissions. These documents should be read
carefully.

                                          Sincerely,

                                          /s/ Robert H. Allen

                                          Robert H. Allen
                                          Chairman of the Board

EX-99.A.1.J

                                                                EXHIBIT(a)(1)(J)


This announcement is neither an offer to purchase nor a solicitation of an offer
to sell any Shares. The Offer is made solely by the Offer to Purchase dated June
12, 2002, and the related Letter of Transmittal and any amendments or
supplements thereto, and is being made to all holders of Shares. Neither Conoco
Canada nor Conoco is aware of any jurisdiction in which the making of the Offer
or the acceptance of shares in connection therewith would not be in compliance
with the laws of such jurisdiction. If either Conoco or Conoco Canada becomes
aware of any valid law in a jurisdiction prohibiting the making of the Offer or
the acceptance of Shares pursuant thereto, Conoco Canada may, in its sole
discretion, take such action as Conoco Canada may deem necessary to make the
Offer in any such jurisdiction. The Offer is not being made to (nor will tenders
be accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction.


                      NOTICE OF OFFER TO PURCHASE FOR CASH
                      ALL OF THE OUTSTANDING COMMON SHARES
                                       OF
                        GULF INDONESIA RESOURCES LIMITED
                                       FOR
                        U.S.$13.25 FOR EACH COMMON SHARE
                                       BY
                         CONOCO CANADA RESOURCES LIMITED
                          A WHOLLY OWNED SUBSIDIARY OF

                                   CONOCO INC.

    Conoco Canada Resources Limited, a Nova Scotia, Canada corporation ("Conoco
Canada") and a wholly owned subsidiary of Conoco Inc., a Delaware corporation
("Conoco"), is offering to purchase all of the outstanding common shares, par
value U.S.$0.01 per share (the "Shares"), of Gulf Indonesia Resources Limited, a
New Brunswick, Canada corporation ("Gulf Indonesia"), not owned by Conoco
Canada. The offer to purchase is being made at a price of U.S.$13.25 per Share,
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
June 12, 2002 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer").

    ------------------------------------------------------------------------
      THE OFFER EXPIRES AT 6:00 P.M., NEW YORK TIME, ON JULY 19, 2002,
      UNLESS THE OFFER IS EXTENDED.
    ------------------------------------------------------------------------

    The Offer is subject to certain conditions, including there having been
validly tendered and not properly withdrawn, at the expiration of the Offer,
more than 50% of the Shares then outstanding (calculated on a fully diluted
basis) not owned by Conoco Canada, its affiliates or certain other persons.

    The Offer is being made pursuant to a Support Agreement dated as of June 7,
2002 (the "Support Agreement"), by and among, Conoco, Conoco Canada and Gulf
Indonesia. Following the consummation of the Offer, Conoco Canada has agreed to
use its best efforts to consummate a second-step transaction (the "Second-Step
Acquisition") to acquire all remaining Shares not tendered in the Offer if the
conditions to such Second-Step Acquisition have been satisfied or waived. The
Second-Step Acquisition would be effected under the laws of New Brunswick,
Canada pursuant to a compulsory acquisition or a statutory transaction such as
an amalgamation, arrangement or share consolidation.

    THE BOARD OF DIRECTORS OF GULF INDONESIA AND A COMMITTEE OF INDEPENDENT
DIRECTORS OF GULF INDONESIA (THE "INDEPENDENT COMMITTEE") HAVE (I) APPROVED THE
OFFER AND THE SUPPORT AGREEMENT AND (II) DETERMINED THAT THE OFFER IS FAIR TO
THE SHAREHOLDERS OF GULF INDONESIA (OTHER THAN CONOCO CANADA) AND IN THE BEST
INTERESTS OF GULF INDONESIA AND THE SHAREHOLDERS OF GULF INDONESIA (OTHER THAN
CONOCO CANADA). THE BOARD OF DIRECTORS OF GULF INDONESIA AND THE INDEPENDENT
COMMITTEE RECOMMEND THAT SHAREHOLDERS OF GULF INDONESIA ACCEPT THE OFFER AND
TENDER THEIR SHARES IN THE OFFER.

    For purposes of the Offer, Conoco Canada will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when Conoco Canada gives oral or written notice to The Bank
of New York (the "Depositary") of its acceptance for payment of such Shares.
Upon the terms and subject to the conditions of the Offer, payment for Shares
accepted pursuant to the Offer will be made by deposit of the purchase price
thereof with the Depositary, which will act as agent for tendering shareholders
whose Shares have been accepted for payment. In all cases, payment for Shares
accepted pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company ("DTC") pursuant to the procedures set forth in the Offer to Purchase,
(ii) the Letter of Transmittal (or facsimile copy thereof), properly completed
and duly executed, with any required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)
and (iii) any other required documents. Under no circumstances will interest
on the purchase price for Shares be paid by Conoco Canada, regardless of any
delay in making such payment.

    The term "Expiration Date" shall mean 6:00 p.m., New York time, on July 19,
2002, unless and until Conoco Canada (in accordance with the terms of the
Support Agreement) shall have extended the period of time during which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date on which the Offer, as so extended by Conoco Canada, shall expire. Any
such extension will be followed by a public announcement thereof no later than
9:00 a.m., New York time, on the next business day after the previously
scheduled Expiration Date. During any such extension, all Shares previously
tendered and not properly withdrawn will remain subject to the Offer, subject to
the rights of a tendering shareholder to withdraw such shareholder's Shares
other than in connection with an extension pursuant to Rule 14d-11 under the
Securities Exchange Act of 1934, as amended (which, in any event, must comply
with Canadian law). Without limiting the manner in which Conoco Canada may
choose to make any public announcement, Conoco Canada will have no obligation to
publish, advertise or otherwise communicate any such announcement other than
by issuing a press release, except as may be required by applicable law.

    Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time until Conoco Canada has accepted for
payment Shares that have been tendered in the Offer. In addition, if Conoco
Canada has not accepted Shares validly tendered into the Offer for payment by
August 11, 2002, tendering shareholders can withdraw such Shares at any time
thereafter until Conoco Canada accepts such Shares for payment. Once Shares are
accepted for payment, they cannot be withdrawn unless Conoco Canada has not
deposited with the Depositary funds to pay for such Shares within three business
days of such Shares having been accepted for payment. For a withdrawal to be
effective, a written or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth in the Offer
to Purchase.

    Any such notice of withdrawal must specify the name of the person having
tendered the Shares to be withdrawn, the number or amount of Shares to be
withdrawn and the names in which the certificate(s) evidencing the Shares to be
withdrawn are registered, if different from that of the person who tendered such
Shares. The signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution (as defined in the Offer to Purchase), unless such Shares
have been tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer set forth in the
Offer to Purchase, any notice of withdrawal must specify the name and number of
the account at DTC to be credited with the withdrawn Shares. If certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, the name of the registered holder and the serial numbers of the
particular certificates evidencing the Shares to be withdrawn must also be
furnished to the Depositary prior to the physical release of such certificates.
Withdrawn Shares may be retendered by again following one of the procedures
described under "THE OFFER--Procedure for Tendering Shares" in the Offer to
Purchase at any time prior to the Expiration Date. All questions as to the form
and validity (including time of receipt) of any notice of withdrawal will be
determined by Conoco Canada, in its sole discretion, whose determination will be
final and binding on all parties.

    The information required to be disclosed by Rule 14d-6(d)(1) of the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.

    The Offer to Purchase, the related Letter of Transmittal and other relevant
documents will be mailed to record holders of Shares whose names appear on Gulf
Indonesia's shareholder lists and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the shareholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.

    THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.

    Questions and requests for assistance or copies of the Offer to Purchase,
the Letter of Transmittal and other tender offer documents may be directed to
the Information Agent or the Dealer Managers at their respective telephone
numbers and addresses set forth below. No fees or commissions will be paid to
brokers, dealers or other persons (other than the Information Agent) for
soliciting tenders of Shares pursuant to the Offer.

                        The Information Agent for the Offer is:

                                [INNISFREE LOGO]

                            501 Madison Avenue, 20th Floor
                              New York, New York 10022
                      BANKS AND BROKERS CALL COLLECT: (212) 750-5833
                        ALL OTHERS CALL TOLL-FREE: (888) 750-5834

                        The Dealer Managers for the Offer are:

              [JP MORGAN LOGO]                     [MERRILL LYNCH LOGO]
         277 Park Avenue, 9th Floor                Bow Valley Square IV
            New York, NY 10172                 Suite 1650, 250-6th Avenue S.W.
          Toll Free: (866) 262-0777                 Calgary, Alberta
         Telephone: (212) 622-2624                  Canada T2P 3H7
                                                 Telephone:(403) 231-7318

JUNE 12, 2002

EX-99.A.1.K

                                                               Exhibit (a)(1)(K)




                    U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 40-F
            ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the Fiscal Year ended December 31, 2001

                         COMMISSION FILE NUMBER 1-14698


                        GULF INDONESIA RESOURCES LIMITED
             (Exact name of Registrant as specified in its charter)

                                  NEW BRUNSWICK
        (Province or other jurisdiction of incorporation or organization)
Wisma 46 - Kota BNI, Jalan Jenderal Sudirman Kavling 1, Jakarta 10220, Indonesia
              (Address of Registrant's principal executive office)

        Registrant's telephone number, including area code: 403-233-4000

   CT Corporation System, 111-8th Avenue, New York N.Y. 10011, (212) 590-9009
 (Name, address (including zip code) and telephone number (including area code)
                   of agent for service in the United States)

 Securities registered or to be registered pursuant to Section 12(b) of the Act


Title of each class                    Name of each exchange on which registered
- -------------------                    -----------------------------------------
Common Shares                          New York Stock Exchange


 Securities registered or to be registered pursuant to Section 12(g) of the Act

                                      None
                               -------------------
                                (Title of Class)

        Securities for which there is a reporting obligation pursuant to
                            Section 15(d) of the Act

                                      None
                               -------------------
                                (Title of Class)

For annual reports, indicate by check mark the information filed with this Form:

              [X] Annual information form
              [X] Audited annual financial statements





 Page 1 of 62








         Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period covered by the
annual report.

                  87,927,853 Common Shares

         Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "YES" is marked, indicate the filing number assigned to
the Registrant in connection with such Rule.

                               Yes      No  X
                                   ---     ---

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act dining 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 Annual Information Form of the Registrant dated March 19, 2002, the
Audited Consolidated Financial Statements of the Registrant and the Auditors'
Report thereon for the fiscal year ended December 31, 2001, and Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
fiscal year ended December 31, 2001 and additional disclosures required by U.S.
GAAP are incorporated by reference herein from Exhibits 1, 2, 3, 5, 6, 7 and 8
respectively, to this Annual Report on Form 40-F.

                  UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A.       Undertaking

         Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.

                                   SIGNATURES

         Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has
duly caused this annual report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Registrant                       GULF INDONESIA RESOURCES LIMITED


                       By:       /s/ Robert H. Allen

                                 -----------------------------------------
                                 Robert H. Allen,
                                 Chairman of the Board and Director

                       By:       /s/ Alan P. Scott

                                 -----------------------------------------
                                 Alan P. Scott,
                                 Corporate Secretary


Page 2 of 62





                                    EXHIBITS




                                                                                   PAGE
                                                                             
Exhibit 1      Annual Information Form of the Registrant dated March 19, 2002       4

Exhibit 2      Audited Consolidated Financial Statements and the Auditors'
               Report thereon for the fiscal year ended December 31, 2001           29

Exhibit 3      Management's Discussion and Analysis of Financial Condition and
               Results of Operations for the fiscal year ended December 31, 2001    45

Exhibit 4      Consent of Independent Chartered Accountants                         55

Exhibit 5      Supplementary Oil and Gas Information                                56

Exhibit 6      Standardized Measure of Discounted Future Net Cash Flows Relating
               to Proved Reserves                                                   57

Exhibit 7      Three Year Reserve Reconciliation                                    58

Exhibit 8      Note 15 to Financial Statements - U.S. GAAP Reconciliation and
               Additional Disclosure                                                59

Exhibit 9      Five-Year Financial Summary                                          61

Exhibit 10     Quarterly Summaries                                                  62




Page 3 of 62






                        GULF INDONESIA RESOURCES LIMITED






                             ANNUAL INFORMATION FORM


                      FOR THE YEAR ENDED DECEMBER 31, 2001








                                 MARCH 19, 2002






                        GULF INDONESIA RESOURCES LIMITED

                             ANNUAL INFORMATION FORM

                                      INDEX


                                                                      
THE CORPORATION .........................................................  1

GENERAL DEVELOPMENT OF THE BUSINESS .....................................  2

NARRATIVE DESCRIPTION OF THE BUSINESS ...................................  4

SELECTED CONSOLIDATED FINANCIAL INFORMATION ............................. 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ..................................... 19

MARKET FOR SECURITIES ................................................... 19

DIRECTORS AND OFFICERS .................................................. 19

ADDITIONAL INFORMATION .................................................. 21

MISCELLANEOUS ........................................................... 22








                                       -1-


                                 THE CORPORATION


INCORPORATION OF THE ISSUER AND SUBSIDIARIES

         Gulf Indonesia Resources Limited was incorporated pursuant to Articles
of Incorporation under the Canada Business Corporations Act as Asamera Canada
Limited and continued under the Business Corporations Act (New Brunswick) on
August 27, 1997. References in this document to the "Corporation" refer to Gulf
Indonesia Resources Limited and references to "Gulf Indonesia" or "the Company"
include the Corporation and its direct or indirect subsidiaries.

         The Corporation's principal executive offices are located at 21st
floor, Wisma 46, Kota BNI, Jalan Jenderal Sudirman Kavling 1, Jakarta 10220,
Indonesia, and its telephone number is (6221) 574-2120. The Corporation's
registered office is 10th Floor Brunswick House, 44 Chipman Hill, Suite 1000,
Saint John, New Brunswick, Canada E2L 2A9.

         On August 19, 1997, the Corporation was involved in a corporate
reorganization in which it acquired all of the shares of Gulf Resources
(Tungkal) Ltd., Gulf Resources (Calik) Ltd., Gulf Resources (Merangin) Ltd.,
Gulf Resources (Sakala Timur) Ltd. and Gulf Resources (Pangkah) Ltd. from Gulf
Canada Resources Limited ("Gulf Canada") in exchange for common shares of the
Corporation. These wholly owned subsidiaries are all incorporated pursuant to
Articles of Incorporation under the Business Corporations Act (Alberta). On that
same date, the Corporation also acquired from Gulf Canada all of the shares of
Gulf Resources (Kakap) Ltd., formerly known as Clyde Petroleum Indonesia Ltd.,
and this subsidiary was subsequently continued in 1998 under the laws of
Barbados.

         On September 29, 1997, the Corporation completed a public offering of
approximately 28 percent of its shares, which are now publicly traded on the New
York Stock Exchange. Following the successful completion of a take-over bid on
July 13, 2001, Conoco Inc., a major integrated energy company active in more
than 40 countries, acquired indirect control of Gulf Canada which held and
continues to hold approximately 72 percent of the shares of the Corporation, and
shortly thereafter the name of Gulf Canada was changed to Conoco Canada
Resources Limited ("Conoco Canada").

         The Corporation has three material direct or indirect subsidiaries:
Gulf Resources (Ramba) Ltd., Gulf Resources (Grissik) Ltd. and Gulf Resources
(Kakap) Ltd., all of which are incorporated under the laws of Barbados. The
Corporation either owns or exercises control over all the voting shares of the
three subsidiaries; no non-voting securities have been issued by these
subsidiaries.

         The following diagram illustrates the intercorporate relationships
between the Corporation and its subsidiaries, all of which are 100 percent
owned, directly or indirectly.


                                  [FLOW CHART]





                                       -2-


                       GENERAL DEVELOPMENT OF THE BUSINESS


THREE YEAR HISTORY

         In 1999, Gulf Indonesia, along with other participants in the Kakap
production sharing contract ("PSC") and two other third party PSCs, signed an
agreement with Pertamina, the Indonesian state oil and gas company, for the sale
of natural gas to be used for power generation and petrochemical projects in
Singapore (the "West Natuna Agreement"). The construction of the upstream
facilities and 650-kilometre pipeline system required to supply the gas under
this agreement was completed in December 2000. Commercial gas sales commenced in
the first quarter of 2001. This continued the Company's development as a natural
gas producer which had achieved a major step forward in 1998 with the start-up
of the Corridor Block Gas Project. The Corridor Gas Project supplies natural gas
to the Duri Steamflood under a long-term agreement (the "Caltex I Agreement") in
exchange for crude oil delivered to the Company by PT Caltex Pacific Indonesia
("Caltex") at the export terminal at Dumai on a British thermal unit ("Btu")
equivalent basis, subject to certain thermal efficiency and cost adjustments.

         In December 2000, Gulf Indonesia and Pertamina signed agreements for
additional gas deliveries from the Corridor Block PSC to the Caltex operated
Duri Steamflood (the "Caltex II Agreement"). The agreements provide for a
contract quantity of 1.1 Tcf of gas (0.6 Tcf net to Gulf Indonesia) to be
delivered over 19 years. Gas for the agreements is to be supplied from the Suban
field where, in 2000, Gulf Indonesia drilled the Suban-4 delineation well which
tested at a flow rate of 80 Mmcf/d. Gas deliveries under this agreement are
expected to commence in late 2002.

         In February 2001, Gulf Indonesia and Pertamina entered into an
agreement with a subsidiary of Singapore Power Limited for the supply of natural
gas from Sumatra to Singapore, (the "Sumatra Gas to Singapore Agreement"). The
agreement provides for a contract quantity of 2.27 Tcf of sales gas (0.7 Tcf net
to Gulf Indonesia) to be delivered over a 20 year period, currently scheduled to
commence in August 2003. The Caltex II and Sumatra Gas to Singapore Agreements
are the third and fourth substantial long-term U.S. dollar gas sales agreements
for Gulf Indonesia. Including the Caltex I and West Natuna Agreements, the
combined cumulative contract quantity of the four agreements to which Gulf
Indonesia is a party is approximately 7 Tcf (2 Tcf net to Gulf Indonesia).

         In August 2001, Gulf Indonesia accelerated the repayment of the loan
facility ("Corridor Loan") originally entered into to provide financing for the
Corridor Gas Project and repaid the entire $142 million of the Corridor Loan
that was outstanding at December 31, 2000, five and one-half years ahead of the
originally scheduled repayment date of February 2007 and less than three years
after the October 1998 start-up of the Project.

         In 2001, Gulf Indonesia celebrated its 40th anniversary of operations
in Indonesia. As at December 31, 2001, Gulf Indonesia had interests in 13
contract areas in Indonesia, covering a total gross acreage of approximately ten
million gross acres (6.3 million net acres) of which four have commercial
production, six contain oil and gas fields that are currently under development
or could potentially be developed or are under appraisal, two are new areas
acquired in 2001 for future exploration and one was submitted for relinquishment
in January 2002.

         A seven-well offshore exploration program that began in 2000 was
completed in 2001, of which four wells were discoveries and a fifth contained
untested gas. Three additional delineation wells were drilled in the Suban field
where Gulf Indonesia has identified substantial gas reserves beyond current
contracted amounts. The Company is currently negotiating with energy consumers
to seek additional gas sales.





                                       -3-


         Gulf Indonesia produced 15 mmboe (41,300 boe/d) of gross oil and gas
production (35,800 boe/d net) in 2001. Approximately 60 percent of this
production came from onshore gas operations, 30 percent from onshore oil
operations on the island of Sumatra, and the balance from offshore oil and gas
operations in the Natuna Sea.


TRENDS

         Over the past five years, Gulf Indonesia has moved from being a small
oil producer on the island of Sumatra to becoming a significant player in
Indonesia's oil and gas industry. The Caltex I Agreement and the successful
completion of the Grissik Gas Plant in South Sumatra in 1998 were major
milestones in that transition. Since that time, Gulf Indonesia has signed three
additional major long-term U.S. dollar based gas contracts, resulting in an
anticipated doubling of its share of contracted daily quantities of natural gas
to over 320 mmcf/d by 2008. In total, these contracts cover approximately 7 Tcf
(2 Tcf Gulf Indonesia share) of cumulative contract quantities over 15 to 23
year terms.

         Deliveries for the Caltex I contract from the Corridor Gas Project
began in October 1998 and in 2001, first gas sales commenced from the Kakap PSC
for the West Natuna gas contract. The Company is actively developing gas fields
for the Caltex II and Sumatra Gas to Singapore contracts that are expected to
commence in late 2002 and 2003, respectively. Further increases in gas sales for
these contracts over the following years are expected to offset natural declines
in oil production from existing fields in Sumatra and the Natuna Sea, providing
a sustainable base level of production until 2009.

         Beyond the gas currently under contract, the Company also has
significant additional gas reserve potential in its portfolio and is actively
seeking to market this gas to domestic energy consumers on the islands of
Sumatra, Batam and Java as well as to international buyers in Malaysia and
Singapore. Based on the identified markets and identified gas prospects, the
Company is targeting to double its gas under contract over the next few years to
achieve its goal of becoming the pre-eminent supplier of the pipeline gas in
Indonesia.

         Crude oil sales volumes from the Company's mature oil fields (both
onshore and offshore) are dependent primarily on reservoir performance and, to a
lesser extent, on the results of planned development activities in the year.
Condensate sales volumes are dependent primarily on the related natural gas
production. The Company anticipates that crude oil and condensate sales volumes
from existing producing fields will decline by 15 to 20 percent per year in 2002
and 2003.

         The Company's exploration team has made a number of oil and gas
discoveries in the last few years. The Company's success in delineating and
developing these oil and gas discoveries and in finding and developing new oil
and gas fields could have a significant effect on sales volumes in 2004 and
beyond. The Company is also actively looking at opportunities to strengthen its
asset portfolio through asset purchases, trades, and/or divestitures. These
efforts could have a significant impact on the Company's sales volumes in the
future.

         The Corporation recognizes the challenge arising from the
uncertainties regarding international energy pricing and the Indonesian economic
and political environment. Gulf Indonesia intends to seek growth through the
application of strong core values to its business, taking pride in the safety of
its people and operations, environmental stewardship, valuing all people and
maintaining high standards of operation.





                                       -4-


                      NARRATIVE DESCRIPTION OF THE BUSINESS


PRINCIPAL BUSINESS

         The Company is an oil and natural gas company engaged in the
exploration, development and production of crude oil and natural gas onshore and
offshore Indonesia. All of Gulf Indonesia's oil and gas producing properties are
located in Indonesia. The Company currently produces crude oil and natural gas
from established fields onshore on the island of Sumatra and from established
fields offshore in the West Natuna Sea. As of December 31, 2001, Gulf Indonesia
had gross and net proved reserves of 323 MMBOE and 244 MMBOE, respectively, of
which approximately 90 percent are natural gas. The Company's principal products
are natural gas and crude oil.

         The Company's current onshore gas production from the Corridor PSC is
exchanged for crude oil on an energy equivalent basis, subject to certain
thermal efficiency and cost adjustments. This crude oil is marketed through a
marketing agreement with Itochu Petroleum Co. (Hong Kong) Ltd. which expires in
2007. The price of the crude oil is determined based on the Indonesian Crude
Price or ICP of the underlying crude oil, which in most cases is Duri crude. The
ICP is set monthly by Pertamina, the Indonesian state owned gas and oil company,
based on spot prices of internationally traded Indonesian crude oils, adjusted
for quality. Offshore natural gas production is sold to SembCorp Gas, a
consortium of SemCorp Industries (Singapore's leading engineering and technology
services group), Temasek Holdings (a Singapore government holding company), and
Tractebel (a power utility company from Belgium). This gas is priced based on a
premium to the price of fuel oil in Singapore.

         Currently, Gulf Indonesia sells its oil production in two markets.
Approximately 79 percent of its oil production is sold to Pertamina at the
Indonesian Crude Price. Approximately 21 percent of oil production, representing
offshore production from the Kakap fields, is sold under a marketing agreement
with BP Oil International Limited. The crude oil from all the Kakap fields is
commingled and sold as the Kerapu blend. The Kerapu blend is sold into regional
markets at prices reflecting market values at the time of sale. The small
balance of the Company's oil production is received through an overriding
royalty payment on Block B in north Sumatra.

         As of December 31, 2001, the Company had 1,557 permanent employees, 570
of whom were located at the Company's offices in Jakarta, Indonesia, and the
remainder of whom were located at field offices. In addition to its permanent
employees, the Company also engaged approximately 1,350 daily contract labourers
as of such date.


PRINCIPAL PROPERTIES

         Gulf Indonesia's operations are conducted through contractual
arrangements with Pertamina in the form of PSCs, one technical assistance
contract ("TAC") and one enhanced oil recovery contract ("EOR") pursuant to
which Gulf Indonesia and its associated participants provide financing and
technical expertise to conduct exploration, development and production
operations in a specified geographic area (each, a "contract area"). Two of
these contract areas are currently producing natural gas and crude oil (Corridor
Block PSC and Kakap PSC), while two more (Corridor Block TAC and Jambi EOR) are
currently producing crude oil. Each of these producing contract areas is
operated by Gulf Indonesia, as are most of the non-producing PSCs. The Pangkah
PSC is operated by an affiliate of Amerada Hess and the operatorship of the
Northwest Natuna Block I PSC is awaiting determination by Pertamina. In 2001,
Gulf Indonesia acquired interests in two new onshore non-producing blocks, a 50
percent interest in the non-operated Banyumas PSC in south-central Java and a 70
percent interest in the Company-operated Sakakemang PSC in South Sumatra and
relinquished its interests in two non-producing blocks, the onshore Calik PSC
and offshore Sakala Timur PSC. In January





                                       -5-


2002, the Company requested relinquishment of its interest in the Sebuku PSC. It
also increased its interest in the Pangkah PSC from a 12 percent to a 22 percent
interest at a cost of approximately $8 million as a result of a contractual
right to share in another party's acquisition. In addition to its interest in
these contract areas, the Company also receives an overriding production payment
on all production from Block B, northern Sumatra.

         Upon commercial production, the production revenue from each contract
area is divided between the Indonesian government and the participants according
to percentages that vary with each production sharing arrangement, subject to
cost recovery provisions. After entering into a production sharing arrangement
with Pertamina, the Company has often farmed out a working interest in the
contract area to one or more parties. Operations among the Company and other
participants with respect to a given contract area are generally governed by a
joint operating agreement which varies from block to block.

         The following table lists, as of December 31, 2001, the Company's
working interest, participants, term and acreage for each of the Company's
production sharing arrangements.



                                                                 Effective Post-Tax
                            Working                                 and Post-Cost
Name, Type of Agreement    Interest                               Recovery Share to   Expiration
     and Location            (%)          Participants              Contractor(3)      of Term      Gross/Net Acreage
- -----------------------    --------       ------------           ------------------   ----------    -----------------
                                                                    Oil       Gas
                                                                                 

Corridor (PSC)                   54     Talisman(36%)               15%       35%        2023          647,830/349,828
South Sumatra                           Pertamina(10%)

Corridor (TAC)                   60     Talisman(40%)               27%       30%        2010           118,843/71,306
South Sumatra

Kakap PSC                     31.25     Premier(18.75%)             15%     27.5%        2028          494,150/154,422
West Natuna Sea                         Novus(25%)
                                        Singapore Petroleum(15%)
                                        Pertamina(10%)

Block A PSC                      50     Exxon Mobil (50%)           15%       30%        2011          445,476/222,738
Northern Sumatra

Tungkal PSC                     100(1)  --                          15%       30%        2022      l,130,862/l,130,862
South Sumatra

South Jambi B PSC                45(2)  Devon(30%)                  15%       30%        2020         380,100/ 171,045
South Sumatra                           Pertamina(25%)

Jambi EOR                        60     Talisman(40%)              7.5%      N/A         2005             15,146/9,087
South Sumatra

Pangkah PSC                      22(2)  Amerada Hess(66%)           15%      35%         2026          723,435/159,156
East Java Sea                           Dana(12%)

Ketapang PSC                     50(1)  Petronas Carigali(50%)      15%       35%        2028          820,783/410,391
East Java Sea

Sebuku PSC(4)                   100(1)  --                          15%       35%        2027      2,167,467/2,167,467
Offshore Kalimantan

Northwest Natuna Block 1         30(1)  Premier(50%)                15%       35%        2027        1,068,352/320,505
PSC(5)                                  Dana(20%)
West Natuna Sea

Banyumas PSC                     50(1)  Coparex(50%)                15%       35%        2031        1,325,804/662,902
South-Central Java

Sakakemang PSC                   70(1)  Pertamina(30%)              15%       35%        2031          662,852/463,997
South Sumatra


(1)      Pertamina has the right to direct that 10 percent of each
         participant's working interest under the PSC be sold to an Indonesian
         Participant.

(2)      The Company agreed to increase its interest in the Pangkah PSC to 22
         percent in 2001 and this increase was approved by Pertamina in February
         2002.





                                       -6-


(3)      These percentages reflect approximate post-tax and post-cost recovery
         share for typical fields but are prior to the effects of any domestic
         market obligations on crude oil production. The effective post-tax and
         post-cost recovery rate is based on the revenue sharing rate stated in
         the PSC and the Indonesian tax rate applicable to the specific PSC. In
         the case of the Corridor Block TAC, the effective post-tax and
         post-cost recovery share is calculated after payment of the petroleum
         revenue tax and, accordingly, may vary depending on the applicable
         petroleum revenue tax. To encourage drilling and exploration in new
         geological horizons and frontier areas as well as enhanced recovery
         projects with respect to mature fields, PSCs typically contain
         provisions increasing the contractor's pre-tax share of production
         under certain circumstances such as production from pre-Tertiary
         reservoirs, wells drilled in water depths in excess of designated
         levels and fields with low rates of production.

(4)      The Company decided in early 2002 to relinquish its interest in the
         Sebuku PSC.

(5)      The status of this Northwest Natuna Block 1 PSC remains uncertain,
         pending Pertamina's consideration of a request to rescind an earlier
         relinquishment request in order to enable a possible farmout of a
         portion of the Company's interest.

         The following table lists the Company's production sharing arrangements
that are currently in commercial production, and reflects reserves data as at
December 31, 2001 and production data for the years ended December 31, 2001,
2000 and 1999.



                                                              Company's Gross/Net     Company's Gross/Net      Company's Gross/Net
                                                              Production for Year     Production for Year      Production for Year
                    Company's Gross/Net Proved Reserves        Ended December 31,      Ended December 31,      Ended December 31,
                         as at December 31, 2001(1)                  2001(1)                 2000(1)                  1999(1)
                 -----------------------------------------    -------------------     -------------------      -------------------
                 Oil & Natural
                  Gas Liquids    Sales Gas        Total             Total                    Total                    Total
Property           (MMBbls)        (Bcf)         (MMBOE)           (MMBOEs)                 (MMBOEs)                (MMBOEs)
- --------         -------------  -----------    -----------    -------------------     -------------------      -------------------
                                                                                             

Corridor PSC        9.7/3.3     1,615/1,243    278.8/210.5          9.65/9.15             11.45/10.86             11.30/10.69

Corridor TAC       13.6/8.4         -/-         13.6/8.4            2.94/1.83              2.95/1.83               2.64/1.64

Kakap PSC           4.8/3.6        88/67        19.5/14.8           1.61/1.47              1.58/1.19               2.27/1.85

Jambi EOR           1.5/1.0         -/-          1.5/1.0            0.78/0.52              0.95/0.56               0.84/0.74

Other(2)            0.2/0.2         -/-          0.2/0.2             .04/04                0.12/0.11               0.31/0.30
                  ---------     -----------    -----------          ---------             -----------             -----------

  Total(3)        30.1/16.7     1,758/1,362    323.0/243.8         15.02/13.01            17.05/14.55             17.36/15.22
                  =========     ===========    ===========         ===========            ===========             ===========


(1)      Gross reserves and production volumes reflect the Company's interest
         prior to, and net reserves and production volumes reflect the Company's
         interest after, deduction of applicable government take payable to the
         Indonesian government under the applicable contractual arrangement.

(2)      Represents reserves attributable to the Block B overriding production
         payment. Crude oil reserves attributable to the Block A PSC were
         written off at year end.

(3)      Numbers may not add due to rounding.

Corridor Block PSC, Southern Sumatra

         Gulf Indonesia is operator of the Corridor Block PSC with a 54 percent
working interest. The original PSC was executed in 1983 and, in 1996, the PSC
was amended and an extension was executed which extended the term until 2023.

         Natural Gas. Natural gas operations in the Corridor Block PSC contract
area consist of 20 commercially producing wells in the Dayung, Gelam, Letang,
Tengah and Sumpal fields. Gas operations commenced in October 1998 with
production in 2001 averaging 140 MMcf/d (134 MMcf/d net) compared to 166 MMcf/d
(159 MMcf/d net) in 2000.

         The "Corridor Block Gas Project" consists of (i) production from gas
wells in the Dayung, Gelam, Letang and Tengah fields; (ii) field separation and
gathering facilities, including three field stations to dehydrate gas; and (iii)
a central gas processing plant to process 440 MMcf/d of raw gas from the three
field






                                       -7-

stations, with an output design capacity of 310 MMcf/d of sales gas. The
Corridor Block Gas Project commenced operations in October 1998 and, in 2002,
the operating capacity was increased to approximately 350 Mmcf/d. On October 13,
2001, the Corridor Gas Project achieved a new single-day gross gas sales record
of 318 mmcf/d (Company share 166 mmcf/d), approximately three percent above the
original design capacity.

         Gas produced in the Corridor Block PSC contract area is used primarily
for steam generation at Caltex's enhanced oil recovery operations at Duri, in
central Sumatra. The gas is transported from the gas processing plant to the
Duri Steamflood through a 28-inch diameter onshore transmission pipeline,
constructed by the Indonesian-owned gas transmission company P.T. Perusahaan Gas
Negara (Persero). Gas takes by Caltex were about five percent lower on an energy
basis in 2001 than in 2000.

         In 2000, the Company drilled the Suban-4 delineation well which tested
at a flow rate of 80 Mmcf/d with approximately 420 barrels of condensate per
day. Extended testing of the Suban-4 well and the Durian Mabok-2 well, which was
drilled in 1998, indicates that these two wells have penetrated the same
structure. In 2001, Gulf Indonesia drilled three successful delineation wells at
Suban, expanding the extent of the area and confirming deliverability from all
sectors of the gas field. Extended production tests were conducted on the
Suban-5 and Suban-6 wells and test information along with data from the wells
drilled in 2001 led to an increase in the proved reserves booked for the field
by the Company by over 25 percent in 2001. Further delineation activity is
planned for 2002.

         In December 2000, the Company and Pertamina signed agreements for
additional gas deliveries from the Corridor Block PSC area to the Duri
Steamflood in central Sumatra operated by Caltex. The agreements provide for a
contract quantity of 1.1 Tcf (Gulf Indonesia's share 0.6 Tcf) of sales gas to be
delivered over a term of 19 years and exchanged for Duri crude oil at an
approximate ratio of 8,000 cubic feet per barrel. Natural gas for the new
contract will be supplied from the Suban field with gas deliveries expected to
commence in late 2002. By early 2003, the Company's 65 Mmcf/d share of contract
quantities will supplement the 160 Mmcf/d of gas (net to the Company) that is
contracted under the original agreement with Caltex, for a total combined
quantity of 225 Mmcf/d.

         On February 12, 2001, Gulf Indonesia and Pertamina entered into a gas
sales and purchase agreement with Gas Supply Pte. Ltd. (a subsidiary of
Singapore Power Limited) for the supply of natural gas from the Corridor PSC,
the South Jambi B PSC (discussed below) and a third party operation. The
agreement provides for a contract quantity of 2.27 Tcf (the Company's share
being 0.7 Tcf) of sales gas to be delivered over a term of 20 years beginning in
2003. The Company's share of daily contract quantities is initially 42 Mmcf/d,
increasing over time to 110 Mmcf/ by 2009. Pricing for the gas sales will be
indexed to the price of high sulphur fuel oil with a premium. Natural gas for
this new agreement will be supplied from the Sumpal field in the Corridor Block
PSC and three fields (Teluk Rendah, Geger Kalong and Bungin) in the South Jambi
B PSC.

         During 2001, the Company completed two onshore gas development
projects in the Corridor PSC, being installation of compression facilities at
the Gelam field to maintain gas production volumes and the completion of the
first stage of the Sumpal field development to provide an additional source of
gas for contracted gas demand. Ultimately, the Sumpal field is targeted to be
the anchor supply field for the Corridor PSC's share of the Sumatra Gas to
Singapore sales contract, commencing in 2003.

         The Company also began construction of phase 1 of the Suban field
development in 2001. The Suban field is scheduled to be on-stream in late 2002
to be available to supply gas for the Caltex II sales contract. The Company also
deferred the installation of compression facilities at the Dayung field by about
one year in order to optimize the timing and amount of capital spending in
relation to gas demand requirements.






                                       -8-


         Crude Oil. Crude oil operations in the Corridor Block PSC contract area
consist of 54 commercially producing wells in 11 fields. Production in 2001
averaged 3,200 Bbls/d (2,700 Bbls/d net) compared to 3,600 Bbls/d (3,100 Bbls/d
net) in 2000.

         At Suban Baru, a two-well delineation program early in 2001 tested
shallow oil deposits above the Suban gas field. The quantities of oil discovered
were insufficient to justify a full-scale development program and the Company
now plans to place a single Suban Baru well on production in 2002.


Corridor TAC, Southern Sumatra

         Gulf Indonesia operates several small non-contiguous areas located
onshore in southern Sumatra with producing oil fields in the Corridor Block
under a TAC between the Company and Pertamina. The Corridor Block TAC was
renewed in 1989 for a 20-year period beginning October 1990 to replace the
original TAC entered into in 1968. The Company is operator of the block with a
60 percent working interest

         The TAC currently has 172 commercially producing wells in six fields.
Production in 2001 averaged 8,000 Bbls/d (5,000 Bbls/d net) compared to 8,100
Bbls/d (5,000 Bbls/d net) in 2000. During 2001, the Corporation drilled 27
development wells in the Ramba and Bentayan fields, which contributed 1,100
Bbls/d (the Company's share being 660 Bbls/d) to the Company's total production
from this area.


Kakap PSC, West Natuna Sea

         Gulf Indonesia operates the Kakap PSC in the West Natuna Sea, offshore
Kalimantan, with a 3l.25 percent working interest that currently consists of
some 33 producing oil wells in 10 fields. In 1999, in connection with the West
Natuna Gas Project described below, the Company signed a 23-year extension of
the contract term of the Kakap PSC, which now expires in 2028.

         Each of the four main producing fields has its own dedicated platform
with initial processing facilities that are linked by pipelines to a floating
production storage and offloading vessel with a storage capacity of 650 MBbls.
In addition, five subsea completions are currently tied back and produced to the
main oil production platforms via subsea flowlines and umbilicals. The Company's
share of oil production in 2001 from the Kakap fields was 3,500 Bbls/d (3,100
Bbls/d net) compared to 4,300 Bbls/d (3,300 Bbls/d net) in 2000.

         The participants in the Kakap, Natuna Sea Block A and South Natuna Sea
Block B PSCs formed the West Natuna Gas Group (the "West Natuna Group") in order
to jointly market gas from the West Natuna Area. In January 1999, the West
Natuna Group concluded extensive negotiations and signed a supply agreement with
Pertamina for natural gas to be used for power generation and petrochemical
projects in Singapore. The Gulf Indonesia share of gas volumes over the life of
this contract is expected to be approximately 0.5 tcf. The construction of the
Kakap upstream facilities and the West Natuna Transportation System was
completed in December 2000, approximately four months ahead of schedule and
under budget. The upstream facilities required for the project were placed into
service in early December 2000 and the 650-kilometre West Natuna pipeline system
was commissioned at the end of 2000. Actual gas sales began in January 2001, six
months prior to the commencement of the full sales contract on July 15, 2001.
West Natuna gas sales averaged 6 mmcf/d for the year and, by the fourth quarter
of 2001, had increased to an average of 9 mmcf/d.






                                       -9-


Block A PSC, Northern Sumatra

         The Company's interest in the Block A area located in the Aceh Province
in northern Sumatra goes back to 1961. In July 1989, Gulf Indonesia entered into
the current Block A production sharing contract, effective for 20 years
beginning in September 1991. The Company is operator of the block with a 50
percent working interest. In 2001, the Company shut-in its remaining oil
production due to sub-economic performance. Civil unrest in the Aceh Province is
one of the factors impacting the Company's ability to develop its probable gas
and condensate reserves in the area.


South Jambi B PSC, Southern Sumatra

         Gulf Indonesia operates the South Jambi B Block, located onshore in
South Sumatra adjacent to the Corridor Block, under a 30-year PSC entered into
in 1990 and holds a 45 percent working interest in the block.

         A plan of development for the Teluk Rendah and Geger Kalong fields in
the north end of the block, and the Bungin field in the southern area of the
block in support of the South Jambi B PSC's share of the Sumatra Gas to
Singapore sales contract, previously noted in discussion of the Corridor Block
PSC, has been approved by Pertamina. The Teluk Rendah and Geger Kalong fields
are currently targeted to commence production in 2003 and the Bungin project is
scheduled to commence production later in the contract term, with the combined
developments expected to increase the total net sales from the block to
approximately 30 Mmcf/d. The development of the shallow gas fields in the South
Jambi B PSC has been deferred until the drilling of the wells in the Teluk
Rendah and Geger Kalong fields in early 2002. The results of these wells will
help determine the appropriate size of facilities required to provide the South
Jambi B PSC's contribution to the Sumatra Gas to Singapore sales contract.


Jambi EOR, Southern Sumatra

         In January 1990, Gulf Indonesia and Pertamina entered into a 15-year
EOR contract to perform secondary recovery operations in six fields in the Jambi
area of southern Sumatra. Three of these six fields are under waterflood as the
Company decided not to pursue development of the remaining three fields. Under
the terms of the EOR, the contractor receives a share in, and can recover costs
from, oil produced in excess of primary oil production. The contractor pays all
the development costs but Pertamina repays past capital costs plus an uplift of
30 percent. Profit oil (the portion remaining of the contractor's equity share,
less contractor's allowed operating costs and investment credits) is split
71.1538 percent with Pertamina and 38.8462 percent with the contractor. The
Company has a 60 percent working interest.

         The Jambi EOR has 191 commercial wells in three fields that produced
2,100 Bbls/d (1,400 Bbls/d net) compared to 2,600 Bbls/d (1,500 Bbls/d net) in
2000. During 2001, the Company drilled 10 wells.


Tungkal PSC, Southern Sumatra

         Gulf Indonesia entered into a 30-year production sharing contract in
1992 for the exploration of the Tungkal PSC located onshore south Sumatra,
northwest of the South Jambi B Block. The Company is operator of the block with
a 100 percent working interest.

         In early 1997, the Company discovered oil and gas at the Mengoepeh
Field on the Tungkal PSC. Four appraisal wells following a 96 square kilometre
3D seismic survey completed in 1997 delineated a marginal oil and gas
accumulation. An additional seismic program was completed in the third quarter
of 2000 to provide drilling locations in the Mengoepeh Field. The Company
drilled the successful Mengoepeh-7 oil delineation well in December 2001,
helping to define additional oil potential. The results of this well will be
used in the






                                      -10-


preparation of a plan of development that the Company expects to submit in 2002
for the Mengoepeh Field. The Company also drilled a successful gas discovery at
SE Mengoepeh late in 2001. The Mengoepeh-6 delineation well drilled in early
2001 which was targeted to define the gas potential of the Mengoepeh field was
unsuccessful.


Pangkah PSC, East Java Sea

         In 1997, Gulf Indonesia entered into a farm-in agreement with Dana
Petroleum (Pangkah) LLC ("Dana") to acquire an interest in a 30-year PSC
executed in May 1996 for exploration of the Pangkah Block, located offshore in
the East Java Sea. The Company agreed to increase its working interest in the
PSC in 2001 to 22 percent, through acquisition of a 10 percent additional
interest for approximately $8 million as a result of a contractual right to
share in another party's acquisition, and Pertamina approved this increase in
February 2002.

         There has been no commercial production of hydrocarbons in this
contract area to date. The Ujung Pangkah-l well drilled in late 1998 tested at
rates of 20 Mmcf/d of gas and 1,000 Bbls/d of oil and condensate. Five wells
drilled during the fourth quarter of 2000 and first quarter of 2001 yielded one
offshore oil discovery and three delineation success. The Sidayu-l oil well
flowed 1,450 Bbls/d during testing and two new vertical wells, Ujung Pangkah-2
and Ujung Pangkah-3 as well as a planned sidetrack of the Ujung Pangkah-2 well
confirmed reservoir continuity and the gas and oil columns seen in the Ujung
Pangkah-l discovery well. The successful appraisal program resulted in the
certification of significant gas reserves for the Ujung Pangkah field. The new
operator of the block is finalizing a plan of development for the gas reserves
in the field and has initiated discussions with customers for potential gas
sales. The appraisal program also confirmed the presence of a significant oil
accumulation underlying the gas and a 2D seismic program is planned for 2002 to
determine locations for a two-well drilling program expected to commence in late
2002. The 3D seismic data acquired in conjunction with the Ketapang block will
be used to define additional exploration prospects in the eastern portion of the
Pangkah block.


Ketapang PSC, East Java Sea

         In June 1998, Gulf Indonesia signed a 30-year PSC with Pertamina for a
100 percent working interest in the offshore Ketapang Block. This block is east
of and adjacent to the Pangkah Block, and the discovery at Ujung Pangkah
confirmed the prospectivity of the main play type in the Ketapang Block. In
December 2000, the Company farmed out 50 percent of its working interest in the
Ketapang PSC to Petronas Carigali, with the Company holding the remaining 50
percent working interest.

         In 2001, the Company drilled three successful exploration wells in the
Ketapang PSC, two that discovered oil and gas, and one that discovered gas,
confirming the potential of the offshore East Java plays that the Company has
been pursuing. The Bukit Tua-l well flowed at a combined rate of 7,250 bbls/d of
oil from two tests of the Kujung III formation and the Jenggolo-l well, drilled
19 kilometres to the west, flowed 3,600 bbls/d of oil from the same formation.
Post-drilling seismic mapping suggests that these two wells have penetrated
different positions on the same structure. Tests for natural gas from shallower
zones in these wells also yielded successful results. On the Payang-l well, a
test of the Kujung I formation flowed 17 mmcf/d of natural gas, adding to gas
discovered in this drilling program (including gas identified but not tested in
the Bukit Panjang-1 well drilled in late 2000).

         To evaluate the extent and magnitude of these discoveries, the Company
conducted what it believes to be the largest offshore 3D seismic survey ever
undertaken in Indonesia. The 2,523 square kilometre survey over most of the
Ketapang block and a portion of the adjacent Pangkah block was completed in
early 2002 and the Company is now in the process of evaluating the seismic
information acquired. The Company plans to use





                                      -11-


the seismic information to select locations in late 2002 for appraisal drilling
on the Bukit Tua/Jenggolo structure. The 3D seismic and oil delineation drilling
program will also support efforts to determine the gas reserve potential of the
block, helping the Company to position itself to compete for the growing East
Java gas markets which are located within 100 kilometres of the Ketapang PSC.


Northwest Natuna Block I PSC

         Gulf Indonesia entered into a farm-in agreement in 1997 with Dana
Petroleum (NW Natuna) LLC to acquire a 30 percent interest in the undeveloped
Northwest Natuna Block I PSC, just north of the Kakap PSC. There has been no
commercial production of hydrocarbons in this contract area to date. A high
resolution 2D seismic survey conducted in 1998 further developed a large oil
prospect on the non-operated Northwest Natuna block. In April 2000, the Ande
Ande Lumut-l well was drilled. The well logged oil pay and oil samples were
recovered from four sands of the Gabus Formations. Testing of the well was
terminated without a sustained oil flow. Plans for appraisal drilling in 2001 to
delineate the Ande Ande Lumut field were deferred and the Company is evaluating
future options for this block.

Banyumas Block, South-Central Java

         In May 2001, Gulf Indonesia acquired a 50 percent non-operated interest
in the Banyumas PSC. The PSC has a term of 30 years and the remaining interest
is held by Coparex, which is the operator of the PSC. The Banyumas Block covers
over 1.3 million gross acres in onshore south-central Java, providing the
Company with an opportunity to expand outside its existing core areas. The
operator has commenced reprocessing of existing seismic data and a 2D seismic
acquisition program is targeted for late 2002.

Sakakemang PSC, South Sumatra

         In November 2001, Gulf Indonesia acquired new exploration acreage in
South Sumatra through the signing of the Sakakemang PSC. Gulf Indonesia holds a
70 percent interest and Pertamina holds the remaining 30 percent in this PSC
which has a term of 30 years. The PSC will be jointly operated by Gulf Indonesia
and Pertamina. The acreage is adjacent to the Corridor PSC and the Company hopes
that it will provide future opportunities to add to its natural gas reserves in
south Sumatra to meet potential future gas sales demand.

Block B, Northern Sumatra

         Gulf Indonesia receives an overriding production payment of $0.04 per
BOE on 60 percent of all crude oil, natural gas and natural gas liquids produced
in the Block B contract area in Aceh, northern Sumatra. This payment amounted to
approximately $0.9 million in 2001 compared to $1.6 million in 2000. Unrest in
the Aceh area in 2001 curtailed the production from Block B in the early part of
the year but production has resumed and has increased to near normal levels.

Sakala Timur PSC, Offshore Bali

         After receiving Pertamina's approval in early 1999, Gulf Indonesia held
a 100 percent working interest and operatorship in a 30-year PSC executed in
January 1991 for exploration of the Sakala Timur Block, located offshore Lombok,
northeast of the island of Bali. An unsuccessful exploration well was drilled in
2000 and effective January 10, 2001, the Company relinquished its interest in
the Sakala Timur Block.





                                      -12-


Calik PSC, Southern Sumatra


         In June 1995, Gulf Indonesia entered into a 30 year PSC for the
exploration of the Calik Block located onshore in southern Sumatra, northeast
of the Corridor Block. Following the drilling of an unsuccessful well in each of
2000 and 2001, the Company initiated the relinquishment process for the block in
November 2001.


Sebuku PSC, Offshore Kalimantan

         In September 1997, Gulf Indonesia entered into a 30-year PSC for the
exploration of the Sebuku Block, located in the Makassar Strait, offshore
Kalimantan. The Company was operator of the block with a 100 percent working
interest. Following the drilling of an unsuccessful exploration well in early
2001 and evaluation of the remaining potential in the Sebuku Block, the Company
decided in early 2002 to request relinquishment of its interest in this PSC.


RESERVES

         The following table summarizes the estimates of the Company's
historical gross and net proved developed and proved undeveloped natural gas,
oil and natural gas liquids reserves as of the dates indicated and the present
value attributable to the net proved reserves at such dates. Gulf Indonesia, for
all years presented, has prepared the reserves and present value data.



                                                          2001         2000         1999
                                                       ----------   ----------   ----------
                                                                        

Gulf Indonesia's gross and net proved, developed
reserves:

  Natural gas (Bcf)                                       718/552      499/374      481/376

  Crude Oil (MMBbls)                                        19/12        22/13        24/13

  Natural Gas Liquids (MMBbls)                                4/2          4/2          5/3

  Total (MMBOE)                                           143/106       109/77       108/79

Present value of future net revenues                   $    1,029       $1,513   $    1,361
  before income taxes (in millions of $)(5)

Standardized measure of discounted                     $      606   $      836   $      826
  future net cash flows (in millions of $)

Gulf indonesia's gross and net proved,
  undeveloped reserves:

  Natural gas (Bcf)                                     1,040/811    1,169/874      782/620

  Crude Oil (MMBbls)                                          2/1          4/2          4/2

  Natural Gas Liquids (MMBbls)                                5/2          4/2          2/1

  Total (MMBOE)                                           180/138      203/150      136/106


Notes:

(1)      "Gross" reserves are reserves attributable to the Company's interest
         but prior to deduction of applicable government take payable to the
         Indonesian government as owner of the reserves under the applicable
         contractual arrangement.

(2)      "Net" reserves are reserves attributable to the Company's interest
         after deduction of applicable government take payable to the Indonesian
         government as owner of the reserves under the applicable contractual
         arrangement, which government take may vary depending on prices,
         production rates, expenditure levels and legislative changes.

(3)      "Proved" reserves are those reserves estimated as recoverable under
         current technology and existing economic conditions, from that portion
         of a reservoir which can be reasonably evaluated as economically
         productive on the basis of analysis of drilling, geological,
         geophysical and engineering data, including the reserves to be obtained
         by enhanced recovery processes demonstrated to be economic and
         technically successful in the subject reservoir.




                                      -13-


(4)      Proved developed reserves are reserves which can be expected to be
         recovered through existing equipment and operating methods.

(5)      The present value of future net revenues before income taxes
         attributable to the Company's net proved reserves was prepared using
         prices and costs in effect as of the end of the respective periods
         presented, discounted at 10 percent.


         Estimates of the Company's reserves and future net revenues are made
using sales prices estimated by the Company to be in effect as of the date of
such reserves estimates and are held constant throughout the life of the
properties (except to the extent a contract specifically provides for
escalation). Estimated quantities of gas reserves and future net revenues
therefrom have been calculated on a Btu equivalent basis based on crude oil
prices. There are numerous uncertainties inherent in estimating natural gas,
condensate and oil reserves and their estimated values, including many factors
beyond the control of the producer. THE FUTURE NET CASH FLOWS ARE NOT INDICATIVE
OF THE CURRENT VALUE OR FUTURE EARNINGS THAT MAY BE REALIZED FROM THE PRODUCTION
OF PROVED RESERVES NOR SHOULD IT BE ASSUMED THAT THEY REPRESENT THE FAIR MARKET
VALUE OF THE RESERVES OR OF THE OIL AND GAS PROPERTIES.


RESERVE RECONCILIATION

         The following table provides a summary of the changes in Gulf
Indonesia's reserves that occurred in the most recent fiscal year on a gross/net
basis.



                                                  Proven              Probable         Total
                                                  ------           -------------  -------------
                                         Developed    Undeveloped
                                         ---------    -----------
                                                                      

NATURAL GAS (Bcf)
AS AT JANUARY 1, 2001                      499/374      1,169/874    1,616/1,176    3,284/2,424
Additions(1)                               283/217     (130)/(99)    (152)/(117)            1/1
Purchases of Reserves                          0/0            0/0            0/0            0/0
Revisions to Previous Estimates            (11)/12           1/36    (358)/(172)    (368)/(124)
Production                               (53)/(51)            0/0            0/0      (53)/(51)
AS AT DECEMBER 31, 2001                    718/552      1,040/811      1,106/887    2,864/2,250


CRUDE OIL (MMBbls)
AS AT JANUARY 1, 2001                    21.7/12.7        3.7/2.0       13.8/7.8      39.3/22.6
Additions(1)                               3.0/1.7    (1.6)/(0.9)    (0.9)/(0.5)        0.5/0.4
Purchases of Reserves                          0/0            0/0            0/0            0/0
Revisions 00 Previous Estimates            0.4/1.6        (0.2)/0    (4.4)/(2.1)    (4.2)/(0.5)
Production                             (5.7)/(4.1)            0/0            0/0    (5.7)/(4.1)
AS AT DECEMBER 31, 2001                  19.5/12.0        1.9/1.1        8.5/5.2      29.9/18.4

NATURAL GAS LIQUIDS (MMBbls)
AS AT JANUARY 1, 2001                      3.8/1.9        3.8/1.8       14.1/7.3      21.8/11.1
Additions(1)                               0.6/0.5        0.9/0.3    (1.5)/(0.8)            0/0
Purchases of Reserves                          0/0            0/0            0/0            0/0
Revisions to Previous Estimates            0/(0.2)        0/(0.4)      (1.8)/0.3    (1.8)/(0.3)
Production                             (0.4)/(0.4)            0/0            0/0        0.4/0.4
AS AT DECEMBER 31, 2001                    4.0/1.9        4.7/1.7       10.8/6.8      19.6/10.4



     (1)  Includes discovery and extension, infill, improved recovery and other.

     (2)  Columns and rows may not add due to rounding.





                                      -14-


DRILLING HISTORY

         The following table sets forth the number of wells on Gulf Indonesia's
properties for the years ended December 31, 2001, 2000 and 1999.

                              Year Ended December 31
                                   (Gross/Net)



                             2001           2000           1999
                         ------------   ------------   ------------
                                              

EXPLORATORY WELLS
Oil                             6/2.8          3/0.7            -/-
Gas                             5/3.1          1/0.5          4/2.3
Dry                             7/4.9          6/3.3          1/0.3
                         ------------   ------------   ------------
Total Exploratory             18/10.8         10/4.5          5/2.6


DEVELOPMENT WELLS
Oil                           40/23.7        40/24.0         14/8.4
Gas                               0/0          1/0.5            -/-
Dry                             5/2.7            -/-          1/0.6
                         ------------   ------------   ------------
Total Development             45/26.4        41/24.5         15/9.0
                         ------------   ------------   ------------
Total Wells                   63/37.2        51/29.0        20/11.6



PRODUCTIVE WELLS

         The following table sets forth the number of productive wells in which
Gulf Indonesia owned an interest as of December 31, 2001.



                  Company Operated Wells     Non-Operated Wells      Total Productive Wells
                   Gross          Net        Gross          Net        Gross         Net
                 ----------   ----------   ----------   ----------   ----------   ----------
                                                                

Oil                     453          258            0            0          453          258
Gas                      26           13            0            0           26           13
Total                   479          271            0            0          479          271


         Productive wells consist of producing wells capable of production,
including wells awaiting connections. Wells that are completed in more than one
producing horizon are counted as one well.


EXPENDITURES

         In 2001, the Company's exploration/delineation expenditures were $49
million compared to $29 million in 2000. Additionally, the Company's development
expenditures in 2001 were $55 million compared to $57 million in 2000. In 2001,
the Company also agreed to spend $8 million for the acquisition of an additional
interest in the Pangkah PSC.


ACREAGE DATA

         The following table sets forth the approximate developed and
undeveloped acreage in which the Company held a contract interest as of December
31, 2001. Undeveloped acreage includes acres on which the Company has a
concession and on which wells have not been drilled or completed to a point that
would permit the production of commercial quantities of oil and gas, regardless
of whether such acreage contains proved reserves. A gross acre is an acre in
which an interest is owned. A net acre is deemed to exist when the sum of






                                      -15-


fractional ownership interests in gross acres equals one. The number of net
acres is the sum of the fractional interests owned in gross acres expressed as
whole numbers and fractions thereof.



                                                     THOUSANDS OF ACRES

                                          Developed                     Undeveloped
                                      ------------------            -------------------
                                       Gross        Net              Gross        Net
                                                                   

              Onshore                   388         207              4,340       2,875
              Offshore                   36          11              5,238       3,201
                Total                   424         218              9,578       6,076



          Note:     The totals above do not include interests in the Calik or
                    Sakala Tumir PSC's on which relinquishment requests were
                    submitted in 2001 and are awaiting approval. The totals do
                    include the 10 percent increase in the Company's interest in
                    the Pangkah PSC which was not approved until February 2002
                    and the Sebuku PSC which was submitted for relinquishment in
                    early 2002. The Northwest Natuna Block 1 PSC is assumed to
                    be retained with an 30 percent interest. For further
                    information, please refer to the earlier table describing
                    the Company's working interests in production sharing
                    contracts.

ENVIRONMENTAL MATTERS

         Indonesian laws and regulations may require the acquisition of a permit
before drilling commences, restrict the types, quantities and concentration of
various substances that can be released into the environment in connection with
drilling and production activities, limit or prohibit drilling activities on
certain lands lying within wilderness, wetlands and other protected areas,
require remedial measures to prevent pollution from former operations, such as
pit closure and plugging abandoned wells, and impose substantial liabilities for
pollution resulting from the Company's operations. In addition, these laws,
rules and regulations may restrict the rate of oil and natural gas production
below the rate that would otherwise exist.


RISK FACTORS

         Risk of Operations in Indonesia. Substantially all of Gulf Indonesia's
oil and gas assets and operations are located in Indonesia, and substantially
all of the Company's crude oil production in Sumatra is sold at a price which is
calculated on the basis of a formula determined by the Indonesian government.
The Indonesian government has exercised and continues to exercise significant
influence over many aspects of the Indonesian economy, including the oil and gas
industry, and any Indonesian government action concerning the economy could have
a material impact on private sector entities, including Gulf Indonesia. There is
no assurance that the Indonesian government will not postpone or review
additional projects or will not make changes in government policies, which in
each case could materially impact or adversely affect the Company's financial
position, results of operations or prospects.

         The Company's business is regulated by the laws and regulations of
Indonesia, including those relating to the development, production, marketing,
pricing, transportation and storage of natural gas and crude oil, taxation and
environmental and safety matters. Gulf Indonesia may be adversely affected by
changes in governmental policies or social instability or. other political,
economic or diplomatic developments in or affecting Indonesia which are not
within the control of the Company including, among other things, a change in
crude oil or natural gas pricing policy, the risks of war, expropriation,
nationalization, renegotiation or nullification of existing concessions and
contracts, taxation policies, foreign exchange and repatriation restrictions,
changing political conditions, international monetary fluctuations and currency
controls.

         During 2001, the Company did not experience, nor has it historically
experienced, problems from civil unrest or disputes with the Indonesian
government However, Indonesia's political and economic environment could impact
the Company's financial position, results of operations or potential for growth
in the future.






                                      -16-


While civil unrest exists in the Aceh Province, planning and negotiations
related to the Company's development of its probable gas reserves in the Block A
PSC are ongoing. Gulf Indonesia continues to monitor the situation and could be
required to re-evaluate its development plans if the situation warrants. If in
the future the Company decides not to proceed with its development plans or
decides to dispose of its interest in this PSC, a material change to earnings
could result.

         Concentration of Assets and Operations. In 2001, 64 percent of the
Company's total production on a barrel of oil equivalent ("boe") basis and 96
percent of the Company's natural gas production was attributable to fields in
the Corridor Block PSC contract area. As of December 31, 2001, 86 percent of the
Company's total gross proved crude oil and natural gas reserves on a boe basis
and 92 percent of the Company's total proved natural gas reserves were located
in the Corridor Block PSC contract area. The concentration of Gulf Indonesia's
crude oil and natural gas reserves in the Corridor Block PSC contract area
increases the Company's exposure to an event that could adversely affect the
development or production of crude oil and natural gas in a limited geographic
area, such as catastrophic damage to pipelines, gas processing plants or
reservoir structures or events that could result in the loss, or material
modification, of the Corridor Block PSC. Adverse developments with respect to
the Corridor Block PSC could have a material adverse effect on the Company's
financial condition, results of operations or prospects.

         In addition, 68 percent of the Company's total crude oil and condensate
production for 2001, and 61 percent of the Company's total proved crude oil and
condensate reserves as of December 31, 2001 were attributable to fields located
in the Corridor Block TAC and Kakap PSC contract areas. Adverse developments
with respect to one or both of these contract areas could also have a material
adverse effect on the Company's financial condition, results of operations or
prospects.

         Natural Gas Projects Under Development. The factors upon which the
success of natural gas projects are contingent are in large part beyond the
control of Gulf Indonesia, and significant complex negotiations among multiple
parties remain with respect to the development of certain gas projects. There is
no assurance that the Company will be able to successfully develop any proposed
project and, if completed, that such projects will be completed on a timely
basis. The failure of the Company or other parties involved to complete and
operate any of these natural gas projects successfully could have a material
adverse effect on the Company's financial condition, results of operations or
prospects.

         Limited Markets for Indonesian Natural Gas. The absence or limited
development of a natural gas transmission and distribution infrastructure within
Indonesia and between Indonesia and Singapore has restricted consumption of
Indonesian natural gas. The Company's ability to market gas may be limited by
the lack of infrastructure within Indonesia. Further, there is no assurance
that long-term market demand will develop.

         Relationship with Pertamina. Under Indonesian law existing for many
years, Pertamina was the sole entity authorized to manage Indonesia's petroleum
resources on behalf of the Indonesian government. In November 2001, the
President signed the bill establishing a new body that is to take over
Pertamina's current right to sign contracts with oil and gas companies for the
development of the country's hydrocarbon resources. The full application of this
new law is uncertain as the implementing regulations are currently being
prepared.

         Pertamina enters into production sharing arrangements with private
energy companies whereby such companies explore, develop and market oil and gas
in specified areas in exchange for a percentage interest in the production from
the fields in the applicable production sharing area. All of the Company's
reserves are attributable to such production sharing arrangements. Production
sharing arrangements contain requirements regarding quality of service, capital
expenditures, legal status of the concessionaires, restrictions on transfer and
encumbrance of assets and other restrictions. Failure to comply with these
arrangements could result, under certain circumstances, in the revocation of a
production sharing arrangement. Such an action could have






                                      -17-


a material adverse effect on the Company's financial condition, results of
operations or prospects. In addition, Gulf Indonesian must obtain approval from
Pertamina for substantially all material activities undertaken with respect to
the production sharing arrangements, including exploration, development,
production, drilling and other operations, sale of oil or natural gas and the
hiring or termination of personnel. Furthermore, all facilities and equipment
purchased by Gulf Indonesia and used in a contract area become the property of
Pertamina, although the Company may recover such costs through the cost recovery
provisions of the applicable production sharing arrangements.

     Substantial Capital Requirements; Liquidity. Gulf Indonesia makes, and will
continue to make, substantial capital expenditures for the acquisition,
exploration, development and production of oil and natural gas reserves. On
February 26, 1997, Gulf Indonesia and the other private PSC participants entered
into a credit agreement (the "Corridor Loan") with various lending institutions
to provide up to $450 million of financing to fund the development of the
Corridor Gas Project. Repayments on the Corridor Loan were scheduled to end
February 2007. In August 2001, Gulf Indonesia elected to accelerate the
repayment of the Corridor Loan and the entire remaining amount was repaid. In
connection with that repayment, the Company entered into an agreement with
Conoco Canada whereby Conoco Canada provides a $65 million committed three-year
senior revolving term credit facility on commercial terms and conditions.

         While Gulf Indonesia expects to be able to fund its current exploration
and development plans with internally generated cash flow and current cash
balances, if its pending gas projects are not completed on time or, if after
production commences, revenues or reserves decline, the Company may have limited
ability to expend the capital necessary to undertake or complete future drilling
programs. There can be no assurance that debt or equity financing or cash
generated by operations will be available or sufficient to meet these
requirements or for other corporate purposes or, if debt or equity financing is
available, that it will be on terms acceptable to the Company. There is also no
assurance that Conoco Canada or Conoco Inc. will choose to provide or continue
financial support for Gulf Indonesia. Moreover, future activities may require
Gulf Indonesia to alter its capitalization significantly. The inability of Gulf
Indonesia to access sufficient capital for its operations could have a material
adverse effect on the Company's financial condition, results of operations or
prospects.

         Uncertainty of Reserves Estimates. This Annual Information Form
includes estimates made by the Company of its gross and net proved oil and gas
reserves and the present value of net proved reserves. There are numerous
uncertainties inherent in estimating quantities of reserves, including many
factors beyond the control of Gull Indonesia. The reserves data set forth in
this Annual Information Form represent estimates only.

         Reliance on Development of Additional Reserves. Gulf Indonesia
continually seeks to acquire, explore for and develop new hydrocarbon reserves
to replace those produced and sold. Although the Company believes that the
properties subject to its PSCs have potential for significant reserves additions
from presently contemplated exploration and development activities, the success
of such activities cannot be assured.

         Exploration, Development and Production Risks. Gulf Indonesia's oil and
gas exploration, development and planned production operations involve risks
normally inherent to such activities, including blowouts, oil spills and fires
(each of which could result in damage to or destruction of wells, production
facilities or other property, or injury to persons), geological uncertainties
and unusual or unexpected formations and pressures, which may result in dry
holes, failure to produce oil or gas in commercial quantities or inability to
fully produce discovered reserves. The Company's offshore operations are also
subject to hazards inherent in marine operations, such as capsizing, sinking,
grounding, collision and damage from severe weather conditions. Oil and gas
exploration may involve unprofitable efforts, not only from dry wells, but from
wells that are productive but do not produce sufficient net revenues to return a
profit after drilling,





                                      -18-


operating and other costs. Completion of a well does not assure a profit on the
investment or recovery of drilling, completion and operating costs. In addition,
drilling hazards or environmental damage could greatly increase the cost of
operations, and various field-operating conditions may adversely affect the
Company's production from successful wells. These conditions include delays in
obtaining governmental approvals or consents, shut-in of connected wells
resulting from extreme weather conditions, insufficient storage or
transportation capacity or other geological and mechanical conditions. While
close well supervision and effective maintenance operations can contribute to
maximizing production rates over time, production delays and declines from
normal field operating conditions cannot be eliminated and can be expected to
adversely affect revenue and cash flow levels to varying degrees.

         Volatility of Oil and Gas Prices. The revenues expected to be generated
by the Company's future operations will be highly dependent upon the prices of,
and demand for, oil and natural gas. In addition, there is no assurance that the
Indonesian government will not adopt a natural gas or oil pricing policy that
would adversely affect the Gulf Indonesia's future results of operations or
prospects. Decreases in the prices of oil and gas could have an adverse effect
on the carrying value of the Company's reserves and the Company's revenues,
profitability, cash flow and credit availability.

         Competition. The oil and gas industry is highly competitive. Gulf
Indonesia's competitors for the acquisition, exploration, production and
development of oil and natural gas properties in Indonesia, and for capital to
finance such activities, include companies that have greater financial and
personnel resources available to them than the Company. Certain of the Company's
customers and potential customers are themselves exploring for oil and natural
gas in Indonesia, and the results of such exploration efforts could affect Gulf
Indonesia's ability to sell or supply oil or gas to these customers in the
future. The Company's ability to successfully bid on and enter into new PSCs or
otherwise acquire additional property rights, to discover reserves, to
participate in drilling opportunities and to identify and enter into commercial
arrangements with customers will be dependent upon a continuation of its close
working relationships with its project participants and joint operators and its
ability to select and evaluate suitable properties and to consummate
transactions in a highly competitive environment.

         Environmental Risks. Gulf Indonesia's business is subject to certain
Indonesian laws and regulations relating to exploration for and development and
production of oil and natural gas, and environmental and safety matters. The
discharge of oil, natural gas or other pollutants into the air, soil or water
may give rise to liabilities to the Indonesian government and third parties and
may require the Company to incur costs to remedy such discharge. No assurance
can be given that Indonesian environmental laws will not result in a curtailment
of production or a material increase in the costs of production, development or
exploration activities or otherwise adversely affect the Company's financial
condition, results of operations or prospects.

         Control by, and Arrangements with, Conoco Potential Conflicts of
Interest. At present, Conoco Canada owns approximately 72 percent of the
outstanding Common Shares and Conoco Canada is itself a subsidiary of Conoco
Inc. which has other subsidiaries active in Indonesia. Accordingly, Conoco Inc.
and Conoco Canada each will be in a position to control the policies, management
and affairs of Gulf Indonesia, to effectively prevent or cause a change in
control of the Company and to determine the outcome of corporate action
requiring shareholder approval, including electing all, or substantially all,
the members of the Board of Directors of the Corporation and adopting amendments
to the Corporation's Articles of Continuance.

         The Corporation and Gulf Canada had entered into a series of agreements
in 1997 relating to their ongoing intercompany arrangements and, in 2001 and
early 2002, the Corporation entered into new agreements to provide for
technical, administrative and information services between the Corporation and
Conoco Inc., superceding the previous services agreement with Conoco Canada.
Although these service agreements provide for payment on a cost recovery basis,
there can be no assurance that each of the agreements between them, or the
transactions provided for therein, has been or will be effected on terms at






                                      -19-


least as favorable to Gulf Indonesia as could have been obtained from
unaffiliated third parties. In addition, although the Company, Conoco Canada and
Conoco Inc. have attempted to address potential future conflicts of interest
through a series of agreements, in light of the significant past and ongoing
relationships among the Company, Conoco Canada and Conoco Inc., the nature of
their respective businesses and Conoco Inc.'s interests in Indonesia and Asia,
there may be conflicts of interest that arise in the future between the Company
and Conoco Canada or Conoco Inc.


                   SELECTED CONSOLIDATED FINANCIAL INFORMATION


SELECTED CONSOLIDATED FINANCIAL INFORMATION

         Selected consolidated financial information is contained under the
heading "Five-Year Financial Summary" on page 59 of the Corporation's 2001
Annual Report filed with securities commissions in Canada. This information is
incorporated herein by reference as the Selected Consolidated Financial
Information. A summary of quarterly financial information is included in page 57
of the Annual Report under the caption "Quarterly Summaries", which summary is
incorporated herein by reference.


DIVIDEND POLICY

         The Corporation's dividend policy has been to retain its available cash
flow to support the continued development of its business. Accordingly, the
Corporation does not plan to declare dividends on its Common Shares in the
foreseeable future.


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


         Reference is made to the information under the heading "Management
Discussion and Analysis" which appears on pages 31 to 40 of the Corporation's
2001 Annual Report and is filed with securities commissions in Canada and with
the Securities and Exchange Commission in the United States. This information is
incorporated herein by reference as the Management's Discussion and Analysis of
Financial Condition and Results of Operations.


                              MARKET FOR SECURITIES


         Gulf Indonesia's common shares are listed for trading on the New York
Stock Exchange, and trade under the symbol "GRL".


                             DIRECTORS AND OFFICERS


         The Board of Directors is currently composed of eleven members.
Directors are elected for a term of office expiring at the next succeeding
annual shareholders' meeting following their election to office or until a
successor is duly elected and qualified. The Officers of the Corporation serve
at the discretion of the Board of Directors.




                                      -20-


DIRECTORS

         Reference is made to information contained under the heading "Election
of Directors" on pages 3 to 5 of the Corporation's Management Proxy Circular
dated March 18, 2002 (the "Circular") for the names of the directors of Gulf
Indonesia as at the date of this AIF, their current offices, their principal
occupations for the five years ended December 31, 2001 and their municipality of
residence, which information is incorporated herein by reference.

         All directors and officers as a group beneficially own, directly or
indirectly, or have control over or exercise direction in respect of 16,323
Common Shares or approximately 0.019 percent of the Common Shares of the
Corporation. Together with stock options that are exercisable within 60 days of
the date hereof, all directors and officers as a group beneficially own,
directly or indirectly, or have control over or exercise direction in respect of
588,816 Common Shares, or approximately 0.67 percent, of the Common Shares of
the Corporation.

         The Audit Committee of the Board of Directors is described under the
heading "Election of Directors" on page 5 of the Circular and the Compensation
Committee is described under the heading "Composition of the Compensation and
Pension Committee" on page 9 of the Circular. The Corporation does not have an
executive committee.

OFFICERS



NAME AND MUNICIPALITY OF RESIDENCE    POSITION WITH THE CORPORATION
                                   

Robert H. Allen                       Chairman of the Board of Directors
Houston, Texas

Paul C. Warwick                       President, Chief Executive Officer and Director
Jakarta, Indonesia


Taufik Ahmad                          Vice President, Administration
Jakarta, Indonesia

Andrew Hastings                       Vice President, Gas Marketing and Business Development
Jakarta, Indonesia

Donald D. MeKechnie                   Vice President, Finance
Jakarta, Indonesia

Supramu Santosa                       Vice President, Corporate Strategy and Government Relations
Jakarta, Indonesia

John K. Wearing                       Vice President, Operations
Jakarta, Indonesia

Cliff W. Zeliff                       Vice President, Exploration
Jakarta, Indonesia

Alan P. Scott                         Corporate Secretary
Calgary, Alberta






                                      -21-


         Mr. Allen has been Chairman of the Board of the Corporation since
February 18, 1998.

         Paul C. Warwick was appointed President and Chief Executive Officer of
the Corporation on July 24, 2001, succeeding William T. Fanagan who resigned
from that position on that same date. Prior to assuming his position with the
Corporation, Mr. Warwick had served since 1999 as President and Managing
Director of Conoco Energy Nigeria Limited, Nigeria. Immediately prior to that
appointment in 1999, Mr. Warwick was President and Chief Executive Officer of
Gulfstream Resources (Canada) Limited and, from 1997 to 1999, he was Managing
Director, Phoenix Park Gas Processors Limited in Trinidad.

         Taufik Ahmad was appointed Vice President, Administration of the
Corporation on February 15, 2001. Prior to such appointment, Mr. Ahmad was
employed by the Company.

         Andrew Hastings assumed his position as an officer of the Corporation
on January 1, 2002. Prior to assuming this position, Mr. Hastings was Business
Development Manager for Conoco Global Power in London for four years and, prior
thereto, was Business Development Manager for Conoco European Gas Limited in
London.

         Donald D. McKechnie was appointed Vice President, Finance in June 2001
succeeding Murray E. Hesje who had moved to Calgary in February 2001 to assume a
position with Gulf Canada. Prior to joining the Corporation at the time of his
appointment, Mr. McKechnie was Vice President, Finance and Corporate Secretary
for Momentum Energy International Inc. from September 1997 and, prior thereto,
was Vice President, Finance of Transwest Energy Inc.

         Prior to assuming his current position, Supramu Santosa was the Vice
President, Administration of the Corporation's operating subsidiaries and held
such position since 1989.

         John K. Wearing was appointed Vice President, Operations of the
Corporation effective July 1, 2001, replacing Robert W. Klassen who left the
Corporation and returned to Canada. Prior to his appointment Mr. Wearing was
Coordinator, Asset Management for Gulf Canada in Calgary. Prior thereto, Mr.
Wearing was President of Wearing Petroleum Management Ltd. in Calgary from 1999
through 2000 and, prior thereto, was Vice President Operations of Maxx Petroleum
Ltd. in Calgary where he had served since 1996.

         Cliff W. Zeliff has been Vice President, Exploration of the
Corporation's operating subsidiaries since 1990. Mr. Zeliff has been employed by
the Company in various capacities since 1984.

         Alan Scott has been Secretary of the Corporation since November 2000.
Mr. Scott has been employed as legal counsel and in other capacities for Conoco
Canada since 1978.


                             ADDITIONAL INFORMATION

         Additional information, including directors' and officers' remuneration
and indebtedness, principal holders of the Corporation's securities, options to
purchase securities and interest of insiders in material transactions, where
applicable, is contained in the Circular provided to holders of common shares of
Gulf Indonesia in connection with the Annual General Meeting of Shareholders to
be held on May 6, 2002. Additional financial information is provided in the
Corporation's consolidated financial statements for the year ended December 31,
2001 filed with securities commissions in Canada and the Securities and Exchange
Commission in the United States.





                                      -22-


         Upon request to the Corporate Secretary, the Corporation will provide
to any person or company:

         (i)      one copy of the Corporation's AIF, together with one copy of
                  any document, or the pertinent pages of any document,
                  incorporated by reference in the ALP;

         (ii)     one copy of the comparative consolidated financial statements
                  of the Corporation for its most recently completed financial
                  year for which financial statements have been filed together
                  with the accompanying report of the auditor and one copy of
                  the most recent interim financial statements of the issuer
                  that have been filed, if any, for any period after the end of
                  its most recently completed financial year; and


         (iii)    one copy of the information circular of the Corporation in
                  respect of its most recent annual meeting of the shareholders
                  that involved the election of directors, or one copy of any
                  annual filing prepared instead of that information circular,
                  as appropriate.

         When the securities of the Corporation are in the course of a
distribution pursuant to a short form prospectus, or a preliminary short form
prospectus has been filed, copies of the foregoing documents and any other
documents that are incorporated by reference into the short form prospectus or
preliminary short form prospectus may also be obtained from the Secretary of the
Corporation, upon request.


                                  MISCELLANEOUS

         As used in this Annual Information Form, the following terms have the
meanings indicated: "Bbls", "MBbls" and "MMBbls" mean barrels, thousand barrels
and million barrels, respectively; "Mcf", "MMcf", "Bcf" and "Tcf" mean thousand
cubic feet, million cubic feet, billion cubic and trillion cubic feet,
respectively; "BOE", "MBOE" and "MMBOE" mean barrels of oil equivalent,
thousand barrels of oil equivalent and million barrels of oil equivalent,
respectively; "Bbls/d", "MBbls/d", "Mcf/d", "MMcf/d", "BOE/d" and "MBOE/d" mean
barrels per day, thousand barrels per day, thousand cubic feet per day, million
cubic feet per day, barrels of oil equivalent per day and thousand barrels of
oil equivalent per day, respectively. Gross reserves or gross production are
reserves or production attributable to the Company's interest prior to deduction
of government take; net reserves or net production are reserves or production
net of such government take. Natural gas volumes are converted to a BOE basis
using the ratio of 6 Mcf of natural gas to one Bbl of oil and condensate. Unless
otherwise indicated, per BOE calculations are on a per BOE sold basis. Natural
gas volumes are stated at the official temperature and pressure bases of the
area in which the reserves are located. Unless otherwise indicated, estimated
reserves quantities as set forth in this Annual Information Form are based upon
the Corporation's assumptions concerning future price and cost escalations.
Additions to reserves are quoted in accordance with applicable Canadian industry
standards. Under United States Statement of Accounting Standards No. 69,
reserves additions from development, would be considered part of revisions of
previous estimates. Finding and development costs per BOE are calculated by
dividing capital expenditures and exploration expenses by gross estimated proved
reserves additions (excluding purchased reserves).

         Unless otherwise indicated, amounts expressed in dollars or $ are in
United States dollars.

         The Indonesian government owns all of Indonesia's petroleum resources.
The Indonesian state-owned oil and gas company, Perusahaan Pertambangan Minyak
dan Gas Bumi Negara ("Pertamina"), manages all of Indonesia's petroleum
resources on behalf of the Indonesian government and, in certain cases, enters
into production sharing arrangements with private energy companies entitling
such private energy companies to a portion of the production from the fields in
the applicable production sharing area. The Company's reserves information
presented in this Annual Information Form is based on estimates of reserves
underlying the properties in which Gulf Indonesia has an interest under
production sharing arrangements with Pertamina. All oil and natural gas reserves
and production volumes presented in this Annual Information Form are, unless





                                      -23-


otherwise indicated, gross to Gulf Indonesia and reflect its interest prior to
deduction of applicable government take payable to the Indonesian government as
owner of the reserves under the applicable contractual arrangement. All
Pertamina interests, other than working interests, and income and revenue taxes,
are considered to be government take. Unless otherwise indicated, references to
"crude oil" or "oil" include condensate.





MANAGEMENT'S RESPONSIBILITY
FOR FINANCIAL STATEMENTS

The management of Gulf Indonesia Resources Limited (the company) is responsible
for preparing the accompanying consolidated financial statements. The financial
statements were prepared in accordance with Canadian generally accepted
accounting principles and are necessarily based in part on management's best
estimates and judgments. When alternative accounting methods exist, management
has chosen those it deems most appropriate in the circumstances. The financial
information included elsewhere in the Annual Report is consistent with that
contained in the financial statements.

The company maintains a system of internal control including an internal audit
function. Management believes that this system of internal control provides
reasonable assurance that financial records are reliable and form a proper basis
for preparation of financial statements. The internal control process includes
communication to employees of the company's standards for ethical business
conduct.

The Board of Directors is responsible for ensuring that management fulfills its
responsibilities for financial reporting and internal controls. The Board
exercises this responsibility through its Audit Committee, none of whom are
officers or employees of the company. The Committee meets with management, its
internal auditors and the independent auditors to satisfy itself that each group
is properly discharging its responsibilities and to review the consolidated
financial statements and the independent auditors' report. The Audit Committee
reports its findings to the Board of Directors for consideration in approving
the consolidated financial statements for issuance to the shareholders. The
Committee also considers, for review by the Board and approval by the
Shareholders, the engagement or re-appointment of the external auditors.

The consolidated financial statements have been examined by the independent
auditors, Ernst & Young LLP, and their report follows. The independent auditors
have full and free access to the Audit Committee.

/s/ PAUL C. WARWICK                            /s/ DONALD D. MCKECHNIE

PAUL C. WARWICK                                DONALD D. MCKECHNIE
President and Chief Executive Officer          Vice-President, Finance
February 19, 2002


AUDITORS' REPORT

To the Shareholders of Gulf Indonesia Resources Limited:

We have audited the consolidated statements of financial position of Gulf
Indonesia Resources Limited as at December 31, 2001 and 2000 and the
consolidated statements of earnings and retained earnings (deficit) and cash
flows for each of the years in the three year period ended December 31, 2001.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2001
and 2000 and the results of its operations and its cash flows for each of the
years in the three year period ended December 31, 2001 in accordance with
Canadian generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

ERNST & YOUNG LLP                              Calgary, Canada
Chartered Accountants                          February 19, 2002


56 GULF INDONESIA RESOURCES LIMITED




CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (DEFICIT)
(millions of United States dollars, except per share amounts)




                                                         YEAR ENDED DECEMBER 31
                                                         ----------------------
                                                          2001    2000     1999
                                                          ----    ----     ----
                                                                 
EARNINGS
   Revenues
   Gross oil and gas revenue (Note 1)                    $ 308   $ 421    $ 246
   Government take                                          54      76       42
                                                         -----   -----    -----
   Net oil and gas revenue                                 254     345      204
   Other                                                     4       4        2
                                                         -----   -----    -----
                                                           258     349      206
                                                         -----   -----    -----
   Expenses
   Operating                                                33      33       35
   Exploration                                              24      18       11
   General and administrative                               13       5        6
   Depreciation, depletion and amortization                 66      69       70
   Finance charges, net (Note 2)                            10      19       21
                                                         -----   -----    -----
                                                           146     144      143
                                                         -----   -----    -----
   Earnings before tax                                     112     205       63
   Income tax expense (Note 3)                              80     121       30
                                                         -----   -----    -----
   Earnings for the year                                 $  32   $  84    $  33
                                                         -----   -----    -----
   Earnings per common share, basic and diluted
     (Note 4)                                            $0.36   $0.96    $0.37
                                                         -----   -----    -----
RETAINED EARNINGS (DEFICIT)
   Balance, beginning of year                            $  81   $  (3)   $ (36)
   Earnings for the year                                    32      84       33
                                                         -----   -----    -----
   Balance, end of year                                  $ 113   $  81    $  (3)
                                                         -----   -----    -----


(See summary of significant accounting policies and notes to consolidated
financial statements)

                                                           2001 ANNUAL REPORT 41





CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions of United States dollars)



                                                             YEAR ENDED DECEMBER 31
                                                             -----------------------
                                                              2001     2000     1999
                                                             -----    -----    -----
                                                                      
OPERATING ACTIVITIES
Earnings for the year                                        $  32    $  84    $  33
Non-cash items included in earnings
   Depreciation, depletion and amortization                     66       69       70
   Exploration expense                                          24       18       11
   Future tax expense (Note 3)                                  (2)      96       21
   Other                                                         6        4        2
                                                             -----    -----    -----
Cash generated from operations                                 126      271      137
Changes in non-cash working capital (Note 5)                    15       19       (4)
                                                             -----    -----    -----
                                                               141      290      133
                                                             -----    -----    -----
INVESTING ACTIVITIES
   Capital expenditures and exploration expenses              (104)     (86)     (66)
   Acquisitions                                                 (8)      --       --
   Decrease (increase) in cash restricted in use (Note 10)      96      (21)     (73)
   Changes in non-cash working capital (Note 5)                  1       --      (35)
                                                             -----    -----    -----
                                                               (15)    (107)    (174)
                                                             -----    -----    -----
FINANCING ACTIVITIES
   Long-term debt repayments (Note 10)                        (142)    (103)     (16)
   Proceeds from issue of long-term debt (Note 10)              --       --       18
                                                             -----    -----    -----
                                                              (142)    (103)       2
                                                             -----    -----    -----

Increase (decrease) in cash and short-term investments         (16)      80      (39)
Cash and short-term investments, beginning of year             107       27       66
                                                             -----    -----    -----
Cash and short-term investments, end of year (Note 12)       $  91    $ 107    $  27
                                                             -----    -----    -----



(See summary of significant accounting policies and notes to consolidated
financial statements)


42 GULF INDONESIA RESOURCES LIMITED




CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(millions of United States dollars)



                                                                   DECEMBER 31
                                                                 ---------------
                                                                  2001     2000
                                                                 ------   ------
                                                                    
ASSETS
Current
Cash and short-term investments (Note 12)                        $   91   $  107
Cash restricted in use (Note 10)                                      1       97
Accounts receivable (Note 12)                                        39       56
Other current assets (Note 6)                                        39       38
                                                                 ------   ------
                                                                    170      298
Deferred charges                                                     --        6
Property, plant and equipment (Note 7)                              778      756
                                                                 ------   ------
                                                                 $  948   $1,060
                                                                 ------   ------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable                                                 $   58   $   53
Accounts payable - parent/affiliate (Note 8)                         10        9
Current portion of long-term debt (Note 10)                          --       31
Other current liabilities (Note 9)                                   13       19
                                                                 ------   ------
                                                                     81      112
Long-term debt (Note 10)                                             --      111
Future income taxes (Note 3)                                        255      257
                                                                 ------   ------
                                                                    336      480
                                                                 ------   ------

Commitments and contingent liabilities (Note 13)

Shareholders' equity
Share capital (Note 11)                                             499      499
Retained earnings                                                   113       81
                                                                 ------   ------
                                                                    612      580
                                                                 ------   ------
                                                                 $  948   $1,060
                                                                 ------   ------


(See summary of significant accounting policies and notes to consolidated
financial statements)


Approved by the Board

/s/ ROBERT H. ALLEN                   /s/ DONALD F. MAZANKOWSKI

ROBERT H. ALLEN                       THE RIGHT HONOURABLE DONALD F. MAZANKOWSKI
Chairman                              Director


                                                           2001 ANNUAL REPORT 43


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


OPERATIONS

Gulf Indonesia Resources Limited (the company), formerly Asamera Canada Limited,
was incorporated under the Canada Business Corporations Act and in August 1997
was continued under the Business Corporations Act, New Brunswick. At December
31, 2001, the company is a 72 per cent owned subsidiary of Conoco Canada
Resources Limited (formerly Gulf Canada Resources Limited), an indirect
subsidiary of Conoco Inc. The company is involved in the exploration for,
development and production of crude oil and natural gas in Indonesia.

BASIS OF PRESENTATION

The consolidated financial statements of the company include the accounts of all
subsidiary companies. Substantially all of the activities of the company are
conducted jointly with others and these activities are accounted for using the
proportionate consolidation method. The financial statements have been prepared
by management in accordance with accounting principles generally accepted in
Canada and conform in all material respects with International Accounting
Standards. The impact of significant differences between accounting principles
generally accepted in Canada and those in the United States are disclosed in
Note 15. All amounts are reported in United States dollars unless otherwise
indicated.

PROPERTY, PLANT AND EQUIPMENT

The successful efforts method of accounting is followed for oil and gas
exploration and development costs. Initial acquisition costs of oil and gas
properties and the costs of drilling and equipping successful exploration wells
are capitalized. The costs of unsuccessful exploration wells are charged to
earnings. All other exploration costs are charged to earnings as incurred. All
development costs are capitalized. Maintenance and repairs are charged to
earnings; renewals and betterments, which extend the economic life of the
assets, are capitalized.

Capitalized costs of proved oil and gas properties are amortized using the
unit-of-production method based on estimated net proved oil and gas reserves
(net reserves are after government take).

As changes in circumstances warrant, the net carrying values of proved
properties, plant and equipment are assessed to ensure that they do not exceed
future cash flows from use. Capitalized costs of unproved properties are also
assessed regularly to determine whether an impairment in value has occurred.

The company has no ownership interest in the producing assets nor in the oil and
gas reserves, but rather has the right to operate the assets and receive
production and/or revenues from the sale of oil and gas in accordance with the
production sharing agreements. Proved reserves have therefore been determined on
a net entitlement basis, which takes into account projections of the
government's share of production calculated with certain price and expenditure
assumptions.

SITE RESTORATION LIABILITIES

Future obligations for site restoration costs, including dismantling plants and
abandoning properties, are provided over the estimated remaining lives of the
related assets.

INTEREST CAPITALIZATION

Interest costs are capitalized on the net investments in major projects during
their respective development stages.

GOVERNMENT TAKE

Operations conducted jointly with the Indonesian state oil and gas company
(Pertamina) are reflected in these financial statements based on the company's
proportionate interest in such activities. All Pertamina interests, other than
working interests, and income and revenue taxes, are considered to be government
take. Government take on production from Indonesian properties represents the
entitlement of Pertamina to a portion of the company's share of crude oil,
condensate and natural gas production and are recorded using rates in effect
under the terms of contracts at the time of production.

Under the terms of each contract, the company and its co-participants (the
Participants) are entitled to recover out of proceeds of production from such
contract, substantially all of the non-capital costs incurred during each year
as well as current year depreciation for capital costs and any costs unrecovered
from prior years. Typically, the maximum cost recovery in any year is
approximately 80 per cent of gross revenue. Pertamina and the Participants are
entitled to share the remaining crude oil, condensate and natural gas profit
based upon the terms contained in each contract. Post cost recovery, the
Participant's pre-tax profit share generally will provide an after-tax rate of
return of 15 per cent for crude oil and condensate production, prior to the
domestic market obligations described below, and 27.5 per cent to 35 per cent
for gas production based on the corporate tax rate that applies to the specific
contract.


44 GULF INDONESIA RESOURCES LIMITED




After a period of five years starting the month of the first delivery of crude
oil produced from each new field in the contract area, the Participant will
typically have a domestic market obligation to sell a portion, not generally
exceeding approximately 9 per cent, of the crude oil produced from the contract
area, at a specific price. This price varies from contract to contract, being
$0.20 per barrel in older contracts and 10 per cent, 15 per cent or 25 per cent
of market price in the more recent contracts, in each case calculated at the
point of export. The domestic market obligation does not apply to natural gas
production.

The Indonesian government's share of revenue may vary considerably from one
fiscal period to the next and also between contracts depending on the level of
unrecovered prior period costs and current period exploration and development
activity.

FOREIGN CURRENCY TRANSLATION

The accounting records of the company are maintained in United States dollars as
substantially all of its operations are transacted in that currency. Monetary
assets and liabilities denominated in foreign currencies are translated into
United States dollars at year-end exchange rates. Non-monetary assets and
liabilities denominated in foreign currencies are translated into United States
dollars at historical rates. Revenues and expenses are translated at exchange
rates prevailing at the transaction dates. Exchange gains and losses are
included in earnings with the exception of the unrealized gains or losses on
translation of long-term monetary liabilities, which are deferred and amortized
over the remaining terms of such liabilities on a straight-line basis.

PIPELINE TARIFFS

Pipeline tariffs are charged against gross oil and gas revenue.

INVENTORIES

Materials and supplies inventories are valued at the lower of cost (determined
on an average cost basis) and estimated net realizable value.

DEFERRED CHARGES

The company incurred certain costs in connection with the financing of the
Corridor Gas Project (the Project). These costs were recorded as deferred
charges and, upon completion of the Project construction period in 1999,
amortized over the remaining term of the loan. All such deferred charges were
fully amortized by December 31, 2001.

INCOME TAXES

The company follows the liability method of tax allocation accounting for income
taxes. Under this method, future tax assets and liabilities are determined based
on differences between the financial reporting and tax basis of assets and
liabilities and measured using substantively enacted tax rates that will be in
effect when the differences are expected to reverse.

STOCK OPTIONS

The company has a fixed stock option plan, which is described in Note 11. The
company does not recognize any compensation expense when stock options are
issued to employees. Any consideration paid by employees on exercise of stock
options is credited to share capital.

MEASUREMENT UNCERTAINTY

Certain items recognized in the financial statements are subject to measurement
uncertainty. The recognized amounts of such items are based on the company's
best information and judgment. Such amounts are not expected to change
materially in the near term.

The amounts recorded for depletion and depreciation as well as the recovery of
the carrying values of property, plant and equipment depend on estimates of oil
and gas reserves and the economic lives and future cash flows from related
assets. The primary factors affecting these estimates are technical engineering
assessments of producible quantities of oil and gas reserves in place and
economic constraints such as the availability of commercial markets for the
company's gas production as well as assumptions related to anticipated commodity
prices and the costs of development and production of the reserves.


                                                           2001 ANNUAL REPORT 45



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(amounts expressed in millions of United States dollars, except where otherwise
noted)


1. GROSS OIL AND GAS REVENUE

Included as a charge against gross oil and gas revenue are the following
pipeline tariffs paid to third parties:



                             YEAR ENDED DECEMBER 31
                             -----------------------
                              2001     2000     1999
                             -----    -----    -----
                                      
Pipeline tariffs - gas       $  32    $  38    $  37
Pipeline tariffs - oil           1        1        1
                             -----    -----    -----
                             $  33    $  39    $  38
                             =====    =====    =====



2. FINANCE CHARGES, NET



                                                                           YEAR ENDED DECEMBER 31
                                                                           -----------------------
                                                                            2001     2000     1999
                                                                           -----    -----    -----
                                                                                    
Interest expense on Corridor Loan                                          $   5    $  18    $  19
Other finance charges(a)                                                       1        2        2
Less: interest income on restricted cash related to the Corridor Loan         (2)      (5)      (1)
                                                                           -----    -----    -----
    Cash finance charges, net                                                  4       15       20
Amortization of debt placement costs                                           6        4        1
                                                                           -----    -----    -----
                                                                           $  10    $  19    $  21
                                                                           =====    =====    =====


(a) In 2001, pursuant to the Senior Revolving Term Credit Facility (see note 10)
    between the company and its parent, Conoco Canada Resources Limited, the
    company incurred a standby fee of 1.5 per cent on the undrawn amount of the
    facility. In 1999 and 2000 as required under the terms of the Corridor Loan,
    the company's parent made available to the company a letter of credit
    totaling $42 million. During 2000, the letter of credit was replaced with
    cash.

(b) Cash interest paid (including other finance charges) and included in the
    determination of earnings was $7 million for 2001 (2000 - $26 million;
    1999 - $14 million).

3. INCOME TAX

Effective tax rate reconciliation: The income tax expense reflects an effective
tax rate that differs from the Canadian statutory rate of 44 per cent. This
difference is mainly the result of the following:



                                                                           YEAR ENDED DECEMBER 31
                                                                           -----------------------
                                                                            2001     2000     1999
                                                                           -----    -----    -----
                                                                                    
Earnings before income taxes                                               $ 112    $ 205    $  63
                                                                           -----    -----    -----
Computed income tax expense at the statutory rate                             49       90       28
Difference between statutory tax rate and PSC tax rates                       16       27       11
Other revenues taxed at non-statutory rates                                   (3)      (5)      (3)
Non-deductible costs related to amortization of assets with no tax basis       1        1        1
Petroleum revenue tax                                                          1        2        1
Unrecorded income tax benefit arising from losses of
    non-producing subsidiaries(a)                                             11        9        5
Recognition of previously unrecognized temporary differences(b)               --       --      (10)
Other                                                                          5       (3)      (3)
                                                                           -----    -----    -----
Income tax expense                                                         $  80    $ 121    $  30
                                                                           =====    =====    =====
Current tax expense                                                        $  82    $  25    $   9
Future tax expense (recovery)                                                 (2)      96       21
                                                                           -----    -----    -----
Income tax expense                                                         $  80    $ 121    $  30
                                                                           =====    =====    =====



46 GULF INDONESIA LIMITED




(a) At December 31, 2001, certain non-producing subsidiaries of the company have
    accumulated losses for tax purposes of approximately $89 million which may
    be carried forward and used to reduce taxable income in these companies in
    future years. These losses, which relate primarily to exploration
    expenditures in pre-commercial production sharing contracts, may be utilized
    if and when development occurs in these production sharing contract areas.
    The potential income tax benefits related to these items have not been
    reflected in the accounts.

(b) During 1999, the company recognized $10 million of previously unrecognized
    income tax benefits related to the planned development of the non-producing
    South Jambi B PSC. The potential income tax benefits of exploration expenses
    incurred to date had not previously been reflected due to insufficient
    likelihood of realization of these benefits.

(c) Cash income tax paid and included in the determination of earnings was $92
    million for 2001 (2000 - $15 million; 1999 - $6 million).

Component of the company's future tax liability: The future tax liability
comprises:



                                                                            DECEMBER 31
                                                                           --------------
                                                                            2001     2000
                                                                           -----    -----
                                                                              
Differences between tax bases and reported amounts of depreciable assets   $ 248    $ 250
Income tax benefit arising from losses of non-producing subsidiaries(a)       39       28
Valuation allowance(a)                                                       (32)     (21)
                                                                           -----    -----
                                                                           $ 255    $ 257
                                                                           =====    =====


(a) A valuation allowance has been provided against the future tax asset related
    to the losses of certain non-producing subsidiaries as the company is not
    permitted to file a consolidated income tax return and accordingly, the
    company does not have reasonable assurance of realizing the benefits of
    these losses.

4. EARNINGS PER COMMON SHARE

The weighted average number of common shares outstanding was 87,920,321 for
2001, 87,901,350 for 2000 and 87,905,320 for 1999. Stock options outstanding for
all periods presented do not have a dilutive effect on earnings per common
share.

5. CHANGES IN NON-CASH WORKING CAPITAL



                                                                  YEAR ENDED DECEMBER 31
                                                                  ----------------------
                                                                   2001     2000     1999
                                                                  -----    -----    -----
                                                                           
(Increase) decrease in non-cash working capital
    Accounts receivable                                           $  17    $  13    $ (29)
    Other current assets                                             (1)      (2)      (6)
    Accounts payable                                                  5        1       (9)
    Accounts payable - parent/affiliate                               1        1        2
    Other current liabilities                                        (6)       6        3
                                                                  -----    -----    -----
                                                                  $  16    $  19      (39)
                                                                  =====    =====    =====
The change relates to the following activities:
    Operating                                                     $  15    $  19    $  (4)
    Investing                                                         1       --      (35)
                                                                  -----    -----    -----
                                                                  $  16    $  19    $ (39)
                                                                  =====    =====    =====



                                                           2001 ANNUAL REPORT 47



6. OTHER CURRENT ASSETS



                                                                 DECEMBER 31
                                                            --------------------
                                                             2001          2000
                                                            ------        ------
                                                                    
Materials and supplies                                      $   32        $   35
Product inventory                                                3             2
Prepaid expenses                                                 4             1
                                                            ------        ------
                                                            $   39        $   38
                                                            ======        ======


7. PROPERTY, PLANT AND EQUIPMENT



                                                      Accumulated
                                           Gross      depreciation,
                                         investment   depletion and      Net
                                          at cost     amortization    investment
                                         ----------   -------------   ----------
                                                             
DECEMBER 31, 2001                         $1,319         $  541         $ 778
                                          ======         ======         =====
December 31, 2000                         $1,231         $  475         $ 756
                                          ======         ======         =====


Property, plant and equipment not being amortized at December 31, 2001 was $220
million (December 31, 2000 - $238 million).

8. ACCOUNTS PAYABLE-PARENT/AFFILIATE

Amounts due to the company's parent and affiliate are interest free, unsecured,
and callable on demand and are as follows:




                                                                 DECEMBER 31
                                                            --------------------
                                                             2001           2000
                                                            -----          -----
                                                                     
Accounts payable-parent/affiliate
   Conoco Canada Resources Limited                          $   8          $   7
   GCRL International Limited                                   2              2
                                                            -----          -----
                                                            $  10          $   9
                                                            =====          =====


Pursuant to inter-company agreements, the company's parent and its affiliate
provide certain technical, financial and accounting and administrative services
to the company (2001 - $1 million; 2000 - $1 million; 1999 - nil). In addition,
the company's parent incurs charges on behalf of the company. All services
rendered to the company and charges incurred on its behalf are billed back to
the company at cost.

9. OTHER CURRENT LIABILITIES



                                                                 DECEMBER 31
                                                            --------------------
                                                             2001          2000
                                                            -----          -----
                                                                     
Income taxes payable                                        $   4          $  14
Deferred take-or-pay revenue(a)                                 8             --
Interest payable on long-term debt (Note 10)                   --              2
Withholding tax payable                                        --              3
Other                                                           1             --
                                                            -----          -----
                                                            $  13          $  19
                                                            =====          =====


(a) Pursuant to the terms of certain gas sales contracts, should gas sales fall
    below prescribed minimum levels, the customer is required to compensate the
    company relative to the deficiencies. Amounts received are recorded as
    deferred revenue and are recognized as income when the gas is eventually
    delivered. During 2001, the company received $10 million of such payments,
    of which $2 million was recognized as income in the fourth quarter.

48 GULF INDONESIA RESOURCES LIMITED



10. LONG-TERM DEBT

On February 26, 1997, the company, along with its co-participant in the Corridor
PSC, entered into a Credit Agreement (the Corridor Loan) with various lending
institutions (the Lenders) to provide up to $450 million of financing to fund
the development of the Corridor Gas Project (the Project). The Lenders recourse
under the Corridor Loan was limited to the Corridor PSC asset that was pledged
as collateral.

The interest rate on the Corridor Loan wan based on LIBOR plus 2 per cent up to
the date of overall completion of the Project, which occurred June 9, 2000, and
LIBOR plus 1.75 per cent - 1.875 per cent thereafter. The effective interest
rate on the balance outstanding during 2001 was approximately 6.96 per cent
(2000 - 8.42 per cent; 1999 - 7.68 per cent).

On August 8, 2001, the company used its existing cash balances to completely
repay the Corridor Loan. At December 31, 2000, the outstanding balance of the
Corridor Loan was $142 million and the company had $97 million of restricted
cash in offshore trust accounts to satisfy the requirement to fund the next
scheduled interest and principal payments and accumulated reserve requirements.
Repayments of the Corridor Loan were quarterly installments that were scheduled
to end in February 2007.

The company has executed a committed Senior Revolving Term Credit Facility with
its parent company, Conoco Canada Resources Limited, for $65 million for a
three-year period at commercial terms and conditions. As at December 31, 2001,
no funds had been drawn under this facility.

11. SHARE CAPITAL

AUTHORIZED:

COMMON SHARES - voting, unlimited number with a par value of U.S. $0.01.

PREFERRED SHARES - unlimited number. These preference shares rank in priority to
the common shares and may be issued from time to time in series, and with the
price, rights, preferences, privileges and restrictions, including voting and
conversion rights, to be fixed by the directors prior to their issue.

ISSUED AND OUTSTANDING:


                                                           Number         Amount
                                                         ----------       ------
                                                                    
COMMON SHARES:

At December 31, 1998                                     87,906,600       $  499
Shares forfeited under restricted stock plan (a)             (5,250)          --
                                                         ----------       ------
At December 31, 1999 and 2000                            87,901,350          499
Issued pursuant to exercise of stock options (b)             64,419           --
Cancelled pursuant to exercise of stock options (b)         (37,916)          --
                                                         ----------       ------
AT DECEMBER 31, 2001                                      87,927,853      $  499
                                                         ----------       ------


(a) On October 3. 1999, pursuant to the terms of the company's 1997 Restricted
    Stock Plan, 97,350 common shares (net of forfeitures) were issued to certain
    individuals in exchange for performance of services. The restricted stock
    vested on October 3, 1999 and the benefit related to the performance of
    services in exchange for the restricted stock was recognized in income over
    the two year vesting period.

(b) The company has a fixed option plan. Pursuant to the terms of the Gulf
    Indonesia Resources Limited 1997 Stock Option and Incentive Plan, the
    company may grant options to its employees at anytime prior to December 31,
    2007. Options outstanding are granted at prices determined at the time the
    option is granted, provided that the exercise price is not less than the
    fair market value of the common shares on the date of grant, and have a
    maximum term of 10 years. Under the plan, 3,421,584 (2000 - 2,688,510
    shares, 1999 - 3,009,219) are reserved but unallocated.


                                                           2001 ANNUAL REPORT 49


A summary of the status of the company's stock options as at December 31, 2001
and 2000 and changes during the years then ended are presented below:



                                                      2001                     2000
- ---------------------------------------------------------------------------------------------
                                                          Weighted                   Weighted
                                                           Average                    Average
                                                          Exercise                   Exercise
                                              Options       Price       Options        Price
                                            ----------    ---------     ---------    --------
                                                                         
Outstanding, beginning of year               6,097,625    $   17.04     5,776,916    $  18.29
    Granted                                    774,875         8.84       738,125        8.16
    Forfeited                               (1,569,718)      (18.77)     (417,416)     (18.55)
    Exercised                                  (64,419)       (8.17)           --          --
                                            ----------    ---------     ---------    --------
Outstanding, end of year                     5,238,363    $   15.42     6,097,625    $  17.04
                                            ----------    ---------     ---------    --------
Options exercisable at year-end              4,113,540                  4,737,375
Weighted average fair value of options
   granted during the year                                $    3.00                  $   3.15


The following table summarizes information about stock options outstanding at
December 31, 2001:



                                         Options Outstanding            Options Exercisable
                             -------------------------------------     -----------------------
                                             Average
                               Number       Remaining      Average       Number       Average
                             Outstanding   Contractual    Exercise     Outstanding    Exercise
Range of Exercise Prices     at 12/31/01      Life         Price       at 12/31/01     Price
- ------------------------     -----------   -----------    --------     -----------    ---------
                                                                       
$ 8.06 -  9.06                1,179,613     8.9 years      $ 8.17         378,790      $ 8.21
$10.70 - 15.38                1,053,750     7.4 years      $11.94         729,750      $12.29
$19.31 - 20.06                3,005,000     5.9 years      $19.48       3,005,000      $19.48
                              ---------     ---------     -------       ---------      ------
                              5,238,363     6.9 years      $15.42       4,113,540      $17.17
                              ---------     ---------     -------       ---------      ------


The company's aggregate stated capital at December 31, 2001 for purposes of the
Business Corporations Act, New Brunswick is $1 million.

12. FINANCIAL INSTRUMENTS

The company's financial instruments recognized on the balance sheet consist of
cash and short-term investments, cash restricted in use, accounts receivable,
current liabilities and long-term debt. Except as referred to below, short-term
investments are comprised of commercial paper with a maturity period no greater
than 90 days. The average interest rate earned in 2001 from the short-term
investments was 3.33 per cent (2000 - 6.26 per cent; 1999 - 5.15 per cent).

Cash and short-term investments at December 31, 2001 included promissory notes
of $52 million due from the company's parent and affiliate. Such promissory
notes were in line with current commercial terms and were repaid in full in
January 2002.

The fair value of all financial instruments approximate their carrying value.

All of the company's onshore natural gas production is delivered to the Duri
Steamflood, exchanged for Duri crude and sold to Itochu Petroleum Co, (Hong
Kong) Ltd. Substantially all of the company's onshore crude oil production
is sold domestically to Pertamina (2001 - $114 million; 2000 - $149 million:
1999 - $89 million). Offshore crude oil production from the Kakap PSC is
marketed to customers throughout Asia.

Accounts receivable at December 31, 2001, included $17 million from Pertamina,
$6 million from Itochu and $16 million from other sources, the latter of which
is subject to normal industry credit risks and routinely assessed for financial
strength.


50 GULF INDONESIA RESOURCES LIMITED




13. COMMITMENTS AND CONTINGENT LIABILITIES

Prior to 1994, the Production Sharing Contracts (PSCs) required environmentally
responsible operating practices but there was no requirement for abandonment and
site restoration. For PSCs and amendments and extensions thereto signed after
January 1, 1994, the contractor is responsible for abandonment and site
restoration costs. For the company, these abandonment and site restoration
obligations involve 5 non-producing PSCs, the Corridor PSC that was amended and
extended in October 1996, and the Kakap PSC that was amended and extended in
January 1999. Per the terms of the amendments and extensions, the company is
responsible for abandonment and site restoration of facilities installed after
the agreements were signed. Total anticipated future costs (including plugging
and abandoning wells), given the company's current inventory of wells and
facilities, is approximately $6 million.

The Indonesian tax authorities have contested tax paid by the company in regard
to certain revenues received outside of Indonesia. The company has been paying
tax on this revenue based on a directive issued by the Director General of
Taxation in 1989. In 1996, the directive was retroactively challenged by a new
Director General of Taxation. The estimated potential unrecorded liability to
the company is approximately $7 million at December 31, 2001. The company
believes that the position taken by the tax authorities is unreasonable,
particularly the retroactive application of the position, and that the
assumptions on which the claim is based are incomplete. The company is
contesting the claim.

Penalties by the Indonesian tax authorities amounting to $4 million have been
assessed on the company for late payment of withholding tax on hypothetical
interest cost recoverable in the Corridor PSC. The current Indonesian tax code
does not address the issue of hypothetical interest. The company has entered
into discussions with the local tax authorities and believe that such penalties
will ultimately be waived.

In accordance with the Ministry of Finance, production sharing contractors were
permitted to defer payments of value added tax (VAT) related to specific
exploration projects until commercial production. The company currently has
approximately $3 million of deferred VAT recorded in accounts payable and
accounts receivable. However, commencing January 1, 2000, the deferral of
payments of VAT is no longer permitted and the company is likely to be assessed
for the VAT payable as well as penalties amounting to approximately $2 million.
The VAT payable will be reimbursed at some future time if and when commercial
production commences. The industry has been lobbying government to reinstate the
previous arrangement and many cases are pending trial in regard to this issue.
Management considers such penalties unreasonable and awaits further
clarification from the government.

The company has been advised by Canadian tax authorities that they are proposing
to issue a notice of assessment related to a dividend paid between two of the
company's subsidiaries in 1994. The income tax in question for 1994 amounts to
$16 million. The company made similar dividend payments in subsequent years and
the comparable tax for those years would be $31 million. The company is of the
view that the dividend qualifies for a tax exemption in Canada since it
represents a repatriation of profits from Indonesian operations on which
Indonesian taxes have already been paid. The position taken by the Canadian tax
authorities is that in this particular circumstance the amounts paid to
Indonesian authorities do not qualify as foreign taxes paid and therefore no
exemption is available on the repatriation of the profits to Canada. The company
does not agree with this interpretation and intends to challenge any assessment
that may be received.

The company is also involved in various litigation, regulatory and other
environmental matters in the ordinary course of business. In management's
opinion, an adverse resolution of these matters would not have a material impact
on operations or financial position.


                                                           2001 ANNUAL REPORT 51



14. SEGMENT INFORMATION



                                     ONSHORE - GAS           ONSHORE - OIL      OFFSHORE - OIL AND GAS
                                ---------------------   ---------------------   ----------------------
                                 2001    2000    1999    2001    2000    1999    2001     2000    1999
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
                                                                      
Revenues
Gross oil and gas revenue       $ 152   $ 228   $ 118   $ 114   $ 151   $  91   $  42    $  45   $  40
Government take                     9      13       7      39      52      25       6       11      10
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
Net oil and gas revenue           143     215     111      75      99      66      36       34      30
Other                              --      --      --      --      --      --      --       --      --
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
                                  143     215     111      75      99      66      36       34      30
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
Expenses
Operating                           8       9       9      16      15      18       9        9       8
Exploration                        --      --      --      --      --      --      --       --      --
General and administrative         --      --      --      --      --      --      --       --      --
Depreciation, depletion and
    amortization                   21      29      29      22      30      26      20       10      15
Finance charges, net               10      19      21      --      --      --      --       --      --
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
                                   39      57      59      38      45      44      29       19      23
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
Earnings (loss) before tax        104     158      52      37      54      22       7       15       7
Income tax expense (recovery)
   Current                         58      11      --      15      12       7       8        1       2
   Future                           3      77      30       8      17       3      (4)       6       2
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
                                   61      88      30      23      29      10       4        7       4
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
Earnings (loss) for the year    $  43   $  70   $  22   $  14   $  25   $  12   $   3    $   8   $   3
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
Total assets                    $ 419   $ 466   $ 438   $ 199   $ 234   $ 272   $ 199    $ 211   $ 180
                                -----   -----   -----   -----   -----   -----   -----    -----   -----
Capital expenditures
   and exploration expenses     $  29   $  10   $   9   $  20   $  15   $  14   $   6    $  32   $  11
                                -----   -----   -----   -----   -----   -----   -----    -----   -----



Gulf Indonesia has four reportable segments: onshore gas operations, onshore oil
operations, offshore oil and gas operations, and exploration. The operations
segments are involved in the production and development of crude oil and natural
gas in Indonesia. The onshore operations are located on the island of Sumatra
while the offshore operations are located in the west Natuna Sea. The
exploration segment is involved in the exploration for crude oil and natural gas
in Indonesia. Gulf Indonesia's reportable segments are strategic business units
that are managed separately as each has different operational requirements and
focuses. Due to the nature of the operations, there are no intersegment sales
and transfers.

The corporate segment is comprised principally of the impact of crude oil
hedging, interest income from unrestricted cash on hand, miscellaneous other
revenue and general corporate expenditures.


52 GULF INDONESIA RESOURCES LIMITED




14. SEGMENT INFORMATION (continued)



                                         EXPLORATION                    CORPORATE                     TOTAL
                                --------------------------    --------------------------    -------------------------
                                 2001      2000      1999      2001      2000      1999      2001      2000     1999
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
                                                                                    
Revenues
Gross oil and gas revenue       $   --        --        --    $   --    $   (3)   $   (3)   $  308    $  421   $  246
Government take                     --        --        --        --        --        --        54        76       42
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
Net oil and gas revenue             --        --        --         4        (3)       (3)      254       345      204
Other                               --        --        --         4         4         2         4         4        2
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
                                    --        --        --         4         1        (1)      258       349      206
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
Expenses
Operating                           --        --        --        --        --        --        33        33       35
Exploration                         24        18        11        --        --        --        24        18       11
General and administrative          --        --        --        13         5         6        13         5        6
Depreciation, depletion and
    amortization                     3        --        --        --        --        --        66        69       70
Finance charges, net                --        --        --        --        --        --        10        19       21
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
                                    27        18        11        13         5         6       146       144      143
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
Earnings (loss) before tax         (27)      (18)      (11)       (9)       (4)       (7)      112       205       63
Income tax expense (recovery)
        Current                     --        --        --         1         1        --        82        25        9
        Future                      (4)       (2)      (12)       (5)       (2)       (2)       (2)       96       21
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
                                    (4)       (2)      (12)       (4)       (1)       (2)       80       121       30
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
Earnings (loss) for the year    $  (23)   $  (16)   $    1    $   (5)   $   (3)   $   (5)   $   32    $   84   $   33
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
Total assets                    $   89    $   72    $   68    $   42    $   77    $   17    $  948    $1,060   $  975
                                ------    ------    ------    ------    ------    ------    ------    ------   ------
Capital expenditures and
   exploration expenses         $   49    $   29    $   32    $   --    $   --    $   --    $  104    $   86   $   66
                                ------    ------    ------    ------    ------    ------    ------    ------   ------



                                                           2001 ANNUAL REPORT 53




15. UNITED STATES ACCOUNTING PRINCIPLES

If United States generally accepted accounting principles (U.S. GAAP) had been
followed, amounts on the Consolidated Statements of Cash Flow would be presented
as follows:



                                                   YEAR ENDED DECEMBER 31
                                                   -----------------------
                                                    2001     2000     1999
                                                   -----    -----    -----
                                                            
OPERATING ACTIVITIES
Cash generated from operations, as reported (a)    $ 126    $ 271    $ 137
Changes in non-cash working capital, as reported      15       19       (4)
Adjustments:
    Geological and geophysical expenditures (b)      (13)      (8)     (10)
                                                   -----    -----    -----
Operating activities, as adjusted                  $ 128    $ 282    $ 123
                                                   -----    -----    -----
INVESTING ACTIVITIES, as reported                  $ (15)   $(107)   $(174)
Adjustments:
    Geological and geophysical expenditures (b)       13        8       10
                                                   -----    -----    -----
Investing activities, as adjusted                  $  (2)   $ (99)   $(164)
                                                   -----    -----    -----



If U.S. GAAP had been followed, amounts on the Consolidated Statements of
Financial Position would be adjusted as follows:



                                                          DECEMBER 31
                                                      -------------------
                                                      2001           2000
                                                      -----         -----
                                                      Increase (decrease)
                                                              
ASSETS                                                $  --         $  --
                                                      -----         -----
LIABILITIES AND SHAREHOLDERS' EQUITY
Contributed surplus (c)                               $  11         $  11
Retained earnings (c)                                   (11)          (11)
                                                      -----         -----
                                                      $  --         $  --
                                                      -----         -----



The financial statements have been prepared in accordance with accounting
principles generally accepted in Canada which, in the case of the company,
conform in all material respects with those in the United States except that:

(a) Under U.S. GAAP, "cash generated from operations" as defined by the company
    would not be presented in the Consolidated Statement of Cash Flows as it
    excludes the effect of changes in non-cash working capital and therefore
    differs from the definition of operating cash flow under Statement of
    Financial Accounting Standards No. 95. The company has presented this item
    for Canadian GAAP as it is commonly used by oil and gas investors in Canada
    as a measure of performance and liquidity and is normally presented in
    Canadian financial statements.

(b) Under U.S. GAAP, geological and geophysical expenditures would be classified
    as operating activities.

(c) Prior to the company going public in 1997, certain costs related to the
    company's technical, financial, accounting and administrative services were
    borne by the company's parent on the company's behalf. Under U.S. GAAP,
    these costs would be recognized as additional general and administrative
    expenses offset by contributions to capital. These adjustments have been
    calculated based on a specific allocation of salary costs of individuals
    providing technical services to the company and a general allocation of
    corporate overhead determined using comparative ratios of reserves, sales
    volumes and assets of the company and its parent.


54 GULF INDONESIA RESOURCES LIMITED




(d) Statement of Financial Accounting Standards No. 133, "Accounting for
    Derivative Instruments and Hedging Activities" (as amended by FAS 137 and
    138) is effective for fiscal years beginning after June 15, 2000. These
    pronouncements have no impact on the company's consolidated financial
    statements. FAS 143, "Accounting for Asset Retirement Obligations" is
    effective January 1, 2003. This standard requires entities to record the
    fair value of a liability for an asset retirement obligation in the period
    in which it has incurred and a corresponding increase in the carrying amount
    of the related long-lived asset. FAS 144, "Accounting for the Impairment or
    Disposal of Long-Lived Assets" is effective January 1, 2002. This standard
    clarifies certain implementation issues arising from an earlier standard,
    FAS 121. At this time, management does not believe that FAS 143 and FAS 144
    will have a material effect on the company's consolidated financial
    statements.

Comprehensive income, as defined by Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", is equivalent to earnings as
presented.

ADDITIONAL DISCLOSURE

STOCK-BASED COMPENSATION PLANS

The Financial Accounting Standards Boards Statement No. 123, "Accounting for
Stock-Based Compensation" (FAS 123) requires the fair value of stock-based
compensation to be either recorded an compensation over the service period or
the impact of the use of fair values are to be disclosed in the financial
statements. The company applies Accounting Principles Board Opinion No. 25 (APB
25) and related Interpretations in accounting for its plans. As a result, no
compensation cost has been recognized in income for its fixed stock option plan
as under APB 25 the exercise price of the company's plans equal the market value
of the underlying stock on the date of grant. Pro forma disclosures of earnings
and earnings per common share are presented below as if the company had adopted
the cost recognition requirements under FAS 123.

The compensation cost for the stock-based compensation for 2001 was $2 million
(2000 - $2 million; 1999 - $3 million). Pro forma disclosures are not likely to
be representative of the effects on reported earnings for future years.



                                       YEAR ENDED DECEMBER 31
                                      -------------------------
                                       2001     2000      1999
                                      -----    -----     -----
                                                
Earnings
   As reported                        $  32    $  84     $  33
   Pro forma                          $  30    $  82     $  30
Earnings per common share ($/share)
   As reported                        $0.36    $0.96     $0.37
   Pro forma                          $0.34    $0.94     $0.33



The fair value of the options granted during 2001 is estimated at the date
of grant using the Black-Scholes option-pricing model with the following
assumptions: expected volatility of 50 per cent (2000 - 50 per cent;
1999 - 55 per cent), risk-free interest rate of 4.5 per cent (2000 - 5.1 per
cent; 1999 - 6.5 per cent) and expected life of 3 years (2000 - 3 years;
1999 - 3 years).

16. RECLASSIFICATIONS

Certain amounts for 2000 and 1999 have been reclassified to conform to the
presentation adopted for 2001.


                                                           2001 ANNUAL REPORT 55


FINANCIAL HIGHLIGHTS

            o   Cash generated from operations of $126 million ($1.43 per share)

            o   Earnings of $32 million ($0.36 per share)

            o   Operating costs of $2.19 per boe

            o   F&D costs of $3.65 per boe of gross proved reserves added, with
                188 per cent of 2001 production replaced

            o   Payout of the company's original investment in the Corridor Gas
                Project after only three years of operation

            o   Repayment of the entire balance of the Corridor Loan facility
                five and a half years ahead of schedule, resulting in a
                debt-free balance sheet

            o   Increase in the net cash surplus to $92 million at year-end 2001

                           [PICTURE OF DON MCKECHNIE]


MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS FROM OPERATIONS



CONSOLIDATED RESULTS                               2001                 2000                1999
                                              US$       US$/       US$       US$/       US$       US$/
                                            million     boe      million     boe      million     boe
                                            -------    -----     -------    -----     -------    -----
                                                                               
Gross oil and gas revenue                      308     20.46        421      24.69       246     14.18
Government take                                (54)    (3.57)       (76)     (4.44)      (42)    (2.45)
                                             -----     -----      -----      -----     -----     -----
Net oil and gas revenue                        254     16.89        345      20.25       204     11.73
Other revenue                                    4      0.24          4       0.23         2      0.14
Operating expense                              (33)    (2.19)       (33)     (1.95)      (35)    (2.05)
Exploration expense                            (24)    (1.56)       (18)     (1.07)      (11)    (0.64)
General and administrative expense             (13)    (0.85)        (5)     (0.33)       (6)    (0.34)
DD&A expense                                   (66)    (4.43)       (69)     (4.06)      (70)    (4.02)
Finance charges, net
    Cash interest charges, net                  (4)    (0.30)       (15)     (0.86)      (20)    (1.13)
    Amortization of debt placement costs        (6)    (0.40)        (4)     (0.24)       (1)    (0.08)
Income tax expense
    Current                                    (82)    (5.42)       (25)     (1.47)       (9)    (0.49)
    Future                                       2      0.11        (96)     (5.56)      (21)    (1.24)
                                             -----     -----      -----      -----     -----     -----
Earnings                                        32      2.09         84       4.94        33      1.88
Add back non-cash items                         94      6.28        187      10.93       104      6.02
                                             -----     -----      -----      -----     -----     -----
Cash generated from operations                 126      8.37        271      15.87       137      7.90
                                             -----     -----      -----      -----     -----     -----
Volumes sold (mboe/d)(gross/net)                41.3/35.8            46.6/39.7            47.6/41.7
WTI (US$/bbl)                                     $25.90               $30.20               $19.24
Per share (dollars)
    Cash generated from operations                $ 1.43               $ 3.08               $ 1.56
    Earnings                                      $ 0.36               $ 0.96               $ 0.37



                                                           2001 ANNUAL REPORT 31



The company's 2001 results varied from the 2000 results due to the following:

o   A reduction in the reported share of Corridor Gas Project results from 60
    per cent to 54 percent. During the development of the Project, the company
    incurred certain costs on behalf of Pertamina's working interest share of
    the Corridor PSC. As reimbursement of these costs, the company was entitled
    to an increased share of production until full repayment occurred in
    December 2000.

o   A reduction in sales volumes, primarily due to lower gas deliveries to
    Caltex in the first three quarters of the year and reservoir declines in its
    mature onshore and offshore oil fields. These effects were partially offset
    by the positive impact of gas sales from the West Natuna Gas Project.

o   A seventeen per cent reduction in realized prices for the year that was
    comprised of a fourteen per cent fall in world oil prices and a further
    three per cent fall due to weaker relative demand for Indonesian crude
    types.

o   An increase in exploration expense due to higher level of exploration
    activity.

o   An increase in general and administrative expense due to lower overhead
    recoveries from partners, one-time costs related to the third quarter
    acquisition of the company's parent by Conoco Inc., and an increase in
    community relations activities.

o   An improvement in net cash finance charges due to lower average outstanding
    net debt balances and lower interest rates.

o   An increase in non-cash finance charges due to the repayment of the Corridor
    Loan that accelerated the amortization of the remaining deferred debt
    placement costs.

o   An increase in current taxes for the Corridor PSC in 2001 as available tax
    deductions resulting from the Corridor Gas Project were fully utilized by
    the fourth quarter of 2000.

o   An adjustment relating to withholding taxes paid on interest costs
    recoverable in the Corridor PSC.

The following table summarizes the impacts of the above items on the company's
year-over-year results.

RECONCILIATION OF SALES VOLUMES,
CASH GENERATED FROM OPERATIONS AND EARNINGS



2001 VERSUS 2000                                               Sales      Cash Generated
                                                              Volumes    From Operations      Earnings
                                                              -------    ---------------   ------------
                                                              (mboe/d)    (US$millions)    (US$millions)
                                                                                  
Year ended December 31, 2000                                   46.6           271                 84
Reconciling Items:
    Reduction in reported share of Corridor Gas Project
      results from 60 per cent to 54 per cent                  (2.9)          (21)                (8)
    Lower gas deliveries to Caltex                             (1.6)          (12)                (5)
    Lower onshore oil sales volumes                            (1.1)           (8)                (3)
    Lower offshore oil sales volumes                           (0.8)           (6)                (2)
    New gas sales volumes from the West Natuna Gas Project      1.1            10                  2
    Lower realized oil and gas prices                                         (54)               (25)
    Increase in exploration expense                                                               (4)
    Increase in general and administrative expense                             (8)                (5)
    Write-off of costs related to relinquished blocks                                             (3)
    Improvement in net cash finance charges                                    11                  5
    Increase in non-cash finance charges                                                          (1)
    Increase in current taxes for the Corridor PSC                            (41)
    Withholding tax adjustment for the Corridor PSC                           (11)                (5)
    Other                                                                      (5)                 2
                                                               ----          ----               ----
YEAR ENDED DECEMBER 31, 2001                                   41.3           126                 32


32 GULF INDONESIA RESOURCES LIMITED




CAPITAL AND EXPLORATION EXPENDITURES AND ACQUISITIONS



(millions of US dollars)                                  2001     2000     1999
                                                          ----     ----     ----
                                                                   
Exploration/Delineation
    Onshore gas                                             16        6       11
    Onshore oil                                              6        7       14
    Offshore oil and gas                                    21       15        6
    New ventures                                             6        1        1
                                                           ---      ---      ---
                                                            49       29       32
                                                           ---      ---      ---
Development
    Onshore gas                                             29       10        9
    Onshore oil                                             20       15       14
    Offshore oil and gas                                     6       32       11
                                                           ---      ---      ---
                                                            55       57       34
                                                           ---      ---      ---

Total capital and exploration expenditures                 104       86       66
Acquisitions                                                 8       --       --
                                                           ---      ---      ---
                                                           112       86       66


Capital and exploration expenditures and acquisitions totaled $112 million in
2001 compared to $86 million in 2000, reflecting an increase in exploration and
delineation activities and the acquisition of an increased interest in the
Pangkah PSC (see below). Development expenditures for the West Natuna Gas
Project were the main reason for the increase in capital spending in 2000
compared to 1999.

Exploration spending in 2001 of $49 million increased significantly compared to
both 2000 and 1999 reflecting the drilling of eighteen exploration/delineation
wells of which eleven were successful -- five offshore oil and gas, four onshore
gas, and two onshore oil. The company drilled ten exploration/delineation wells
in 2000 and five in 1999. As well, the company acquired interests in two new
exploration blocks in 2001.

Total development spending in 2001 of $55 million remained relatively flat
year-over-year with higher levels of spending to develop the company's onshore
gas fields being offset by lower offshore development spending (due to the
completion of construction of the West Natuna Gas Project in 2000).

The company also acquired an additional ten per cent working interest in the
Pangkah PSC for approximately $8 million, increasing its working interest in
this block to 22 per cent.


PROVED RESERVES



                                                       2001      2000      1999
                                                      -----     -----     -----
                                                                 
Proved reserve additions
   (gross mmboe)                                       28.4      74.5      42.1
Finding and development costs
   (US$ per gross proved boe added)                   $3.65     $1.15     $1.57
Gross proved reserve replacement ratio
   (per cent of production)                             188%      437%      242%


During 2001, the company booked 28.4 million boe of gross proved reserve
additions, replacing 188 per cent of the oil and gas produced in the year at an
average cost of $3.65 per boe. Over the past three years, the company has added
145 million boe of gross proved reserves, replacing nearly 300 per cent of the
oil and gas produced over the three-year period at an average finding and
development cost of $1.76 per boe.


                                                           2001 ANNUAL REPORT 33




SEGMENTS

Gulf Indonesia reports its year-to-year operations in five business segments:
onshore gas, onshore oil, offshore oil and gas, exploration and corporate. Each
of the segments is detailed in this report. See Note 14 to the consolidated
financial statements for additional segment information.

ONSHORE GAS OPERATIONS



SEGMENT RESULTS                                 2001              2000             1999
                                            US$      US$/     US$      US$/     US$      US$/
                                          million    boe    million    boe    million    boe
                                          -------   -----   -------   -----   -------   -----
                                                                      
Gross gas revenue
    Before pipeline tariff                   184    21.62      266    26.22      155    15.83
    Pipeline tariff                          (32)   (3.72)     (38)   (3.72)     (37)   (3.72)
    Government take                           (9)   (1.11)     (13)   (1.29)      (7)   (0.75)
                                           -----    -----    -----    -----    -----    -----
Net gas revenue                              143    16.79      215    21.21      111    11.36
Operating expense                             (8)   (0.93)      (9)   (0.94)      (9)   (0.99)
DD&A expense                                 (21)   (2.53)     (29)   (2.87)     (29)   (3.00)
Finance charges, net
    Cash interest charges net                 (4)   (0.49)     (15)   (1.46)     (20)   (2.00)
    Amortization of debt placement costs      (6)   (0.70)      (4)   (0.39)      (1)   (0.15)
Income tax expense
    Current                                  (58)   (6.85)     (11)   (1.07)      --       --
    Future                                    (3)   (0.36)     (77)   (7.63)     (30)   (3.08)
                                           -----    -----    -----    -----    -----    -----
Earnings                                      43     4.93       70     6.85       22     2.14
Add back non-cash items                       30     3.59      110    10.89       60     6.23
                                           -----    -----    -----    -----    -----    -----
Cash generated from operations                73     8.52      180    17.74       82     8.37
                                           -----    -----    -----    -----    -----    -----
Volumes sold (gross/net)
    mmcf/d                                    140 / 134         166 / 159         161 / 154
    mboe/d                                   23.3 / 22.4       27.7 / 26.5       26.8 / 25.7


The onshore gas segment consists of gas operations in the Corridor PSC. Related
condensate production from this block is reported under the onshore oil segment,
while exploration activity related to this block is reported under the
exploration segment.

The 2001 results for the onshore gas segment reflect the reduction in the
reported share of Corridor Gas Project results from 60 per cent to 54 per cent.
The impact of this reduction in reported share on sales volumes, cash generated
from operations, and earnings for the onshore gas segment in 2001 was 2,800
boe/d, $21 million and $8 million, respectively.

Cash generated from onshore gas operations was $73 million in 2001 compared to
$180 million in 2000, primarily reflecting lower realized prices, lower reported
sales volumes and higher current taxes, partially offset by lower cash finance
charges. Cash generated from operations in 2000 benefited from higher realized
prices, higher sales volumes and the improvement in cash finance charges
compared to 1999.

Gross revenue before pipeline tariff in 2001 was $184 million, 31 per cent lower
than 2000 reflecting lower realized prices and lower reported sales volumes.
Gross revenue before pipeline tariff in 2000 was higher than 1999 due to higher
realized prices and higher reported sales volumes.

Onshore gas prices are dependent on crude oil prices as the gas is exchanged for
Duri crude oil on an energy equivalent basis. The 18 per cent decline in
realized prices compared to 2000 reflects the 14 per cent decline in the WTI
price and a six percent decrease resulting from lower demand for Duri crude
relative to WTI, partially offset by a two per cent increase in price due to the
higher energy content of the gas. The 66 per cent increase in realized price
between 2000 and 1999 includes the impact of the 57 per cent improvement in the
WTI price and higher demand for Duri crude relative to WTI.

34 GULF INDONESIA LIMITED



The sales volume decrease of 26 mmcf/d between 2001 and 2000 reflects the
following:

o   A reduction of approximately 17 mmcf/d reflecting the change in the
    company's reported share of Corridor Gas Project results from 60 per cent to
    54 per cent.

o   A reduction of approximately 6 mmcf/d related to lower gas takes by Caltex
    during the first three quarters of 2001 to levels below the contracted take
    or pay amounts. During periods where gas takes fall below take or pay
    levels, Gulf Indonesia receives oil volumes equivalent to the contracted
    take or pay quantities of gas, thereby maintaining a minimum level of Duri
    crude oil liftings. In the fourth quarter of 2001, gas takes by Caltex
    increased to above take or pay levels, resulting in the delivery of make-up
    gas and the recognition of revenue at prices realized at the time the oil
    was received.

o   A reduction of approximately 3 mmcf/d in the volume required to meet the
    energy demand of Caltex. An increase in the carbon dioxide removal capacity
    at the Grissik gas plant during the latter part of 2000 helped to improve
    the energy content of the sales gas stream by two percent in 2001. Since the
    amount of Duri crude oil received in exchange for the gas deliveries is
    calculated based on energy and the pipeline tariff is calculated based on
    volume, the higher energy content of the gas improves overall netbacks by
    reducing the pipeline tariff per unit of energy sold.

The year-over-year volume increase in 2000 compared to 1999 reflects lower
volumes during the startup phase of the Project (January 1999) when gas
production was constrained by restricted pipeline capacity.

Government take in all three years was approximately five per cent of gross
revenue before pipeline tariff. The low rate reflects utilization of substantial
gas deductions (including hypothetical interest cost recovery and non-tax
deductible investment credits). The company has claimed an investment credit
related to the development of pre-tertiary gas reserves in the Dayung field that
currently supplies gas to the Grissik gas plant for the Corridor Gas Project.
This investment credit is equal to 130 per cent of the applicable costs of the
related facilities and is claimed as a component of the costs recoverable from
production in the Corridor PSC. This incentive reduces government take, but is
taxable when claimed. The net cash flow benefit is approximately 9 percent of
the amount claimed. The company's claim is subject to Pertamina approval.

Operating expense per boe remained relatively flat from 2000 to 2001 as a
decrease in costs related primarily to the installation of pre-treatment
facilities at the Grissik gas plant in the second quarter of 2000 was virtually
offset by lower volumes in 2001. Excluding a $0.29 per boa benefit from an
insurance recovery in 1999, operating expenses per boa in 2000 were 27 percent
lower than in 1999.

Depreciation, depletion and amortization expense declined in 2001 due to lower
volumes and a lower rate per boe. The depreciation, depletion and amortization
rate per boe was lower in both 2001 and 2000, primarily as a result of
significant low-cost reserve additions in 2000 and 1999, respectively.

Finance charges include cash interest expense and amortization of debt placement
costs and are net of interest income on cash restricted in use related to the
Corridor Loan. Cash finance charges of $4 million in 2001 were $11 million below
2000 levels, due primarily to repayment of the Corridor Loan in August 2001, as
discussed more fully in the "Liquidity and Capital Resources" section. The
amortization of debt placement costs of $6 million in 2001 compared to $4
million in 2000 and $1 million in 1999 reflects the level of loan repayments in
each of those years.

Total income tax expense was $61 million in 2001, $88 million in 2000 and $30
million in 1999. The effective rate was approximately 59 per cent, 56 per cent
and 59 per cent, respectively. While there were no current or cash income taxes
in 1999, the Corridor PSC's available tax pools were fully utilized by the
fourth quarter of 2000 resulting in the recognition of current taxes of $11
million in 2000 and $58 million in 2001 (including taxes owed related to
investment credits claimed in the year). The extent of cash taxes in future
periods will depend on revenues and the availability of tax-deductible costs,
including the remaining tax depreciation on the Project facilities. Future costs
in the Corridor PSC will generally be immediately available for tax deduction
with the exception of the costs of production facilities and other tangible
equipment that are to be depreciated over a specified period beginning in the
year the particular asset is placed into service. In 2001, the Sumpal field
facilities were placed into service, reducing the company's tax liability in the
year by $2 million.


                                                           2001 ANNUAL REPORT 35



ONSHORE OIL OPERATIONS




SEGMENT RESULTS                        2001              2000             1999
                                   US$     US$/     US$      US$/     US$      US$/
                                 million   bbl    million    bbl    million    bbl
                                 -------  -----   -------   -----   -------   -----
                                                            
Gross liquids revenue              114    23.35      151    28.18       91    17.14
Government take                    (39)   (7.92)     (52)   (9.67)     (25)   (4.66)
                                 -----    -----    -----    -----    -----    -----
Net liquids revenue                 75    15.43       99    18.51       66    12.48
Operating expense                  (16)   (3.28)     (15)   (2.81)     (18)   (3.36)
DD&A expense                       (22)   (4.45)     (30)   (5.58)     (26)   (4.89)
Income tax expense
    Current                        (15)   (3.21)     (12)   (2.32)      (7)   (1.25)
    Future                          (8)   (1.55)     (17)   (3.08)      (3)   (0.71)
                                 -----    -----    -----    -----    -----    -----
Earnings                            14     2.94       25     4.72       12     2.27
Add back non-cash items             30     6.00       47     8.66       29     5.60
                                 -----    -----    -----    -----    -----    -----
Cash generated from operations      44     8.94       72    13.38       41     7.87
                                 -----    -----    -----    -----    -----    -----
Volumes sold (mb/d)(gross/net)
    Corridor TAC                     8.0/5.0           8.1/5.0           7.2/ 4.6
    Corridor PSC                     3.2/2.7           3.6/3.1           4.2/ 3.5
    Jambi EOR                        2.1/1.4           2.6/1.5           2.3/ 2.0
                                    --------          --------          ---------
                                    13.3/9.1          14.3/9.6          13.7/10.1
    Other                            0.1/0.1           0.3/0.3           0.9/ 0.8
                                    --------          --------          ---------
                                    13.4/9.2          14.6/9.9          14.6/10.9


The onshore oil segment consists of crude oil and condensate operations in the
Corridor TAC, Corridor PSC, Jambi EOR and "other" which includes the Block A PSC
and an overriding royalty on the gas and condensate production from the Block B
PSC. Exploration activity related to these blocks is reported under the
exploration segment.

Cash generated from onshore oil operations was $44 million in 2001, down 39 per
cent from 2000, primarily as a result of lower realized prices and lower sales
volumes. Cash generated from operations in 2000 benefited from higher realized
prices and reduced operating expenses compared to 1999.

Onshore oil sales volumes were 13,400 b/d in 2001 compared to 14,600 b/d in 2000
and 1999. Sales volumes before "other" were 13,300 b/d in 2001, down seven per
cent from 2000 as natural reservoir declines more than offset the impact of
development activities during 2001. In 2000, volumes before "other' increased by
four per cent as successful development activities in the Corridor TAC and Jambi
EOR more than offset natural reservoir declines. "Other" volumes include an
overriding royalty production payment which declined in 2001 and 2000 due to
lower production from the gas fields in the Block B PSC in the province of Aceh.

Government take averaged approximately 34 per cent of gross revenue during 2001
compared to 34 per cent in 2000 and 27 per cent in 1999. The government take
rate for 200l and 2000 was higher than 1999 due to the full utilization in early
2000 of certain previously unrecovered costs for the Jambi EOR contract area.

Operating expenses of $16 million in 2001 were 7 per cent above 2000 levels due
primarily to increased costs in the Jambi EOR contract area. On a per barrel
basis the operating cost increased to $3.28 per bbl due to higher costs and
lower production. Costs in 2000 benefited from the impact of cost cutting
initiatives.

Depreciation, depletion and amortization expense was $22 million or $4.45 per
bbl in 2001 compared to $30 million or $5.58 per bbl in 2000. This expense is
based on net volumes and decreased on a per bbl basis in 2001 as a result of
lower-cost reserve additions in the Corridor TAC at year-end 2000 In 2000, the
depreciation, depletion and amortization expense per bbl increased as a result
of negative reserve revisions at year-end 1999.

Income tax expense was approximately 62 per cent of pre-tax earnings in 2001
compared to approximately 53 per cent in 2000. The increase in the effective tax
rate in 2001 was due to the reduction in the proportionate share of taxable
income arising from overriding royalties, which have a lower tax rate of 20 per
cent. Current taxes increased in 2001 due to the recognition of current taxes
for the Corridor PSC for the full year 2001.

36 GULF INDONESIA LIMITED



OFFSHORE OIL AND GAS OPERATIONS



SEGMENT RESULTS                           2001                 2000                1999
                                     US$       US$/       US$       US$/       US$       US$/
                                   million     boe      million     boe      million     boe
                                   -------    ------    -------     -----    -------     -----
                                                                       
Gross oil and gas revenue             42       25.09      45        28.61       40       17.65
Government take                       (6)      (3.42)    (11)       (7.09)     (10)      (4.63)
                                     ---      ------     ---        -----      ---       -----
Net oil and gas revenue               36       21.67      34        21.52       30       13.02
Operating expense                     (9)      (5.37)     (9)       (5.55)      (8)      (3.50)
DD&A expense                         (20)     (12.22)    (10)       (6.58)     (15)      (6.35)
Income tax (expense) recovery
    Current                           (8)      (4.39)     (1)       (0.77)      (2)      (0.65)
    Future                             4        2.22      (6)       (3.40)      (2)      (1.14)
                                     ---      ------     ---        -----      ---       -----
Earnings                               3        1.91       8         5.22        3        1.38
Add back non-cash items               16       10.00      16         9.98       17        7.49
                                     ---      ------     ---        -----      ---       -----
Cash generated from operations        19       11.91      24        15.20       20        8.87
                                     ---      ------     ---        -----      ---       -----
Volumes sold (gross/net)
    Gas (mmcf/d)                          6/  6               --/ --               --/ --
    Crude oil and condensate            3.5/3.1              4.3/3.3              6.2/5.1
                                        -------              -------              -------
                                        4.6/4.2              4.3/3.3              6.2/5.1


The offshore oil and gas segment consists of operations related to the Kakap
PSC, located in the West Natuna Sea. The 2001 results reflect the startup of gas
sales from this PSC as part of the West Natuna Gas Project. Exploration activity
related to this block is reported under the exploration segment.

Cash generated from offshore operations was $19 million, compared to $24 million
in 2000 and $20 million in 1999. The startup of gas sales from the Kakap PSC in
2001 generated $10 million in cash, while lower realized prices and lower sales
volumes in 2001 decreased the cash generated by oil sales from this PSC.

Gross oil and gas revenue was $42 million in 2001, lower than 2000 as lower
prices more than offset higher volumes sold on a boe basis. The gross revenue in
2000 was higher than 1999 reflecting the impact of higher realized prices offset
by lower crude oil and condensate sales volumes.

Offshore volumes sold on a boe basis increased to 4,600 boe/d in 2001 from 4,300
b/d in 2000. Offshore oil sales volumes declined to 3,500 b/d in 2001 from 4,300
b/d in 2000 and 6,200 b/d in 1999 due to reservoir declines. West Natuna gas
sales commenced in early 2001 and averaged 6 mmcf/d for the year. By the fourth
quarter of 2001, West Natuna gas sales had increased to an average of 9 mmcf/d,
with December 2001 volumes averaging 11 mmcf/d.

Government take was $6 million in 2001 compared to $11 million in 2000 and $10
million in 1999, as lower revenues and higher deductions arising from the West
Natuna Gas Project (including a non-tax deductible investment credit) reduced
the Indonesian government's before-tax share of gross revenues. The company has
claimed an investment credit equal to 55 per cent of the applicable costs of the
West Natuna Gas Project. This incentive reduces government take, but is
taxable when claimed. The net cash flow benefit over time is approximately 16.5
per cent of the amount claimed. The company's claim is subject to Pertamina
approval.

The operating expenses per barrel of oil equivalent in 2001 declined slightly
from 2000 as the relatively fixed expenses in the Kakap PSC supported
the increase in production related to the startup of gas sales. Operating costs
per boe 1999 benefited from higher oil sales volumes.

Depreciation, depletion and amortization expense increased in 20Ol due to higher
depreciation, depletion and amortization rates and higher net volumes sold.
Rates in 2001 reflect the transfer of $37 million of unproved property value to
the proved (depreciable) category. Net volumes sold in 2001 increased due to the
impact of higher deductions on the calculation of the company's share of
production after government take (see above).

Income tax effective rates were relatively comparable in each of the three
years. Current income taxes increased to $8 million in 2001 from $1 million in
2000 primarily due to taxes owed on investment credits claimed in the year.


                                                           2001 ANNUAL REPORT 37



EXPLORATION



SEGMENT RESULTS
(millions of US dollars)                         2001         2000         1999
                                                 ----         ----         ----
                                                                  
Exploration expense
    Producing blocks                               (7)          (3)          (4)
    Non-producing blocks                          (17)         (15)          (7)
                                                  ---          ---          ---
                                                  (24)         (18)         (11)
DD&A expense                                       (3)          --           --
Income tax recovery
    Future                                          4            2           12
                                                  ---          ---          ---
Earnings (loss)                                   (23)         (16)           1


The exploration segment includes exploration activity related to the onshore
producing Corridor PSC and non-producing South Jambi B and Tungkal PSCs, and the
offshore producing Kakap PSC and non-producing Pangkah, Ketapang, Northwest
Natuna Block I and Sebuku PSCs. The 2001 results also include the exploration
activities in two new onshore non-producing blocks acquired in 2001 - the
Banyumas and Sakakemang PSCs and in two non-producing blocks that were
relinquished in 2001 - the onshore Calik PSC and offshore Sakala Timur PSC. The
1999 results include activities in the Halmahera, West Natuna and Merangin PSCs
that were relinquished in that year.


Exploration expense was $24 million for 2001 compared to $18 million in 2000 and
$11 million in 1999. The company drilled eighteen exploration wells in 2001
compared to ten wells in 2000 and five wells in 1999. The success factor during
each of these periods was 61 per cent, 40 per cent and 80 per cent,
respectively.

Depreciation, depletion and amortization expense of $3 million in 2001 reflects
the write-off of costs related to exploration blocks that were relinquished.

Income tax recoveries in the exploration segment reflect the company's ability
to immediately recognize a tax recovery on exploration expense related to
producing PSCs. As well, a tax recovery may be recognized for non-producing PSCs
if it becomes likely at a particular time that these PSCs will be able to use
the available tax pools. The tax recovery in 1999 includes $11 million of future
income tax recoveries related to the planned development of the South Jambi B
PSC. The potential income tax benefits of exploration expenses in the South
Jambi B PSC had not previously been reflected due to insufficient likelihood of
realization of these benefits.

CORPORATE



SEGMENT RESULTS
(millions of US dollars)                             2001       2000       1999
                                                     ----       ----       ----
                                                                  
Gross oil and gas revenue                              --         (3)        (3)
Other revenue                                           4          4          2
General and administrative expense                    (13)        (5)        (6)
Income tax (expense) recovery
    Current                                            (1)        (1)        --
    Future                                              5          2          2
                                                      ---        ---        ---
Earnings (loss)                                        (5)        (3)        (5)
Add back non-cash items                                (5)        (2)        (1)
                                                      ---        ---        ---
Cash generated from operations                        (10)        (5)        (6)


The corporate segment includes general and administrative expenses for the
entire company and other revenue related to interest income on unrestricted cash
and short-term investments. The 2000 and 1999 results also include the impact of
the company's hedging program in those years.

General and administrative expense increased to $13 million in 2001 compared to
$5 million in 2000 and $6 million in 1999, reflecting lower overhead recoveries
from partners, one-time severance costs related to the third quarter acquisition
of the company's parent by Conoco Inc., and an increase in community relations
activities.

Interest income was $4 million in 2001 compared to $4 million in 2000 and $2
million in 1999, reflecting changes in cash and short-term investment balances
and interest rates over these periods.

During 2000 and 1999, the company utilized a limited crude oil hedging program
to increase the likelihood that its annual capital programs could be funded from
internally generated unrestricted cash flows. As actual prices were higher than
the prices in the hedge contracts, the program resulted in a reduction in net
oil and gas revenues of $3 million in both 2000 and 1999. A more detailed
discussion of the company's use of crude oil hedging is included under "Risks
and Uncertainties - Commodity Prices."


38 GULF INDONESIA RESOURCES LIMITED



LIQUIDITY AND CAPITAL RESOURCES



                                                   DECEMBER 31
                                                   ------------
(millions of US dollars)                           2001    2000
- ------------------------                           ----    ----
                                                     
Cash and short-term investments                      91     107
Cash restricted in use                                1      97
Less: Long-term debt (including current portion)     --    (142)
                                                   ----    ----
Net cash position                                    92      62


During 2001, the company increased its net cash surplus by $30 million to $92
million from $62 million at year-end 2000. Cash generated from operations of
$126 million exceeded the $112 million required for capital and exploration
expenditures and acquisitions by $14 million while the receipt of deferred
revenue in 2001 related to take or pay deficiencies for the Caltex I gas
contract and other changes in non-cash working capital provided the remaining
$16 million.

In 2001, the company elected to accelerate the repayment of the Corridor Loan.
As a result, the entire $142 million of the Corridor Loan facility that was
outstanding at December 31, 2000 was repaid, five and a half years ahead of the
originally scheduled final repayment date of February 2007 and less than three
years after the startup of the Corridor Gas Project.

In connection with the Corridor Loan repayment, the company entered into an
agreement with its parent company, Conoco Canada Resources Limited (formerly
Gulf Canada Resources Limited), for a $65 million committed Senior Revolving
Term Credit Facility for a three-year period at commercial terms and conditions.

Looking forward, the company expects to be able to fund its 2002 capital program
of $120 million with internally generated cash and existing cash balances.
Actual capital spending in 2002 will depend partially on the timing of
expenditures related to capital projects and on whether development and/or
delineation wells are drilled in the year.

The company is actively evaluating business opportunities outside of its current
asset portfolio. Funding for these opportunities could be provided by the
company's existing cash balances and the credit facility from Conoco Canada.
Opportunities requiring funding in excess of the company's current sources of
funds may require external forms of financing. The company's ability to raise
external funds may be influenced by certain risk factors in Indonesia, which are
more fully described under "Risks and Uncertainties".


RISKS AND UNCERTAINTIES

INDONESIAN POLITICAL AND ECONOMIC ENVIRONMENT

Substantially all of the company's assets, except for cash and short-term
investments, are located in Indonesia. During 2001, the company did not
experience, nor has it historically experienced, problems from civil unrest or
disputes with the Indonesian government. However, Indonesia's political and
economic environment could impact the company's financial position, results of
operations or potential for growth in the future. The company expects that,
should the need arise, its ability to borrow additional funds at a reasonable
rate could be negatively impacted by the Indonesian environment.

While civil unrest exists in the Aceh Province, planning and negotiations
related to the company's development of its gas reserves in the Block A PSC are
ongoing. The company continues to monitor the situation and may be required to
re-evaluate its development plans as the situation warrants. If in the future
the company decides not to proceed with its development plans or decides to
dispose of its interest in this PSC, a material charge to earnings may result.

The Indonesian government has exercised and continues to exercise significant
influence over many aspects of the Indonesian economy, including the oil and gas
industry, as demonstrated by the introduction of the new oil and gas law in 2001
and new laws on revenue sharing and autonomy in 2000. The company is attempting
to mitigate its risk through building strong relationships with the local,
regional, provincial and central governments and their agencies as well as with
the communities in which it operates. However, it is unclear at the present time
what impact, if any, the above will have on the company's financial position,
results of operations or potential for growth in the future.

An additional consequence of Indonesia's political and economic uncertainty is
possible fluctuation in the Rupiah/US dollar exchange rate. However, this
currency volatility is not expected to have a material long-term impact on the
company's financial position, as all current revenues are US dollar-denominated,
all major contracts entered into are in US dollars and Rupiah-denominated
expenses are limited to approximately 10-15 per cent of the company's overall
expenditure profile.


                                                           2001 ANNUAL REPORT 39




COMMODITY PRICES

The company's financial results are substantially dependent upon the price of,
and demand for, crude oil. Onshore oil production is sold to Pertamina in US
dollars at the Indonesian Crude Price (ICP), a price based on spot prices of
internationally traded Indonesian crude oils, adjusted for quality. Offshore oil
production is sold in the spot market. Onshore gas production from the Corridor
Gas Project is exchanged for Duri crude oil that is exported at a price based on
a formula tied to the Duri ICP. Offshore gas production is sold at prices linked
to the price of fuel oil in Singapore. Crude oil prices have been volatile in
the past and are expected to continue to be volatile in the near future, due to
a number of economic factors beyond the company's control.

Part of Gulf Indonesia's financial strategy is to seek to fund exploration,
maintenance and current development capital programs with internally generated
cash flows. When necessary, the company may use crude oil price hedging to help
enhance the predictability of internal cash flows. Although the company does not
have any outstanding oil price hedge positions, it will continue to assess its
capital requirements and the need for price security in the future.

INVESTMENT INCENTIVES

Production sharing contracts in Indonesia contain incentives including interest
cost recovery and investment credits that can be used to improve the economic
viability of development projects. The company has applied for incentives
related to its development projects and the company's financial results assume
that the incentives will be granted. The incentives are subject to Pertamina
approval and as such, if Pertamina does not approve these incentives, the
company's current and future results could be materially impacted.

SENSITIVITIES

Based on current production and price assumptions, the estimated effect of a
change in the following factors on the company's 2002 cash generated from
operations and earnings is set out in the table below.



                                                                   CASH GENERATED
(MILLIONS OF US DOLLARS)                                           FROM OPERATIONS    EARNINGS
- ------------------------                                           ---------------    --------
                                                                                
Prices:   US$1.00/bbl change in WTI oil price                             5               4
Sales:    1,000 b/d change in crude oil and condensate volumes            3               2
          10 mmcf/d change in gas volumes                                 5               4



Cash generated from operations and earnings can also be influenced by the level
of capital spending in the Corridor and Kakap PSCs, as available deductions
for the government take and current income tax calculations are impacted by the
amount of spending in a particular year.


40 GULF INDONESIA RESOURCES LIMITED

                              [ERNST & YOUNG LETTERHEAD]


                  CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS


We consent to the use of our report dated February 19, 2002 with respect to the
consolidated financial statements of Gulf Indonesia Resources Limited filed
under cover of the Annual Report for the year ended December 31, 2001 (Form
40-F) with the United States Securities and Exchange Commission.

We also consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-07886) pertaining to the Incentive Stock Option Plan of Gulf
Indonesia Resources Limited of our report dated February 19, 2002 with respect
to the consolidated financial statements of Gulf Indonesia Resources Limited
included in the Annual Report (Form 40-F) for the year ended December 31 2001.

                                                           /s/ ERNST & YOUNG LLP
Calgary, Canada
March 19, 2002                                             Chartered Accountants





SUPPLEMENTARY OIL AND GAS INFORMATION
(millions of United States dollars)
(unaudited)



                                                          2001     2000     1999
                                                         ------   ------   ------
                                                                  
RESULTS OF OIL AND GAS OPERATIONS
Gross revenue derived from proved oil and gas reserves   $  341   $  460   $  284
Less: Pipeline tariffs                                       33       39       38
      Government take                                        54       76       42
                                                         ------   ------   ------
Net revenue derived from proved oil and gas reserves        254      345      204
Less: Production costs                                       33       33       35
      Exploration expense                                    24       18       11
      Depreciation, depletion and amortization               66       69       70
      Income tax expense                                     80      121       30
                                                         ------   ------   ------
Results of operations from producing activities          $   51   $  104   $   58
                                                         ------   ------   ------
COSTS INCURRED
Costs incurred (capitalized and expensed) for:
      Property acquisitions:
           Proved                                        $   --   $   --   $   --
           Unproved                                           9       --       --
      Exploration                                            48       29       32
      Development                                            55       57       34
                                                         ------   ------   ------
                                                         $  112   $   86   $   66
                                                         ------   ------   ------
CAPITALIZED COSTS
Proved properties                                        $1,120   $1,012   $  949
Unproved properties                                         153      180      179
Incomplete wells and facilities                              46       39       35
                                                         ------   ------   ------
                                                          1,319    1,231    1,163
Less related accumulated depreciation, depletion,
      and amortization                                      541      475      406
                                                         ------   ------   ------
Net capitalized costs                                    $  778   $  756   $  757
                                                         ------   ------   ------


60 GULF INDONESIA RESOURCES LIMITED





STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
RELATING TO PROVED OIL AND GAS RESERVES
(unaudited)

The standardized measure for calculating the present value of future net cash
flows from proved oil and gas reserves is based on current costs and prices and
a 10 per cent discount factor as prescribed by the Financial Accounting
Standards Board (FASB).

Accordingly, the estimated future net cash inflows were computed by applying
selling prices prevailing at the end of the indicated period for crude oil and
during the last month of the period indicated for other products to the
estimated future production of proved reserves. Estimated future expenditures to
be incurred in developing and producing proved reserves are based upon average
costs incurred in each period presented and assume the continuation of economic
conditions existing at the end of each year presented.

Although these calculations have been prepared according to the standards
described above, it should be emphasized that, due to the number of assumptions
and estimates required in the calculations, the amounts are not indicative of
the amount of net revenue that the company expects to receive in future years.
They are also not indicative of the current value or future earnings that may be
realized from the production of proved reserves nor should it be assumed that
they represent the fair market value of the reserves or of the oil and gas
properties.

Although the calculations are based on existing economic conditions at each year
end, such economic conditions have changed, and may continue to change
significantly due to events such as the continuing changes in international
crude oil availability and prices, and changes in government policies and
regulations. While the calculations are based on the company's understanding of
the established FASB guidelines, there are numerous other equally valid
assumptions under which these assumptions could be made which would produce
significantly different results.


STANDARDIZED MEASURE


(millions of United States dollars)          AS AT DECEMBER 31
                                       -----------------------------
                                         2001      2000       1999
                                       -------    -------    -------
                                                    
Future cash inflows                    $ 2,693    $ 3,639    $ 3,072
Future development costs                  (203)      (278)      (309)
Future production costs                   (388)      (447)      (364)
Future income taxes                       (862)    (1,238)      (924)
                                       -------    -------    -------
Future net cash flows                    1,240      1,676      1,475
10 per cent annual discount for
    estimated timing of cash flows        (634)      (840)      (649)
                                       -------    -------    -------
Standardized measure of
    discounted future net cash flows   $   606    $   836    $   826
                                       =======    =======    =======



CHANGES IN THE STANDARDIZED MEASURE DURING THE YEAR


(millions of United States dollars)                     YEAR ENDED DECEMBER 31
- -----------------------------------                 -----------------------------
                                                      2001       2000       1999
                                                    -------    -------    -------
                                                                 
Sales of oil and gas produced net of
    production costs                                $  (221)   $  (315)   $  (173)
Development costs incurred
    during the year                                      55         57         34
Extensions, discoveries and
    improved recovery, less related costs                62        254        158
Revisions of previous quantity
    and timing estimates                                 10         (5)        43
Price and cost changes
    - selling prices                                   (510)        10      1,032
    - production costs                                   (2)       (18)         5
    - development costs                                   5         41         19
Accretion of discount                                   151        136         22
Change in income taxes                                  220       (150)      (517)
                                                    -------    -------    -------
Net change                                             (230)        10        623
Balance at beginning of year                            836        826        203
                                                    -------    -------    -------
Balance at end of year                              $   606    $   836    $   826
                                                    =======    =======    =======



                                                           2001 ANNUAL REPORT 61






                                                            NET VOLUMES
                                                   ----------------------------
                                                     OIL         NGL       GAS
                                                   (MMBBLS)    (MMBBLS)   (BCF)
                                                   --------    --------   -----
                                                                 
PROVED DEVELOPED

At December 31, 1998                                   23          3        436
     Additions from discoveries and extensions          0          0          0
     Additions from improved recovery                   0          0          0
     Additions from development (1)                     1          0          0
     Purchases of Reserves in place                     0          0          0
     Revisions of previous estimates                   (5)        (0)        (4)
     Sales of reserves in place                         0          0          0
     Production                                        (6)        (0)       (56)
                                                     ----       ----       ----
At December 31, 1999                                   13          3        376
     Additions from discoveries and extensions          0          0          0
     Additions from improved recovery                   0          0          0
     Additions from development (1)                     2          0          4
     Purchases of Reserves in place                     0          0          0
     Revisions of previous estimates                    2         (1)        52
     Sales of reserves in place                         0          0          0
     Production                                        (4)         0        (58)
                                                     ----       ----       ----
At December 31, 2000                                   13          2        374
     Additions from discoveries and extensions          0          0          0
     Additions from improved recovery                   0          0          0
     Additions from development (1)                     1          0        217
     Purchases of Reserves in place                     0          0          0
     Revisions of previous estimates                    2         (0)        12
     Sales of reserves in place                         0          0          0
     Production                                        (4)        (0)       (51)
                                                     ----       ----       ----
At December 31, 2001                                   12          2        552


PROVED UNDEVELOPED

At December 31, 1998                                    3          0        483
     Additions from discoveries and extensions          0          1        100
     Additions from improved recovery                   0          0          0
     Additions from development (1)                     0          0         94
     Purchases of Reserves in place                     0          0          0
     Revisions of previous estimates                   (0)         0        (56)
     Sales of reserves in place                         0          0          0
     Production                                         0          0         (1)
                                                     ----       ----       ----
At December 31, 1999                                    3          1        620
     Additions from discoveries and extensions          0          1        215
     Additions from improved recovery                   0          0          0
     Additions from development (1)                     0          0         87
     Purchases of Reserves in place                     0          0          0
     Revisions of previous estimates                   (1)        (0)       (48)
     Sales of reserves in place                         0          0          0
     Production                                         0          0          0
                                                     ----       ----       ----
At December 31, 2000                                    2          2        874
     Additions from discoveries and extensions         (0)         0        117
     Additions from improved recovery                   0          0          0
     Additions from development (1)                    (1)         0       (216)
     Purchases of Reserves in place                     0          0          0
     Revisions of previous estimates                    0         (0)        36
     Sales of reserves in place                         0          0          0
     Production                                         0          0          0
                                                     ----       ----       ----
At December 31, 2001                                    1          2        811



Note 1 - Under Financial Accounting Standards No. 69, these additions are
considered part of revisions of previous estimates.




15. UNITED STATES ACCOUNTING PRINCIPLES

If United States generally accepted accounting principles (U.S. GAAP) had been
followed, amounts on the Consolidated Statements of Cash Flow would be presented
as follows:



                                                   YEAR ENDED DECEMBER 31
                                                   -----------------------
                                                    2001     2000     1999
                                                   -----    -----    -----
                                                            
OPERATING ACTIVITIES
Cash generated from operations, as reported (a)    $ 126    $ 271    $ 137
Changes in non-cash working capital, as reported      15       19       (4)
Adjustments:
    Geological and geophysical expenditures (b)      (13)      (8)     (10)
                                                   -----    -----    -----
Operating activities, as adjusted                  $ 128    $ 282    $ 123
                                                   =====    =====    =====

INVESTING ACTIVITIES, as reported                  $ (15)   $(107)   $(174)
Adjustments:
    Geological and geophysical expenditures (b)       13        8       10
                                                   -----    -----    -----
Investing activities, as adjusted                  $  (2)   $ (99)   $(164)
                                                   =====    =====    =====


If U.S. GAAP had been followed, amounts on the Consolidated Statements of
Financial Position would be adjusted as follows:



                                                            DECEMBER 31
                                                        -------------------
                                                        2001           2000
                                                        ----           ----
                                                        Increase (decrease)
                                                                 
ASSETS                                                  $ --           $ --
                                                        ----           ----
LIABILITIES AND SHAREHOLDERS' EQUITY
Contributed surplus (c)                                 $ 11           $ 11
Retained earnings (c)                                    (11)           (11)
                                                        ----           ----
                                                        $ --           $ --
                                                        ====           ====


The financial statements have been prepared in accordance with accounting
principles generally accepted in Canada which, in the case of the company,
conform in all material respects with those in the United States except that:

(a) Under U.S. GAAP, "cash generated from operations" as defined by the company
    would not be presented in the Consolidated Statement of Cash Flows as it
    excludes the effect of changes in non-cash working capital and therefore
    differs from the definition of operating cash flow under Statement of
    Financial Accounting Standards No. 95. The company has presented this item
    for Canadian GAAP as it is commonly used by oil and gas investors in Canada
    as a measure of performance and liquidity and is normally presented in
    Canadian financial statements.

(b) Under U.S. GAAP, geological and geophysical expenditures would be classified
    as operating activities.

(c) Prior to the company going public in 1997, certain costs related to the
    company's technical, financial, accounting and administrative services were
    borne by the company's parent on the company's behalf. Under U.S. GAAP,
    these costs would be recognized as additional general and administrative
    expenses offset by contributions to capital. These adjustments have been
    calculated based on a specific allocation of salary costs of individuals
    providing technical services to the company and a general allocation of
    corporate overhead determined using comparative ratios of reserves, sales
    volumes and assets of the company and its parent.


54 GULF INDONESIA RESOURCES LIMITED



(d) Statement of Financial Accounting Standards No. 133, "Accounting for
    Derivative Instruments and Hedging Activities" (as amended by FAS 137 and
    138) is effective for fiscal years beginning after June 15, 2000. These
    pronouncements have no impact on the company's consolidated financial
    statements. FAS 143, "Accounting for Asset Retirement Obligations" is
    effective January 1, 2003. This standard requires entities to record the
    fair value of a liability for an asset retirement obligation in the period
    in which it has incurred and a corresponding increase in the carrying amount
    of the related long-lived asset. FAS 144, "Accounting for the Impairment or
    Disposal of Long-Lived Assets" is effective January 1, 2002. This standard
    clarifies certain implementation issues arising from an earlier standard,
    FAS 121. At this time, management does not believe that FAS 143 and FAS 144
    will have a material effect on the company's consolidated financial
    statements.

Comprehensive income, as defined by Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", is equivalent to earnings as
presented.

ADDITIONAL DISCLOSURE

STOCK-BASED COMPENSATION PLANS

The Financial Accounting Standards Boards Statement No. 123, "Accounting for
Stock-Based Compensation" (FAS 123) requires the fair value of stock-based
compensation to be either recorded as compensation over the service period or
the impact of the use of fair values are to be disclosed in the financial
statements. The company applies Accounting Principles Board Opinion No. 25 (APB
25) and related Interpretations in accounting for its plans. As a result, no
compensation cost has been recognized in income for its fixed stock option plan
as under APB 25 the exercise price of the company's plans equal the market value
of the underlying stock on the date of grant. Pro forma disclosures of earnings
and earnings per common share are presented below as if the company had adopted
the cost recognition requirements under FAS 123.

The compensation cost for the stock-based compensation for 2001 was $2 million
(2000 - $2 million; 1999 - $3 million). Pro forma disclosures are not likely to
be representative of the effects on reported earnings for future years.



                                          YEAR ENDED DECEMBER 31
                                        -------------------------
                                         2001     2000      1999
                                        ------   ------    ------
                                                  
Earnings
    As reported                         $   32   $   84    $   33
    Pro forma                           $   30   $   82    $   30
Earnings per common share ($/share)
    As reported                         $ 0.36   $ 0.96    $ 0.37
    Pro forma                           $ 0.34   $ 0.94    $ 0.33


The fair value of the options granted during 2001 is estimated at the date of
grant using the Black-Scholes option-pricing model with the following
assumptions: expected volatility of 50 per cent (2000 - 50 per cent; 1999 - 55
per cent), risk-free interest rate of 4.5 per cent (2000 - 5.1 per cent; 1999 -
6.5 per cent) and expected life of 3 years (2000 - 3 years; 1999 - 3 years).

16. RECLASSIFICATIONS

Certain amounts for 2000 and 1999 have been reclassified to conform to the
presentation adopted for 2001.


                                                           2001 ANNUAL REPORT 55



FIVE-YEAR FINANCIAL SUMMARY
(millions of United States dollars, except per share amounts)



                                                                 YEAR ENDED DECEMBER 31
                                                   ---------------------------------------------------
                                                    2001       2000        1999      1998        1997
                                                   -------    -------    -------    -------    -------
                                                                                
STATEMENTS OF EARNINGS (LOSS)
Revenues
   Net oil and gas revenue                         $   254    $   345    $   204    $    81    $   113
   Other                                                 4          4          2          5          3
                                                   -------    -------    -------    -------    -------
                                                   $   258    $   349    $   206    $    86    $   116
                                                   -------    -------    -------    -------    -------
Earnings (loss)                                    $    32    $    84    $    33    $   (30)   $     8
                                                   -------    -------    -------    -------    -------
Earnings (loss) per common share                   $  0.36    $  0.96    $  0.37    $ (0.34)      0.11
                                                   -------    -------    -------    -------    -------
Dividends declared per common share                $    --    $    --         --         --       0.88
                                                   =======    =======    =======    =======    =======
STATEMENTS OF CASH FLOWS
Operating activities
    Cash generated from operations                 $   126    $   271    $   137    $    44    $    74
    Other operating activities, net                     15         19         (4)        16         (1)
                                                   -------    -------    -------    -------    -------
                                                       141        290        133         60         73
Investing activities                                   (15)      (107)      (174)      (194)      (363)
Financing activities                                  (142)      (103)         2         93        387
                                                   -------    -------    -------    -------    -------
Increase (decrease) in cash                        $   (16)   $    80    $   (39)   $   (41)        97
                                                   =======    =======    =======    =======    =======
Cash generated from operations per common share    $  1.43    $  3.08    $  1.56    $  0.51    $  0.96
                                                   =======    =======    =======    =======    =======




                                                                      DECEMBER 31
                                                   ---------------------------------------------------
                                                    2001       2000        1999      1998        1997
                                                   -------    -------    -------    -------    -------
                                                                                
STATEMENTS OF FINANCIAL POSITION
Total assets                                       $   948    $ 1,060    $   975    $   932    $   859
Current liabilities                                    (81)      (112)      (112)       (92)       (57)
                                                   -------    -------    -------    -------    -------
Capital employed                                       867        948        863        840        802
Long-term debt                                          --        111        206        228        150
Future income taxes                                    255        257        161        149        158
                                                   -------    -------    -------    -------    -------
Shareholders' equity                               $   612    $   580    $   496    $   463    $   494
                                                   =======    =======    =======    =======    =======
NET CASH (DEBT) POSITION
Cash and short-term investments                    $    91    $   107    $    27    $    66    $   107

Cash restricted in use                                   1         97         76          3         --
Less: Long-term debt (including current portion)        --       (142)      (245)      (243)      (150)
                                                   -------    -------    -------    -------    -------
                                                   $    92    $    62    $  (142)   $  (174)   $   (43)
                                                   =======    =======    =======    =======    =======


                                                           2001 ANNUAL REPORT 59




QUARTERLY SUMMARIES
(unaudited)



                                                              2001                                 2000
                                                ---------------------------------    ---------------------------------
                                                  1        2        3        4         1        2        3        4
                                                ------   ------   ------   ------    ------   ------   ------   ------
                                                                                        
FINANCIAL (millions of United States dollars)
Gross oil and gas revenue                           80       86       82       60        95      103      113      110
Total revenue                                       65       71       68       53        80       84       92       93
Earnings (Loss)                                      9       18        9       (4)       20       20       17       27
    per common share (dollars)                    0.10     0.21     0.10    (0.04)     0.23     0.22     0.20     0.31
Cash generated from operations                      37       38       34       17        63       66       76       66
    per common share (dollars)                    0.42     0.44     0.38     0.20      0.71     0.75     0.86     0.75
EBITDAX(1)                                          56       60       55       38        70       74       82       81
                                                ------   ------   ------   ------    ------   ------   ------   ------
OPERATING
Volumes sold (gross)
   Onshore gas (mmcf/d)                            144      134      133      149       171      162      165      167
     Barrels of oil equivalent(mboe/d)(2)         24.0     22.3     22.1     24.8      28.5     27.0     27.5     27.8
   Onshore crude oil and condensate (mb/d)        13.7     12.9     13.6     13.2      14.5     14.5     14.3     14.9
   Offshore oil and gas
     Natural gas (mmcf/d)                           --        9        6        9        --       --       --       --
     Crude oil and condensate (mb/d)               0.2      2.6      4.9      2.9       4.1      5.8      3.8      3.6
       Barrels of oil equivalent (mboe/d)(2)       0.2      4.1      6.0      4.4       4.1      5.8      3.8      3.6
   Total (mboe/d)(2)                              37.9     39.3     41.7     42.4      47.1     47.3     45.6     46.3
Gross average prices
   Onshore gas ($/mcf)                            3.12     3.64     3.12     2.15      3.28     3.73     4.02     3.98
     Oil equivalent ($/boe)(2)                   18.71    21.85    18.73    12.89     19.66    22.35    24.13    23.90

   Onshore oil ($/bbl)                           24.41    27.04    24.23    17.81     25.80    27.15    30.76    29.00
   Offshore oil and gas
     Natural gas ($/mcf)                            --     4.35     4.81     3.72        --       --       --       --
     Crude oil and condensate ($/bbl)            26.31    27.09    24.22    22.84     25.74    26.72    35.72    27.29
      Oil equivalent($/boe)(2)                   26.31    26.74    25.05    22.65     25.74    26.72    35.72    27.29
   Combined ($/boe)(2)                           21.30    24.05    21.43    15.44     22.09    23.95    27.00    25.80
   WTI ($/bbl)                                   28.73    27.96    26.49    20.43     28.73    28.63    31.58    31.86

Operating expense ($/boe)(2)
   Onshore gas                                    0.60     0.93     0.95     1.24      0.97     1.00     0.76     1.02
   Onshore oil                                    3.16     3.93     2.89     3.69      2.85     2.47     3.24     2.67
   Offshore oil and gas                           5.18     4.81     6.17     4.96      3.95     4.76     6.10     8.05
   Total                                          1.87     2.14     2.33     2.39      1.81     1.91     1.99     2.10
                                                ------   ------   ------   ------    ------   ------   ------   ------

MARKET VALUE PER SHARE (DOLLARS)

New York Stock Exchange
   high                                          10.15    11.50    11.89     9.10    9 7/16   9 3/8    12 3/4   12 1/2
   low                                            8.37     7.48     8.69     7.89    6 15/16  6 9/16    7 3/8    8 1/8
   close                                          8.88    10.16     8.70     9.00    7 15/16  8        10 7/8    9 5/16
                                                ------   ------   ------   ------    -------  ------   -------  -------



(1) EBITDAX: earnings before interest, taxes, depletion, depreciation and
    amortization, exploration expense and other non-cash charges

(2) Natural gas converted at 6:1


                                                           2001 ANNUAL REPORT 57

EX-99.A.1.L

                                                              Exhibit (a)(1)(l)

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 40-F

             ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                         COMMISSION FILE NUMBER 1-14698


                        GULF INDONESIA RESOURCES LIMITED
             (Exact name of Registrant as specified in its charter)

                                  NEW BRUNSWICK
        (Province or other jurisdiction of incorporation or organization)
Wisma 46 - Kota BNI, Jalan Jenderal Sudirman Kavling 1, Jakarta 10220, Indonesia
              (Address of Registrant's principal executive office)

        Registrant's telephone number, including area code: 403-233-4000

   CT CORPORATION SYSTEM, 111-8TH AVENUE, NEW YORK N.Y. 10011, (212) 590-9009
 (Name, address (including zip code) and telephone number (including area code)
                   of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class                    Name of each exchange on which registered
- -------------------                    -----------------------------------------
Common Shares                          New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

                                      None
                         ------------------------------
                                (Title of Class)


 Securities for which there is a reporting obligation pursuant to Section 15(d)
                                  of the Act.

                                      None
                         ------------------------------
                                (Title of Class)

For annual reports, indicate by check mark the information filed with this Form:

                [X] Annual information form

                [X] Audited annual financial statements



Page 1 of 55






                  Indicate the number of outstanding shares of each of the
         issuer's classes of capital or common stock as of the close of the
         period covered by the annual report.

                           87,901350 Common Shares

                  Indicate by check mark whether the Registrant by filing the
         information contained in this Form is also thereby furnishing the
         information to the Commission pursuant to Rule 12g3-2(b) under the
         Securities Exchange Act of 1934 (the "Exchange Act"). If "YES" is
         marked, indicate the filing number assigned to the Registrant in
         connection with such Rule.

                                    Yes [ ] No [X]

                  Indicate by check mark whether the Registrant (1) has filed
         all reports required to be filed by Section 13 or 15(d) of the Exchange
         Act 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 Annual Information Form of the Registrant dated March 19,
         2001, the Audited Consolidated Financial Statements of the Registrant
         and the Auditors' Report thereon for the fiscal year ended December 31,
         2000, and Management's Discussion and Analysis of Financial Condition
         and Results of Operations for the fiscal year ended December 31, 2000
         and additional disclosures required by U.S. GAAP are incorporated by
         reference herein from Exhibits 1,2,3 and 8 respectively, to this Annual
         Report on Form 40-F.

                  UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

         A. Undertaking

                  Registrant undertakes to make available, in person or by
         telephone, representatives to respond to inquiries made by the
         Commission staff, and to furnish promptly, when requested to do so by
         the Commission staff, information relating to: the securities
         registered pursuant to Form 40-F; the securities in relation to which
         the obligation to file an annual report on Form 40-F arises; or
         transactions in said securities.

                                   SIGNATURES

                  Pursuant to the requirements of the Exchange Act, the
         Registrant certifies that it meets all of the requirements for filing
         on Form 40-F and has duly caused this annual report to be signed on its
         behalf by the undersigned, thereunto duly authorized.



         Registrant:                     GULF INDONESIA RESOURCES LIMITED


                                  By:    /s/ Henry W. Sykes
                                         -------------------------------------
                                         Henry W. Sykes,
                                         Director




                                  By:    /s/ Alan P. Scott
                                         -------------------------------------
                                         Alan P. Scott,
                                         Corporate Secretary





Page 2 of 55



                                    EXHIBITS




                                                                                            PAGE
                                                                                      
Exhibit l      Annual Information Form of the Registrant dated March 19,2001                  4

Exhibit 2      Audited Consolidated Financial Statements and the Auditors'                   26
               report thereon for the fiscal year ended December 31, 2000

Exhibit 3      Management's Discussion and Analysis of Financial Condition and               41
               Results of Operations for the fiscal year ended December 31,2000

Exhibit 4      Consent of Independent Chartered Accountants                                  50

Exhibit 5      Supplementary Oil and Gas Information                                         51

Exhibit 6      Standardized Measure of Discounted Future Net Cash flows Relating             52
               to Proved Reserves

Exhibit 7      Three Year Reserve Reconciliation                                             53

Exhibit 8      Note 15 to Financial Statements - U.S. GAAP Reconciliation and                54
               Additional Disclosure





Page 3 of 55




                        GULF INDONESIA RESOURCES LIMITED







                            ANNUAL INFORMATION FORM

                      For the year ended December 31, 2000








                                 March 19, 2001






                        GULF INDONESIA RESOURCES LIMITED
                            ANNUAL INFORMATION FORM

                                     INDEX

                                                                        
THE CORPORATION ..........................................................  2

GENERAL DEVELOPMENT OF THE BUSINESS ......................................  2

NARRATIVE DESCRIPTION OF THE BUSINESS ....................................  4

SELECTED CONSOLIDATED FINANCIAL INFORMATION .............................. 18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ...................................... 18

MARKET FOR SECURITIES .................................................... 18

DIRECTORS AND OFFICERS ................................................... 18

ADDITIONAL INFORMATION ................................................... 20

MISCELLANEOUS ............................................................ 21








                                       -2-

                                THE CORPORATION

INCORPORATION OF THE ISSUER AND SUBSIDIARIES

         Gulf Indonesia Resources Limited ("Gulf Indonesia" or the
"Corporation") was incorporated pursuant to Articles of Incorporation under the
Canada Business Corporations Act as Asamera Canada Limited and continued under
the Business Corporations Act (New Brunswick) on August 27, 1997.

         The Corporation's principal executive offices are located at 21st
floor, Wisma 46, Kota BNI, Jalan Jenderal Sudirman Kavling 1, Jakarta 10220,
Indonesia, and its telephone number is (6221) 574- 2120. The Corporation's
registered office is 10th Floor Brunswick House, 44 Chipman Hill, Suite 1000,
Saint John, New Brunswick, Canada E2L 2A9.

         Effective February 18, 1997, Gulf Canada Resources Limited ("Gulf
Canada") acquired control of Clyde Petroleum Plc, of which Clyde Petroleum
Indonesia Ltd. ("Clyde Indonesia") was a wholly owned subsidiary. Clyde
Indonesia's name was changed to Gulf Resources (Kakap) Ltd., and on August 19,
1997, the Corporation acquired all of the shares of Gulf Resources (Kakap) Ltd.

         On August 19, 1997, the Corporation was involved in a corporate
reorganization in which it acquired all of the shares of Gulf Resources
(Tungkal) Ltd., Gulf Resources (Calik) Ltd., Gulf Resources (Merangin) Ltd.,
Gulf Resources (Sakala Timur) Ltd. and Gulf Resources (Pangkah) Ltd. from Gulf
Canada in exchange for common shares of the Corporation. These wholly owned
subsidiaries are all incorporated pursuant to Articles of Incorporation under
the Business Corporations Act (Alberta).

         On September 29, 1997, the Corporation completed a public offering of
approximately 28 per cent of its shares, which are now publicly traded on the
New York Stock Exchange. The offering netted approximately U.S. $100 million to
the Corporation (after payment of a dividend to Gulf Canada and repayment of
inter-company amounts).

         The Corporation has three material subsidiaries: Gulf Resources (Ramba)
Ltd., Gulf Resources (Grissik) Ltd. and Gulf Resources (Kakap) Ltd., all of
which are incorporated under the laws of Barbados. The Corporation either owns
or exercises control over all the voting shares of the three subsidiaries; no
non-voting securities have been issued by the subsidiaries.

                      GENERAL DEVELOPMENT OF THE BUSINESS

THREE YEAR HISTORY

         In 1998, construction of the Corridor Block Gas Project was essentially
completed, doubling the Corporation's overall production. Natural gas production
from the Corridor Block Gas Project is dedicated to the Duri Steamflood under a
long-term agreement (the "Caltex I Agreement"). In exchange, PT Caltex Pacific
Indonesia ("Caltex") delivers designated crude oil to the Corporation at the
export terminal at Dumai on a British thermal unit ("Btu") equivalent basis,
subject to certain thermal efficiency and cost adjustments. During the first
nine years of the contract, the crude oil received from Caltex is sold under an
offtake agreement to Itochu Petroleum Co. (Hong Kong) Ltd. ("Itochu"), a
subsidiary of Itochu Corporation. The Corridor Block Gas Project was financed
through a credit agreement with a consortium of lenders. Gulf's share of the
loan facility was drawn to U.S. $261 MM, of which U.S. $119MM was repaid by
year-end 2000, with a further $15 million repaid on February 8, 2001.





                                       -3-

         In 1999, the Corporation, along with other participants in the Kakap
production sharing contract ("PSC") and two other third party PSCs, signed an
agreement with Pertamina, the Indonesian state oil and gas company, for the sale
of natural gas to be used for power generation and petrochemical projects in
Singapore (the "West Natuna Agreement"). The construction of the upstream
facilities and 650-kilometre pipeline system required to supply the gas under
this agreement was completed in December, 2000. Sustained gas sales are expected
to commence in the first quarter of 2001.

         In December, 2000, the Corporation and Pertamina signed agreements for
additional gas deliveries from the Corridor Block PSC to the Caltex operated
Duri Steamflood (the "Caltex II Agreement"). The agreements provide for a
contract quantity of 1.1 Tcf of gas (0.06 Tcf net to the Corporation) to be
delivered over 19 years. Gas for the agreements is to be supplied from the Suban
field where, in 2000, the Corporation drilled the Suban-4 delineation well which
tested at a flow rate of 80 Mmcf/d. Gas deliveries under this agreement are
expected to commence in late 2002.

         In February 2001, the Corporation and Pertamina entered into an
agreement with a subsidiary of Singapore Power Limited for the supply of natural
gas from Sumatra to Singapore beginning in mid-2003 (the "Sumatra Gas to
Singapore Agreement"). The agreement provides for a contract quantity of 2.27
Tcf of sales gas (0.7 Tcf net to the Corporation) to be delivered over a 20 year
period.

         The Caltex II and Sumatra Gas to Singapore Agreements are the third and
fourth substantial long-term US dollar gas sales agreements for the Corporation.
Including the Caltex I and West Natuna Agreements, the combined cumulative
contract quantity of the four agreements that the Corporation is a party to is
approximately 7 Tcf (2 Tcf net to the Corporation).

TRENDS

         The Corporation has developed a three-part exploration strategy. The
first part of this strategy is an onshore oil exploration program that targets
prospects in the five to ten million barrel range. The second part is an
offshore program that targets large oil prospects with unrisked potential in
excess of 100 million barrels. Three of the seven wells in the current offshore
program were drilled in 2000, including the successful Ande Ande Lumut-1 well in
the Northwest Natuna Block I PSC and two dry holes in the Sakala Timur and
Ketapang Blocks. The third part of the exploration strategy is onshore gas
exploration where the Corporation presently has a large number of prospects.
This three- part exploration strategy is designed to balance the higher risk,
but high return, offshore oil exploration with lower risk, but lower return,
onshore oil exploration. The Corporation will continue to explore for gas to the
extent that it perceives that additional reserves are required to meet market
opportunities.

         The Corporation recognizes the challenge arising from the need to
coordinate its obligations under the Caltex II and Sumatra Gas to Singapore
Agreements with the addition of compression to the existing pipeline to the
Caltex facility and the construction of a new pipeline from Sumatra by third
parties, as well as the usual uncertainties regarding international energy
pricing and the political and economic environment in Indonesia.





                                       -4-

                     NARRATIVE DESCRIPTION OF THE BUSINESS

PRINCIPAL BUSINESS

         The Corporation is an independent oil and natural gas company engaged
in the exploration, development and production of crude oil and natural gas
onshore and offshore Indonesia. All of the Corporation's oil and gas producing
properties are located in Indonesia. The Company currently produces crude oil
and natural gas from established fields onshore on the island of Sumatra and
from established fields offshore in the West Natuna Sea. As of December 31,
2000, the Corporation had gross and net proved reserves of 311 MMBOE and 227
MMBOE, respectively, of which approximately 90 per cent were natural gas. The
Corporation's principal products are crude oil and natural gas.

         Currently, the Corporation sells all of its oil production in two
markets. Approximately 76 per cent of its oil production is sold to Pertamina,
the Indonesian state owned oil and gas company, at the Indonesian Crude Price,
being prices set monthly by Pertamina based on spot prices of internationally
traded Indonesian crude oils, adjusted for quality. Approximately 23 per cent of
oil production, representing offshore production from Kakap fields, is sold
under a marketing agreement with BP Oil International Limited. The crude oil
from all the Kakap fields is commingled and sold as the Kerapu blend. The Kerapu
blend is sold into regional markets at prices reflecting market values at the
time of sale. The balance of the Corporation's oil production is received
through an overriding royalty payment on Block B in north Sumatra.

         As of December 31, 2000, the Corporation had approximately 1600
permanent employees, approximately 500 of whom were located at the Corporation's
offices in Jakarta, Indonesia, and the remainder of whom were located at field
offices. In addition to its permanent employees, the Corporation also engaged
over 1,400 daily contract labourers as of such date.

PRINCIPAL PROPERTIES

         The Corporation's operations are conducted through contractual
arrangements with Pertamina in the form of eleven PSCs, one technical assistance
contract ("TAC") and one enhanced oil recovery contract ("EOR") pursuant to
which the Corporation and its partners provide financing and technical expertise
to conduct exploration, development and production operations in a specified
geographic area (each, a "contract area"). Five of these contract areas are
currently producing crude oil: the Corridor Block PSC, Corridor Block TAC, Block
A PSC, Kakap PSC and Jambi EOR. Each of these producing contract areas is
operated by the Corporation, as are six non-producing PSCs. The remaining two
non-producing PSC, are operated by affiliates of Premier Oil Plc. (the Pangkah
and Northwest Natuna Block I PSCs). In addition to its interest in these
thirteen contract areas, the Corporation also receives an overriding production
payment on all production from Block B, northern Sumatra. Upon commercial
production, the production revenue from each contract area is divided between
the Indonesian government and the participants according to percentages that
vary with each production sharing arrangement, subject to cost recovery
provisions. After entering into a production sharing arrangement with Pertamina,
the Corporation has often farmed out a working interest in the contract area to
one or more parties. Operations among the Corporation and other participants
with respect to a given contract area are generally governed by a joint
operating agreement which varies from block to block.





                                       -5-

         The following table lists, as of December 31, 2000, the Corporation's
working interest, participants, term and acreage for each of the Corporation's
production sharing arrangements.



                                                                    Effective Post-Tax
                                Working                                and Post-Cost
Name, Type of Agreement        Interest                              Recovery Share to       Expiration
     and Location                 (%)        Participants               Contractor(6)          of Term      Gross/Net Acreage
- -----------------------        --------      ------------           ------------------       ----------     -----------------
                                                                       Oil       Gas
                                                                                         

Corridor (PSC)                   54        Talisman(36%)               15%        35%           2023          647,830/349,828
South Sumatra                              Pertamina(10%)

Corridor (TAC)                   60        Talisman(40%)               27%        30%           2010           118,843/71,306
South Sumatra

Kakap PSC                     31.25        Premier(18.75%)             15%      27.5%           2028          494,150/154,422
West Natuna Sea                            Novus(25%)
                                           Singapore Petroleum(15%)
                                           Pertamina(10%)

Block A PSC                      50        Mobil Oil(50%)              15%        30%           2011          445,476/222,738
Northern Sumatra

Tungkal PSC                     100(1)     --                          15%        30%           2022      1,130,862/1,130,862
South Sumatra

South Jambi B PSC                45(2)     Santa Fe(30%)               15%        30%           2020          380,100/171,045
South Sumatra                              Pertamina(25%)

Jambi EOR                        60        Talisman(40%)              7.5%       N/A            2005             15,146/9,087
South Sumatra

Calik PSC                       100(1)(3)                              15%        35%           2025            88,846/88,846
South Sumatra

Sakala Timur PSC                100(1)(4)  --                          35%        40%           2021      1,249,211/1,249,211
Offshore Bali

Pangkah PSC                      12(1)     Premier(40%)                15%        35%           2026           723,435/86,812
East Java Sea                              Amerada Hess(36%)
                                           Dana (12%)

Ketapang PSC                     50(1)(5)  Petronas Carigali(50%)      15%        35%           2028        1,095,283/547,641
East Java Sea

Sebuku PSC                      100(1)     --                          15%        35%           2027      2,160,176/2,160,176
Offshore Kalimantan

Northwest Natuna PSC             30(1)     Premier(50%)                15%        35%           2027        1,068,352/320,506
West Natuna Sea                            Dana(20%)


(1)  Pertamina has the right to direct that a 10 per cent working interest under
     the PSC be sold to an Indonesian Participant.

(2)  Approval of the change in working interest holder was received from
     Pertamina in early 2000.

(3)  The change in working interest from 40 per cent to 100 per cent was
     approved by Pertamina in 2000.

(4)  In early 2001, the Corporation filed a letter with Pertamina to relinquish
     this block effective January 10, 2001.

(5)  Awaiting approval from Pertamina for the December 2000 Farm-in Agreement
     with Petronas Carigali whereunder Petronas will acquire a 50 per cent
     working interest from the Corporation.

(6)  These percentages reflect approximate post-tax and post-cost recovery share
     for typical fields but are prior to the effects of any domestic market
     obligations on crude oil production. The effective post-tax and post-cost
     recovery rate is based on the revenue sharing rate stated in the PSC and
     the Indonesian tax rate applicable to the specific PSC. In the case of the
     Corridor Block TAC, the effective post-tax and post-cost recovery share is
     calculated after payment of the petroleum revenue tax and accordingly, may
     vary depending on the applicable petroleum revenue tax. To encourage
     drilling and exploration in new geological horizons and frontier areas as
     well as enhanced recovery projects with respect to mature fields, PSCs
     typically contain provisions increasing the contractor's pre-tax share of
     production under certain circumstances such as production from pre-Tertiary
     reservoirs, wells drilled in water depths in excess of designated levels
     and fields with low rates of production.






                                       -6-

The following table lists the Corporation's production sharing arrangements that
are currently in commercial production, and reflects reserves data as at
December 31, 2000 and production data for the years ended December 31, 2000,
1999 and 1998.



                                                         Corporation's Gross/Net  Corporation's Gross/Net   Corporation's Gross/Net
                                                           Production for Year      Production for Year       Production for Year
               Corporation's Gross/Net Proved Reserves      Ended December 31,       Ended December 31,        Ended December 31,
                      as at December 31, 2000(1)                  2000(1)                   1999(1)                   1998(1)
               ---------------------------------------   -----------------------  -----------------------   -----------------------
               Oil & Natural
                Gas Liquids      Sales Gas      Total             Total                    Total                     Total
Property         (MMBbls)          (Bcf)       (MMBOE)           (MMBOEs)                 (MMBOEs)                  (MMBbls)
- --------       -------------     ---------     -------   -----------------------  -----------------------   -----------------------
                                                                                          

Corridor PSC      9.9/4.6       1,523/1,142  263.7/194.9        11.45/10.86              11.30/10.69                2.62/2.39

Corridor TAC     15.4/8.6               -/-     15.4/8.6          2.95/1.83                2.64/1.64                2.72/1.69

Kakap PSC         4.7/3.4             90/64    19.7/14.1          1.58/1.19                2.27/1.85                2.25/2.25

Jambi EOR         2.5/1.4               -/-      2.5/1.4          0.95/0.56                0.84/0.74                0.72/0.64
                                                 9.2/7.0

South Jambi           -/-             55/42          -/-                -/-                      -/-                      -/-

Other(2)          0.6/0.5               -/-      0.6/0.5          0.12/0.11                0.31/0.30                0.38/0.37
                                                                                         -----------              -----------

Total           33.1/18.5       1.668/1.248  311.1/226.5        17.05/14.55              17.36/15.22                8.69/7.34
                                                                                         ===========              ===========


(1)  Gross reserves and production volumes reflect the Corporation's interest
     prior to, and net reserves and production volumes reflect the Corporation's
     interest after, deduction of applicable government take payable to the
     Indonesian government under the applicable contractual arrangement.


(2)  Represents reserves attributable to the Block A PSC and the Block B
     overriding production payment.

Corridor Block PSC, Southern Sumatra

         The Corporation operates in two contract areas in the Corridor Block,
one of which is governed by a PSC executed in 1983 and one of which is governed
by a TAC originally entered into in 1968. Pertamina amended the Corridor Block
PSC in 1996 to extend its term until 2023. The Corporation is operator of the
Corridor Block PSC with a 54 per cent working interest.

         Crude Oil. Crude oil operations in the Corridor Block PSC contract area
consist of 47 commercially producing wells in 11 fields. Production in 2000
averaged 3,600 Bbls/d (3,100 Bbls/d net) compared to 4,200 Bbls/d (3,500 Bbls/d
net) in 1999.

         Natural Gas. Natural gas operations in the Corridor Block PSC contract
area consist of 15 commercially producing wells in the Dayung, Gelam, Letang,
and Tengah fields. Gas operations commenced in October 1998 with production in
2000 averaging 166 MMcf/d (159 MMcf/d net) compared to 161 MMcf/d (154 MMcf/d
net) in 1999.

         Corridor Block Gas Project. The "Corridor Block Gas Project" consists
of (i) production from gas wells in the Dayung, Gelam, Letang and Tengah fields
(collectively, the "Phase I Fields"); (ii) field separation and gathering
facilities, including three field stations to dehydrate gas from the Phase I
Fields; and (iii) a central gas processing plant to process 440 MMcf/d of Raw
Gas from the three field stations, with an output design capacity of 310 MMcf/d
of sales gas (the "Gas Processing Plant" and, together with the field separation
and gathering facilities, the "Project Facilities") and an operating capacity
increase in 2000 to approximately 350 Mmcf/d. The Corridor Block Gas Project
commenced operations in October 1998.





                                       -7-

         Gas produced in the Corridor Block PSC contract area is used for steam
generation at Caltex's enhanced oil recovery operations at Duri, in central
Sumatra.

         The gas is transported from the gas processing plant to the Duri
Steamflood through a 28-inch diameter onshore transmission pipeline, constructed
by the Indonesian-owned gas transmission company P.T. Perusahaan Gas Negara
(Persero) ("PGN").

         In 2000, the Corporation drilled the Suban-4 delineation well which
tested at a flow rate of 80 Mmcf/d with approximately 420 barrels of condensate
per day. Extended testing of the Suban-4 well and the Durian Mabok-2 well, which
was drilled in 1998, indicates that these two wells have penetrated the same
structure. The Corporation believes that the Suban-4 well will be capable of a
sustainable production of 100 Mmcf/d, similar to the Durian Mabok-2 well. The
Corporation is currently drilling the Suban-5 delineation well and plans to
drill three additional delineation wells in 2001 to further establish the size
of the Suban field.

         Ongoing drilling success in the Corridor Block PSC resulted in the
Corporation booking gross proved reserve additions of over 400 Bcf in 2000, with
estimated remaining proved reserves at year- end 2000 of 1.5 Tcf.

         In December 2000, the Corporation and Pertamina signed agreements for
additional gas deliveries from the Corridor Block PSC area to the Duri
Steamflood in central Sumatra operated by Caltex. The agreements provide for a
contract quantity of 1.1 Tcf (Corporation's share 0.6 Tcf) of sales gas to be
delivered over a term of 19 years and exchanged for Duri crude oil at an
approximate ratio of 8,000 cubic feet per barrel. Natural gas for the new
contract will be supplied from the Suban field with gas deliveries expected to
commence in late 2002. By early 2003, the Corporation's 65 Mmcf/d share of
contract quantities will supplement the 160 Mmcf/d of gas (net to the
Corporation) that is contracted under the original agreement with Caltex, for a
total combined quantity of 225 Mmcf/d.

         On February 12, 2001, the Corporation and Pertamina entered into a gas
sales and purchase agreement with Gas Supply Pte. Ltd. (a subsidiary of
Singapore Power Limited) for the supply of natural gas from the Corridor and
South Jambi B PSCs and a third party operation. The agreement provides for a
contract quantity of 2.27 Tcf (the Corporation's share being 0.7 Tcf) of sales
gas to be delivered over a term of 20 years beginning in mid-2003. The
Corporation's share of daily contract quantities is initially 42 Mmcf/d,
increasing over time to 110 Mmcf/ by 2009. Pricing for the gas sales will be
indexed to the price of high sulphur fuel oil. Natural gas for this new
agreement will be supplied from the Sumpal field in the Corridor Block PSC and
three fields (Teluk Rendah, Geger Kalong and Bungin) in the South Jambi B PSC.

Corridor TAC, Southern Sumatra

         The Corporation operates several small non-contiguous areas located
onshore in southern Sumatra with producing oil fields in the Corridor Block
under a TAC between the Corporation and Pertamina. The Corridor Block TAC was
renewed in 1989 for a 20-year period beginning October 1990 to replace the
original TAC entered into in 1968. The Corporation is operator of the block with
a 60 per cent working interest.

         The TAC currently has 163 commercially producing wells in six fields.
Production in 2000 averaged 8,100 Bbls/d (5,000 Bbls/d net) compared to 7,200
Bbls/d (4,600 Bbls/d net) in 1999. During 2000, the Corporation drilled 28
development wells in the Ramba and Bentayan fields, which contributed 2,500
Bbls/d (the Corporation's share being 1,500 Bbls/d) in production to the
Corporation's total production from this area. In June 2000, the Corporation
also acquired 73





                                       -8-

kilometres of 2D seismic data in the Bentayan field to investigate the
possibility of a southeast extension to the field.

Kakap PSC, West Natuna Sea

         The Corporation operates the Kakap PSC in the West Natuna Sea, offshore
Kalimantan, with a 31.25 per cent working interest that currently consists of
some 33 producing oil wells in 10 fields. In 1999, in connection with the West
Natuna Gas Project described below, the Corporation signed a 23- year extension
of the contract term of the Kakap PSC, which now expires in 2028.

         Each of the four main producing fields has its own dedicated platform
with initial processing facilities that are linked by pipelines to a floating
production storage and offloading vessel with a storage capacity of 650 MBbls.
In addition, five subsea completions are currently tied back and produced to the
main oil production platforms via subsea flowlines and umbilicals. The
Corporation's share of production in 2000 from the Kakap fields was 4,300 Bbls/d
(3,300 Bbls/d net) compared to 6,200 Bbls/d (5,100 Bbls/d net) in 1999.

         West Natuna Gas Project. The participants in the Kakap, Natuna Sea
Block A and South Natuna Sea Block B PSCs have formed the West Natuna Gas Group
(the "West Natuna Group") in order to jointly market gas from the West Natuna
Area. In January 1999, the West Natuna Group concluded extensive negotiations
and signed a supply agreement with Pertamina for natural gas to be used for
power generation and petrochemical projects in Singapore. The construction of
the Kakap upstream facilities and the West Natuna Transportation System was
completed in December, 2000, approximately four months ahead of schedule and
under budget. The upstream facilities required for the project were placed into
service in early December, 2000 and the 650-kilometre West Natuna pipeline
system was commissioned at the end of 2000. Actual gas sales began in January
2001, six months prior to the commencement of the full sales contract on July
15, 2001.

Block A PSC, Northern Sumatra

         In July 1989, the Corporation entered into a production sharing
contract (effective for 20 years beginning in September 1991) for exploration of
the Block A PSC located in northern Sumatra. The Corporation is operator of the
block with a 50 per cent working interest. The PSC consists of 12 commercially
producing wells in three fields with production averaging 132 Bbls/d (113 Bbls/d
net) in 2000 compared to 181 Bbls/d (155 Bbls/d net) in 1999. From a development
perspective, civil unrest in the Aceh Province, where the Block A PSC is
located, is one of the factors impacting the Corporation's ability to develop
its probable reserves in the area.

Tungkal PSC, Southern Sumatra

         The Corporation entered into a 30-year production sharing contract in
1992 for the exploration of the Tungkal PSC located onshore south Sumatra,
northwest of the South Jambi B Block. The Corporation is operator of the block
with a 100 per cent working interest.

         In early 1997, the Corporation discovered oil and gas at the Mengoepeh
Field on the Tungkal PSC. Four appraisal wells following a 96 square kilometre
3D seismic survey completed in 1997 delineated a marginal oil and gas
accumulation. An additional seismic program was completed in the third quarter
of 2000 to provide drilling locations in the Mengoepeh Field and the Corporation
drilled the unsuccessful Mengoepeh-6 well in January 2001. The Corporation
continues to investigate the field for its oil potential and for development
options to commercialize the field.





                                       -9-

South Jambi B PSC, Southern Sumatra

         The Corporation operates the South Jambi B Block, located onshore in
South Sumatra adjacent to the Corridor Block, under a 30-year PSC entered into
in 1990. The Corporation holds a 45 per cent working interest in the block.

         A plan of development for the Teluk Rendah and Geger Kalong fields in
the north end of the block, and the Bungin field in the southern area of the
block in support of the South Jambi B PSC's share of the Sumatra Gas to
Singapore sales contract has been approved by Pertamina. The Teluk Rendah and
Geger Kalong fields are targeted to commence production in mid-2003 and the
Bungin project is scheduled to commence production later in the contract term,
with the combined developments expected to increase the total net sales from the
block to approximately 40 Mmcf/d.

Jambi EOR, Southern Sumatra

         In January, 1990, the Corporation and Pertamina entered into a 15-year
EOR contract to perform secondary recovery operations in six fields in the Jambi
area of southern Sumatra. Three of these six fields are under waterflood as the
Corporation decided not to pursue development of the remaining three fields.
Under the terms of the EOR, the contractor receives a share in, and can recover
costs from, oil produced in excess of primary oil production. The contractor
pays all the development costs but Pertamina repays past capital costs plus an
uplift of 30 per cent. Profit oil (the portion remaining of the contractor's
equity share, less contractor's allowed operating costs and investment credits)
is split 71.1538 per cent with Pertamina and 38.8462 per cent with the
contractor. The Corporation has a 60 per cent working interest.

         The Jambi EOR has 195 commercial wells in three fields that currently
produce 2,600 Bbls/d (1,500 Bbls/d net) compared to 2,300 Bbls/d (2,000 Bbls/d
net) in 1999. During 2000, the Corporation drilled 12 development wells.

Calik PSC, Southern Sumatra

         In June, 1995, the Corporation entered into a 30 year PSC for the
exploration of the Calik Block located onshore in southern Sumatra, northeast of
the Corridor Block. The Corporation, which is operator of the block, received
approval from Pertamina in 2000 for a change in working interest from 60 per
cent to 100 per cent.

         Through 2000, the Company completed a work program commitment, which
consisted of reprocessing seismic data, acquiring additional 2D seismic,
conducting geological studies and drilling one exploratory well, which did not
produce oil in commercial quantities. Recent seismic mapping has identified
several potential oil prospects in the lower Talang Akar sandstone formation. In
May 2000, the Corporation drilled the Cahaya-1 prospect well, which was plugged
and abandoned.

Sakala Timur PSC, Offshore Bali

         After receiving Pertamina's approval in early 1999, the Corporation
held a 100 per cent working interest and operatorship in a 30-year PSC executed
in January, 1991 for exploration of the Sakala Timur Block, located offshore
Lombok, northeast of the island of Bali.

         There has been no commercial production of hydrocarbons in this
contract area to date. In July, 2000, the Corporation drilled the Sawangan-1X
well, which was plugged and abandoned. Effective January 10, 2001, the
Corporation relinquished its interest in the Sakala Timur Block, as the
remaining potential identified on the block was not sufficient to justify
further expenditures.





                                      -10-

Pangkah PSC, East Java Sea

         In 1997, the Corporation entered into a farm-in agreement with Dana
Petroleum (Pangkah) LLC ("Dana") to acquire an interest in a 30-year PSC
executed in May 1996 for exploration of the Pangkah Block, located offshore in
the East Java Sea. Premier Oil Pangkah Ltd. is operator of the Pangkah Block
contract area. The Corporation has a 12 per cent working interest.

         There has been no commercial production of hydrocarbons in this
contract area to date. The Ujung Pangkah-1 well drilled in late 1998 tested gas
and oil and condensate at rates of 20 Mmcf/d and 1,000 Bbls/d, respectively.
Three wells drilled in the fourth quarter of 2000 yielded one offshore oil
discovery and one delineation success. The Sidayu-1 oil well flowed 1,450 Bbls/d
during testing and the Ujung Pangkah-2 delineation well confirmed reservoir
continuity and the gas and oil columns seen in the Ujung Pangkah-1 discovery
well. The results of these wells along with the results of the successful Ujung
Pangkah-3 well drilled in early 2001 are being evaluated for the potential
submission of a plan of development to the Indonesian government in late 2001
for both the Ujung Pangkah and Sidayu fields.

Ketapang PSC, East Java Sea

         In June, 1998, the Corporation signed a 30-year PSC with Pertamina for
a 100 per cent working interest in the 1.1 million acre offshore Ketapang Block.
This block is east of and adjacent to the Pangkah Block, and the discovery at
Ujung Pangkah confirmed the prospectivity of the main play type in the Ketapang
Block. In December 2000, the Corporation farmed out 50 per cent of its working
interest in the Ketapang PSC to Petronas Carigali, with the Corporation holding
the remaining 50 per cent working interest.

         Several oil and gas prospects have been confirmed by the mapping of new
and reprocessed seismic data and the discovery at Ujung. A seismic survey was
conducted in early 1999, which further defined drilling prospects, and locations
were selected for a four well drilling program. The first of these four wells,
the Bukit Panjang-1 well was drilled in late 2000 and plugged and abandoned. The
remaining three wells are scheduled to be drilled in the first half of 2001.

Sebuku PSC, Offshore Kalimantan

         In September, 1997, the Corporation entered into a 30-year PSC for the
exploration of the Sebuku Block, located in the Makassar Strait, offshore
Kalimantan. The Corporation is operator of the block with a 100 per cent working
interest.

         Although there is currently no commercial production of hydrocarbons in
the contract area, the Corporation is evaluating a 1974 discovery, Makassar 1,
and several prospects and leads were identified by the mapping of 2,633
kilometres of new 2D seismic data. In early 2001, the Corporation completed the
drilling of the Pangkat-1 well, a large oil prospect. The well encountered oil
shows during drilling and flowed a small amount of oil during testing, but has
been plugged and abandoned as non-commercial.

Northwest Natuna Block I PSC.

         The Corporation entered into a farm-in agreement in 1997 with Dana
Petroleum (NW Natuna) LLC to acquire a 30 per cent interest in the undeveloped
Northwest Natuna Block I PSC, just north of the Kakap PSC. The Corporation will
earn its interest by funding 50 per cent of the next $6.5





                                      -11-

million spent on the block, including shooting and processing seismic and
drilling one exploratory well.

         There has been no commercial production of hydrocarbons in this
contract area to date. A high resolution 2D seismic survey conducted in 1998
further developed a large oil prospect on the Premier operated Northwest Natuna
block. In April 2000, the Corporation drilled the Ande Ande Lumut-1 well. The
well logged oil pay and the Corporation recovered oil samples from four sands of
the Gabus Formations. Testing of the well was terminated without a sustained oil
flow. Plans for appraisal drilling in 2001 to delineate the Ande Ande Lumut
field are being considered.

Block B, Northern Sumatra

         The Corporation receives an overriding production payment of $0.04 per
BOE on 60 per cent of all crude oil, natural gas and natural gas liquids
produced in the Block B contract area in Aceh, northern Sumatra. This payment
amounted to approximately $1.6 million in 2000 compared to $3.5 million in 1999.

NATURAL GAS AND OIL RESERVES

         The following table summarizes the estimates of the Corporation's
historical gross and net proved natural gas and oil reserves as of the dates
indicated and the present value attributable to the net proved reserves at such
dates. The Corporation, for all years presented, has prepared the reserves and
present value data.



                                                                2000           1999           1998
                                                            ------------   ------------   ------------
                                                                                 

Corporation's gross and net proved reserves(1)(2)(3):
   Natural gas (Bcf)                                         1,668/1,248      1,263/996       1053/919
   Oil and Condensate (MMBbls)                                     33/19          34/20          39/30
   Total (MMBOE)                                                 311/227        245/186        214/183
Corporation's gross and net proved developed reserves             109/77         108/79         116/99
   (MMBOE)

Present value of future net revenues                        $      1,513   $      1,361   $        218
   before income taxes (in millions of $)(4)
Standardized measure of discounted                          $        836   $        826   $        203
   future net cash flows (in millions of $)


(1)      "Gross" reserves are reserves attributable to the Corporation's
         interest but prior to deduction of applicable government take payable
         to the Indonesian government as owner of the reserves under the
         applicable contractual arrangement.

(2)      "Net" reserves are reserves attributable to the Corporation's interest
         after deduction of applicable government take payable to the Indonesian
         government as owner of the reserves under the applicable contractual
         arrangement, which government take may vary depending on prices,
         production rates, expenditure levels and legislative changes.

(3)      "Proved" reserves are those reserves estimated as recoverable under
         current technology and existing economic conditions, from that portion
         of a reservoir which can be reasonably evaluated as economically
         productive on the basis of analysis of drilling, geological,
         geophysical and engineering data, including the reserves to be obtained
         by enhanced recovery processes demonstrated to be economic and
         technically successful in the subject reservoir. All of the proved
         developed reserves were producing as of December 31, 2000.

(4)      The present value of future net revenues before income taxes
         attributable to the Corporation's net proved reserves was prepared
         using prices and costs in effect as of the end of the respective
         periods presented, discounted at 10 per cent.





                                      -12-

         Estimates of the Corporation's reserves and future net revenues are
made using sales prices estimated by the Corporation to be in effect as of the
date of such reserves estimates and are held constant throughout the life of the
properties (except to the extent a contract specifically provides for
escalation). Estimated quantities of reserves and future net revenues therefrom
have been gas calculated on a Btu equivalent basis based on crude oil prices.
There are numerous uncertainties inherent in estimating natural gas and oil
reserves and their estimated values, including many factors beyond the control
of the producer. THE FUTURE NET CASH FLOWS ARE NOT INDICATIVE OF THE CURRENT
VALUE OR FUTURE EARNINGS THAT MAY BE REALIZED FROM THE PRODUCTION OF PROVED
RESERVES NOR SHOULD IT BE ASSUMED THAT THEY REPRESENT THE FAIR MARKET VALUE OF
THE RESERVES OR OF THE OIL AND GAS PROPERTIES.

RESERVE RECONCILIATION

         The following table provides a summary of the changes in the
Corporation's reserves which occurred in the most recent fiscal year on a
gross/net basis.



                                           Proven         Probable         Total
                                      ---------------   ---------------   ---------------
                                                                 

NATURAL GAS (BCF)
AS AT JANUARY 1, 2000                   1,262.5/996.3       745.7/612.3   2,008.2/1,608.6
Additions(1)                              407.9/218.8       924.9/647.4     1,332.8/866.2
Purchases of Reserves                          0/87.1               0/0            0/87.1
Revisions to Previous Estimates             62.9/47.3        (54.3)/(38)          8.6/9.3

Production                               (60.7)/(58.2)              0/0      (60.7)/(58.2)
Royalty Adjustment                        (4.8)/(43.4)            0/(46)      (4.8)/(89.4)
                                      ---------------   ---------------   ---------------
AS AT DECEMBER 31, 2000               1,667.9/1,247.9   1,616.3/1,175.7   3,284.2/2,423.6

OIL AND CONDENSATE (MMBbls)
AS AT JANUARY 1, 2000                       34.1/19.6         23.2/15.2         57.3/34.8
Additions(1)                                  6.5/2.1           8.5/2.7            15/4.8
Purchases of Reserves                           0/1.4               0/0             0/1.4
Revisions to Previous Estimates            (0.6)/(0.7)       (3.8)/(2.1)       (4.4)/(2.7)
Production                                 (6.9)/(4.8)              0/0        (6.9)/(4.8)
Royalty Adjustment and Rounding                 0/1.0            0/(0.8)           0/(0.2)
                                      ---------------   ---------------   ---------------
AS AT DECEMBER 31, 2000                     33.1/18.5         27.9/15.1         61.1/33.7


(1)  Includes discovery and extension, infill, improved recovery and other

(2)  Columns may not add due to rounding.





                                      -13-

DRILLING HISTORY

         The following table sets forth the number of wells completed by the
Corporation on its properties for the years ended December 31, 2000, 1999 and
1998.



                               Year Ended December 31,
                                     (Gross/Net)

                           2000         1999         1998
                        ----------   ----------   ----------
                                         

EXPLORATORY WELLS
Oil                          3/0.7          -/-        4/1.8
Gas                          1/0.5        4/2.3       10/5.6
Dry                          6/3.3        1/0.3       10/5.6
                        ----------   ----------   ----------
Total Exploratory           10/4.5        5/2.6      24/13.0

DEVELOPMENT WELLS
Oil                        40/24.0       14/8.4      20/11.4
Gas                          1/0.5          -/-        6/3.2
Dry                            -/-        1/0.6          -/-
                        ----------   ----------   ----------
Total Development          41/24.5       15/9.0      26/14.6
                        ----------   ----------   ----------
Total Wells                51/29.0      20/11.6      50/27.6


PRODUCTIVE WELLS

         The following table sets forth the number of productive wells in which
the Corporation owned an interest as of December 31, 2000.



                                                                           Total Productive
                Corporation Operated Wells       Non-Operated Wells              Wells
                    Gross         Net            Gross         Net         Gross        Net
                -----------   ------------    ----------   ----------   ----------   ----------
                                                                   

Oil                      40        251.5               4          1.1          444        252.6
Gas                      15          8.1              --           --           15          8.1
Total                   455        259.6               4          1.1          459        260.7


         Productive wells consist of producing wells capable of production,
including wells awaiting connections. Wells that are completed in more than one
producing horizon are counted as one well. The Corporation also owns an interest
in four offshore platforms.

EXPENDITURES

         In 2000, the Corporation's exploration/delineation expenditures were
$29 million compared to $32 million in 1999. Additionally, the Corporation's
development expenditures in 2000 were $57 million compared to $34 million in
1999.

ACREAGE DATA

         The following table sets forth the approximate developed and
undeveloped acreage in which the Corporation held a contract interest as of
December 31, 2000. Undeveloped acreage includes acres on which the Corporation
has a concession and on which wells have not been drilled or completed to a
point that would permit the production of commercial quantities of oil and gas,





                                      -14-

regardless of whether such acreage contains proved reserves. A gross acre is an
acre in which an interest is owned. A net acre is deemed to exist when the sum
of fractional ownership interests in gross acres equals one. The number of net
acres is the sum of the fractional interests owned in gross acres expressed as
whole numbers and fractions thereof.



                                   Thousands of Acres
                           Developed                Undeveloped
                    ----------   ----------   ----------   ----------
                       Gross         Net         Gross         Net
                                            

Onshore                 388          207        2,440        1,837
Offshore                 36           11        6,754        4,507
Total                   424          218        9,194        6,344


ENVIRONMENTAL MATTERS

         Indonesian laws and regulations may require the acquisition of a permit
before drilling commences, restrict the types, quantities and concentration of
various substances that can be released into the environment in connection with
drilling and production activities, limit or prohibit drilling activities on
certain lands lying within wilderness, wetlands and other protected areas,
require remedial measures to prevent pollution from former operations, such as
pit closure and plugging abandoned wells, and impose substantial liabilities for
pollution resulting from the Corporation's operations. In addition, these laws,
rules and regulations may restrict the rate of oil and natural gas production
below the rate that would otherwise exist.

RISK FACTORS

         Risk of Operations in Indonesia. Substantially all of the Corporation's
assets and operations are located in Indonesia, and substantially all of the
Corporation's crude oil production in Sumatra is sold at a price determined by
the Indonesian government. The Indonesian government has exercised and continues
to exercise significant influence over many aspects of the Indonesian economy,
including the oil and gas industry, and any Indonesian government action
concerning the economy could have a material impact on private sector entities,
including the Corporation. There is no assurance that the Indonesian government
will not postpone or review additional projects or will not make changes in
government policies, which in each case could materially impact or adversely
affect the Corporation's financial position, results of operations or prospects.

         The Corporation's business is regulated by the laws and regulations of
Indonesia, including those relating to the development, production, marketing,
pricing, transportation and storage of natural gas and crude oil, taxation and
environmental and safety matters. The Corporation may be adversely affected by
changes in governmental policies or social instability or other political,
economic or diplomatic developments in or affecting Indonesia which are not
within the control of the Corporation including, among other things, a change in
crude oil or natural gas pricing policy, the risks of war, expropriation,
nationalization, renegotiation or nullification of existing concessions and
contracts, taxation policies, foreign exchange and repatriation restrictions,
changing political conditions, international monetary fluctuations and currency
controls.

         Concentration of Assets and Operations. As of December 31, 2000, 85 per
cent of the Corporation's total gross proved crude oil and natural gas reserves
on an energy equivalent basis and 91 per cent of the Corporation's total proved
natural gas reserves were located in the Corridor Block PSC contract area. The
concentration of the Corporation's crude oil and natural gas reserves in the
Corridor Block PSC contract area increases the Corporation's exposure to an
event that could adversely affect the development or production of crude oil and
natural gas in a limited geographic area, such as catastrophic damage to
pipelines, gas processing plants or reservoir structures or events





                                      -15-

that could result in the loss, or material modification, of the Corridor Block
PSC. Adverse developments with respect to the Corridor Block PSC could have a
material adverse effect on the Corporation's financial condition, results of
operations or prospects.

         In addition, 66 per cent of the Corporation's total crude oil and
condensate production for 2000 was attributable to oil fields located in the
Corridor Block TAC and the Kakap PSC contract areas, and 68 per cent of the
Corporation's total proved crude oil and condensate reserves as of December 31,
2000 were located in the Kakap PSC, Corridor Block TAC and Jambi EOR contract
areas. Adverse developments with respect to one or more of these contract areas
could also have a material adverse effect on the Corporation's financial
condition, results of operations or prospects.

         Natural Gas Projects Under Development. The factors upon which the
success of natural gas projects are contingent are in large part beyond the
control of the Corporation, and significant complex negotiations among multiple
parties remain with respect to the development of certain gas projects. There is
no assurance that the Corporation will be able to successfully develop any
proposed project and, if completed, that such projects will be completed on a
timely basis. The failure of the Corporation or other parties involved to
complete and operate any of these natural gas projects successfully could have a
material adverse effect on the Corporation's financial condition, results of
operations or prospects.

         Limited Markets for Indonesian Natural Gas. The absence of, or limited
development of a natural gas transmission and distribution infrastructure within
Indonesia and between Indonesia and Singapore has restricted consumption of
Indonesian natural gas. The Corporation's ability to market gas may be limited
by the lack of infrastructure within Indonesia. Further, there is no assurance
that long-term market demand will develop.

         Relationship with Pertamina. Under current Indonesian law, Pertamina is
the sole entity authorized to manage Indonesia's petroleum resources on behalf
of the Indonesian government. In September, 2000, the Indonesian government
submitted a bill to the House of Representatives proposing to establish an
"Executive Body" that would take over Pertamina's current right to sign
contracts with oil and gas companies for the development of the country's
hydrocarbon resources. The status of this bill is unclear at this time.

         Pertamina enters into production sharing arrangements with private
energy companies whereby such companies explore, develop and market oil and gas
in specified areas in exchange for a percentage interest in the production from
the fields in the applicable production sharing area. All of the Corporation's
reserves are attributable to such production sharing arrangements. Production
sharing arrangements contain requirements regarding quality of service, capital
expenditures, legal status of the concessionaires, restrictions on transfer and
encumbrance of assets and other restrictions. Failure to comply with these
arrangements could result, under certain circumstances, in the revocation of a
production sharing arrangement. Such an action could have a material adverse
effect on the Corporation's financial condition, results of operations or
prospects. In addition, the Corporation must obtain approval from Pertamina for
substantially all material activities undertaken with respect to the production
sharing arrangements, including exploration, development, production, drilling
and other operations, sale of oil or natural gas and the hiring or termination
of personnel. Furthermore, all facilities and equipment purchased by the
Corporation and used in a contract area become the property of Pertamina,
although the Corporation may recover such costs through the cost recovery
provisions of the applicable production sharing arrangements.

         Substantial Capital Requirements; Liquidity. The Corporation makes, and
will continue to make, substantial capital expenditures for the acquisition,
exploration, development and production of oil and natural gas reserves. During
1996 and 1997, a portion of the Corporation's capital requirements were financed
by loans from Gulf Canada. On February 26, 1997, the Corporation and





                                      -16-

the other private PSC participants entered into a credit agreement (the
"Corridor Loan") with various lending institutions (the "Lenders") to provide up
to $450 million of financing to fund the development of the Corridor Gas Project
(the "Project"). Repayments on the Corridor Loan are equal quarterly
installments ending February, 2007. Under the terms of the Corridor Loan, the
Project net cash flows contribute to certain cash reserve requirements that the
Corporation reports as "cash restricted in use". Additionally a specified
percentage of the surplus cash is used to fund mandatory early repayments with
the remainder released to the Corporation. The mandatory early repayments were
substantial in 2000 because of high prices and the Corporation not paying
current taxes. Based on long-term debt outstanding at December 31, 2000, the
Corporation's repayment requirements for the next five years are $25 million
plus a $6 million mandatory early repayment in 2001, and $21 million (assuming
no mandatory early repayments) for each of the years 2002 through 2005. Pursuant
to certain financing agreements entered into in connection with the Corridor
Facility, Gulf Canada is required for the term of the Corridor Facility to hold
(directly or indirectly) at least 60 per cent of the outstanding voting shares
of the Corporation and, in any event, to continue to control the Corporation.

         While the Corporation expects to be able to fund its current
exploration and development plans with internally generated cash flow and
current cash balances, if its pending gas projects are not completed on time or,
if after production commences, revenues or reserves decline, the Corporation may
have limited ability to expend the capital necessary to undertake or complete
future drilling programs. There can be no assurance that debt or equity
financing or cash generated by operations will be available or sufficient to
meet these requirements or for other corporate purposes or, if debt or equity
financing is available, that it will be on terms acceptable to the Corporation.
Moreover, future activities may require the Corporation to alter its
capitalization significantly. The inability of the Corporation to access
sufficient capital for its operations could have a material adverse effect on
the Corporation's financial condition, results of operations or prospects.

         Uncertainty of Reserves Estimates. This Annual Information Form
includes estimates made by the Corporation of the Corporation's gross and net
proved oil and gas reserves and the present value of net proved reserves. There
are numerous uncertainties inherent in estimating quantities of reserves,
including many factors beyond the control of the Corporation. The reserves data
set forth in this Annual Information Form represent estimates only.

         Reliance on Development of Additional Reserves. The Corporation must
continually acquire, explore for and develop new hydrocarbon reserves to replace
those produced and sold. Although the Corporation believes that the properties
subject to its PSCs have potential for significant reserves additions from
presently contemplated exploration and development activities, the success of
such activities cannot be assured.

         Exploration, Development and Production Risks. The Corporation's oil
and gas exploration, development and planned production operations involve risks
normally inherent to such activities, including blowouts, oil spills and fires
(each of which could result in damage to or destruction of wells, production
facilities or other property, or injury to persons), geological uncertainties
and unusual or unexpected formations and pressures, which may result in dry
holes, failure to produce oil or gas in commercial quantities or inability to
fully produce discovered reserves. The Corporation's offshore operations are
also subject to hazards inherent in marine operations, such as capsizing,
sinking, grounding, collision and damage from severe weather conditions. Oil and
gas exploration may involve unprofitable efforts, not only from dry wells, but
from wells that are productive but do not produce sufficient net revenues to
return a profit after drilling, operating and other costs. Completion of a well
does not assure a profit on the investment or recovery of drilling, completion
and operating costs. In addition, drilling hazards or environmental damage could
greatly increase the cost of operations, and various field-operating conditions
may adversely affect the Corporation's production from successful wells. These
conditions include delays in obtaining governmental approvals or consents,
shut-in of connected wells resulting from extreme weather conditions,





                                      -17-

insufficient storage or transportation capacity or other geological and
mechanical conditions. While close well supervision and effective maintenance
operations can contribute to maximizing production rates over time, production
delays and declines from normal field operating conditions cannot be eliminated
and can be expected to adversely affect revenue and cash flow levels to varying
degrees.

         Volatility of Oil and Gas Prices. The revenues expected to be generated
by the Corporation's future operations will be highly dependent upon the prices
of, and demand for, oil and natural gas. In addition, there is no assurance that
the Indonesian government will not adopt a natural gas or oil pricing policy
that would adversely affect the Corporation's future results of operations or
prospects. Decreases in the prices of oil and gas could have an adverse effect
on the carrying value of the Corporation's reserves and the Corporation's
revenues, profitability, cash flow and credit availability.

         Competition. The oil and gas industry is highly competitive. The
Corporation's competitors for the acquisition, exploration, production and
development of oil and natural gas properties in Indonesia, and for capital to
finance such activities, include companies that have greater financial and
personnel resources available to them than the Corporation. Certain of the
Corporation's customers and potential customers are themselves exploring for oil
and natural gas in Indonesia, and the results of such exploration efforts could
affect the Corporation's ability to sell or supply oil or gas to these customers
in the future. The Corporation's ability to successfully bid on and enter into
new PSCs or otherwise acquire additional property rights, to discover reserves,
to participate in drilling opportunities and to identify and enter into
commercial arrangements with customers will be dependent upon a continuation of
its close working relationships with its partners and joint operators and its
ability to select and evaluate suitable properties and to consummate
transactions in a highly competitive environment.

         Environmental Risks. The Corporation's business is subject to certain
Indonesian laws and regulations relating to exploration for and development and
production of oil and natural gas, and environmental and safety matters. The
discharge of oil, natural gas or other pollutants into the air, soil or water
may give rise to liabilities to the Indonesian government and third parties and
may require the Corporation to incur costs to remedy such discharge. No
assurance can be given that Indonesian environmental laws will not result in a
curtailment of production or a material increase in the costs of production,
development or exploration activities or otherwise adversely affect the
Corporation's financial condition, results of operations or prospects.

         Control by, and Arrangements with, Gulf Canada; Potential Conflicts of
Interest. At present, Gulf Canada owns approximately 72 per cent of the
outstanding Common Shares. Additionally, pursuant to certain financing
agreements entered into in connection with the Corridor Loan, Gulf Canada is
required for the term of the Corridor Loan to hold (directly and indirectly) at
least 60 per cent of the outstanding voting shares of the Corporation and to
continue to control the Corporation. Accordingly, Gulf Canada will be in a
position to control the policies, management and affairs of the Corporation, to
effectively prevent or cause a change in control of the Corporation and to
determine the outcome of corporate action requiring shareholder approval,
including electing all, or substantially all, the members of the Board of
Directors of the Corporation and adopting amendments to the Corporation's
Articles of Continuance.

         The Corporation and Gulf Canada have also entered into a series of
agreements relating to their ongoing intercompany arrangements.

         Because of the complexity of the various relationships between the
Corporation and Gulf Canada, there can be no assurance that each of the
agreements between them, or the transactions provided for therein, has been or
will be effected on terms at least as favorable to the Corporation as could have
been obtained from unaffiliated third parties. In addition, although the
Corporation and Gulf Canada have attempted to address potential future conflicts
of interest through a series of





                                      -18-

agreements, in light of the significant past and ongoing relationships between
the Corporation and Gulf Canada and the nature of their respective businesses,
there may be conflicts of interest that arise in the future between the
Corporation and Gulf Canada.

                  SELECTED CONSOLIDATED FINANCIAL INFORMATION

SELECTED CONSOLIDATED FINANCIAL INFORMATION

         Reference is made to the information under the heading "Consolidated
Financial Statements" on pages 32 to 34 of the Corporation's 2000 Annual Report
filed with securities commissions in Canada and with the Securities and Exchange
Commission in the United States. This information is incorporated herein by
reference as the Selected Consolidated Financial Information.

DIVIDEND POLICY

         The Corporation's dividend policy has been to retain its available cash
flow to support the continued development of its business. Accordingly, the
Corporation does not plan to declare dividends on its common shares in the
foreseeable future.

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

         Reference is made to the information under the heading "Management
Discussion and Analysis" which appears on pages 21 to 29 of the Corporation's
2000 Annual Report, filed with securities commissions in Canada and with the
Securities and Exchange Commission in the United States. This information is
incorporated herein by reference as the Management's Discussion and Analysis of
Financial Condition and Results of Operations.

                             MARKET FOR SECURITIES

         Gulf Indonesia's common shares are listed for trading on the New York
Stock Exchange, and trade under the symbol "GRL".

                             DIRECTORS AND OFFICERS

         The Board of Directors is currently composed of eleven members.
Directors are elected for a term of office expiring at the next succeeding
annual shareholders' meeting following their election to office or until a
successor is duly elected and qualified. The Officers of the Corporation serve
at the discretion of the Board of Directors.





                                      -19-

DIRECTORS

         Reference is made to information contained under the heading "Election
of Directors" on pages 3 to 5 of the Circular for the names of the directors of
Gulf Indonesia as at the date of this AIF, their current offices, their
principal occupations for the five years ended December 31, 2000 and their
municipality of residence, which information is incorporated herein by
reference.

         All directors and officers as a group beneficially own, directly or
indirectly, or have control over or exercise direction in respect of 40,136
Common Shares or approximately 0.012 per cent of the Common Shares of the
Company. Together with stock options that are exercisable within 60 days of the
date hereof, all directors and officers as a group beneficially own, directly or
indirectly, or have control over or exercise direction in respect of 1,491,294
Common Shares, or approximately 1.69 per cent, of the Common Shares of the
Company.

         The Committees of the Board of Directors are described under the
heading "Election of Directors" on page 5 of the Circular.

OFFICERS



NAME AND MUNICIPALITY OF RESIDENCE     POSITION WITH THE CORPORATION
                                    
William T. Fanagan                     President, Chief Executive Officer and
Jakarta, Indonesia                     Director

Murray E. Hesje                        Vice President, Finance
Calgary, Alberta

Robert W. Klassen                      Vice President, Operations
Jakarta, Indonesia

Supramu Santosa                        Vice President, Business Planning and
Jakarta, Indonesia                     Government Relations

Cliff W. Zeliff                        Vice President, Exploration
Jakarta, Indonesia

Taufik Ahmad                           Vice President, Administration
Jakarta, Indonesia

Alan P. Scott                          Corporate Secretary
Calgary, Alberta


         William T. Fanagan has been President and Chief Executive Officer of
the Corporation since May, 1998. Mr. Fanagan was Director-International of Gulf
Canada from 1996 to May 1998. From 1992 to 1995, Mr. Fanagan was Finance
Director of the KomiArcticOil joint venture. Mr. Fanagan has been employed by
Gulf Canada in various capacities since 1977.

         Murray E. Hesje was appointed Vice President, Finance of each of the
Corporation's operating subsidiaries in 1999. Mr. Hesje has been employed by
Gulf Canada or its subsidiaries in various capacities since at least 1974. In
February, 2001, Mr. Hesje moved to Calgary and assumed the position of Vice
President and Controller of Gulf Canada. His responsibilities as Vice President,
Finance of the Corporation are expected to be assumed by a new officer in the
near future.





                                      -20-


         Robert W. Klassen has been Vice President, Operations of the
Corporation since May 1998. Mr. Klassen was the Senior Development Engineer -
International, from 1993 to May 1998. Mr. Klassen has been employed by Gulf
Canada in various capacities since 1976.

         Prior to assuming his current position, Supramu Santosa was the Vice
President, Administration of each of the Corporation's operating subsidiaries
and held such position since 1989.

         Taufik Ahmad was appointed Vice President, Administration of the
Corporation on February 15, 2001.

         Cliff W. Zeliff has been Vice President, Exploration of each of the
Corporation's operating subsidiaries since 1990. Mr. Zeliff has been employed by
the Corporation in various capacities since 1984.

         Alan Scott has been Secretary of the Corporation since November, 2000.
Mr. Scott has been employed as legal counsel and in other capacities for Gulf
Canada since 1978.

                             ADDITIONAL INFORMATION

         Additional information, including directors' and officers' remuneration
and indebtedness, principal holders of the Corporation's securities, options to
purchase securities and interest of insiders in material transactions, where
applicable, is contained in Gulf Indonesia's Management Proxy Circular dated
March 19, 2001 provided to holders of common shares of Gulf Indonesia in
connection with the Annual General Meeting of Shareholders to be held on May 7,
2001 the ("2001 Management Proxy Circular"). Additional financial information is
provided in the Corporation's consolidated financial statements for the year
ended December 31, 2000 filed with securities commissions in Canada and the
Securities and Exchange Commission in the United States.

         Upon request to the Corporate Secretary, the Corporation will provide
to any person or company:

          (i)   one copy of the Corporation's AIF, together with one copy of any
                document, or the pertinent pages of any document, incorporated
                by reference in the AIF;

          (ii)  one copy of the comparative consolidated financial statements of
                the Corporation for its most recently completed financial year
                for which financial statements have been filed together with the
                accompanying report of the auditor and one copy of the most
                recent interim financial statements of the issuer that have been
                filed, if any, for any period after the end of its most recently
                completed financial year; and

          (iii) one copy of the information circular of the Corporation in
                respect of its most recent annual meeting of the shareholders
                that involved the election of directors, or one copy of any
                annual filing prepared instead of that information circular, as
                appropriate.

When the securities of the Corporation are in the course of a distribution
pursuant to a short form prospectus, or a preliminary short form prospectus has
been filed, copies of the foregoing documents and any other documents that are
incorporated by reference into the short form prospectus or preliminary short
form prospectus may also be obtained from the Secretary of the Corporation, upon
request.





                                      -21-

                                 MISCELLANEOUS

         As used in this Annual Information Form, the following terms have the
meanings indicated: "Bbls", "MBbls" and "MMBbls" mean barrels, thousand barrels
and million barrels, respectively; "Mcf", "MMcf", "Bcf" and "Tcf" mean thousand
cubic feet, million cubic feet, billion cubic and trillion cubic feet,
respectively; "BOE", "MBOE" and "MMBOE" mean barrels of oil equivalent, thousand
barrels of oil equivalent and million barrels of oil equivalent, respectively;
"Bbls/d", "MBbls/d", "Mcf/d", "MMcf/d", "BOE/d" and "MBOE/d" mean barrels per
day, thousand barrels per day, thousand cubic feet per day, million cubic feet
per day, barrels of oil equivalent per day and thousand barrels of oil
equivalent per day, respectively. Gross reserves or gross production are
reserves or production attributable to the Corporation's interest prior to
deduction of government take; net reserves or net production are reserves or
production net of such government take. Natural gas volumes are converted to a
BOE basis using the ratio of 6 Mcf of natural gas to one Bbl of oil and
condensate. Unless otherwise indicated, per BOE calculations are on a per BOE
sold basis. Natural gas volumes are stated at the official temperature and
pressure bases of the area in which the reserves are located. Unless otherwise
indicated, estimated reserves quantities as set forth in this Annual Information
Form are based upon the Corporation's assumptions concerning future price and
cost escalations. Additions to reserves are quoted in accordance with applicable
Canadian industry standards. Under United States Statement of Accounting
Standards No. 69, reserves additions from development would be considered part
of revisions of previous estimates. Finding and development costs per BOE are
calculated by dividing capital expenditures and exploration expenses by gross
estimated proved reserves additions (excluding purchased reserves). Unless
otherwise indicated, amounts expressed in dollars or $ are in United States
dollars.

         The Indonesian government owns all of Indonesia's petroleum resources.
The Indonesian state-owned oil and gas company, Perusahaan Pertambangan Minyak
dan Gas Bumi Negara ("Pertamina"), manages all of Indonesia's petroleum
resources on behalf of the Indonesian government and, in certain cases, enters
into production sharing arrangements with private energy companies entitling
such private energy companies to a portion of the production from the fields in
the applicable production sharing area. The Corporation's reserves information
presented in this Annual Information Form is based on estimates of reserves
underlying the properties in which the Corporation has an interest under
production sharing arrangements with Pertamina. All oil and natural gas reserves
and production volumes presented in this Annual Information Form are, unless
otherwise indicated, gross to the Corporation and reflect its interest prior to
deduction of applicable government take payable to the Indonesian government as
owner of the reserves under the applicable contractual arrangement. All
Pertamina interests, other than working interests, and income and revenue taxes,
are considered to be government take. Unless otherwise indicated, references to
"crude oil" or "oil" include condensate.


                                              /s/ HENRY W. SYKES
                                              ----------------------------------
                                              Henry W. Sykes
                                              Director

                                              /s/ MARCEL R. COUTU
                                              ----------------------------------
                                              Marcel R. Coutu
                                              Director

                                                                              31

                           MANAGEMENT'S RESPONSIBILITY
                            FOR FINANCIAL STATEMENTS

The management of Gulf Indonesia Resources Limited (the company) is responsible
for preparing the accompanying consolidated financial statements. The financial
statements were prepared in accordance with accounting principles generally
accepted in Canada and are necessarily based in part on management's best
estimates and judgments. When alternative accounting methods exist, management
has chosen those it deems most appropriate in the circumstances. The financial
information included elsewhere in the Annual Report is consistent with that
contained in the financial statements.

The company maintains a system of internal control including an internal audit
function. Management believes that this system of internal control provides
reasonable assurance that financial records are reliable and form a proper basis
for preparation of financial statements. The internal control process includes
communication to employees of the company's standards for ethical business
conduct.

The Board of Directors is responsible for ensuring that management fulfills its
responsibilities for financial reporting and internal controls. The Board
exercises this responsibility through its Audit Committee, none of whom are
officers or employees of the company. The Committee meets with management, its
internal auditors and the independent auditors to satisfy itself that each group
is properly discharging its responsibilities and to review the consolidated
financial statements and the independent auditors' report. The Audit Committee
reports its findings to the Board of Directors for consideration in approving
the consolidated financial statements for issuance to the shareholders. The
Committee also considers, for review by the Board and approval by the
Shareholders, the engagement or re-appointment of the external auditors.

The consolidated financial statements have been examined by the independent
auditors, Ernst & Young LLP, and their report follows. The independent auditors
have full and free access to the Audit Committee.

signed signature                              signed signature
William T. Fanagan                            Murray E. Hesje


William T. Fanagan                             Murray E. Hesje President and
Chief Executive Officer                        Vice President, Finance
February 12, 2001






                                    AUDITORS' REPORT

TO THE SHAREHOLDERS OF GULF INDONESIA RESOURCES LIMITED: We have audited the
consolidated statements of financial position of Gulf Indonesia Resources
Limited as at December 31, 2000 and 1999 and the consolidated statements of
earnings (loss) and retained earnings (deficit) and cash flows for each of the
years in the three year period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in Canada. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2000
and 1999 and the results of its operations and its cash flows for each of the
years in the three year period ended December 31, 2000 in accordance with
accounting principles generally accepted in Canada.


signed signature
Ernst & Young LLP

Ernst & Young LLP                             Calgary, Canada
Chartered Accountants                         February 12, 2001





32

   CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND RETAINED EARNINGS (DEFICIT)
         (millions of United States dollars, except per share amounts)





                                                              YEAR ENDED DECEMBER 31
                                                        --------------------------------------
                                                           2000          1999         1998
                                                        ----------    ----------    ----------

                                                                           
EARNINGS (LOSS)
REVENUES
Gross oil and gas revenue (Note 1)                      $      421    $      246    $       99
Government take                                                 76            42            18
                                                        ----------    ----------    ----------
Net oil and gas revenue                                        345           204            81
Other                                                            4             2             5
                                                        ----------    ----------    ----------
                                                               349           206            86
                                                        ----------    ----------    ----------
EXPENSES
Operating                                                       33            35            27
Exploration                                                     18            11            34
General and administrative                                       5             6             8
Depreciation, depletion and amortization                        69            70            48
Finance charges, net (Note 2)                                   19            21             2
                                                        ----------    ----------    ----------
                                                               144           143           119
                                                        ----------    ----------    ----------
Earnings (loss) before tax                                     205            63           (33)
                                                        ----------    ----------    ----------
Income tax expense (recovery) (Note 3)                         121            30            (3)
                                                        ----------    ----------    ----------
Earnings (loss) for the year                            $       84    $       33    $      (30)
                                                        ==========    ==========    ==========


Earnings (loss) per common share (Note 4)               $     0.96    $     0.37    $    (0.34)
                                                        ==========    ==========    ==========
RETAINED EARNINGS (DEFICIT)
Balance, beginning of year                              $       (3)   $      (36)   $       (6)
Earnings (loss) for the year                                    84            33           (30)
                                                        ----------    ----------    ----------
Balance, end of year                                    $       81    $       (3)   $      (36)
                                                        ==========    ==========    ==========



(See summary of significant accounting policies and notes to consolidated
financial statements)


GULF INDONESIA RESOURCES LIMITED




                                                                              33
CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions of United States dollars)





                                                                      YEAR ENDED DECEMBER 31
                                                             --------------------------------------
                                                                2000          1999          1998
                                                             ----------    ----------    ----------
                                                                                

OPERATING ACTIVITIES
Earnings (loss) for the year                                 $       84    $       33    $      (30)
Non-cash items included in earnings (loss)
   Depreciation, depletion and amortization                          69            70            48
   Exploration expense                                               18            11            34
   Future tax expense (Note 3)                                       96            21            (9)
   Other                                                              4             2             1
                                                             ----------    ----------    ----------
Cash generated from operations                                      271           137            44
Changes in non-cash working capital (Note 5)                         19            (4)           16
                                                             ----------    ----------    ----------
                                                                    290           133            60
                                                             ----------    ----------    ----------
INVESTING ACTIVITIES
Capital expenditures and exploration expenses                       (86)          (66)         (190)
Increase in cash restricted in use (Note 10)                        (21)          (73)           (3)
Changes in non-cash working capital (Note 5)                         --           (35)           (1)
                                                             ----------    ----------    ----------
                                                                   (107)         (174)         (194)
                                                             ----------    ----------    ----------

FINANCING ACTIVITIES
Long-term debt repayments (Note 10)                                (103)          (16)           --
Proceeds from issue of long-term debt (Note 10)                      --            18            93
                                                             ----------    ----------    ----------
                                                                   (103)            2            93
                                                             ----------    ----------    ----------

Increase (decrease) in cash and short-term investments               80           (39)          (41)
Cash and short-term investments, beginning of year                   27            66           107
                                                             ----------    ----------    ----------
Cash and short-term investments, end of year (Note 12)       $      107    $       27    $       66
                                                             ==========    ==========    ==========




(See summary of significant accounting policies and notes to consolidated
financial statements)





                                                                              34

                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                       (millions of United States dollars)





                                                                DECEMBER 31
                                                         ---------------------------
                                                            2000           1999
                                                         ------------   ------------

                                                                  
ASSETS
CURRENT
Cash and short-term investments (Note 12)                $        107   $         27
Cash restricted in use (Note 10)                                   97             76
Accounts receivable (Note 12)                                      56             69
Other current assets (Note 6)                                      38             36
                                                         ------------   ------------
                                                                  298            208
Deferred charges                                                    6             10
Property, plant and equipment (Notes 2 and 7)                     756            757
                                                         ------------   ------------
                                                         $      1,060   $        975
                                                         ============   ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable                                         $         53   $         52
Accounts payable - parent/affiliates (Note 8)                       9              8
Current portion of long-term debt (Note 10)                        31             39
Other current liabilities (Note 9)                                 19             13
                                                         ------------   ------------
                                                                  112            112
Long-term debt (Note 10)                                          111            206
Future income taxes (Note 3)                                      257            161
                                                         ------------   ------------
                                                                  480            479
                                                         ------------   ------------
Commitments and contingent liabilities (Note 13)

SHAREHOLDERS' EQUITY

Share capital (Note 11)                                           499            499
Retained earnings (deficit)                                        81             (3)
                                                         ------------   ------------
                                                                  580            496
                                                         ------------   ------------
                                                         $      1,060   $        975
                                                         ============   ============



(See summary of significant accounting policies and notes to consolidated
financial statements)


Approved by the Board

signed signature                     signed signature
Robert H. Allen                      The Right Honourable Donald F. Mazankowski


Robert H. Allen                      The Right Honourable Donald F. Mazankowski
Director                             Director


GULF INDONESIA RESOURCES LIMITED



                                                                              35

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


OPERATIONS

Gulf Indonesia Resources Limited (the company), formerly Asamera Canada Limited,
was incorporated under the Canada Business Corporations Act and in August 1997
was continued under the Business Corporations Act, New Brunswick. At December
31, 2000, the company is a 72 per cent owned subsidiary of Gulf Canada Resources
Limited. The company is involved in the exploration for, development and
production of crude oil and natural gas in Indonesia.

BASIS OF PRESENTATION

The consolidated financial statements of the company include the accounts of all
subsidiary companies. Substantially all of the activities of the company are
conducted jointly with others and these activities are accounted for using the
proportionate consolidation method. The financial statements have been prepared
by management in accordance with accounting principles generally accepted in
Canada and conform in all material respects with International Accounting
Standards. The impact of differences between accounting principles generally
accepted in Canada and those in the United States are disclosed in Note 15. All
amounts are reported in United States dollars unless otherwise indicated.

PROPERTY, PLANT AND EQUIPMENT

The successful efforts method of accounting is followed for oil and gas
exploration and development costs. Initial acquisition costs of oil and gas
properties and the costs of drilling and equipping successful exploration wells
are capitalized. The costs of unsuccessful exploration wells are charged to
earnings. All other exploration costs are charged to earnings as incurred. All
development costs are capitalized. Maintenance and repairs are charged to
earnings; renewals and betterments, which extend the economic life of the
assets, are capitalized.

Capitalized costs of proved oil and gas properties are amortized using the
unit-of-production method based on estimated net proved oil and gas reserves
(net reserves are after government take).

As changes in circumstances warrant, the net carrying values of proved
properties, plant and equipment are assessed to ensure that they do not exceed
future cash flows from use. Capitalized costs of unproved properties are also
assessed regularly to determine whether an impairment in value has occurred.

The company has no ownership interest in the producing assets nor in the oil and
gas reserves, but rather has the right to operate the assets and receive
production and/or revenues from the sale of oil and gas in accordance with the
production sharing agreements. Proved reserves have therefore been determined on
a net entitlement basis, which takes into account projections of the
government's share of production calculated with certain price and expenditure
assumptions.

SITE RESTORATION LIABILITIES

Future obligations for site restoration costs, including dismantling plants and
abandoning properties, are provided for using the estimated remaining lives of
the related assets.

INTEREST CAPITALIZATION

Interest costs are capitalized on the net investments in major projects during
their respective development stages.

GOVERNMENT TAKE

Operations conducted jointly with the Indonesian state oil and gas company
(Pertamina) are reflected in these financial statements based on the company's
proportionate interest in such activities. All Pertamina interests, other than
working interests, and income and revenue taxes, are considered to be government
take. Government take on production from Indonesian properties represents the
entitlement of Pertamina to a portion of the company's share of crude oil,
condensate and natural gas production and are recorded using rates in effect
under the terms of contracts at the time of production. Certain of the company's
withholding tax obligations are also classified as government take.

Under the terms of each contract, the company and its joint venture partners
(the Participants) are entitled to recover out of proceeds of production from
such contract, substantially all of the non-capital costs incurred during each
year as well as current year depreciation for capital costs and any costs
unrecovered from prior years. Typically, the maximum cost recovery in any year
is equal to 80 per cent of gross revenue. Pertamina and the Participants are
entitled to share the remaining crude oil, condensate and natural gas profit
based upon the terms contained in each contract. Post cost recovery, the
Participant's pre-tax profit share is generally the rate that will provide an
after-tax profit share of 15 per cent for crude oil and condensate production,
prior to the domestic market obligations described below, and 27. 5 per cent to
35 per cent for gas production based on the corporate tax rate that applies to
the specific contract.





36

After a period of five years starting the month of the first delivery of crude
oil produced from each new field in the contract area, the Participant will
typically have a domestic market obligation to sell a portion, not generally
exceeding approximately 8 per cent to 9 per cent, of the crude oil produced from
the contract area, at a specific price. This price varies from contract to
contract, being $0.20 per barrel in older contracts and 10 per cent, 15 per
cent or 25 per cent of market price in the more recent contracts, in each case
calculated at the point of export. The domestic market obligation does not apply
to natural gas production.

The Indonesian government's share of revenue may vary considerably from one
fiscal period to the next and also between contracts depending on the level of
unrecovered prior period costs and current period exploration and development
activity.

FOREIGN CURRENCY TRANSLATION

The accounting records of the company are maintained in United States dollars as
substantially all of its operations are transacted in that currency. Monetary
assets and liabilities denominated in foreign currencies are translated into
United States dollars at year-end exchange rates. Non-monetary assets and
liabilities denominated in foreign currencies are translated into United States
dollars at historical rates. Revenues and expenses are translated at exchange
rates prevailing at the transaction dates. Exchange gains and losses are
included in earnings with the exception of the unrealized gains or losses on
translation of long-term monetary liabilities, which are deferred and amortized
over the remaining terms of such liabilities on a straight-line basis.

PIPELINE TARIFFS

Pipeline tariffs are charged against gross oil and gas revenue.

INVENTORIES

Materials and supplies inventories are valued at the lower of cost (determined
on an average cost basis) and estimated net realizable value.

DEFERRED CHARGES

The company incurred certain costs in connection with the financing of the
Corridor Gas Project (the Project). These costs have been recorded as deferred
charges and, upon completion of the Project construction period in 1999, are
being amortized over the remaining term of the loan.

INCOME TAXES

The company follows the liability method of tax allocation accounting for income
taxes. Under this method, future tax assets and liabilities are determined based
on differences between the financial reporting and tax basis of assets and
liabilities and measured using substantively enacted tax rates that will be in
effect when the differences are expected to reverse. Prior to January 1, 1999,
the company followed the deferral method of tax allocation accounting whereby
deferred taxes are recorded based on differences in timing between the
recognition of revenues and expenses for financial reporting and income tax
purposes.

STOCK OPTIONS

The company has a fixed stock option plan which is described in Note 11. The
company does not recognize any compensation expense when stock options are
issued to employees. Any consideration paid by employees on exercise of stock
options is credited to share capital.

MEASUREMENT UNCERTAINTY

Certain items recognized in the financial statements are subject to measurement
uncertainty. The recognized amounts of such items are based on the company's
best information and judgment. Such amounts are not expected to change
materially in the near term.

The amounts recorded for depletion and depreciation as well as the recovery of
the carrying values of property, plant and equipment depend on estimates of oil
and gas reserves and the economic lives and future cash flows from related
assets. The primary factors affecting these estimates are technical engineering
assessments of producible quantities of oil and gas reserves in place and
economic constraints such as the availability of commercial markets for the
company's gas production as well as assumptions related to anticipated commodity
prices and the costs of development and production of the reserves.



GULF INDONESIA RESOURCES LIMITED




                                                                              37

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
            (amounts expressed in millions of United States dollars,
                         except where otherwise noted)


1.  GROSS OIL AND GAS REVENUE

Included as a charge against gross oil and gas revenue are the following
pipeline tariffs paid to third parties:




                                                      YEAR ENDED DECEMBER 31
                                                --------------------------------------
                                                   2000          1999          1998
                                                ----------    ----------    ----------
                                                                   
Pipeline tariffs - gas                          $       38    $       37    $        5
Pipeline tariffs - oil                                   1             1             1
                                                ----------    ----------    ----------
                                                $       39    $       38    $        6
                                                ==========    ==========    ==========



2.  FINANCE CHARGES, NET




                                                        YEAR ENDED DECEMBER 31
                                                --------------------------------------
                                                   2000          1999           1998
                                                ----------    ----------    ----------

                                                                   
Interest expense on Corridor Loan(a)            $       18    $       19    $        2
Letter of credit fees(b)                                 2             2            --
Less: interest income on restricted cash
         related to the Corridor Loan                   (5)           (1)           --
                                                ----------    ----------    ----------
     Cash finance charges, net                          15            20             2
Amortization of debt placement costs                     4             1            --
                                                ----------    ----------    ----------
                                                $       19    $       21    $        2
                                                ==========    ==========    ==========




(a)      Interest and commitment fees related to the Corridor Loan were
         capitalized during the Project construction period (2000 - $nil; 1999 -
         $1 million; and 1998 - $15 million).

(b)      As required under the terms of the Corridor Loan, the company's parent,
         Gulf Canada Resources Limited, made available to the company a letter
         of credit totalling $42 million. During 2000, the letter of credit was
         replaced with cash.

(c)      Cash interest paid (including letter of credit fees) and included in
         the determination of earnings (loss) was $26 million for 2000 (1999 -
         $14 million; 1998 - $nil).

3.  INCOME TAX

Effective tax rate reconciliation: The income tax expense (recovery) reflects an
effective tax rate that differs from the Canadian statutory rate of 44 per cent.
This difference is mainly the result of the following:





                                                                           YEAR ENDED DECEMBER 31
                                                                   --------------------------------------
                                                                      2000          1999           1998
                                                                   ----------    ----------    ----------

                                                                                      
Earnings (loss) before income taxes                                $      205    $       63    $      (33)
                                                                   ----------    ----------    ----------
Computed income tax expense (recovery)
     at the statutory rate                                         $       90    $       28    $      (14)
Difference between statutory tax rate and PSC tax rate                     27            11            (1)
Non-deductible costs related to amortization of
     assets with no tax basis                                               1             1             1
Petroleum revenue tax                                                       2             1             1
Non-taxable revenues                                                       (6)           (3)           (3)
Unrecorded income tax benefit arising from losses
     of non-producing subsidiaries(a)                                       6             3            12
Recognition of previously unrecognized temporary differences(b)            --           (10)           --
Other                                                                       1            (1)            1
                                                                   ----------    ----------    ----------
Income tax expense (recovery)                                      $      121    $       30    $       (3)
                                                                   ==========    ==========    ==========
Current tax expense                                                $       25    $        9    $        6
Future tax expense                                                         96            21            (9)
                                                                   ----------    ----------    ----------
Income tax expense (recovery)                                      $      121    $       30    $       (3)
                                                                   ==========    ==========    ==========





38

(a)      At December 31, 2000, certain non-producing subsidiaries of the company
         have accumulated losses for tax purposes of approximately $55 million
         which may be carried forward and used to reduce taxable income in these
         companies in future years. The potential income tax benefits related to
         these items have not been reflected in the accounts.

(b)      During 1999, the company recognized $10 million of previously
         unrecognized income tax benefits related to the planned development of
         the non-producing South Jambi B PSC. The potential income tax benefits
         of exploration expenses had not previously been reflected due to
         insufficient likelihood of realization of these benefits.

(c)      Cash income tax paid and included in the determination of earnings
         (loss) was $15 million for 2000 (1999 - $6 million; 1998 - $6 million).

Components of the company's future tax liability: The future tax liability
comprises:




                                                                                         DECEMBER 31
                                                                                   ------------------------
                                                                                      2000          1999
                                                                                   ----------    ----------
                                                                                           
Differences between tax bases and reported amounts of depreciable assets(a)        $      250    $      154
Income tax benefit arising from losses of non-producing subsidiaries(b)                    31            25
Valuation allowance(b)                                                                    (24)          (18)
                                                                                   ----------    ----------
                                                                                   $      257    $      161
                                                                                   ==========    ==========


(a)      During 1999, the company recognized $9 million of previously
         unrecognized temporary differences associated with one of its producing
         subsidiaries. This amount has been accounted for as a reduction of
         property, plant and equipment and future income taxes.

(b)      A valuation allowance has been provided against the future tax asset
         related to the losses of certain non-producing subsidiaries as the
         company is not permitted to file a consolidated income tax return and
         accordingly, the company does not have reasonable assurance of
         realizing the benefits of these losses. During 1999, the company
         recognized previously unrecognized income tax benefits related to the
         planned development of the non-producing South Jambi B PSC. The
         potential income tax benefits of exploration expenses had not
         previously been reflected due to insufficient likelihood of realization
         of these benefits.

4.  EARNINGS (LOSS) PER COMMON SHARE

The weighted average number of common shares outstanding was 87,901,350 for
2000; 87,905,320 for 1999 and 87,906,600 for 1998. Stock options outstanding for
all periods presented do not have a dilutive effect on earnings (loss) per
common share.

5.  CHANGES IN NON-CASH WORKING CAPITAL




                                                            YEAR ENDED DECEMBER 31
                                                     --------------------------------------
                                                        2000          1999          1998
                                                     ----------    ----------    ----------
                                                                        
(Increase) decrease in non-cash working capital
   Accounts receivable                               $       13    $      (29)   $        1
   Other current assets                                      (2)           (6)           (5)
   Accounts payable                                           1            (9)            9
   Accounts payable - parent/affiliates                       1             2             6
   Other current liabilities                                  6             3             4
                                                     ----------    ----------    ----------
                                                     $       19    $      (39)   $       15
                                                     ==========    ==========    ==========

The change relates to the following activities:
   Operating                                         $       19    $       (4)   $       16
   Investing                                                 --           (35)           (1)
   Financing                                                 --            --            --
                                                     ----------    ----------    ----------
                                                     $       19    $      (39)   $       15
                                                     ==========    ==========    ==========




GULF INDONESIA RESOURCES LIMITED




                                                                              39

6.  OTHER CURRENT ASSETS



                                                     DECEMBER 31
                                                -----------------------
                                                   2000         1999
                                                ----------   ----------

                                                       
Materials and supplies                          $       35   $       33
Product inventory                                        2            1
Prepaid expenses                                         1            2
                                                ----------   ----------
                                                $       38   $       36
                                                ==========   ==========



7.  PROPERTY,  PLANT AND EQUIPMENT




                                                          Accumulated
                                              Gross      depreciation,
                                            investment   depletion and       Net
                                             at cost      amortization    investment
                                           ------------   ------------   ------------

                                                                
Oil and gas property and equipment
     DECEMBER 31, 2000                     $      1,231   $        475   $        756
                                           ============   ============   ============

December 31, 1999                          $      1,163   $        406   $        757
                                           ------------   ------------   ------------


Property, plant and equipment not being amortized at December 31, 2000 was $238
million (December 31, 1999 - $233 million).

8.  ACCOUNTS PAYABLE - PARENT/AFFILIATES

Amounts due to the company's parent and affiliates are interest free, unsecured,
and callable on demand and are as follows:




                                                       DECEMBER 31
                                                -----------------------
                                                   2000         1999
                                                ----------   ----------

                                                       
Gulf Canada Resources Limited                   $        7   $        6
GCRL International Limited                               2            2
                                                ----------   ----------
                                                $        9   $        8
                                                ==========   ==========


Pursuant to inter-company agreements, the company's parent and affiliates
provide certain technical, financial and accounting and administrative services
to the company (2000 - $1 million; 1999 - $nil; 1998 - $1 million). In addition
the company's parent incurs charges on behalf of the company. All services
rendered to the company and charges incurred on its behalf are billed back to
the company at cost.

9.  OTHER CURRENT LIABILITIES




                                                       DECEMBER 31
                                                -----------------------
                                                   2000         1999
                                                ----------   ----------
                                                       
Income taxes payable                            $       14   $        5
Interest payable on long-term debt (Note 10)             2            8
Withholding tax payable                                  3           --
                                                ----------   ----------
                                                $       19   $       13
                                                ==========   ==========



10.  LONG-TERM DEBT

On February 26, 1997, the company, along with its partner in the Corridor PSC,
entered into a Credit Agreement (the Corridor Loan) with various lending
institutions (the Lenders) to provide up to $450 million of financing to fund
the development of the Corridor Gas Project (the Project). The Lender's recourse
under the Corridor Loan is limited to the Corridor PSC asset which has been
pledged as collateral.

The interest rate on the Corridor Loan is based on LIBOR plus 2 per cent, up to
the date of overall completion of the Project, which occurred June 9, 2000, and
LIBOR plus 1.75 per cent - 1.875 per cent thereafter. Interest and commitment
fees were compounded during the Project construction period. The effective
interest rate on the balance outstanding during 2000 was approximately 8.42 per
cent (December 31, 1999 - 7.68 per cent; December 31, 1998 - 7.97 per cent).





40

Funds required to satisfy the next scheduled interest and principal payments and
accumulated reserve requirements are held in offshore trust accounts. At
December 31, 2000, the amount of restricted cash was $97 million (December 31,
1999 - $76 million). Funds in these offshore trust accounts earned interest at a
rate of 6.23 per cent (December 31, 1999 - 5.09 per cent).

Repayments on the Corridor Loan are equal quarterly installments which are
scheduled to end in February 2007. Additional mandatory early repayments and
optional prepayments may also occur, depending on the cash flow generated by the
Project. Based on long-term debt outstanding at December 31, 2000, the company's
repayment requirements for the next five years are $31 million for 2001 and $21
million for each of the years 2002 through 2005. These repayments assume a $6
million mandatory early repayment in 2001 and $nil for each of the years 2002
through 2005.

11.  SHARE CAPITAL

AUTHORIZED:

COMMON SHARES - voting, unlimited number with a par value of U. S. $0.01.

PREFERRED SHARES - unlimited number. These preference shares rank in priority to
the common shares and may be issued from time to time in series, and with the
price, rights, preferences, privileges and restrictions, including voting and
conversion rights, to be fixed by the directors prior to their issue.




ISSUED AND OUTSTANDING:                               Number         Amount
                                                   -----------    -----------
                                                            
COMMON SHARES:
AT DECEMBER 31, 1998                                87,906,600    $       499
Shares forfeited under restricted stock plan(a)         (5,250)            --
                                                   -----------    -----------

AT DECEMBER 31, 1999 AND 2000                       87,901,350    $       499
                                                   ===========    ===========


(a)      On October 3, 1999, pursuant to the terms of the company's 1997
         Restricted Stock Plan, 97,350 common shares (net of forfeitures) were
         issued to certain individuals in exchange for performance of services.
         The restricted stock vested on October 3, 1999 and the benefit related
         to the performance of services in exchange for the restricted stock was
         recognized in income over the two year vesting period.

(b)      The company has a fixed option plan. Pursuant to the terms of the Gulf
         Indonesia Resources Limited 1997 Stock Option and Incentive Plan,
         implemented in August 1997, the company may grant options to its
         employees at any time prior to December 31, 2007. The maximum number of
         common shares which may be issuable at any particular time is 10 per
         cent of the outstanding common shares. Options outstanding are granted
         at prices determined at the time the option is granted, provided that
         the exercise price is not less than the fair market value of the common
         shares on the date of grant, and have a maximum term of 10 years. Under
         the plan, 2,688,510 shares (1999 - 3,009,219; 1998 - 3,324,960) are
         reserved but unallocated.

A summary of the status of the company's stock options as at December 31, 2000
and 1999 and changes during the years then ended are presented below:




                                                             2000                                1999
                                                --------------------------------    --------------------------------
                                                                      WEIGHTED                           Weighted
                                                                      AVERAGE                            Average
                                                                     EXERCISE                            Exercise
                                                   SHARES             PRICE             Shares            Price
                                                --------------    --------------    --------------    --------------
                                                                                          
Outstanding, beginning of year                       5,776,916    $        18.29         5,461,700    $        18.63
   Granted                                             738,125              8.16           369,250             11.25
   Forfeited                                          (417,416)           (18.55)          (54,034)            (4.46)
                                                --------------    --------------    --------------    --------------
Outstanding, end of year                             6,097,625    $        17.04         5,776,916    $        18.29
                                                ==============    ==============    ==============    ==============
Options exercisable at year-end                      4,737,375                           5,087,666

Weighted average fair value of options
   granted during the year                                        $         3.15                      $         4.13



GULF INDONESIA RESOURCES LIMITED



                                                                              41

The following table summarizes information about stock options outstanding at
December 31, 2000:





                                             OPTIONS OUTSTANDING           OPTIONS EXERCISABLE
- ------------------------------------------------------------------------------------------------------------
                                                AVERAGE
                                   NUMBER      REMAINING        AVERAGE          NUMBER             AVERAGE
                                OUTSTANDING   CONTRACTUAL       EXERCISE       OUTSTANDING         EXERCISE
RANGE OF EXERCISE PRICES        AT 12/31/00      LIFE             PRICE        AT 12/31/00           PRICE
- ------------------------        -----------   -----------      ----------     ------------       -----------

                                                                                  
$ 8.06 -  9.06                     736,125     9.4 years       $     8.16          3,125         $     8.06
$11.19 - 15.38                     895,500     7.9 years       $    12.15        268,250         $    14.32
$19.31 - 20.06                   4,466,000     6.4 years       $    19.49      4,466,000         $    19.49
                                 ---------     ---------       ----------      ---------         ----------
                                 6,097,625     7.0 years       $    17.04      4,737,375         $    19.19
                                 =========     =========       ==========      =========         ==========




The company's aggregate stated capital at December 31, 2000 for purposes of the
Business Corporations Act, New Brunswick is $1 million.

12.  FINANCIAL INSTRUMENTS

The company's financial instruments recognized on the balance sheet consist of
cash and short-term investments, cash restricted in use, accounts receivable,
current liabilities and long-term debt. Short-term investments are comprised of
commercial paper with a maturity period no greater than 90 days. The average
interest rate earned in 2000 from the short-term investments was 6.26 per cent
(1999 - 5.15 per cent; 1998 - 5.65 per cent).

Borrowings under the Corridor Loan are market rate based, thus, carrying value
approximates fair value. The fair value of all other financial instruments
approximate their carrying value.

All of the company's onshore natural gas production is delivered to the Duri
Steamflood, exchanged for Duri crude and sold to Itochu Petroleum Co, (Hong
Kong) Ltd. Substantially all of the company's onshore crude oil production is
sold domestically to Pertamina (2000 - $149 million; 1999 - $89 million; 1998 -
$60 million). Offshore crude oil production from the west Natuna Sea is marketed
to customers throughout Asia.

Accounts receivable at December 31, 2000, includes $20 million from Pertamina,
$17 million from Itochu and $19 million from other sources, the latter of which
is subject to normal industry credit risks and routinely assessed for financial
strength.

13.  COMMITMENTS AND CONTINGENT LIABILITIES

Prior to 1994, the Production Sharing Contracts (PSCs) required environmentally
responsible operating practices but there was no requirement for abandonment and
site restoration. For PSCs and amendments and extensions thereto signed after
January 1, 1994, the contractor is responsible for abandonment and site
restoration costs. For the company these abandonment and site restoration
obligations involve 5 non-producing PSCs, the Corridor PSC which was amended and
extended in October 1996 and the Kakap PSC which was amended and extended in
January 1999. Per the terms of the amendments and extensions the company is
responsible for abandonment and site restoration of facilities installed after
the agreement was signed. Total anticipated future costs (including plugging and
abandoning wells), given the company's current inventory of wells and
facilities, is approximately $6 million. Facilities subject to abandonment and
site restoration costs have been provided for.

The Indonesian tax authorities have contested tax paid by the company in regard
to certain revenues received outside of Indonesia. The company has been paying
tax on this revenue based on a directive issued by the Director General of
Taxation in 1989. In 1996, the directive was retroactively challenged by a new
Director General of Taxation. The estimated potential unrecorded liability to
the company is approximately $7 million at December 31, 2000. The company
believes that the position taken by the tax authorities is unreasonable,
particularly the retroactive application of the position, and that the
assumptions on which the claim is based are incomplete. The company is
contesting the claim.

The company is also involved in various litigation, regulatory and other
environmental matters in the ordinary course of business. In management's
opinion, an adverse resolution of these matters would not have a material impact
on operations or financial position.




42

14.  SEGMENT INFORMATION




                                 Onshore - Gas                Onshore - Oil                   Offshore
                            -----------------------     ------------------------     ------------------------
                              2000     1999     1998      2000     1999      1998      2000     1999     1998
                            ------   ------   ------    ------   ------    ------    ------   ------   ------

                                                                            
REVENUES
Gross oil and
     gas revenue            $  228   $  118   $    7    $  151   $   91    $   62    $   45   $   40   $   30
Government take                 13        7       --        52       25        18        11       10       --
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
Net oil and
     gas revenue               215      111        7        99       66        44        34       30       30
Other                           --       --       --        --       --        --        --       --       --
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
                               215      111        7        99       66        44        34       30       30
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
EXPENSES
Operating                        9        9        1        15       18        19         9        8        7
Exploration                     --       --       --        --       --        --        --       --       --
General and
     administrative             --       --       --        --       --        --        --       --       --
Depreciation,
     depletion and
     amortization               29       29        4        30       26        28        10       15       16
Finance charges                 19       21        2        --       --        --        --       --       --
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
                                57       59        7        45       44        47        19       23       23
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
EARNINGS (LOSS)
     BEFORE TAX                158       52       --        54       22        (3)       15        7        7
Income tax expense
     (recovery)
        Current                 11       --       --        12        7         5         1        2       --
        Future                  77       30        1        17        3        (7)        6        2        4
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
                                88       30        1        29       10        (2)        7        4        4
                            ------   ------   ------    ------   ------    ------    ------   ------   ------
EARNINGS (LOSS) FOR
     THE YEAR               $   70   $   22   $   (1)   $   25   $   12    $   (1)   $    8   $    3   $    3
                            ======   ======   ======    ======   ======    ======    ======   ======   ======
TOTAL ASSETS                $  466   $  438   $  391    $  234   $  272    $  254    $  211   $  180   $  187
                            ======   ======   ======    ======   ======    ======    ======   ======   ======
CAPITAL EXPENDITURES
     AND EXPLORATION
     EXPENSES               $   10   $    9   $   73    $   15   $   14    $   19    $   32   $   11   $    9
                            ======   ======   ======    ======   ======    ======    ======   ======   ======


Gulf Indonesia has four reportable segments:onshore gas operations, onshore oil
operations, offshore oil and gas operations, and exploration. The operations
segments are involved in the production and development of crude oil and natural
gas in Indonesia. The onshore operations are focused on the island of Sumatra
while the offshore operations are located in the west Natuna Sea. The
exploration segment is involved in the exploration for crude oil and natural gas
in Indonesia. Gulf Indonesia's reportable segments are strategic business units
that are managed separately as each has different operational requirements and
focuses. Due to the nature of the operations, there are no intersegment sales
and transfers.

The corporate segment is comprised principally of the impact of crude oil
hedging, interest income from unrestricted cash on hand, miscellaneous other
revenue and general corporate expenditures.


GULF INDONESIA RESOURCES LIMITED




                                                                              43
14.  SEGMENT INFORMATION (continued)





                                    Exploration                   Corporate                     Total
                            --------------------------    --------------------------    -------------------------
                             2000      1999      1998      2000      1999      1998      2000     1999      1998
                            ------    ------    ------    ------    ------    ------    ------   ------    ------

                                                                                
REVENUES
Gross oil and
     gas revenue            $   --    $   --    $   --    $   (3)   $    3)   $   --    $  421   $  246    $   99
Government take                 --        --        --        --        --        --        76       42        18
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
Net oil and
     gas revenue                --        --        --        (3)       (3)       --       345      204        81
Other                           --        --        --         4         2         5         4        2         5
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
                                --        --        --         1        (1)        5       349      206        86
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
EXPENSES
Operating                       --        --        --        --        --        --        33       35        27
Exploration                     18        11        34        --        --        --        18       11        34
General and
     administrative             --        --        --         5         6         8         5        6         8
Depreciation,
     depletion and
     amortization               --        --        --        --        --        --        69       70        48
Finance charges                 --        --        --        --        --        --        19       21         2
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
                                18        11        34         5         6         8       144      143       119
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
EARNINGS (LOSS)
     BEFORE TAX                (18)      (11)      (34)       (4)       (7)       (3)      205       63       (33)
Income tax expense
     (recovery)
        Current                 --        --        --         1        --         1        25        9         6
        Future                  (2)      (12)       (4)       (2)       (2)       (3)       96       21        (9)
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
                                (2)      (12)       (4)       (1)       (2)       (2)      121       30        (3)
                            ------    ------    ------    ------    ------    ------    ------   ------    ------
EARNINGS (LOSS) FOR
     THE YEAR               $  (16)   $    1    $  (30)   $   (3)   $   (5)   $   (1)   $   84   $   33    $  (30)
                            ======    ======    ======    ======    ======    ======    ======   ======    ======
TOTAL ASSETS                $   72    $   68    $   55    $   77    $   17    $   45    $1,060   $  975    $  932
                            ======    ======    ======    ======    ======    ======    ======   ======    ======
CAPITAL EXPENDITURES
     AND EXPLORATION
     EXPENSES               $   29    $   32    $   89    $   --    $   --    $   --    $   86   $   66    $  190
                            ======    ======    ======    ======    ======    ======    ======   ======    ======







44

15.  UNITED STATES ACCOUNTING PRINCIPLES

If United States generally accepted accounting principles (U.S. GAAP) had been
followed, the earnings (loss) and earnings (loss) per common share would have
been as follows:




                                                          YEAR ENDED DECEMBER 31
                                                     --------------------------------
                                                       2000        1999        1998
                                                     --------    --------    --------
                                                                    
EARNINGS (LOSS) BEFORE TAX, as reported              $    205    $     63    $    (33)
Adjustments:
     New asset values (a)                                  --          --          (4)
EARNINGS (LOSS) BEFORE TAX, as adjusted                   205          63         (37)
                                                     --------    --------    --------
Income tax recovery (expense), as reported               (121)        (30)          3
Income tax recovery (a)                                    --          --           4
                                                     --------    --------    --------
                                                         (121)        (30)          7
                                                     --------    --------    --------
EARNINGS (LOSS), as adjusted                         $     84    $     33    $    (30)
                                                     ========    ========    ========
EARNINGS (LOSS) PER COMMON SHARE
     ($/SHARE)                                       $   0.96    $   0.37    $  (0.34)
                                                     ========    ========    ========


Comprehensive income, as defined by Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", is equivalent to earnings (loss) as
presented.

If U. S. GAAP were followed, amounts on the Consolidated Statements of Cash Flow
would be presented as follows:




                                                        YEAR ENDED DECEMBER 31
                                                     --------------------------------
                                                      2000        1999        1998
                                                     --------    --------    --------

                                                                    
OPERATING ACTIVITIES
CASH GENERATED FROM OPERATIONS, as reported (d)      $    271    $    137    $     44
Changes in non-cash working capital, as reported           19          (4)         16
Adjustments:
     Geological and geophysical expenditures (e)           (8)        (10)        (13)
                                                     --------    --------    --------
Operating activities, as adjusted                    $    282    $    123    $     47
                                                     ========    ========    ========

INVESTING ACTIVITIES, as reported                    $   (107)   $   (174)   $   (194)
Adjustments:
     Geological and geophysical expenditures (e)            8          10          13
                                                     --------    --------    --------
Investing activities, as adjusted                    $    (99)   $   (164)   $   (181)
                                                     ========    ========    ========



If U. S. GAAP were followed, amounts on the Consolidated Statements of Financial
Position would be adjusted as follows:




                                                                      DECEMBER 31,
                                                                 --------------------
                                                                   2000        1999
                                                                 --------    --------
                                                                  Increase (decrease)


                                                                       
ASSETS                                                           $     --    $     --
                                                                 ========    ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Contributed surplus(b)                                           $     11    $     11
Deficit(a)(b)                                                         (11)        (11)
                                                                 --------    --------
                                                                 $     --    $     --
                                                                 ========    ========


The financial statements have been prepared in accordance with accounting
principles generally accepted in Canada which, in the case of the company,
conform in all material respects with those in the United States except that:

(a)      Prior to January 1, 1999, the financial statements would reflect the
         effect of adopting Statement of Financial Accounting Standards No. 109,
         "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires a
         restatement, to pre-tax amounts, of the new asset values reflected in
         the accounts in connection with the parent company's


GULF INDONESIA RESOURCES LIMITED

acquisition of the company in 1988 and the acquisition of Gulf Resources (Kakap)
Ltd. on February 18, 1997. These differences result in additional depreciation,
depletion and amortization charges and related income tax recoveries over the
lives of the related assets. Effective January 1, 1999 such differences have
been eliminated as the company retroactively changed (with restatement of prior
periods) its method of accounting for income taxes under Canadian GAAP. While
the new Canadian standards are substantially identical to those of SFAS 109, the
method and assumptions used to apply these new standards in the Canadian GAAP
financial statements differ in some respects from those applied to SFAS 109. The
U.S. GAAP financial statements shall reflect application of these standards
consistent with the Canadian GAAP financial statements prospectively from
January 1, 1999.

(b)      Prior to the company going public in 1997, the costs of certain of the
         company's technical, financial, accounting and administrative services
         were borne by the company's parent on the company's behalf. Under U.S.
         GAAP, these costs would be recognized as additional general and
         administrative expenses offset by contributions to capital. These
         adjustments have been calculated based on a specific allocation of
         salary costs of individuals providing technical services to the company
         and a general allocation of corporate overhead determined using
         comparative ratios of reserves, sales volumes and assets of the company
         and its parent.

(c)      Unrealized gains or losses arising on translation of long-term
         liabilities repayable in foreign funds would be included in earnings in
         the period in which they arise in the United States. At December 31,
         2000 and December 31, 1999, no such liabilities existed.

(d)      Under U.S. GAAP, "cash generated from operations" as defined by the
         company would not be presented in the Consolidated Statement of Cash
         Flows as it excludes the effect of changes in non-cash working capital
         and therefore differs from the definition of operating cash flow under
         Statement of Financial Accounting Standards No. 95. The company has
         presented this item for Canadian GAAP as it is commonly used by oil and
         gas investors in Canada as a measure of performance and liquidity and
         is normally presented in Canadian financial statements.

(e)      Under U.S. GAAP, geological and geophysical expenditures would be
         classified as operating activities.

(f)      Statement of Financial Accounting Standards (FAS) No. 133, "Accounting
         for Derivative Instruments and Hedging Activities" (as amended by FAS
         137 and 138) is effective for fiscal years beginning after June 15,
         2000. These pronouncements have no impact on the company's consolidated
         financial statements.

Additional disclosure

STOCK-BASED COMPENSATION PLANS

The Financial Accounting Standards Boards Statement No. 123, "Accounting for
Stock-Based Compensation" (FAS 123) requires the fair value of stock-based
compensation to be either recorded as compensation over the service period or
the impact of the use of fair values are to be disclosed in the financial
statements. The company applies Accounting Principles Board Opinion No. 25 (APB
25) and related Interpretations in accounting for its plans. As a result, no
compensation cost has been recognized in income for its fixed stock option plan
as under APB 25 the exercise price of the company's plans equal the market value
of the underlying stock on the date of grant. Pro forma disclosures of earnings
(loss) and earnings (loss) per common share are presented below as if the
company had adopted the cost recognition requirements under FAS 123.

The compensation cost for the stock-based compensation for 2000 was $2 million
(1999 - $3 million; 1998 - $10 million). Pro forma disclosures are not likely to
be representative of the effects on reported earnings for future years.




                                                            YEAR ENDED DECEMBER 31
                                                     -------------------------------------
                                                        2000         1999         1998
                                                     ----------   ----------   ----------

                                                                      
Earnings (loss)
As reported                                          $       84   $       33   $      (30)
Pro forma                                            $       82   $       30   $      (40)
Earnings (loss) per common share ($/share)
As reported                                          $     0.96   $     0.37   $    (0.34)
Pro forma                                            $     0.94   $     0.33   $    (0.46)
                                                     ==========   ==========   ==========



The fair value of the options granted during 2000 is estimated at the date of
grant using the Black-Scholes option-pricing model with the following
assumptions: expected volatility of 50 per cent (1999 - 55 per cent; 1998 - 42
per cent); risk-free interest rate of 5.1 per cent (1999 - 6.5 per cent; 1998
- - 5.0 per cent); and expected life of 3 years (1999 - 3 years; 1998 - 3 years).

16.  RECLASSIFICATIONS

Certain amounts for 1999 and 1998 have been reclassified to conform with the
presentation adopted for 2000.

                                                                              21


                      MANAGEMENT'S DISCUSSION AND ANALYSIS



                  OUTSTANDING FUNDAMENTALS YIELD RECORD RESULTS

o        Record cash generation of $271 million or $3.08 per share was nearly
         double 1999 levels and over six times that of 1998.

o        Record earnings of $84 million or $0.96 per share were nearly 160 per
         cent higher than in 1999.

o        Gulf Indonesia continues to be a low-cost producer. In 2000, we reduced
         operating costs to $1.95 per boe, down 5 per cent from 1999 and 38 per
         cent from 1998.

o        The company replaced 437 per cent of 2000 production at a finding and
         development cost of $1.15 per boe. Over the past three years, Gulf
         Indonesia has replaced 391 per cent of production at a finding and
         development cost of $2.03 per boe.

o        Gulf Indonesia became debt free on a net basis during the third quarter
         of 2000. At year end, the company had a net cash surplus of $62
         million.

o        The company renegotiated the Corridor Loan facility to alter the terms
         such that disbursements occur quarterly rather than semi-annually,
         providing more timely access to restricted funds.

RESULTS FROM OPERATIONS

Cash generated from operations was $271 million in 2000, a 97 per cent
improvement over 1999 and a 509 per cent improvement over 1998.

Gross revenue in 2000 was $421 million, a 71 per cent improvement over 1999,
primarily due to higher prices. The improvement over 1998 relates to increases
in both realized price and volumes from the onshore natural gas segment that
commenced production in October 1998.

Government take ranged between 17 and 18 per cent of gross oil and gas revenue
in each of the three years. However, rates vary significantly by segment, as
discussed further in this document.

Operating expenses were $1.95 per boe in 2000, representing a five per cent
reduction from 1999 and a 38 per cent reduction when compared to 1998. The
improvement over 1999 relates to operating efficiencies, while the reduction
from 1998 primarily reflects the addition of low cost natural gas production
since October 1998.

Exploration expense has fluctuated significantly over the three year period.
These fluctuations are explained in the exploration segment.

Finance charges are reported net of interest income on cash which is restricted
in use under the terms of the Corridor Loan. An explanation of year-over-year
changes is included in the onshore natural gas segment.

Current income tax expense was $25 million in 2000 compared to $9 million in
1999 and $6 million in 1998. The substantial increase in 2000 is detailed in the
onshore natural gas segment.

Overall income tax expense (current and future) reflects effective rates of 59
per cent in 2000, 48 per cent in 1999 and 9 per cent in 1998. The variability in
effective rates results from the company's inability to recognize a tax recovery
for exploration expense related to non-producing PSCs. This situation occurs
because Indonesian income tax returns are not filed on a consolidated basis as
each PSC is "ring fenced," which is discussed further in the exploration
segment.



22



TOTAL COMPANY OPERATIONS



                                               2000                         1999                       1998
                                         US$           US$/          US$           US$/          US$            US$/
                                       MILLION         BOE         million         boe         million          boe
                                      ---------      --------     ---------      --------     ---------      --------
                                                                                           
Gross oil and gas revenue                   421         24.69           246         14.18            99         11.46
Government take                             (76)        (4.44)          (42)        (2.45)          (18)        (2.03)
                                      ---------      --------     ---------      --------     ---------      --------
Net oil and gas revenue                     345         20.25           204         11.73            81          9.43
Other revenue                                 4          0.23             2          0.14             5          0.58
Operating expense                           (33)        (1.95)          (35)        (2.05)          (27)        (3.17)
Exploration expense                         (18)        (1.07)          (11)        (0.64)          (34)        (3.88)
General and administration expense           (5)        (0.33)           (6)        (0.34)           (8)        (0.97)
DD&A expense                                (69)        (4.06)          (70)        (4.02)          (48)        (5.53)
Finance charges, net
  Cash                                      (15)        (0.86)          (20)        (1.13)           (2)        (0.26)
  Amortization of debt
    placement costs                          (4)        (0.24)           (1)        (0.08)           --            --
Income tax expense
  Current                                   (25)        (1.47)           (9)        (0.49)           (6)        (0.61)
  Future                                    (96)        (5.56)          (21)        (1.24)            9          1.04
                                      ---------      --------     ---------      --------     ---------      --------
Earnings (loss)                              84          4.94            33          1.88           (30)        (3.37)
Add back non cash items                     187         10.93           104          6.02            74          8.48
                                      ---------      --------     ---------      --------     ---------      --------
Cash generated from operations              271         15.87           137          7.90            44          5.11
                                      ---------      --------     ---------      --------     ---------      --------
Volumes sold (mboe/d) (gross/net)     46.6/39.7                   47.6/41.7                   23.8/20.1
                                      ---------      --------     ---------      --------     ---------      --------
WTI (US$/bbl)                             30.20                       19.24                       14.43
                                      ---------      --------     ---------      --------     ---------      --------




CAPITAL AND EXPLORATION EXPENDITURES

During 2000, the company replaced 437 per cent of its production at a finding
and development cost of $1.15 per boe. Over the three-year period, reserve
additions replaced an average of 391 per cent of production at a finding and
development cost of $2.03 per boe.

Exploration/delineation spending for 2000 was $29 million compared to $32
million in 1999 and $89 million in 1998, reflecting changes in level and
composition of exploration drilling activity over the three-year period. The
company drilled ten exploration/delineation wells in 2000, compared to five
wells in 1999 and 24 wells in 1998.




CAPITAL AND EXPLORATION EXPENDITURES





(millions of dollars)                                     2000          1999          1998
                                                        --------      --------      --------

                                                                           
Exploration/Delineation
  Onshore natural gas                                          6            11            17
  Onshore oil                                                  7            14            42
  Offshore oil/gas                                            15             6            29
  New ventures                                                 1             1             1
                                                        --------      --------      --------
                                                              29            32            89
                                                        --------      --------      --------
Development
  Onshore natural gas                                         10             9            73
  Onshore oil                                                 15            14            19
  Offshore oil/gas                                            32            11             9
                                                        --------      --------      --------
                                                              57            34           101
                                                        --------      --------      --------
Total capital and exploration expenditures                    86            66           190
                                                        --------      --------      --------
Proved reserve additions (gross mmboe)                      74.5          42.1          51.8
                                                        --------      --------      --------
Finding and development costs
(US$/gross proved boe added)                            $   1.15      $   1.57      $   3.68
                                                        --------      --------      --------
Proved reserve replacement (per cent of production)          437%          242%          596%
                                                        --------      --------      --------



GULF INDONESIA RESOURCES LIMITED




                                                                              23

                                  [BAR CHARTS]










24


Development drilling and project capital spending of $57 million increased by
$23 million over 1999 levels and $44 million over 1998 levels. The main reason
for the year-over-year increase is due to expenditures related to the West
Natuna Gas Project (2000 - $30 million; 1999 - $13 million) which was completed
in the fourth quarter of 2000. The 1998 expenditures included $73 million
related to the development of the Corridor PSC reserves.

SEGMENTS

Gulf Indonesia reports its year-to-year operations in five business segments:
onshore natural gas, onshore oil, offshore oil/gas, exploration and corporate.
Each of the segments is detailed in this report. See Note 14 to the consolidated
financial statements for additional segment information.

ONSHORE NATURAL GAS OPERATIONS

The onshore natural gas segment consists of operations in the Corridor PSC.
Related condensate production from this block is reported under the onshore oil
segment, while exploration activity related to this segment is reported under
the exploration segment.

Cash generated from onshore gas operations was $180 million in 2000,
representing 66 per cent of the company's total cash generated from operations,
as compared to 60 per cent in 1999 and 9 per cent in 1998.

Gross revenue for 2000, before pipeline tariff, was $266 million, a 72 per cent
increase over 1999 due to a 66 per cent improvement in realized price and a 3
per cent improvement in volumes sold. Natural gas prices are dependent on crude
oil prices as the company's contracted natural gas volumes are exchanged for
Duri crude oil production on an energy equivalent basis. The increase in price
includes not only the 57 per cent improvement in the WTI price, but also the
benefit of reduced differentials (discounts) between Duri crude and WTI, which
were approximately 13 percent in 2000 versus 18 per cent in 1999. Over the last
five years the differential has averaged 15 per cent

The year-over-year volume increase in 2000 reflects lower volumes during the
start-up period (January 1999) when gas production was constrained by restricted
pipeline capacity. Volumes reported by the company for all years


ONSHORE NATURAL GAS OPERATIONS




                                                      2000                        1999                        1998(1)
                                                US$           US$/          US$           US$/          US$           US$/
                                              million        boe(2)       million        boe(2)       million        boe(2)
                                             ---------     ---------     ---------     ---------     ---------     ---------
                                                                                                 
Gross gas revenue
  Before pipeline tariff                           266         26.22           155         15.83            12          9.94
  Pipeline tariff                                  (38)        (3.72)          (37)        (3.72)           (5)        (3.72)
Government take                                    (13)        (1.29)           (7)        (0.75)           --         (0.40)
                                             ---------     ---------     ---------     ---------     ---------     ---------
Net gas revenue                                    215         21.21           111         11.36             7          5.82
Operating expense
  Before one time insurance settlement              (9)        (0.94)          (12)        (1.28)           (1)        (1.04)
  One time insurance settlement                     --            --             3          0.29            --            --
DD&A expense                                       (29)        (2.87)          (29)        (3.00)           (4)        (3.57)
Finance charges, net
  Cash                                             (15)        (1.46)          (20)        (2.00)           (2)        (1.88)
  Amortization of debt placement costs              (4)        (0.39)           (1)        (0.15)           --            --
Income tax expense
  Current                                          (11)        (1.07)           --            --            --            --
  Future                                           (77)        (7.63)          (30)        (3.08)           (1)        (0.78)
                                             ---------     ---------     ---------     ---------     ---------     ---------
Earnings (loss)                                     70          6.85            22          2.14            (1)        (1.45)
Add back non-cash items                            110         10.89            60          6.23             5          4.35
                                             ---------     ---------     ---------     ---------     ---------     ---------
Cash generated from operations                     180         17.74            82          8.37             4          2.90
                                             ---------     ---------     ---------     ---------     ---------     ---------
Volumes sold (gross/net)
  mmcf/d                                       166/159                     161/154                       20/19
  mboe/d                                     27.7/26.5                   26.8/25.7                     3.3/3.2
                                             ---------     ---------     ---------     ---------     ---------     ---------
Unrecovered cost pools - producing PSCs
  Costs immediately eligible for recovery           48                         148                         132
  Costs subject to depreciation                     88                         128                         158
                                             ---------     ---------     ---------     ---------     ---------     ---------
                                                   136                         276                         290
                                             ---------     ---------     ---------     ---------     ---------     ---------



(1) Gas deliveries commenced October 1998
(2) US$/boe based on natural gas boe volumes


GULF INDONESIA RESOURCES LIMITED


                                                                              25


presented represent 60 per cent of the total volumes from the Corridor Gas
Project (Project).

Government take in all three years was approximately six per cent of gross
revenue. The low rate reflects substantial natural gas cost pools and a lower
government take percentage for natural gas compared to liquids. Government take
is expected to remain at these low levels throughout 2001.

Operating expense per boe (before the benefit of a 1999 insurance recovery)
dropped 27 per cent from $1.28 per boe in 1999 to $0.94 per boe in 2000 due to
cost reduction initiatives, including the installation of pretreatment
facilities at the Grissik gas plant in the second quarter of 2000.

The depreciation, depletion and amortization rate per boe was lower in both 1999
and 2000, primarily as a result of significant reserve additions in 1998 and
1999.

Finance charges include cash interest expense and amortization of debt placement
costs and are net of interest income on cash restricted in use related to the
Corridor Loan. Cash finance charges of $15 million were $5 million below 1999
levels, due largely to repayments of the Corridor Loan as more fully discussed
in the "Liquidity and Capital Resources" section. During 1998, the majority of
the finance costs incurred on the Corridor Loan were capitalized prior to the
completion of construction of the Corridor gas plant and facilities in the
fourth quarter of 1998. The amortization of debt placement costs was $4 million
in 2000 compared to $1 million in 1999, due to acceleration of the provision
resulting from mandatory early repayments of the Corridor Loan, as discussed in
the "Liquidity and Capital Resources" section.


Total income tax expense was $88 million in 2000, $30 million in 1999 and $1
million in 1998. The effective rate was approximately 56 percent, 59 per cent
and (117) per cent, respectively. While there were no current or cash income
taxes in either 1999 or 1998, high realized prices in 2000 served to increase
the present value of the company's tax pools by accelerating their recovery.
This acceleration resulted in full utilization of the Corridor PSC's available
tax pools and $11 million of current taxes being recognized in the fourth
quarter of 2000. The extent of cash taxes in future periods will depend on
revenues and the availability of tax-deductible cost, including the remaining
tax depreciation on the Project facilities. All future costs in the Corridor PSC
will be immediately available for tax deduction with the exception of the cost
of production facilities and other tangible equipment which are depreciated over
a specified period beginning in the year the particular asset is placed into
service.

As part of the Project, the company incurred certain costs on behalf of
Pertamina and consequently has been recording an increased share of production
as repayment of these costs. Full repayment of these cost occurred in December
2000, resulting in the company's reported share of the Project's results
decreasing from 60 per cent to 54 per cent effective January 2001.

ONSHORE OIL OPERATIONS

The onshore oil segment consists of crude oil and condensate operations in the
Corridor PSC, Corridor TAC, Jambi EOR and "other" which includes Block A and an
overriding royalty. Exploration activity related to these blocks is reported
under the exploration segment.

Cash generated from onshore oil operations was $72 million in 2000, up 76 per
cent from 1999 and 260 per cent from 1998, primarily as a result of increased
realized prices and reduced operating expenses.

Sales volumes of 14,600 b/d in 2000 were unchanged from 1999 levels and two per
cent higher than 1998. Sales volumes before "other" were 14,300 b/d in 2000, up
four per cent over 1999 and eight per cent over 1998, as successful development
drilling programs in the Corridor TAC and Jambi EOR more than offset natural
reservoir declines. "Other" volumes include an overriding royalty production
payment where volumes decline in periods of higher realized prices.

ONSHORE OIL OPERATIONS



                                       2000            1999            1998
                                   ------------    ------------    ------------
                                                          
Volumes sold (gross/net)
Crude oil and condensate (mb/d)
  Corridor PSC                        3.6 / 3.1      4.2 /  3.5      3.9 /  3.3
  Corridor TAC                        8.1 / 5.0      7.2 /  4.6      7.4 /  4.6
  Jambi EOR                           2.6 / 1.5      2.3 /  2.0      2.0 /  1.8
                                   ------------    ------------    ------------
                                     14.3 / 9.6     13.7 / 10.1     13.3 /  9.7
  Other                               0.3 / 0.3      0.9 /  0.8      1.0 /  1.0
                                   ------------    ------------    ------------
                                     14.6 / 9.9     14.6 / 10.9     14.3 / 10.7
                                   ------------    ------------    ------------




26




ONSHORE OIL OPERATIONS



                                                      2000                        1999                        1998
                                                US$           US$/          US$           US$/          US$           US$/
                                              MILLION         Bbl         million         Bbl         million         Bbl
                                             ---------     ---------     ---------     ---------     ---------     ---------
                                                                                                 
Gross liquids revenue                              151         28.18            91         17.14            62         11.95
Government take                                    (52)        (9.67)          (25)        (4.66)          (18)        (3.30)
                                             ---------     ---------     ---------     ---------     ---------     ---------
Net liquids revenue                                 99         18.51            66         12.48            44          8.65
Operating expense                                  (15)        (2.81)          (18)        (3.36)          (19)        (3.63)
DD&A expense                                       (30)        (5.58)          (26)        (4.89)          (28)        (5.38)
Income tax recovery (expense)
  Current                                          (12)        (2.32)           (7)        (1.25)           (5)        (0.94)
  Future                                           (17)        (3.08)           (3)        (0.71)            7          1.32
                                             ---------     ---------     ---------     ---------     ---------     ---------
Earnings (loss)                                     25          4.72            12          2.27            (1)         0.02
Add back DD&A and future income
  tax expense                                       47          8.66            29          5.60            21          4.06
                                             ---------     ---------     ---------     ---------     ---------     ---------
Cash generated from operations                      72         13.38            41          7.87            20          4.08
                                             ---------     ---------     ---------     ---------     ---------     ---------
Unrecovered cost pools - producing PSCs
  Costs immediately eligible for recovery           77                          92                          99
  Coats subject to depreciation                      8                          10                          13
                                             ---------     ---------     ---------     ---------     ---------     ---------
                                                    85                         102                         112
                                             ---------     ---------     ---------     ---------     ---------     ---------



Government take averaged approximately 34 per cent of gross revenue during 2000
compared to 27 per cent of gross revenue in 1999 and 1998. The seven per cent
increase in the government take rate in 2000 reflects the full utilization in
2000 of certain opening cost pools for the Jambi EOR contract area.

Operating expenses of $2.81 per boe in 2000 were 16 per cent below 1999 levels
and 23 per cent below 1998 due primarily to cost cutting initiatives.

DD&A expense was $5.58 per boe in 2000 compared to $4.89 per boe in 1999 and
$5.38 per boe in 1998. This expense is based on net volumes and increased on a
per boe basis in 2000 as a result of reserve revisions in 1999.

Income tax expense was approximately 53 per cent of pre-tax earnings in 2000
compared to approximately 46 per cent in 1999. The increase in 2000 was due to
lower overriding royalties, which have a tax rate of 20 per cent.

OFFSHORE OIL/GAS OPERATIONS

The offshore oil/gas segment consist of operations related to the Kakap PSC,
located in the West Natuna Sea. Exploration activity related to this PSC is
reported under the exploration segment.

Cash generated from offshore operations was $24 million, compared to $20 million
in 1999 and $23 million in 1998.

Gross revenue was $45 million in 2000, higher than either 1999 or 1998 as
stronger prices more than offset volume declines.

Sales volumes declined from 6,200 b/d in 1999 and 1998 to 4,300 b/d in 2000 due
to reservoir declines.

Volumes in 1999 and 2000 benefited from the Jangkar and KRA South field, which
were brought on stream in late 1998.

Government take was $11 million in 2000, virtually unchanged from 1999 levels
despite a 62 per cent increase in realized prices. During 2000, the West Natuna
Gas Project was placed in service, allowing the company to benefit from
additional cost pools. The government take obligation in 1998 was $nil due to
lower realized prices and the ability to utilize cost pools carried forward from
prior years.

The increase in operating expenses per barrel is due to declining production and
relatively fixed expenses. Upon start-up of the West Natuna gas project,
operating expense on a boe basis will decline as these fixed costs will also
support natural gas sales.

DD&A expense, which is sensitive to net volumes sold, declined over the
three-year period.

Income tax effective rates were comparable in each of the three years.

EXPLORATION

This segment includes exploration activity related to both the company's
producing and non-producing blocks, including onshore blocks at the South Jambi
B. Tungkal and Calik PSCs. Also included are non-producing offshore blocks at
the Northwest Natuna Block I, Pangkah, Ketapang and Sebuku PSCs. In 1999, the
company relinquished its interests in the Halmahera, West Natuna and Merangin
PSCs.

   Exploration expense was $18 million for 2000 compared to $11 million in 1999
and $34 million in 1998. The $7



                                                                              27


OFFSHORE OIL/GAS OPERATIONS



                                                       2000                        1999                        1998
                                                 US$           US$/          US$           US$/          US$           US$/
                                               MILLION         BBL         million         Bbl         million         Bbl
                                              ---------     ---------     ---------     ---------     ---------     ---------
                                                                                                 

Gross liquids revenue                                45         28.61            40         17.65            30         13.17
Government take                                     (11)        (7.09)          (10)        (4.63)           --            --
                                              ---------     ---------     ---------     ---------     ---------     ---------
Net liquids revenue                                  34         21.52            30         13.02            30         13.17
Operating expense                                    (9)        (5.55)           (8)        (3.50)           (7)        (3.24)
DD&A expense                                        (10)        (6.58)          (15)        (6.35)          (16)        (6.91)
Income tax expense
   Current                                           (1)        (0.77)           (2)        (0.65)            --           --
   Future                                            (6)        (3.40)           (2)        (1.14)           (4)        (1.64)
                                              ---------     ---------     ---------     ---------     ---------     ---------
Earnings                                              8          5.22             3          1.38             3          1.38
Add back DD&A and future Income
   tax expense                                       16          9.98            17          7.49            20          8.55
                                              ---------     ---------     ---------     ---------     ---------     ---------
Cash generated from operations                       24         15.20            20          8.87            23          9.93
                                              ---------     ---------     ---------     ---------     ---------     ---------
Volumes sold (mb/d) (gross/net)                 4.3/3.3                     6.2/5.1                     6.2/6.2
                                              ---------     ---------     ---------     ---------     ---------     ---------
Unrecovered cost pools - producing PSCs
   Costs immediately eligible for recovery           --                          --                           5
   Costs subject to depreciation                     32                           6                          20
                                              ---------     ---------     ---------     ---------     ---------     ---------
                                                     32                           6                          25
                                              ---------     ---------     ---------     ---------     ---------     ---------


million increase over 1999 was mostly due to an $8 million charge associated
with the costs of the unsuccessful Sawangan-IX well drilled in the non-producing
Sakala Timur PSC. The company also increased its exploration activity during the
year, drilling ten exploration wells compared to five wells in 1999. During
1998, the company drilled 24 wells. The success factor during each of these
periods was 40 per cent, 80 per cent and 58 per cent, respectively.

Income tax expense reflects effective rates which varied significantly over the
three-year period, due to the company's inability to recognize a tax recovery on
exploration expense related to non-producing PSCs. A tax recovery may be
recognized in future years if it becomes likely at that time that these PSCs
will be able to use available cost pools. The 1999 tax recovery reflects $11
million of future income tax recoveries related to the planned development of
the South Jambi B PSC. The potential income tax benefits of exploration expenses
in the South Jambi B PSC had not previously been reflected due to insufficient
likelihood of realization of these benefits.

CORPORATE

The corporate segment includes general and administration expenses for the
entire company, the impact of the company's hedging program and interest income
related to unrestricted cash and short-term investments.

In the second quarter of 1999, the company's Board of Directors approved the
implementation of a limited crude oil hedging program to help ensure that its
capital program could be funded from internally generated unrestricted cash
flows. This program impacted net oil and gas revenues in both 2000 and 1999. A
more detailed discussion of the company's hedging program is included under
"Risks and Uncertainties -- Commodity Prices."

Other revenue relates to interest income on cash and short-term investments
(excluding interest income on cash restricted in use). Year-over-year
improvements in interest income are directly attributable to the $80 million
increase in unrestricted cash balances during the year.


EXPLORATION



(millions of dollars)             2000         1999          1998
                                --------     --------     --------
                                                 
Exploration expense
   Producing                          (3)          (4)          (7)
   Non-producing                     (15)          (7)         (27)
                                --------     --------     --------
                                     (18)         (11)         (34)
Income tax recovery - future           2           12            4
                                --------     --------     --------
Earnings (loss)                      (16)           1          (30)
                                --------     --------     --------





28

CORPORATE



(millions of dollars)                      2000         1999         1998
                                         --------     --------     --------
                                                          
Net oil and gas revenue                        (3)          (3)          --
Other revenue                                   4            2            5
G&A expense                                    (5)          (6)          (8)
Income tax (expense) recovery
   Current                                     (1)          --           (1)
   Future                                       2            2            3
                                         --------     --------     --------
Earnings (loss)                                (3)          (5)          (1)
Add back non-cash items                        (2)          (1)          (2)
                                         --------     --------     --------
Cash generated from operations                 (5)          (6)          (3)
                                         --------     --------     --------


G&A expense has been reduced significantly over the three-year period, falling
from $8 million in 1998 to $5 million in 2000.

LIQUIDITY AND CAPITAL RESOURCES

During 2000, the company moved to a cash surplus of $62 million from a net debt
position of $142 million. Approximately $185 million of the $204 million
improvement was the result of cash generated from operations exceeding capital
and exploration expenditures. The remaining $19 million resulted from a decrease
in non-cash working capital, of which a significant component was related to a
$9 million increase in income tax payable for the Corridor PSC and to collection
of outstanding value added tax receivables.

Long-term debt was reduced by $103 million during 2000. Approximately $39
million was related to scheduled repayments, while $64 million was related to
mandatory early repayments. Under the terms of the Corridor Loan, net cash flows
from the Corridor PSC contribute to certain cash reserve requirements which the
company reports as "cash restricted in use." Additionally, a specified
percentage of the surplus cash is used to fund mandatory early repayments with
the remainder released to the company. The mandatory early repayments were
substantial in 2000 due to the increase in cash generation from the Corridor
PSC, as discussed in the onshore natural gas segment

The company has taken action to reduce cash restricted in use by altering the
terms of the Corridor Loan such that disbursements occur quarterly rather than
semiannually. On November 8, 2000 the first quarterly disbursement occurred
resulting in $30 million, which would otherwise have been held until the first
quarter of 2001, being released to the unrestricted category.

Looking forward to 2001, the company expects to be able to fund approximately
$150 million of capital spending with internally generated cash. Actual capital
spending will depend partially on the timing of expenditures on capital
projects, whether delineation wells are drilled and the results of the company's
farmout activities.

The company is actively looking at potential uses for its surplus cash. The cash
may be used in whole or in part for funding of development following potential
exploration successes, acquisitions, or debt repayments. The eventual use of the
company's surplus cash may be influenced by certain risk factors in Indonesia,
which are more fully described under "Risks and Uncertainties".

RISKS AND UNCERTAINTIES

INDONESIAN POLITICAL AND ECONOMIC ENVIRONMENT

Substantially all of the company's assets are located in Indonesia. Although
Gulf Indonesia has not historically experienced problems from civil unrest or
disputes with the Indonesian government, Indonesia's current political and
economic environment could impact the company's financial position, results of
operations or prospects. The company expects that, should the need


LIQUIDITY AND CAPITAL RESOURCES



                                                            DECEMBER 31
                                                   -----------------------------
(millions of dollars)                                  2000             1999
                                                   ------------     ------------
                                                              
Cash and short-term investments                    $        107     $         27
Cash restricted in use                                       97               76
Less: Long-term debt (including current portion)           (142)            (245)
                                                   ------------     ------------
Net cash (debt) position                           $         62     $       (142)
                                                   ------------     ------------




GULF INDONESIA RESOURCES LIMITED



                                                                              29



arise, its ability to borrow additional funds at a reasonable rate could be
negatively impacted by the current situation in Indonesia. While civil unrest
exists in the Aceh Province, planning and negotiations related to the company's
development of its gas reserves in the Block A PSC are ongoing. The company will
continue to monitor the situation and re-evaluate its development plans if the
situation warrants.

The Indonesian government has exercised and continues to exercise significant
influence over many aspects of the Indonesian economy, including the oil and gas
industry. The Indonesian government recently undertook the following actions:

o   During 1999, two new laws (on revenue sharing and regional autonomy,
    respectively) were passed which will see a transfer of some of the economic
    and political power from the central government to the regions, effective
    January 1, 2001.

o   During 2000, a new oil and gas law was drafted and is under consideration by
    the Indonesian parliament. Under current Indonesian law, Pertamina is the
    sole entity authorized to manage Indonesia's petroleum resources on behalf
    of the Indonesian government. The proposed oil and gas law would see the
    management of petroleum resources transferred from Pertamina to an Executive
    Body that reports directly to the President of Indonesia. Pertamina itself
    would become an independent oil and gas company and, along with other oil
    and gas companies, would report to the Executive Body.

It is unclear at the present time what impact, if any, the above will have on
the company's financial position, results of operations or prospects.

Further, an additional consequence of Indonesia's political and economic
uncertainty is fluctuation in the Rupiah/U.S. dollar exchange rate. However, the
currency volatility is not expected to have a material long-term impact on the
company's financial position, as all current revenues are U.S.
dollar-denominated, all major contracts entered into are in U.S. dollars and
Rupiah-denominated expenses are limited to approximately 10-15 per cent of the
company's overall expenditure profile.

COMMODITY PRICES

The company's financial results are substantially dependent upon the price of,
and demand for, crude oil. Onshore oil production is sold to Pertamina in U.S.
dollars at the Indonesian Crude Price (ICP), a price based on spot prices of
internationally traded Indonesian crude oils, adjusted for quality. Offshore oil
production is sold in the spot market. Natural gas production contracted from
the Project is exchanged for Duni crude oil and is exported at a price based on
a formula that yields not less than the Duri ICR. Crude oil prices have been
volatile in the past and are expected to continue to be volatile in the near
future, due to a number of economic factors beyond the company's control.

Part of Gulf Indonesia's financial strategy is to fund exploration, maintenance
and current development capital programs with internally generated cash flows.
When necessary, the company will use hedging to help ensure the predictability
of internal cash flows and help implement this strategy. Although the company
does not have any outstanding hedge positions it will continue to assess its
capital requirements and the need for price security in the future.

SENSITIVITIES

Based on current production and price assumptions, the estimated effect of a
change in the following factors on the company's 2001 cash generated from
operations and earnings, is set out in the table below.

During 2000, the impact of changes in prices on the company's cash generated
from operations was dramatically reduced from prior years (1999 - $12 million)
as a result of the Corridor PSC becoming taxable. Cash generation is also
influenced by the level of capital spending in the Corridor PSC as available tax
pools (and hence current taxability) are impacted by the amount of spending in a
particular year.

SENSITIVITIES



millions of dollars)                                     Cash Generation        Earnings
                                                         ---------------    ---------------
                                                                      
Prices:     US$1.00/Bbl change in WTI oil price                 6                  6
Production: 1 mb/d change in crude oil and condensate           3                  2
            10 mmcf/d change in natural gas                     5                  4






                         [ERNST & YOUNG LLP LETTERHEAD]


                  CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS


We consent to the use of our report dated February 12, 2001 with respect to the
consolidated financial statements of Gulf Indonesia Resources Limited included
in the Annual Information Form, filed under cover of the Annual Report for the
year ended December 31, 2000 (Form 40-F) with the United States Securities and
Exchange Commission.

We also consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-07886) pertaining to the Incentive Stock Option Plan of Gulf
Indonesia Resources Limited of our report dated February 12, 2001 with respect
to the consolidated financial statements of Gulf Indonesia Resources Limited
included in the Annual Report (Form 40-F) for the year ended December 31, 2000.

                                                         /s/ ERNST & YOUNG, LLP


Calgary, Canada
April 2, 2001                                             Chartered Accountants







                                                                              43

                     SUPPLEMENTARY OIL AND GAS INFORMATION
                      (millions of United States dollars)
                                  (unaudited)



                                                 2000         1999         1998
                                                -------      -------      -------
                                                                 
RESULTS OF OIL AND GAS OPERATIONS
Gross revenues derived from proved
      oil and gas reserves during the year      $   460      $   284      $   105
Less: Government take                                76           42           18
      Pipeline tariffs                               39           38            6
                                                -------      -------      -------
Net revenue derived from proved oil and
      gas reserves during the year                  345          204           81
Less: Production costs                               33           35           27
      Exploration expense                            18           11           34
      Depreciation, depletion and amortization       69           70           48
      Income tax expense (recovery)                 121           30           (3)
                                                -------      -------      -------
Results of operations from producing
      activities                                $   104      $    58      $   (25)
                                                =======      =======      =======

COSTS INCURRED
Costs incurred (capitalized and expensed
      during the year) for:
      Property acquisitions:
           Proved                               $   --       $    --      $    --
           Unproved                                 --            --            1
      Exploration                                   29            32           88
      Development                                   57            34          101
                                                -------      -------      -------
                                                $   86       $    66      $   190
                                                =======      =======      =======

CAPITALIZED COSTS
Proved properties                               $ 1,012      $   949      $   886
Unproved properties                                 180          179          179
Incomplete wells and facilities                      39           35           52
                                                -------      -------      -------
                                                  1,231        1,163        1,117

Less related accumulated depreciation,
      depletion and amortization                    475          406          336
                                                -------      -------      -------
Net capitalized costs                           $   756      $   757      $   781
                                                =======      =======      =======


The standardized measure for calculating the present value of future net cash
flows from proved oil and gas reserves is based on current costs and prices and
a 10 per cent discount factor as prescribed by the Financial Accounting
Standards Board (FASB).

Accordingly, the estimated future net cash inflows were computed by applying
selling prices prevailing at the end of the indicated period for crude oil and
during the last month of the period indicated for other products to the
estimated future production of proved reserves. Estimated future expenditures to
be incurred in developing and producing proved reserves are based upon average
costs incurred in each period presented and assume the continuation of economic
conditions existing at the end of each year presented.

Although these calculations have been prepared according to the standards
described above, it should be emphasized that, due to the number of assumptions
and estimates required in the calculations, the amounts are not indicative of
the amount of net revenue that the company expects to receive in future years.
They are also not indicative of the current value or future earnings that may be
realized from the production of proved reserves nor should it be assumed that
they represent the fair market value of the reserves or of the oil and gas
properties.

Although the calculations are based on existing economic conditions at each
year end, such economic conditions have changed, and may continue to change
significantly due to events such as the continuing changes in international
crude oil availability and prices, and changes in government policies and
regulations. While the calculations are based on the company's understanding of
the established FASB guidelines, there are numerous other equally valid
assumptions under which these assumptions could be made which would produce
significantly different results.


STANDARDIZED MEASURE



                                                                     AS AT DECEMBER 31
                                                                ---------------------------
                                                                  2000      1999      1998
                                                                -------    ------    ------
                                                                        (millions of
                                                                    United States Dollars)
                                                                           
Future cash inflows                                             $ 3,639    $3,072    $1,009
Future development costs                                           (278)     (309)     (254)
Future production costs                                            (447)     (364)     (324)
Future income taxes                                              (1,238)     (924)      (33)
                                                                -------    ------    ------
Future net cash flows                                             1,676     1,475       398
10 per cent annual discount for estimated timing
    of cash flows                                                  (840)     (649)     (195)
                                                                -------    ------    ------
Standardized measure of discounted future net cash flows        $   836    $  826    $  203
                                                                =======    ======    ======


CHANGES IN THE STANDARDIZED MEASURE DURING THE YEAR



                                                                  YEAR ENDED DECEMBER 31
                                                                ---------------------------
                                                                  2000      1999      1998
                                                                -------    ------    ------
                                                                        (millions of
                                                                    United States Dollars)
                                                                           
Sales of oil and gas produced net of production costs            $  (315)   $ (173)   $  (55)
Development costs incurred during the year                           57        34        86
Extensions, discoveries and improved recovery, less
    related costs                                                   254       158        36
Revisions of previous quantity and timing estimates                  (5)       43        47
Price and cost changes
    - selling prices                                                 10     1,032      (507)
    - producing costs                                               (18)        5        28
    - development costs                                              41        19         2
Accretion of discount                                               136        22        53
Change in income taxes                                             (150)     (517)      136
                                                                -------    ------    ------
Net change                                                           10       623      (174)
Balance at beginning of year                                        826       203       377
                                                                -------    ------    ------
Balance at end of year(1)                                       $   836    $  826    $  203
                                                                =======    ======    ======


(1) 2000 reflects higher income taxes resulting from utilization of substantial
    tax pools during the year.





                                                       Net Volumes(2)
                                                     ------------------
                                                     Liquids       Gas
                                                     (mmbbls)     (Bcf)
                                                     --------     -----
                                                            

PROVED DEVELOPED AND
    UNDEVELOPED
At December 31, 1997                                     28         652
    Additions from discoveries and extensions             1         180
    Additions from improved recovery                      1           0
    Additions from development(1)                         1          75
    Purchases of Reserves in place                        0           0
    Revisions of previous estimates                       5          19
    Sales of reserves in place                            0           0
    Production                                           (6)         (7)
                                                      -----       -----
At December 31, 1998                                     30         919
    Additions from discoveries and extensions             1         100
    Additions from improved recovery                      0           0
    Additions from development(1)                         1          93
    Purchases of Reserves in place                        0           0
    Revisions of previous estimates                      (6)        (59)
    Sales of reserves in place                            0           0
    Production                                           (6)        (57)
                                                      -----       -----
At December 31, 1999                                     20         996
    Additions from discoveries and extensions             1         215
    Additions from improved recovery                      0           0
    Additions from development (1)                        1           4
    Purchases of Reserves in place                        1          87
    Revisions of previous estimates                       0           4
    Sales of reserves in place                            0           0
    Production                                           (5)        (58)
                                                      -----       -----
At December 31, 2000                                     18        1248
                                                      =====       =====

PROVED DEVELOPED
    At December 31, 1998                                 26         436
    At December 31, 1999                                 16         376
    At December 31, 2000                                 15         374


(1)      Under Statement of Financial Accounting Standards No. 69 (SFAS 69),
         these additions are considered past of revisions of previous estimates.

(2)      The above estimated reserve quantities are based upon year-end economic
         conditions as required under SFAS 69.



Page 53 of 55





44       15. UNITED STATES ACCOUNTING PRINCIPLES

If United States generally accepted accounting principles (U.S. GAAP) had been
followed, the earnings (loss) and earnings (loss) per common share would have
been as follows:



                                                        YEAR ENDED DECEMBER 31
                                                   ------------------------------
                                                    2000        1999        1998
                                                   ------      ------      ------
                                                                  
Earnings (loss) before tax, as reported            $  205      $   63      $  (33)
Adjustments:
   New asset values (a)                                --          --          (4)
                                                   ------      ------      ------
Earnings (loss) before tax, as adjusted               205          63         (37)
                                                   ------      ------      ------
Income tax recovery (expense), as reported           (121)        (30)          3
Income tax recovery (a)                                --          --           4
                                                   ------      ------      ------
                                                     (121)        (30)          7
                                                   ------      ------      ------
Earnings (loss), as adjusted                       $   84      $   33      $  (30)
                                                   ======      ======      ======
Earnings (loss) per common share
  ($/share)                                        $ 0.96      $ 0.37      $(0.34)
                                                   ======      ======      ======



Comprehensive income, as defined by Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income", is equivalent to earnings (loss) as
presented.

If U.S. GAAP were followed, amounts on the Consolidated Statements of Cash Flow
would be presented as follows:



                                                            YEAR ENDED DECEMBER 31
                                                        ------------------------------
                                                         2000        1999        1998
                                                        ------      ------      ------
                                                                       

OPERATING ACTIVITIES
Cash generated from operations, as reported (d)         $  271      $  137      $   44
Changes in non-cash working capital, as reported            19          (4)         16
Adjustments:
  Geological and geophysical expenditures (e)               (8)        (10)        (13)
                                                        ------      ------      ------
Operating activities, as adjusted                       $  282      $  123      $   47
                                                        ======      ======      ======
INVESTING ACTIVITIES, as reported                       $ (107)     $ (174)     $ (194)
Adjustments:
  Geological and geophysical expenditures (e)                8          10          13
                                                        ------      ------      ------
Investing activities, as adjusted                       $  (99)     $ (164)     $ (181)
                                                        ======      ======      ======


If U.S. GAAP were followed, amounts on the Consolidated Statements of Financial
Position would be adjusted as follows:



                                                            DECEMBER 31,
                                                       ----------------------
                                                         2000          1999
                                                       --------      --------
                                                          Increase (decrease)
                                                               
ASSETS                                                 $     --      $     --
                                                       --------      --------

LIABILITIES AND SHAREHOLDERS' EQUITY
Contributed surplus (b)                                $     11      $     11
Deficit (a)(b)                                              (11)          (11)
                                                       --------      --------
                                                       $     --      $     --
                                                       ========      ========


The financial statements have been prepared in accordance with accounting
principles generally accepted in Canada which, in the case of the company,
conform in all material respects with those in the United States except that:

(a)      Prior to January 1, 1999, the financial statements would reflect the
         effect of adopting Statement of Financial Accounting Standards No. 109.
         "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires a
         restatement, to pre-tax amounts, of the new asset values reflected in
         the accounts in connection with the parent company's

                                                                              45

         acquisition of the company in 1988 and the acquisition of Gulf
         Resources (Kakap) Ltd. on February 18, 1997. These differences result
         in additional depreciation, depletion and amortization charges and
         related income tax recoveries over the lives of the related assets.
         Effective January 1, 1999 such differences have been eliminated as the
         company retroactively changed (with restatement of prior periods) its
         method of accounting for income taxes under Canadian GAAP. While the
         new Canadian standards are substantially identical to those of SFAS
         109, the method and assumptions used to apply these new standards in
         the Canadian GAAP financial statements differ in some respects from
         those applied to SFAS 109. The U.S. GAAP financial statements shall
         reflect application of these standards consistent with the Canadian
         GAAP financial statements prospectively from January 1, 1999.

(b)      Prior to the company going public in 1997, the costs of certain of the
         company's technical, financial, accounting and administrative services
         were borne by the company's parent on the company's behalf. Under U.S.
         GAAP, these costs would be recognized as additional general and
         administrative expenses offset by contributions to capital. These
         adjustments have been calculated based on a specific allocation of
         salary costs of individuals providing technical services to the company
         and a general allocation of corporate overhead determined using
         comparative ratios of reserves, sales volumes and assets of the company
         and its parent.

(c)      Unrealized gains or losses arising on translation of long-term
         liabilities repayable in foreign funds would be included in earnings in
         the period in which they arise in the United States. At December 31,
         2000 and December 31, 1999, no such liabilities existed.

(d)      Under U.S. GAAP, "cash generated from operations" as defined by the
         company would not be presented in the Consolidated Statement of Cash
         Flows as it excludes the effect of changes in non-cash working capital
         and therefore differs from the definition of operating cash flow under
         Statement of Financial Accounting Standards No. 95. The company has
         presented this item for Canadian GAAP as it is commonly used by oil and
         gas investors in Canada as a measure of performance and liquidity and
         is normally presented in Canadian financial statements.

(e)      Under U.S. GAAP, geological and geophysical expenditures would be
         classified as operating activities.

(f)      Statement of Financial Accounting Standards (FAS) No. 133, "Accounting
         for Derivative Instruments and Hedging Activities" (as amended by FAS
         137 and 138) is effective for fiscal years beginning after June 15,
         2000. These pronouncements have no impact on the company's consolidated
         financial statements.

Additional disclosure
Stock-based compensation plans

The Financial Accounting Standards Boards Statement No. 123, "Accounting for
Stock-Based Compensation" (FAS 123) requires the fair value of stock-based
compensation to be either recorded as compensation over the service period or
the impact of the use of fair values are to be disclosed in the financial
statements. The Company applies Accounting Principles Board Opinion No. 25 (APB
25) and related Interpretations in accounting for its plans. As a result, no
compensation cost has been recognized in income for its fixed stock option plan
as under APB 25 the exercise price of the company's plans equal the market value
of the underlying stock on the date of grant. Pro forma disclosures of earnings
(loss) and earnings (loss) per common share are presented below as if the
company had adopted the cost recognition requirements under FAS 123.

The compensation cost for the stock-based compensation for 2000 was $2 million
(1999 - $3 million; 1998 - $10 million). Pro forma disclosures are not likely to
be representative of the effects on reported earnings for future years.



                                                          YEAR ENDED DECEMBER 31
                                                     ----------------------------------
                                                       2000         1999         1998
                                                     --------     --------     --------
                                                                      

Earnings (loss)
   As reported                                       $     84     $     33     $    (30)
   Pro forma                                         $     82     $     30     $    (40)
Earnings (loss) per common share ($/share)
   As reported                                       $   0.96     $   0.37     $  (0.34)
   Pro forma                                         $   0.94     $   0.33     $  (0.46)
                                                     ========     ========     ========



The fair value of the options granted during 2000 is estimated at the date of
grant using the Black-Scholes option-pricing model with the following
assumptions: expected volatility of 50 per cent (1999 - 55 per cent; 1998 - 42
per cent); risk-free interest rate of 5.1 per cent (1999 - 6.5 per cent; 1998 -
5.0 per cent); and expected life of 3 years (1999 - 3 years; 1998 - 3 years).

Page 55 of 55

EX-99.C.2

EXHIBIT (c)(2)

Current top 20 shareholders 1 Each of these entities is part of The Capital Group, a privately-held organization comprised of a family of companies whose only business is the management of equity and fixed income investment portfolios and necessary supporting activities. Capital Intl Inc. manages the Emerging Markets Growth Fund, an open-end interval fund that invests in the securities of developing countries. The holdings of each of these entities appear to be separate and distinct, suggesting that elements of The Capital Group could hold as much as 27% of the outstanding minority interest 2 Genesis Asset Managers and Genesis Investment Mgmt. Ltd. may be part of the same institution. These entries appear to represent separate and distinct holdings 3 5/14/02 prices actually reflect the three months ending 3/31/02 Note: Share positions are based on public filings. In many cases, current top shareholders have not filed holding reports since 12/31/01. In all cases, 3/31/02 would be the most recent date on which any report could have been filed Source: Carson GEO Spectrum CDA

Estimated returns for shareholders Return scenarios correlate to stock price cases: Worst / high: Assumes that all shareholders bought shares at highest price registered during successive quarters since June 1999 Reasonable / average: Assumes that all shareholders bought shares at weighted average price registered during successive quarters since June 1999 Best / low: Assumes that all shareholders bought shares at lowest price registered during successive quarters since June 1999 Percentage of shares with returns > 20% across a range of offer prices Based on top 30 shareholders Source: Carson GEO, Spectrum CDA, Bloomberg

Estimated returns for shareholders (cont'd) 1 As of May 14, 2002 2 Assumes that selected major shareholders bought shares at weighted average price registered during successive quarters since June 1999 Source: Carson GEO, Spectrum CDA, Bloomberg Based on selected major shareholders across a range of offer prices

EX-99.C.3

EXHIBIT (c)(3)

Executive summary Publicly available information does not provide a definitive, current view of Hornet East's shareholders, nor their potential returns in an acquisition scenario Share positions are based on public filings, and since there are often substantial and irregular time lags between filings, it is not possible to have a truly current view of the shareholder base Estimating potential returns for at various offer prices requires application of another set of simplifying assumptions related to holders' basis in Hornet East shares Nevertheless, the information available does permit the formulation of some useful working hypotheses about Hornet East's shareholders Prominent institutions dominate Hornet East's shareholder base In total, institutions own more than 80% of the float, with the top seven institutions holding approximately two-thirds of the minority interest Three institutions (The Capital Group, PPM America, and Genesis Asset Managers) own approximately 51% of the minority interest There has been heavy trading volume in the last few weeks accompanied by a substantial number of large block trades, suggesting that one or more large shareholders could be adjusting their positions Nearly 20% of the minority interest has traded since March 1 A substantial number of major shareholders could experience acceptable returns across offer prices ranging from $12.50 to $13.50 There is relatively little overlap between shareholders of Eagle, Hornet East, and Porsche The Capital Group could hold as much as 27% of Hornet East through various entities, and through its Capital Research & Management subsidiary owns approximately 2% of Eagle and 4% of Porsche Wellington Management owns 4.7% of Hornet East and has a 0.7% interest in Eagle and a 1% stake in Porsche

The Capital Group 27 PPM America 12.5 Genesis Asset Managers 11.6 Wellington 4.7 Invesco Funds Group 4.4 Boston Partners asset 3.9 Oak Tree Capital 3.4 Other institutional 14.9 Other holders 17.6 The Capital Group, PPM America, and Genesis Asset Managers own approximately 51% of the Hornet East minority interest Total fully diluted shares = 24.6MM Institutions own more than 80% of the minority interest, with the top seven holding approximately two-thirds The Capital Group (U.S.) 27.0%1 Capital Int'l Inc. (13.0%) Emerging Market Growth Fund (8.8%) Capital Int'l S.A. (2.4%) Capital Research & Management (1.4%) Capital Guardian Trust (1.4%) PPM America (U.S.) 12.5% Genesis Asset Managers (U.K.) 11.6% Wellington Management (U.S.) 4.7% Invesco Funds Group (U.S.) 4.4% Boston Partners Asset Management (U.S.) 3.9% Oaktree Capital Management (U.S.) 3.4% Other institutional holders 14.9% Other holders 17.6% 1 Each of these entities is part of The Capital Group, a privately-held organization comprised of a family of companies whose only business is the management of equity and fixed income investment portfolios and necessary supporting activities. Capital Intl Inc. manages the Emerging Markets Growth Fund, an open-end interval fund that invests in the securities of developing countries. The holdings of each of these entities appear to be separate and distinct, suggesting that elements of The Capital Group could hold as much as 27% of the outstanding minority interest Note: Share positions are based on public filings. In many cases, current top shareholders have not filed holding reports since 12/31/01. In all cases, 3/31/02 would be the most recent date on which any report would have been filed Source: Carson GEO, Spectrum CDA

The top shareholders in Hornet East are prominent institutional investors Source: Nelson Information's Directory of Investment Mangers - 2001, Carson GEO, Spectrum CDA

Current top 20 shareholders 1 Each of these entities is part of The Capital Group, a privately-held organization comprised of a family of companies whose only business is the management of equity and fixed income investment portfolios and necessary supporting activities. Capital Intl Inc. manages the Emerging Markets Growth Fund, an open-end interval fund that invests in the securities of developing countries. The holdings of each of these entities appear to be separate and distinct, suggesting that elements of The Capital Group could hold as much as 27% of the outstanding minority interest 2 Genesis Asset Managers and Genesis Investment Mgmt. Ltd. may be part of the same institution. These entries appear to represent separate and distinct holdings 3 5/22/02 prices actually reflect the three months ending 3/31/02 to maintain comparability with shareholder data Note: Share positions are based on public filings. In many cases, current top shareholders have not filed holding reports since 12/31/01. In all cases, 3/31/02 would be the most recent date on which any report could have been filed Source: Carson GEO, Spectrum CDA

Individual block trades All other trades 5/3/2002 73 32 25 88 5/10/2002 40 56 5/13/2002 150 100 100 100 163 5/14/2002 110 50 51 89 5/17/2002 50 50 154 5/20/2002 447 100 15 5/22/2002 40 25 25 63 Large block trades have dominated heavy trading volume days, suggesting institutions may be adjusting positions Number of shares (000) and price at which shares traded $11.25 1 Average daily volume during the period was approximately 77,000 shares. The trading days shown are those on which volume exceeded the average during the period Source: Bloomberg Significant block trade activity on selected heavy volume days since May 1, 20021 $11.28 $11.30 $11.15 $11.10 $11.10 $11.10 $11.10 $11.20 $11.28 $10.75 $10.75 $10.90 $10.90 $10.90 $10.90 $11.25 $10.90 Total 218 96 613 300 254 562 153

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 2-Jan-02 17-Jan-02 4-Feb-02 20-Feb-02 7-Mar-02 22-Mar-02 9-Apr-02 24-Apr-02 9-May-02 0 150 300 450 600 750 900 1,050 Hornet East Special Committee for Hornet East convened in late March Trading volume has been heavy since the Special Committee convened, though price has fluctuated within a relatively narrow band January 1, 2002 - present Share price Volume (000s)

Nearly 20% of the outstanding minority shares have traded since March 1 Trading volume since March 1, 2002 to present 1 Volume (000s) Cumulative shares traded (000s) 1 4.7 million shares have traded since March 1, 2002, representing approximately 19% of 24.6 million shares of public float

Estimated returns for shareholders Return scenarios correlate to stock price cases Worst/high: Assumes that all shareholders bought shares at highest price registered during successive quarters since June 1999 Reasonable/average: Assumes that all shareholders bought shares at weighted average price registered during successive quarters since June 1999 Best/low: Assumes that all shareholders bought shares at lowest price registered during successive quarters since June 1999 Percentage of shares with returns > 20% across a range of offer prices Based on top 30 shareholders Source: Carson GEO, Spectrum CDA, Bloomberg

Estimated returns for shareholders (cont'd) 1 As of May 14, 2002 2 Assumes that selected major shareholders bought shares at weighted average price registered during successive quarters since June 1999 Source: Carson GEO, Spectrum CDA, Bloomberg Based on selected major shareholders across a range of offer prices

EX-99.C.4

EXHIBIT (c)(4)

Hornet East NAV US$ millions 1 Includes $92 million in cash, short-term investments and cash restricted in use Source: Wood Mackenzie

Preliminary DCF assumptions Price Decks (Brent $/bbl) Strip Downside Natural gas: determined by Brent price deck and current contract terms High sulfur fuel oil: 80% of Brent price deck Production profiles Per Wood Mackenzie Operating costs and capital requirements Per Wood Mackenzie Discount rate of 8-14% Valuation date as of January 1, 2002

Oil (Mbbls/d) 2002 8.5 2003 7.6 2004 6.7 2005 5.7 2006 4.8 2007 4.1 2008 3.5 2009 2.9 2010 2.1 2011 1.9 2012 1.4 2013 1.6 2014 1.1 2015 1.1 2016 1.1 2017 1.1 2018 0.8 Kakap Corridor PSC North Sumatra Block A Corridor Tempino South Jambi E Jambi EOR DCF assumptions: production profiles1 Oil (Mbbls/d) Gas (Mmcf/d) 2002 2.6 159.1 2003 2.9 236.6 2004 2.6 252.1 2005 2.2 261.4 2006 1.9 266.4 2007 1.6 275.3 2008 1.3 286.8 2009 1.3 271.4 2010 1.3 250.1 2011 1.1 230 2012 0.9 208.4 2013 0.8 186.8 2014 0.6 165.2 2015 0.6 154.4 2016 0.5 143.6 2017 0.4 132.8 2018 0.2 122 2019 0.1 111.2 2020 0.1 100.4 2021 0.3 95 2022 0.3 83.7 2023 0.3 42.7 Oil (Mbbls/d) 2002 2.6 2003 2 2004 1.4 Oil (Mbbls/d) Gas (Mmcf/d) 2002 2.8 12.5 2003 2.1 18.1 2004 1.7 18.1 2005 1.5 18.1 2006 1.2 18.1 2007 1 18.1 2008 1 18.1 2009 0.8 18.1 2010 0.7 18.1 2011 0.7 18.1 2012 0.6 18.1 2013 0.6 18.1 2014 0.5 18.1 2015 0.3 18.1 2016 0.2 18.1 2017 0 14.7 2018 0 9.1 Oil (Mbbls/d) Gas (Mmcf/d) 2002 0 0 2003 0 0 2004 1.2 65 2005 1.2 65 2006 1.2 65 2007 1.2 65 2008 1.4 70 2009 1.4 70 2010 2.1 70 2011 2.3 62.5 2012 1.7 33.5 2013 1.6 27.5 2014 1.4 22.5 2015 0.4 6 Oil (Mbbls/d) Gas (Mmcf/d) 2002 0 0 2003 0.1 5.9 2004 0.2 11.7 2005 0.3 14.4 2006 0.3 16.2 2007 0.3 19.4 2008 0.3 23.4 2009 0.3 30.2 2010 0.3 30.2 2011 0.2 30.2 2012 0.2 30.2 2013 0.1 24.3 2014 0.1 22.1 2015 0 18.5 2016 0 18.5 2017 0 18.5 2018 0 9 2019 0 4.5 2020 0 4.5 1 Production is the net entitlement to Hornet East Source: Wood Mackenzie

Corridor PSC Corridor Tempino Jambi Display total South Jambi North Sumatra Kakap 2002E 29.1 8.5 2.6 0 0 4.9 2003E 42.3 7.6 2 1.1 0 5.2 2004E 44.6 6.7 1.4 2.2 12.1 4.7 2005E 45.8 5.7 0 2.7 12.1 4.6 2006E 46.3 4.8 0 3 12.1 4.2 Hornet East production growth1 MBOEPD 1 Production is net to Hornet East Source: Wood Mackenzie Note: Existing projects only (no exploration wedge) 2002 - 2006 CAGR: 12%

Discount rate analysis 1 Based on predicted Beta, foreign companies based on World Predicted Betas (source: Barra, January 2002)

Canadian oil and gas 1 Precision Drilling launched a takeover bid without approaching Special Committee and Special Committee recommended that its shareholders reject the offer, resulting in subsequent negotiations and an increase in the offer price Transaction statistics Valuation range analysis Premium analysis Total transactions: 8 Average spread as a % of high: 15.4% Average premium to 1 day prior: 35.9% Number of takeover bids: 7 Median spread as a % of high: 15.1% Median premium to 1 day prior: 35.2% Number of arrangements/amalgamations: 1 Average premium to 1 month prior: 43.5% Median premium to 1 month prior: 42.3% Selected minority squeeze-out transactions

Canadian all industries (excluding oil & gas) Transaction statistics Valuation range analysis Premium analysis Total transactions: 7 Average spread as a % of high: 13.1% Average premium to 1 day prior: 19.1% Number of takeover bids: 4 Median spread as a % of high: 13.5% Median premium to 1 day prior: 19.9% Number of arrangements/amalgamations: 1 Average premium to 1 month prior: 29.5% Median premium to 1 month prior: 30.6% Selected minority squeeze-out transactions (cont'd)

Minority squeeze-out analysis 1 Includes minority squeeze-out transactions between $100 and $500 million since 1998 where parent company owned in excess of 50% of target's outstanding shares prior to announcement Source: Thomson Financial SDC Platinum, news and press releases, company filings Precedent U.S. transactions1

Comparable company trading statistics 1 Based on diluted shares using the treasury stock method 2 Firm value based on equity market value plus net debt, preferred stock, and minority interest as of latest reported quarterly statements 3 EPS, CFPS and EBITDAX estimates from First Call, IBES and / or recent select analyst reports 4 Oil and gas reserves converted using a 6:1 ratio 5 CNOOC: Balance sheet as of 6/30/01; pro forma for acquisition of Repsol YPF's Indonesian assets (announced 1/18/02) for $585MM and the $500 MM bond offering on March 4, 2002 6 Woodside: Reserves as of 12/31/00, balance sheet data as of 9/30/01 and production is for 2001 7 Enterprise: Balance sheet data as of 6/30/01 and reserves as of 12/31/00 8 Santos: Reserves and balance sheet as of 12/31/01 9 PTT E&P: Balance sheet as of 12/3/01 based on equity research reports and reserves as of 12/3/01 based on PTT E&P press release 10 Premier Oil: Balance sheet data as of 6/30/01 and reserve data as of 12/31/00 11 Cairn Energy: Reserves and production figures based on J.S Herold, Inc. Balance sheet data as of 9/30/01 12 Oil Search: Shares outstanding as of 12/31/00 and are pro forma for secondary offering of 86 MM shares on 8/7/01. Balance sheet as of 12/31/01 13 Not pro forma for Oil Search's acquisition of Orogen Minerals (announced 1/21/02) 14 Novus Petroleum: Balance sheet and reserve data as of 12/31/01 15 Orogen Minerals: Balance sheet as of 12/31/01 16 Hornet East: Balance sheet and reserves as of 12/31/01 based on press release 17 Devon Energy: Pro forma for acquisition of interests in Caspian Sea reserves for $58.3MM (completed 2/23/01); pro forma for acquisition of Mitchell Energy (ann. 8/14/01) and Anderson Exploration (completed 10/17/01) 18 Talisman Energy: Balance sheet and reserve data as of 12/31/01 19 Ocean Energy: Pro forma for acquisition of Texoil (completed 3/22/01) for $130MM and EnSight (completed 6/30/01) for $121MM 20 Pogo Producing: Balance sheet and reserve data as of 12/31/01 US$ millions

Legend 1 CSFB 9 SSB 11 MSDW 11.8 UBS 11 RBC 11 CSFB 14.5 ABN AMRO 8 First Energy 11 ABN AMRO 7.45 SSB 11 CSFB 14.5 Analysts' 12-18 month price targets Analysts' price targets over time Current Post-announcement Pre-announcement Buy Outperform Neutral Buy Buy Buy Reduce Underperform Buy Sell (prior to 5/25/01) Median: $11.00 Average: $10.76 (5/25/01 - 9/30/01) Median: $11.00 Average: $11.17 (9/30/01 - current) Median: $11.00 Average: $10.98 Additional ratings with no price targets: Goldman Sachs "Market Performer" (2/5/02), Dresdner Kleinwort Wasserstein "Hold" 2/20/02, Nomura "Hold" (2/20/02) Buy

Having increased their positions since the acquisition of Hornet, the current top 20 shareholders now own almost 80% of all minority shares outstanding Source: Thomson Financial, Carson GEO (3/15/02)

2/15/02 9.05 9.1115 2/18/02 9.05 9.1115 2/19/02 8.9 9.1115 2/20/02 8.9 9.1115 2/21/02 8.7 9.1115 2/22/02 8.75 9.1115 2/25/02 8.65 9.1115 2/26/02 8.5 9.1115 2/27/02 8.55 9.1115 2/28/02 8.6 9.1115 3/1/02 8.73 9.1115 3/4/02 8.9 9.1115 3/5/02 8.82 9.1115 3/6/02 9.18 9.1115 3/7/02 9.4 9.1115 3/8/02 9.7 9.1115 3/11/02 9.9 9.1115 3/12/02 9.95 9.1115 3/13/02 10 9.1115 3/14/02 10 9.1115 Hornet East trading history Last 20 trading days Average: $9.11 1/18/02 8.83 9.1115 1/21/02 8.83 9.1115 1/22/02 8.75 9.1115 1/23/02 8.68 9.1115 1/24/02 8.7 9.1115 1/25/02 8.88 9.1115 1/28/02 8.99 9.1115 1/29/02 8.75 9.1115 1/30/02 8.99 9.1115 1/31/02 9 9.1115 2/1/02 9 9.1115 2/4/02 8.95 9.1115 2/5/02 9 9.1115 2/6/02 9 9.1115 2/7/02 8.95 9.1115 2/8/02 8.9 9.1115 2/11/02 9 9.1115 2/12/02 9 9.1115 2/13/02 8.95 9.1115 2/14/02 9.15 9.01325 2/15/02 9.05 9.01325 2/18/02 9.05 9.01325 2/19/02 8.9 9.01325 2/20/02 8.9 9.01325 2/21/02 8.7 9.01325 2/22/02 8.75 9.01325 2/25/02 8.65 9.01325 2/26/02 8.5 9.01325 2/27/02 8.55 9.01325 2/28/02 8.6 9.01325 3/1/02 8.73 9.01325 3/4/02 8.9 9.01325 3/5/02 8.82 9.01325 3/6/02 9.18 9.01325 3/7/02 9.4 9.01325 3/8/02 9.7 9.01325 3/11/02 9.9 9.01325 3/12/02 9.95 9.01325 3/13/02 10 9.01325 3/14/02 10 9.01325 Last 40 trading days Average: $9.01 12/21/01 8.32 8.950333333 12/24/01 8.3 8.950333333 12/25/01 8.3 8.950333333 12/26/01 8.35 8.950333333 12/27/01 8.35 8.950333333 12/28/01 8.7 8.950333333 12/31/01 9 8.950333333 1/1/02 9 8.950333333 1/2/02 9.41 8.950333333 1/3/02 9.29 8.950333333 1/4/02 9.25 8.950333333 1/7/02 8.85 8.950333333 1/8/02 8.78 8.950333333 1/9/02 8.9 8.950333333 1/10/02 9.25 8.950333333 1/11/02 9 8.950333333 1/14/02 8.97 8.950333333 1/15/02 8.9 8.950333333 1/16/02 8.87 8.950333333 1/17/02 8.7 8.950333333 1/18/02 8.83 8.950333333 1/21/02 8.83 8.950333333 1/22/02 8.75 8.950333333 1/23/02 8.68 8.950333333 1/24/02 8.7 8.950333333 1/25/02 8.88 8.950333333 1/28/02 8.99 8.950333333 1/29/02 8.75 8.950333333 1/30/02 8.99 8.950333333 1/31/02 9 8.950333333 2/1/02 9 8.950333333 2/4/02 8.95 8.950333333 2/5/02 9 8.950333333 2/6/02 9 8.950333333 2/7/02 8.95 8.950333333 2/8/02 8.9 8.950333333 2/11/02 9 8.950333333 2/12/02 9 8.950333333 2/13/02 8.95 8.950333333 2/14/02 9.15 8.950333333 2/15/02 9.05 8.950333333 2/18/02 9.05 8.950333333 2/19/02 8.9 8.950333333 2/20/02 8.9 8.950333333 2/21/02 8.7 8.950333333 2/22/02 8.75 8.950333333 2/25/02 8.65 8.950333333 2/26/02 8.5 8.950333333 2/27/02 8.55 8.950333333 2/28/02 8.6 8.950333333 3/1/02 8.73 8.950333333 3/4/02 8.9 8.950333333 3/5/02 8.82 8.950333333 3/6/02 9.18 8.950333333 3/7/02 9.4 8.950333333 3/8/02 9.7 8.950333333 3/11/02 9.9 8.950333333 3/12/02 9.95 8.950333333 3/13/02 10 8.950333333 3/14/02 10 8.950333333 Last 60 trading days Average: $8.95 9/28/01 8.7 8.669666667 10/1/01 8.4 8.669666667 10/2/01 8.2 8.669666667 10/3/01 8.24 8.669666667 10/4/01 8.3 8.669666667 10/5/01 8.4 8.669666667 10/8/01 8.34 8.669666667 10/9/01 8.03 8.669666667 10/10/01 7.9 8.669666667 10/11/01 8.06 8.669666667 10/12/01 8 8.669666667 10/15/01 8 8.669666667 10/16/01 8 8.669666667 10/17/01 7.94 8.669666667 10/18/01 7.95 8.669666667 10/19/01 7.89 8.669666667 10/22/01 8 8.669666667 10/23/01 8 8.669666667 10/24/01 8.04 8.669666667 10/25/01 8 8.669666667 10/26/01 8.19 8.669666667 10/29/01 8.3 8.669666667 10/30/01 8.45 8.669666667 10/31/01 8.4 8.669666667 11/1/01 8.58 8.669666667 11/2/01 8.5 8.669666667 11/5/01 8.78 8.669666667 11/6/01 8.81 8.669666667 11/7/01 8.83 8.669666667 11/8/01 8.85 8.669666667 11/9/01 8.9 8.669666667 11/12/01 8.89 8.669666667 11/13/01 8.91 8.669666667 11/14/01 9.1 8.669666667 11/15/01 8.89 8.669666667 11/16/01 8.86 8.669666667 11/19/01 8.87 8.669666667 11/20/01 9.09 8.669666667 11/21/01 8.87 8.669666667 11/22/01 8.87 8.669666667 11/23/01 8.79 8.669666667 11/26/01 8.4 8.669666667 11/27/01 8.51 8.669666667 11/28/01 8.37 8.669666667 11/29/01 8.3 8.669666667 11/30/01 8.01 8.669666667 12/3/01 8.2 8.669666667 12/4/01 8.14 8.669666667 12/5/01 8.27 8.669666667 12/6/01 8.3 8.669666667 12/7/01 8.35 8.669666667 12/10/01 8.35 8.669666667 12/11/01 8.31 8.669666667 12/12/01 8.3 8.669666667 12/13/01 8.24 8.669666667 12/14/01 8.3 8.669666667 12/17/01 8.18 8.669666667 12/18/01 8.2 8.669666667 12/19/01 8.2 8.669666667 12/20/01 8.29 8.669666667 12/21/01 8.32 8.669666667 12/24/01 8.3 8.669666667 12/25/01 8.3 8.669666667 12/26/01 8.35 8.669666667 12/27/01 8.35 8.669666667 12/28/01 8.7 8.669666667 12/31/01 9 8.669666667 1/1/02 9 8.669666667 1/2/02 9.41 8.669666667 1/3/02 9.29 8.669666667 1/4/02 9.25 8.669666667 1/7/02 8.85 8.669666667 1/8/02 8.78 8.669666667 1/9/02 8.9 8.669666667 1/10/02 9.25 8.669666667 1/11/02 9 8.669666667 1/14/02 8.97 8.669666667 1/15/02 8.9 8.669666667 1/16/02 8.87 8.669666667 1/17/02 8.7 8.669666667 1/18/02 8.83 8.669666667 1/21/02 8.83 8.669666667 1/22/02 8.75 8.669666667 1/23/02 8.68 8.669666667 1/24/02 8.7 8.669666667 1/25/02 8.88 8.669666667 1/28/02 8.99 8.669666667 1/29/02 8.75 8.669666667 1/30/02 8.99 8.669666667 1/31/02 9 8.669666667 2/1/02 9 8.669666667 2/4/02 8.95 8.669666667 2/5/02 9 8.669666667 2/6/02 9 8.669666667 2/7/02 8.95 8.669666667 2/8/02 8.9 8.669666667 2/11/02 9 8.669666667 2/12/02 9 8.669666667 2/13/02 8.95 8.669666667 Last 120 trading days Average: $8.67 5/25/01 7.6 9.498899522 5/29/01 10.35 9.498899522 5/30/01 9.72 9.498899522 5/31/01 10.8 9.498899522 6/1/01 11.5 9.498899522 6/4/01 11 9.498899522 6/5/01 10.95 9.498899522 6/6/01 10.75 9.498899522 6/7/01 10.75 9.498899522 6/8/01 10.75 9.498899522 6/11/01 10.65 9.498899522 6/12/01 10.59 9.498899522 6/13/01 10.7 9.498899522 6/14/01 10.7 9.498899522 6/15/01 10.7 9.498899522 6/18/01 10.4 9.498899522 6/19/01 10.3 9.498899522 6/20/01 10.55 9.498899522 6/21/01 10.23 9.498899522 6/22/01 10.15 9.498899522 6/25/01 10 9.498899522 6/26/01 10.27 9.498899522 6/27/01 10.19 9.498899522 6/28/01 10.25 9.498899522 6/29/01 10.16 9.498899522 7/2/01 10.43 9.498899522 7/3/01 10.32 9.498899522 7/4/01 10.32 9.498899522 7/5/01 10.21 9.498899522 7/6/01 10.43 9.498899522 7/9/01 10.55 9.498899522 7/10/01 10.7 9.498899522 7/11/01 10.62 9.498899522 7/12/01 10.57 9.498899522 7/13/01 10.7 9.498899522 7/16/01 10.65 9.498899522 7/17/01 10.65 9.498899522 7/18/01 11.79 9.498899522 7/19/01 11 9.498899522 7/20/01 11.21 9.498899522 7/23/01 11.4 9.498899522 7/24/01 11.2 9.498899522 7/25/01 11.25 9.498899522 7/26/01 11.4 9.498899522 7/27/01 11.07 9.498899522 7/30/01 11.06 9.498899522 7/31/01 11.3 9.498899522 8/1/01 11.89 9.498899522 8/2/01 11.85 9.498899522 8/3/01 11.82 9.498899522 8/6/01 11.34 9.498899522 8/7/01 11.55 9.498899522 8/8/01 11.5 9.498899522 8/9/01 11.37 9.498899522 8/10/01 11.59 9.498899522 8/13/01 11.53 9.498899522 8/14/01 11.55 9.498899522 8/15/01 11.5 9.498899522 8/16/01 11.48 9.498899522 8/17/01 11.01 9.498899522 8/20/01 11.12 9.498899522 8/21/01 10.98 9.498899522 8/22/01 10.8 9.498899522 8/23/01 10.88 9.498899522 8/24/01 10.96 9.498899522 8/27/01 10.8 9.498899522 8/28/01 10.6 9.498899522 8/29/01 10.61 9.498899522 8/30/01 10.3 9.498899522 8/31/01 10.2 9.498899522 9/3/01 10.2 9.498899522 9/4/01 10.25 9.498899522 9/5/01 10.4 9.498899522 9/6/01 11.1 9.498899522 9/7/01 10.54 9.498899522 9/10/01 10.51 9.498899522 9/11/01 10.51 9.498899522 9/12/01 10.51 9.498899522 9/13/01 10.51 9.498899522 9/14/01 10.51 9.498899522 9/17/01 10.49 9.498899522 9/18/01 10.05 9.498899522 9/19/01 9.65 9.498899522 9/20/01 8.69 9.498899522 9/21/01 9.05 9.498899522 9/24/01 8.97 9.498899522 9/25/01 9.05 9.498899522 9/26/01 8.95 9.498899522 9/27/01 8.9 9.498899522 9/28/01 8.7 9.498899522 10/1/01 8.4 9.498899522 10/2/01 8.2 9.498899522 10/3/01 8.24 9.498899522 10/4/01 8.3 9.498899522 10/5/01 8.4 9.498899522 10/8/01 8.34 9.498899522 10/9/01 8.03 9.498899522 10/10/01 7.9 9.498899522 10/11/01 8.06 9.498899522 Since announcement of Hornet acquisition1 Average: $9.50 3/15/01 9 9.271187739 3/16/01 9 9.271187739 3/19/01 9.06 9.271187739 3/20/01 9.15 9.271187739 3/21/01 9.15 9.271187739 3/22/01 9 9.271187739 3/23/01 8.95 9.271187739 3/26/01 9.1 9.271187739 3/27/01 8.9 9.271187739 3/28/01 8.8 9.271187739 3/29/01 8.88 9.271187739 3/30/01 8.88 9.271187739 4/2/01 8.9 9.271187739 4/3/01 8.81 9.271187739 4/4/01 9 9.271187739 4/5/01 9 9.271187739 4/6/01 8.51 9.271187739 4/9/01 8.3 9.271187739 4/10/01 8.1 9.271187739 4/11/01 8.12 9.271187739 4/12/01 8.2 9.271187739 4/13/01 8.2 9.271187739 4/16/01 8.35 9.271187739 4/17/01 8.49 9.271187739 4/18/01 8.39 9.271187739 4/19/01 8.4 9.271187739 4/20/01 8.3 9.271187739 4/23/01 8.37 9.271187739 4/24/01 8.47 9.271187739 4/25/01 8.6 9.271187739 4/26/01 8.55 9.271187739 4/27/01 8.64 9.271187739 4/30/01 8.65 9.271187739 5/1/01 8.5 9.271187739 5/2/01 8.2 9.271187739 5/3/01 8.2 9.271187739 5/4/01 8.18 9.271187739 5/7/01 7.98 9.271187739 5/8/01 7.75 9.271187739 5/9/01 7.48 9.271187739 5/10/01 7.5 9.271187739 5/11/01 7.6 9.271187739 5/14/01 8.02 9.271187739 5/15/01 7.66 9.271187739 5/16/01 7.61 9.271187739 5/17/01 7.59 9.271187739 5/18/01 7.75 9.271187739 5/21/01 7.77 9.271187739 5/22/01 7.75 9.271187739 5/23/01 7.65 9.271187739 5/24/01 7.5 9.271187739 5/25/01 7.6 9.271187739 5/28/01 7.6 9.271187739 5/29/01 10.35 9.271187739 5/30/01 9.72 9.271187739 5/31/01 10.8 9.271187739 6/1/01 11.5 9.271187739 6/4/01 11 9.271187739 6/5/01 10.95 9.271187739 6/6/01 10.75 9.271187739 6/7/01 10.75 9.271187739 6/8/01 10.75 9.271187739 6/11/01 10.65 9.271187739 6/12/01 10.59 9.271187739 6/13/01 10.7 9.271187739 6/14/01 10.7 9.271187739 6/15/01 10.7 9.271187739 6/18/01 10.4 9.271187739 6/19/01 10.3 9.271187739 6/20/01 10.55 9.271187739 6/21/01 10.23 9.271187739 6/22/01 10.15 9.271187739 6/25/01 10 9.271187739 6/26/01 10.27 9.271187739 6/27/01 10.19 9.271187739 6/28/01 10.25 9.271187739 6/29/01 10.16 9.271187739 7/2/01 10.43 9.271187739 7/3/01 10.32 9.271187739 7/4/01 10.32 9.271187739 7/5/01 10.21 9.271187739 7/6/01 10.43 9.271187739 7/9/01 10.55 9.271187739 7/10/01 10.7 9.271187739 7/11/01 10.62 9.271187739 7/12/01 10.57 9.271187739 7/13/01 10.7 9.271187739 7/16/01 10.65 9.271187739 7/17/01 10.65 9.271187739 7/18/01 11.79 9.271187739 7/19/01 11 9.271187739 7/20/01 11.21 9.271187739 7/23/01 11.4 9.271187739 7/24/01 11.2 9.271187739 7/25/01 11.25 9.271187739 7/26/01 11.4 9.271187739 7/27/01 11.07 9.271187739 7/30/01 11.06 9.271187739 7/31/01 11.3 9.271187739 Last 12-months Average: $9.27 1 Beginning at closing price on 5/25/01, one-day prior to announcement and opening price on 5/29/01 morning of announcement Source: Tradeline

Top 6 shareholders 0.524772427 Remaining top 10 shareholders 0.125768395 Remaining top 20 shareholders 0.135555576 All other shareholders 0.213903602 Minority shareholder breakdown as of 12/31/01 (% of total minority shares outstanding) Total = 24.4MM minority shares outstanding Source: Thomson Financial, Carson GEO (3/15/02) Over 50% of the outstanding shares of Hornet East are now owned by the top 6 shareholders

Legend 1 $7-$8 254.7 $8-$9 3472.2 $9-$10 1569.4 $10-$11 5093.5 $11-$12 1864.5 Shares traded analysis Volume traded 000's Announcement to current (May 29, 2001 - March 14, 2002) 2.1% 28.3% 12.8% 15.2% Legend 1 $7-$8 254.7 $8-$9 3726.9 $9-$10 5296.3 $10-$11 10389.8 $11-$12 12254.3 Cumulative volume traded 000's 2.1% 30.4% 43.2% 84.8% Average daily volume Last 30 days 33,410 Last 60 days 30,619 Last 90 days 30,589 Last 6 months 36,213 Last year 65,315 Last 2 years 105,868 41.6% 100.0% Total minority shares (MM) 24.4 Total shares traded over period (MM) 12.2 Shares traded/minority 50%

Legend 1 $7-$8 3235.6 $8-$9 5868.6 $9-$10 1816.9 $10-$11 5093.5 $11-$12 1864.5 Shares traded analysis Volume traded 000's Last 12 months (March 14, 2001 - March 14, 2002) 18.1% 32.8% 10.2% 28.5% 10.4% Legend 1 $7-$8 3235.6 $8-$9 9104.2 $9-$10 10921.1 $10-$11 16014.6 $11-$12 17879.1 Cumulative volume traded 000's 18.1% 50.9% 61.1% 89.6% 100.0% Total minority shares (MM) 24.4 Total shares traded over period (MM) 17.9 Shares traded/minority 73% Average daily volume Last 30 days 33,410 Last 60 days 30,619 Last 90 days 30,589 Last 6 months 36,213 Last year 65,315 Last 2 years 105,868

Price negotiation (Limited ability to influence valuation) Special committee valuation finalized Price negotiation options Increase offer price to level Hornet East special committee is willing to support Indicate unwillingness to negotiate further increase in offer price Negotiate support agreement and launch offer STOP/ withdraw Accept Eagle offer price Accept Eagle offer price No Accept Eagle offer price No No Yes Yes Yes Note: dotted lines indicate optional path

Deal consummation for tender (Board recommendation received, offer documents mailed to shareholders) Yes No STOP/ withdraw Eagle owns 100% of Hornet East shares Extend offer period? Do not waive minimum condition proceed with efforts to acquire 90% of shares Waive the 90% minimum condition take and pay for shares tendered Yes Subsequent acquisition transaction Close offer and proceed to compulsory acquisition Deposit of >50% Yes Initial offer period to close Deposit of >90% Yes Deposit of >90% No No No Note: Dotted lines indicate optional path

Draft Hornet East Discussion March 18, 2002

Disclaimer This presentation was prepared exclusively for the benefit and internal use of Eagle in order to indicate, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure to any other party. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by JPMorgan. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of JPMorgan. The information in this presentation is based upon management forecasts and reflects prevailing conditions and our views as of this date, all of which are subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of Eagle or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of Eagle. JPMorgan is a marketing name for investment banking businesses of J.P. Morgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by J.P. Morgan Securities Inc., and its securities affiliates, and lending, derivatives and other commercial banking activities are performed by Morgan Guaranty Trust Company of New York, The Chase Manhattan Bank and their banking affiliates. JPMorgan deal team members may be employees of any of the foregoing entities.

EX-99.D

                                                                     Exhibit (d)
                                SUPPORT AGREEMENT

         THIS SUPPORT AGREEMENT dated June 7, 2002,


A M O N G :       Conoco Inc., a corporation subsisting under the
                  laws of Delaware ("Conoco")

                                     - and -

                  Conoco Canada Resources Limited, a corporation subsisting
                  under the laws of Nova Scotia ("Bidco")

                                                     - and -

                  Gulf Indonesia Resources Limited, a corporation subsisting
                  under the laws of New Brunswick ("Gulf Indonesia")


         THIS AGREEMENT WITNESSETH THAT in consideration of the covenants and
agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows:

                                    ARTICLE I
                                 INTERPRETATION

1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires:

         "ACQUISITION PROPOSAL" means any proposal by a single person or
         combination of persons to acquire, directly or indirectly, more than
         10% of the Gulf Indonesia Shares, excluding the Offer;

         "AFFILIATE" has the meaning ascribed thereto in the NBCA;

         "APPROPRIATE REGULATORY APPROVALS" means those waivers, sanctions,
         rulings, consents, orders, exemptions, permits and other approvals
         (including the lapse, without objection, of a prescribed time under a
         statute or regulation that states that a transaction may be implemented
         if a prescribed time lapses following the giving of notice, the making
         of an application or the taking of any other required steps or
         proceeding without an objection being made) of Governmental Entities or
         self-regulatory organizations, necessary or desirable in connection
         with the Offer, any Compulsory Acquisition or any Subsequent
         Acquisition Transaction, including those set out in Schedule B;

                                      -2-


         "BUSINESS DAY" means any day, other than a Saturday, a Sunday or a
         statutory holiday in Calgary, Alberta or a federal holiday in the
         United States;

         "CANADIAN GAAP" means Canadian generally accepted accounting principles
         applied on a consistent basis;

         "COMPULSORY ACQUISITION" means an acquisition by Bidco of Gulf
         Indonesia Shares not owned by Conoco or its affiliates and not tendered
         to the Offer utilizing the provisions of Section 133 of the NBCA;

         "DEPOSITARY" means The Bank of New York;

         "EXCHANGE ACT" means the U.S. Securities and Exchange Act of 1934, as
         amended;

         "EXPIRY DATE" means the date on which Bidco first takes up and pays for
         any Gulf Indonesia Shares deposited to the Offer, by way of notice
         thereof given to the Depositary;

         "EXPIRY TIME" means the time the Offer, as may be extended from time to
         time, expires;

         "FINANCIAL STATEMENTS" has the meaning ascribed thereto in Section
         3.1(f);

         "GOVERNMENTAL ENTITY" means (a) any multinational, federal, provincial,
         state, regional, municipal, local or other government, governmental or
         public department, ministry, central bank, court, tribunal, arbitral
         body, commission, board, bureau or agency, domestic or foreign, (b) any
         subdivision, agent, commission, board, or authority of any of the
         foregoing or (c) any quasi-governmental or private body exercising any
         regulatory, expropriation or taxing authority under or for the account
         of any of the foregoing;

         "GULF INDONESIA OPTION" means an option to purchase Gulf Indonesia
         Shares granted under the Gulf Indonesia Stock Plans or as an inducement
         to enter the employ of Gulf Indonesia;

         "GULF INDONESIA SHAREHOLDERS" means the holders of Gulf Indonesia
         Shares, other than Conoco and its affiliates;

         "GULF INDONESIA SHARES" means the common shares in the capital of Gulf
         Indonesia;

         "GULF INDONESIA STOCK PLANS" means the Gulf Indonesia Incentive Stock
         Option Plan (1997), the Executive Restricted Share Unit/Deferred Share
         Unit Plan and the Executive Leveraged Purchase Plan;

         "INITIAL EXPIRY TIME" has the meaning ascribed thereto in Section
         2.1(c);

         "INDEPENDENT COMMITTEE" has the meaning ascribed thereto in Section
         3.1(a);

         "LAW OR LAWS" means all laws, by-laws, statutes, rules, regulations,
         principles of law, orders, ordinances, judgements, decrees or other
         requirements and the terms and

                                      -3-


         conditions of any grant of approval, permission, authority or licence
         of any Governmental Entity or self-regulatory authority (including the
         NYSE), and the term "applicable" with respect to such Laws and in a
         context that refers to one or more Parties, means such Laws as are
         applicable to such Party or its business, undertaking, property or
         securities and emanate from a person having jurisdiction over the Party
         or Parties or its or their business, undertaking, property or
         securities;

         "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when used
         in connection with a person, any change, effect, event, occurrence or
         state of facts (or any effect, development, occurrence or state of
         facts involving a prospective change) that is, or could reasonably be
         expected to be, material and adverse to the business, assets, rights,
         liabilities, capitalization, operations, prospects or financial
         condition of that person and its subsidiaries taken as a whole, other
         than any change, effect, event, occurrence or state of facts (or any
         effect, development, occurrence or state of fact involving a
         prospective change); (i) resulting from changes affecting the worldwide
         oil and gas industry, including without limitation changes in crude
         oil, natural gas, gas liquids or other commodity prices on a current or
         forward basis; (ii) resulting from changes in general economic,
         political, civil, financial, banking, regulatory, currency exchange,
         securities market or commodity market conditions in Canada or the
         United States; (iii) which prior to the date hereof has been Publicly
         Disclosed by Gulf Indonesia or otherwise disclosed in writing by Gulf
         Indonesia to Conoco or Bidco; (iv) resulting from the negotiation,
         announcement, execution, delivery, consummation or anticipation of the
         transactions contemplated by, or compliance with, this Agreement; or
         (v) resulting from any change in Law of any Canadian or U.S.
         Governmental Entity;

         "MINIMUM CONDITION" has the meaning ascribed thereto in Schedule A;

         "NBCA" means the Business Corporations Act, R.S.N.B. 1973, c. B-9.1, as
         amended;

         "NYSE" means the New York Stock Exchange, Inc.;

         "OFFER" means the offer to purchase all of the outstanding Gulf
         Indonesia Shares not owned by Conoco and its affiliates, including any
         Gulf Indonesia Shares which may become outstanding pursuant to the
         exercise of outstanding stock options, to be made by Bidco to all of
         the Gulf Indonesia Shareholders on the terms and conditions described
         in this Agreement and Schedule A and on such other terms as are
         consistent with this Agreement;

         "OFFERING DOCUMENTS" means the Offer and all other documents required
         under U.S. and Canadian Law to be provided by Bidco to the Gulf
         Indonesia Shareholders in respect of the Offer, and the related letter
         of transmittal and notice of guaranteed delivery;

         "OUTSIDE DATE" means January 1, 2003 or such later date as may be
         mutually agreed in writing by the Parties;

         "PARTIES" means Gulf Indonesia, Conoco and Bidco; and "PARTY" means any
         of them;

                                      -4-


         "PERSON" includes an individual, partnership, association, body
         corporate, trustee, executor, administrator, legal representative,
         Governmental Entity or any other business enterprise, whether or not
         having legal status;

         "PUBLICLY DISCLOSED BY GULF INDONESIA" means disclosed by Gulf
         Indonesia in a public filing or press release made by it and publicly
         available with the Alberta or Ontario Securities Commissions or the SEC
         from January 1, 2002 to and including the date hereof;

         "SCHEDULE 14D-9" means Gulf Indonesia's Solicitation/Recommendation
         Statement on Schedule 14D-9 with respect to the Offer, as amended from
         time to time;

         "SEC" means the United States Securities and Exchange Commission;

         "SECURITIES ACT" means the Securities Act (Alberta), R.S.A. 2000, c.
         S-4 and the rules and regulations made thereunder, as now in effect and
         as they may be amended from time to time prior to the Expiry Time;

         "SECURITIES AUTHORITIES" has the meaning ascribed thereto in Section
         2.1(b);

         "SECURITIES LAWS" has the meaning ascribed thereto in Section 2.1(b);

         "SUBSEQUENT ACQUISITION TRANSACTION" means a "going private
         transaction" (as that term is defined in Rule 61-501 of the Ontario
         Securities Commission) for Gulf Indonesia which, if successfully
         completed, will result in Conoco owning, directly or indirectly, all of
         the Gulf Indonesia Shares;

         "SUBSIDIARY" means, with respect to a specified body corporate, any
         body corporate of which more than 50% of the outstanding shares
         ordinarily entitled to elect a majority of the board of directors
         thereof (whether or not shares of any other class or classes shall or
         might be entitled to vote upon the happening of any event or
         contingency) are at the time owned directly or indirectly by such
         specified body corporate and shall include any body corporate,
         partnership, joint venture or other person (excluding any Governmental
         Entity) over which such specified body corporate exercises direction or
         control whether through the ownership of voting securities, by contract
         or otherwise, or which is in a like relation to a subsidiary;

         "SUBSIDIARY" means a subsidiary of Gulf Indonesia, whether direct or
         indirect;

         "SUPERIOR PROPOSAL" means any bona fide written unsolicited Acquisition
         Proposal that (a) in the good faith determination of the Independent
         Committee is reasonably capable of being completed, taking into account
         all legal, financial, regulatory and other aspects of such proposal and
         the person making such proposal, and (b) in the good faith
         determination of the Independent Committee would, if consummated in
         accordance with its terms, result in a transaction more favourable from
         a financial point of view to Gulf Indonesia Shareholders than the
         transactions contemplated by this Agreement; and

                                      -5-


         "TAXES" means (i) all taxes and any instalments in respect thereof,
         however denominated, including any interest, penalties or other
         additions that may become payable in respect thereof, imposed by any
         federal, provincial, state, local or foreign government or any agency
         or political subdivision of any such government, which taxes shall
         include, without limiting the generality of the foregoing, all income
         or profits taxes (including, but not limited to, federal, provincial
         and state income taxes), capital, payroll, employee withholding and
         non-resident withholding taxes, labour taxes, unemployment insurance,
         pension contributions, social insurance taxes, sales and use taxes, ad
         valorem taxes, value added taxes, goods and services taxes, capital
         gains taxes, excise taxes, franchise taxes, gross receipts taxes,
         business license taxes, occupation taxes, real and personal property
         taxes, stamp taxes, environmental taxes, transfer taxes, workers'
         compensation and other governmental charges, levies and other
         obligations of the same or of a similar nature to any of the foregoing,
         which Gulf Indonesia or any of its Subsidiaries is required to pay,
         withhold or collect, (ii) liability for the payment of any amounts of
         the type described in clause (i) as a result of being a member of an
         affiliated, consolidated, combined, unitary or aggregate group, and
         (iii) liability for the payment of any amounts as a result of being
         party to any tax sharing agreement or as a result of any express or
         implied obligation to indemnify any other person with respect to the
         payment of any amounts of the type described in clause (i) or (ii).

1.2      INTERPRETATION NOT AFFECTED BY HEADINGS

         The division of this Agreement into Articles, Sections, subsections and
paragraphs and the insertion of headings are for convenience of reference only
and shall not affect in any way the meaning or interpretation of this Agreement.
Unless the contrary intention appears, references in this Agreement to an
Article, Section, subsection, paragraph or Schedule by number or letter or both
refer to the Article, Section, subsection, paragraph or Schedule, respectively,
bearing that designation in this Agreement.

1.3      NUMBER AND GENDER

         In this Agreement, unless the contrary intention appears, words
importing the singular include the plural and vice versa, and words importing
gender include all genders.

1.4      DATE FOR ANY ACTION

         If the date on which any action is required to be taken hereunder by a
Party is not a business day, such action shall be required to be taken on the
next succeeding day which is a business day.

1.5      CURRENCY

         Unless otherwise stated, all references in this Agreement to sums of
money are expressed in lawful money of the United States.

                                      -6-


1.6      ACCOUNTING MATTERS

         Unless otherwise stated, all accounting terms used in this Agreement in
respect of Gulf Indonesia shall have the meanings attributable thereto under
Canadian GAAP and all determinations of an accounting nature in respect of Gulf
Indonesia required to be made shall be made in a manner consistent with Canadian
GAAP and past practice.

1.7      SCHEDULES

         The following Schedules are annexed to this Agreement and are
incorporated by reference into this Agreement and form a part hereof:

         Schedule A         -       Conditions of the Offer

         Schedule B         -       Appropriate Regulatory Approvals

                                           ARTICLE II
                                           THE OFFER

2.1      ACTIONS BY CONOCO AND BIDCO

         (a)      Conoco agrees to cause Bidco to make and Bidco agrees to make
                  the Offer at a cash price of $13.25 per Gulf Indonesia Share,
                  which will be commenced (within the meaning of the rules and
                  regulations of the SEC) on or before 10 days from the date of
                  execution of this Agreement (the "Offer Deadline"), provided
                  that in the event that Bidco shall not have been provided with
                  such of the lists referred to in Section 2.2 in order to allow
                  Bidco to mail the Offer to Gulf Indonesia Shareholders and
                  holders of Gulf Indonesia Options by the Offer Deadline, the
                  Offer Deadline shall be extended to the third business day
                  following the obtaining of such lists.

         (b)      Bidco shall prepare the Offering Documents in both English
                  and, if required under the laws of Quebec, French, in
                  compliance with the Exchange Act, the Securities Act and all
                  other applicable Canadian and United States federal and state
                  securities laws, rules and regulations thereunder
                  (collectively, the "Securities Laws"). Gulf Indonesia and its
                  counsel shall be given a reasonable opportunity to review the
                  Offering Documents which shall be delivered in accordance with
                  the notice provisions of Section 9.1 (and which opportunity,
                  in any event, will be at least two days), and comment thereon,
                  prior to their being mailed to Gulf Indonesia Shareholders and
                  filed with the appropriate securities commissions and other
                  regulatory authorities in Canada and the United States (the
                  "Securities Authorities"). Bidco shall file the Offering
                  Documents on a timely basis with the Securities Authorities.
                  In connection therewith, on the date of commencement of the
                  Offer, Bidco, Conoco and Gulf Indonesia shall file a statement
                  (the

                                      -7-


                  "Statement") with the SEC that constitutes both (i) the Tender
                  Offer Statement on Schedule TO of Bidco and Conoco with
                  respect to the Offer, which shall be filed and signed by Bidco
                  and Conoco and (ii) the Rule 13e-3 Transaction Statement on
                  Schedule 13E-3 of Bidco, Conoco and Gulf Indonesia with
                  respect to the Offer (as amended from time to time, the
                  "Schedule 13E-3"), which shall be filed and signed by Bidco,
                  Conoco and Gulf Indonesia. Gulf Indonesia shall provide such
                  information as is reasonably required by Bidco for inclusion
                  in the Offering Documents and the Statement. The Offering
                  Documents and the Statement, when filed with the Securities
                  Authorities and, if applicable, mailed to the Gulf Indonesia
                  Shareholders, shall in all material respects comply with the
                  requirements of applicable Law. The terms of the Offer shall
                  comply with the terms of this Agreement. In making the Offer,
                  Bidco shall comply in all material respects with the
                  provisions of applicable Law. Each of Conoco, Bidco and Gulf
                  Indonesia shall promptly correct any information provided by
                  it for use in the Offering Documents and the Statement if and
                  to the extent that such information shall have become false or
                  misleading in any material respect, and each of Conoco and
                  Bidco shall take all steps necessary to amend or supplement
                  the Offering Documents and the Statement and to cause the
                  Offering Documents and the Statement as so amended or
                  supplemented to be filed with the SEC and the Offering
                  Documents and the Statement as so amended or supplemented to
                  be disseminated to Gulf Indonesia's Shareholders, in each case
                  as and to the extent required by applicable Securities Laws.
                  Gulf Indonesia shall join in such steps, filings and
                  disseminations to the extent relating to the Schedule 13E-3.
                  Conoco and Bidco shall provide Gulf Indonesia and its counsel
                  with a copy of any written comments or telephonic notification
                  of any oral comments they or their counsel may receive from
                  the Securities Authorities or their staff with respect to the
                  Offering Documents or the Statement promptly after the receipt
                  of such comments.

         (c)      Conoco and Bidco agree that the initial expiry time (the
                  "Initial Expiry Time") for the Offer will be 6:00 p.m. (New
                  York time) on the 36th day following the day of the mailing of
                  the Offering Documents to the Gulf Indonesia Shareholders or,
                  if such day is not a business day, on the next business day
                  thereafter.

         (d)      Subject to the satisfaction or, to the extent permitted
                  hereunder, waiver of the conditions set forth in Schedule A
                  and Article VI, Bidco shall promptly (but in no event later
                  than three business days), after taking up the Gulf Indonesia
                  Shares under the Offer, accept for payment and pay for all
                  Gulf Indonesia Shares validly tendered (and not properly
                  withdrawn) pursuant to the Offer.

2.2      ACTIONS BY GULF INDONESIA

         Gulf Indonesia covenants in favour of Conoco and Bidco that:

         (a)      it will provide a list of the Gulf Indonesia Shareholders, a
                  list of the holders of Gulf Indonesia Options, and a list of
                  the holders of any other rights, warrants or

                                      -8-


                  convertible securities currently outstanding (with full
                  particulars as to the purchase, exercise or conversion price,
                  vesting and expiry date) prepared by Gulf Indonesia (as well
                  as a security position listing from each depositary, including
                  The Canadian Depositary for Securities Limited and Cede & Co.)
                  and deliver such lists to Bidco as soon as practicable
                  following the execution of this Agreement, and will obtain and
                  deliver to Bidco thereafter supplemental lists setting out any
                  changes thereto from time to time as requested by Conoco
                  following the execution of this Agreement, all such deliveries
                  to be in both printed form and, if available,
                  computer-readable format; and

         (b)      sufficiently in advance of the mailing of the Offering
                  Documents, so that the Schedule 14D-9 can be mailed together
                  with the Offering Documents, Gulf Indonesia will convene a
                  meeting of the Board of Directors of Gulf Indonesia to approve
                  the Schedule 14D-9, which Schedule 14D-9 shall include the
                  recommendation referred to in Section 3.1(a), subject to the
                  provisions of Section 7.3, and all information required to be
                  included in a directors' circular under the Securities Act.

2.3      SCHEDULE 14D-9

         Gulf Indonesia shall prepare the Schedule 14D-9 in both English and, if
required under the laws of Quebec, French in compliance with the Securities
Laws. Gulf Indonesia shall cause the Schedule 14D-9 and any other documentation
required by the Exchange Act and the Securities Act to be sent to each Gulf
Indonesia Shareholder and each holder of Gulf Indonesia Options to be issued and
so sent together with the Offering Documents. Gulf Indonesia shall, on the date
the Statement is filed with the SEC, file with the SEC and the Securities
Authorities the Schedule 14D-9 describing the recommendations referred to in
Section 3.1(a), subject to the provisions of Section 7.3. The Schedule 14D-9 and
any other documents required to be filed by Gulf Indonesia, when filed with the
Securities Authorities, and, if applicable, mailed to the Gulf Indonesia
Shareholders, shall in all material respects comply with the requirements of
applicable Law. Bidco and its counsel shall be given a reasonable opportunity to
review the Schedule 14D-9 and any other documents required to be filed by Gulf
Indonesia which shall be delivered in accordance with the notice provisions of
Section 9.1 (and which opportunity, in any event, will be at least two days
prior to the Gulf Indonesia Board of Directors' meeting referred to in Section
2.2(b)), and comment thereon prior to their being mailed to Gulf Indonesia
Shareholders and filed with the Securities Authorities. Each of Conoco, Bidco
and Gulf Indonesia shall promptly correct any information provided by it for use
in the Schedule 14D-9 and any other documents required to be filed by Gulf
Indonesia if and to the extent that such information shall have become false or
misleading in any material respect. Gulf Indonesia shall take all steps
necessary to amend or supplement the Schedule 14D-9 and any other documents
required to be filed by Gulf Indonesia and to cause the Schedule 14D-9 and such
other documents as so amended or supplemented to be filed with the SEC and the
Schedule 14D-9 and such other documents as so amended or supplemented to be
disseminated to the Gulf Indonesia Shareholders, in each case as and to the
extent required by applicable Securities Laws. Gulf Indonesia shall provide
Conoco and Bidco and their counsel with a copy of any written

                                      -9-


comments or telephonic notification of any oral comments they or their counsel
may receive from the Securities Authorities or their staff with respect to the
Schedule 14D-9 and such other documents promptly after the receipt of such
comments.

2.4      PREPARATION OF FILINGS

         Conoco, Bidco and Gulf Indonesia shall co-operate in the preparation of
any application for orders, registrations, consents, filings, circulars and
approvals and the preparation of any required documents reasonably deemed by the
Parties to be necessary to discharge their respective obligations under
applicable Laws in connection with this Agreement, the Offer, any Compulsory
Acquisition and any Subsequent Acquisition Transaction.

2.5      SHAREHOLDER COMMUNICATIONS

         Gulf Indonesia, Bidco and Conoco agree to co-operate in the preparation
of presentations, if any, to investors, regarding the Offer prior to the making
of such presentations and to promptly consult with each other in issuing any
press releases or otherwise making public statements with respect to this
Agreement or the Offer and in making any filing with any Governmental Entity or
with the NYSE with respect thereto. Notwithstanding the foregoing, no Party
shall issue any press release regarding the Offer, this Agreement or any
transaction relating to this Agreement without first providing a draft of such
press release to the other Parties and prior notice and reasonable opportunity
for comment; provided, however, that the foregoing shall be subject to each
Party's overriding obligation to make any such disclosure required in accordance
with applicable Laws. If such disclosure is required and the other Parties have
not reviewed or commented on the disclosure, the Party making such disclosure
shall use all commercially reasonable efforts to give prior oral or written
notice to the other Parties, and if such prior notice is not possible, to give
such notice immediately following such disclosure.

2.6      WITHHOLDING

         Conoco and Bidco shall be entitled to deduct and withhold from the
amount otherwise payable pursuant to this Agreement or the Offer to any Gulf
Indonesia Shareholder such amounts as are required to be deducted and withheld
with respect to the making of such payment under the United States Internal
Revenue Code of 1986, as amended (the "Code"), or any other provision of
domestic or foreign (whether national, federal, state, provincial, local or
otherwise) Tax Law. To the extent that amounts are so deducted and withheld and
paid over to the appropriate taxing authority by Conoco or Bidco, such deducted
and withheld amounts shall be treated for all purposes of this Agreement and the
Offer as having been paid to the Gulf Indonesia Shareholder in respect of which
such deduction and withholding was made by Conoco or Bidco.

2.7      COMPULSORY ACQUISITION OR SUBSEQUENT ACQUISITION TRANSACTION

         (a) If the Minimum Condition is satisfied and Bidco takes up and pays
for Gulf Indonesia Shares under the Offer, then subject to satisfaction or
waiver of the conditions set forth in Article VI, Bidco agrees to use its best
efforts to acquire the balance of the Gulf Indonesia

                                      -10-


Shares as soon as practicable after completion of the Offer by way of Compulsory
Acquisition or Subsequent Acquisition Transaction carried out for a
consideration per Gulf Indonesia Share that is identical to the consideration
paid under the Offer, provided that the foregoing shall not be construed to
prevent Conoco or Bidco from acquiring, directly or indirectly, additional Gulf
Indonesia Shares in the open market or in a privately negotiated transaction in
accordance with Securities Laws after the Expiry Date.

         (b) If Bidco is required under Section 2.7(a) to use its best efforts
to acquire the balance of the Gulf Indonesia Shares, Gulf Indonesia agrees to
use its best efforts to assist Bidco in satisfying its obligations under Section
2.7(a). Without limiting the generality of the foregoing, Gulf Indonesia agrees
that if Bidco seeks to effect a Subsequent Acquisition Transaction which
requires approval of the Gulf Indonesia Shareholders in a meeting of Gulf
Indonesia Shareholders, Gulf Indonesia shall take all action necessary in
accordance with the Securities Laws, other applicable Laws, Gulf Indonesia's
constating documents and the requirements of the NYSE or any other Governmental
Entity having jurisdiction, to duly call, give notice of, convene and hold a
meeting of Gulf Indonesia Shareholders as promptly as practicable to consider
and vote upon the action proposed by Bidco. In the event of such a meeting, Gulf
Indonesia shall use its best efforts to file with the applicable Securities
Authorities, and mail to the Gulf Indonesia Shareholders a management proxy
circular, or if requested by Bidco, an information statement, and all related
materials at the time required to be mailed to the Gulf Indonesia Shareholders
and all amendments or supplements thereto, if any. Conoco, Bidco and Gulf
Indonesia shall each use their respective best efforts to obtain and furnish the
information required to be included in any management proxy circular or
information statement, as applicable. Such information, on both the date the
management proxy circular or information statement, as applicable, is first
mailed to Gulf Indonesia Shareholders and on the date any such meeting is held,
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not misleading
and will comply in all material requests with all applicable requirements of
Law. Conoco, Bidco and Gulf Indonesia each agree to correct promptly any such
information provided by it for use in any management proxy circular or
information statement, as applicable, which shall have become false or
misleading. Each party shall provide the others with a copy of any written
comments or telephonic notification of any oral comments they or their counsel
may receive from the Securities Authorities or their staff with respect to the
management proxy circular or information statement, as applicable, promptly
after receipt of such comments.

                                      -11-


                                   ARTICLE III
                REPRESENTATIONS AND WARRANTIES OF GULF INDONESIA

3.1      REPRESENTATIONS AND WARRANTIES

         Gulf Indonesia hereby represents and warrants to and in favour of
Conoco and Bidco as follows and acknowledges that Conoco and Bidco are relying
upon such representations and warranties in connection with the entering into of
this Agreement and the making of the Offer:

         (a)      Board Approval and Fairness. The Independent Committee of the
                  Board of Directors of Gulf Indonesia (the "Independent
                  Committee") and the Board of Directors of Gulf Indonesia have
                  both unanimously approved the Offer and this Agreement and
                  determined unanimously that the Offer is fair to the Gulf
                  Indonesia Shareholders and is in the best interests of Gulf
                  Indonesia and the Gulf Indonesia Shareholders and have
                  resolved unanimously to recommend to the Gulf Indonesia
                  Shareholders that they accept the Offer and tender their Gulf
                  Indonesia Shares to the Offer. Conoco and Bidco acknowledge
                  that eight members of the Board of Directors of Gulf Indonesia
                  have declared their interests as directors or officers of
                  Conoco and its affiliates and have abstained from voting as
                  directors of Gulf Indonesia in connection with the aforesaid
                  approval, determination and recommendation. The Independent
                  Committee has received an opinion from RBC Dominion Securities
                  Inc. addressed to the Board of Directors of Gulf Indonesia
                  that the consideration to be received under the Offer is fair
                  from a financial point of view to the Gulf Indonesia
                  Shareholders. The Independent Committee has received an
                  opinion from RBC Dominion Securities Inc. addressed to the
                  Board of Directors of Gulf Indonesia prepared in accordance
                  with Rule 61-501 of the Ontario Securities Commission and
                  Policy Q-27 of the Commission des valeurs mobilieres du Quebec
                  that the fair market value of the Gulf Indonesia Shares is in
                  a range of values of $11.50 to $14.00.

         (b)      Organization and Qualification. Gulf Indonesia and each of its
                  Subsidiaries is a corporation duly incorporated or a person
                  duly created, validly existing and in good standing under the
                  laws of its jurisdiction of incorporation, continuance or
                  creation and has the requisite corporate or other power and
                  authority to own its properties as now owned and to carry on
                  its business as it is now being conducted. Gulf Indonesia and
                  each of its Subsidiaries is duly registered or otherwise
                  authorized to do business and each is in good standing in each
                  jurisdiction in which the character of its properties, owned,
                  leased, licensed or otherwise held, or the nature of its
                  activities makes such registration necessary, except where the
                  failure to be so registered or in good standing could not
                  reasonably be expected to have a material adverse effect on
                  Gulf Indonesia and its Subsidiaries taken as a whole or
                  prevent or materially delay the making and completion of the
                  Offer by Bidco, a Compulsory Acquisition or a Subsequent
                  Acquisition Transaction or any of the other transactions
                  contemplated hereby.

                                      -12-


         (c)      Authority Relative to this Agreement. Gulf Indonesia has the
                  requisite corporate authority to enter into this Agreement and
                  to carry out its obligations hereunder. The execution and
                  delivery of this Agreement and the consummation of the
                  transactions contemplated hereby have been duly authorized by
                  the Board of Directors of Gulf Indonesia and no other
                  corporate proceedings on the part of Gulf Indonesia are
                  necessary to authorize this Agreement subject, in the case of
                  any Subsequent Acquisition Transaction, to approval of the
                  Subsequent Acquisition Transaction by the votes of the
                  requisite number of Gulf Indonesia Shares. This Agreement has
                  been duly executed and delivered by Gulf Indonesia and
                  constitutes a legal, valid and binding obligation of Gulf
                  Indonesia enforceable against Gulf Indonesia in accordance
                  with its terms, subject to the qualification that such
                  enforceability may be limited by bankruptcy, insolvency,
                  reorganization or other laws of general application relating
                  to or affecting rights of creditors generally and equitable
                  remedies, including specific performance, that are
                  discretionary and may not be ordered.

         (d)      No Violations.

                  (i)      To the best of Gulf Indonesia's knowledge, after
                           reasonable inquiry, neither the execution and
                           delivery of this Agreement by Gulf Indonesia nor the
                           completion of the Offer, a Compulsory Acquisition or
                           a Subsequent Acquisition Transaction contemplated
                           hereby nor compliance by Gulf Indonesia with any of
                           the provisions hereof will: (1) violate, conflict
                           with, or result in a breach of any provision of,
                           require any consent, approval or notice under, or
                           constitute a default (or an event which, with notice
                           or lapse of time or both, would constitute a default)
                           or result in a right of termination or acceleration
                           under, or permit any person to exercise rights
                           against Gulf Indonesia or any of its Subsidiaries, or
                           have an adverse effect on Gulf Indonesia or any of
                           its Subsidiaries, or result in the creation of any
                           lien, charge, encumbrance, claim or right of others
                           (collectively, "encumbrance") upon any of the
                           properties or assets of Gulf Indonesia or any of its
                           Subsidiaries or cause any indebtedness to come due
                           before its stated maturity or cause any credit to
                           cease to be available, under any of the terms,
                           conditions or provisions of (A) their respective
                           charters or by-laws or other comparable
                           organizational documents or (B) any material note,
                           bond, mortgage, indenture, loan agreement, deed of
                           trust, agreement, lien, contract or other instrument
                           or obligation to which Gulf Indonesia or any of its
                           Subsidiaries is a party or to which any of them, or
                           any of their respective properties or assets, may be
                           subject or by which Gulf Indonesia or any of its
                           Subsidiaries is bound; (2) subject to compliance with
                           the statutes and regulations referred to in Schedule
                           B, "Appropriate Regulatory Approvals", violate any
                           Law applicable to Gulf Indonesia or any of its
                           Subsidiaries or any of their respective properties or
                           assets (except, in the case of each of clauses (1)
                           and (2) above, for such violations, conflicts,
                           breaches, defaults, terminations, accelerations or

                                      -13-


                           creations of encumbrances which, or any consents,
                           approvals or notices which if not given or received,
                           could not reasonably be expected to have any material
                           adverse effect on Gulf Indonesia and its Subsidiaries
                           taken as a whole or prevent or materially delay the
                           making and completion of the Offer by Bidco, a
                           Compulsory Acquisition or a Subsequent Acquisition
                           Transaction or any of the other transactions
                           contemplated hereby); (3) cause the suspension or
                           revocation of any authorization, consent, approval or
                           licence currently in effect which could reasonably be
                           expected to have a material adverse effect on Gulf
                           Indonesia and its Subsidiaries taken as a whole or
                           prevent or materially delay the making and completion
                           of the Offer by Bidco, a Compulsory Acquisition or a
                           Subsequent Acquisition Transaction or any of the
                           other transactions contemplated hereby; or (4) result
                           in any payment (including severance, unemployment
                           compensation, golden parachute, bonus or otherwise)
                           becoming due to any director or employee of Gulf
                           Indonesia or any Subsidiary.

                  (ii)     Subject to obtaining the Appropriate Regulatory
                           Approvals set forth in Schedule B and other than in
                           connection with or in compliance with the provisions
                           of applicable Securities Laws, (1) there is no legal
                           impediment to the delivery of the Schedule 14D-9 or
                           the Schedule 13E-3, and (2) no filing or registration
                           with, or authorization, consent or approval of, any
                           Governmental Entity is required to be obtained or
                           made by Gulf Indonesia or any of its Subsidiaries in
                           connection with the execution, delivery and
                           performance of this Agreement, the making or
                           completion of the Offer by Bidco, a Compulsory
                           Acquisition or any Subsequent Acquisition Transaction
                           or the delivery of the Schedule 14D-9 or the Schedule
                           13E-3, except for such filings or registrations
                           which, if not made, or for such authorizations,
                           consents or approvals which, if not received, could
                           not reasonably be expected to have a material adverse
                           effect on Gulf Indonesia and its Subsidiaries taken
                           as a whole or prevent or materially delay the making
                           and completion of the Offer by Bidco, a Compulsory
                           Acquisition or any Subsequent Acquisition Transaction
                           or any of the other transactions contemplated hereby.

(e)      Capitalization. As of the date hereof, the authorized share capital of
         Gulf Indonesia consists of an unlimited number of common shares with a
         nominal or par value of $0.01 per share and an unlimited number of
         preferred shares without nominal or par value, issuable in series. As
         at June 4, 2002, Gulf Indonesia had 88,014,315 issued and outstanding
         Gulf Indonesia Shares and no preferred or other shares issued and
         outstanding. Since January 1, 2002 to the date of this Agreement, Gulf
         Indonesia has not issued any Gulf Indonesia Shares (other than pursuant
         to the Gulf Indonesia Options or upon the vesting of restricted stock
         units). As at June 4, 2002, there were no more than 5,199,227 Gulf
         Indonesia Options outstanding, each exercisable for one Gulf Indonesia
         Share. As at June 4, 2002, there were 45,534 stock appreciation rights
         and 30,350 restricted stock units

                                      -14-


         outstanding under the Gulf Indonesia Stock Plans. Except as set forth
         above, and other than under the Gulf Indonesia Stock Plans, there are
         no options, warrants or other rights, "phantom" stock rights, stock
         appreciation rights, stock-based performance units, agreements or
         commitments of any nature whatsoever requiring or which may require the
         issuance, sale or transfer by Gulf Indonesia of any shares of Gulf
         Indonesia or its Subsidiaries or any other equity interest in Gulf
         Indonesia or its Subsidiaries or any securities convertible into, or
         exchangeable or exercisable for, or otherwise evidencing a right to
         acquire, any shares of Gulf Indonesia or its Subsidiaries or any other
         equity interest in Gulf Indonesia or its Subsidiaries. All outstanding
         Gulf Indonesia Shares have been duly authorized and validly issued, are
         fully paid and non-assessable and are not subject to, nor were they
         issued in violation of, any pre-emptive rights, and all Gulf Indonesia
         Shares issuable upon the exercise of outstanding Gulf Indonesia Options
         in accordance with their respective terms have been duly authorized
         and, upon issuance, will be validly issued as fully paid and
         non-assessable and will not be subject to any pre-emptive rights. Other
         than the Gulf Indonesia Shares and the Gulf Indonesia Options, there
         are no securities of Gulf Indonesia or of any Subsidiary outstanding
         which have the right to vote generally (or are convertible into or
         exchangeable for securities having the right to vote generally) with
         the Gulf Indonesia Shareholders on any matter. There are no outstanding
         contractual or other obligations of Gulf Indonesia or any Subsidiary to
         repurchase, redeem or otherwise acquire any of its securities or with
         respect to the voting or disposition of any outstanding securities of
         any of the Subsidiaries.

(f)      Reports. As of their respective dates: (i) Gulf Indonesia's audited
         financial statements as of and for the fiscal years ended December 31,
         2000 and December 31, 2001 (collectively, the "Financial Statements");
         (ii) Gulf Indonesia's Annual Information Forms dated March 19, 2001 and
         March 19, 2002, (including all documents incorporated by reference
         therein); (iii) Gulf Indonesia's Management Proxy Circular dated March
         19, 2001 in respect of its Annual Meeting of Shareholders held on May
         7, 2001 and Gulf Indonesia's Management Proxy Circular dated March 18,
         2002 in respect of its Annual Meeting of Shareholders held on May 6,
         2002; (iv) all forms, schedules, statements, reports, material change
         reports, press releases or other documents filed by Gulf Indonesia with
         the Registrar of Companies in New Brunswick or Securities Authorities
         since December 31, 2000; and (v) all offering documents used by Gulf
         Indonesia in the offering of its securities or filed with Securities
         Authorities or the NYSE since December 31, 2000: (1) are all the
         financial statements, information circulars, forms, reports,
         prospectuses or other documents required to be filed by it by virtue of
         the applicable Securities Laws since December 31, 2000; (2) at their
         respective dates did not contain any untrue statement of a material
         fact or omit to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the circumstances
         in which they were made, not misleading; and (3) complied in all
         material respects with all applicable Laws, including the Securities
         Laws. The Financial Statements and all financial statements of Gulf

                                      -15-


         Indonesia and its Subsidiaries included or incorporated by reference in
         such information circulars, forms, reports, statements, prospectuses
         and other documents were prepared in accordance with Canadian GAAP
         applied on a consistent basis during the periods involved (except (A)
         as otherwise indicated in such financial statements and the notes
         thereto or, in the case of audited statements, in the related report of
         Gulf Indonesia's independent auditors, or (B) in the case of unaudited
         interim statements, to the extent they may not include footnotes, are
         subject to normal year-end adjustments or may be condensed or summary
         statements), to the extent filed with the SEC, comply as to form in all
         material respects with applicable accounting requirements and the
         published rules and regulations of the SEC with respect thereto, and
         fairly present the consolidated financial position, results of
         operations and changes in financial position of Gulf Indonesia and its
         Subsidiaries as of the dates thereof and for the periods indicated
         therein (subject, in the case of any unaudited interim financial
         statements, to normal year-end adjustments) and reflect reserves
         required by Canadian GAAP in respect of all material contingent
         liabilities, if any, of Gulf Indonesia and its Subsidiaries on a
         consolidated basis.

(g)      Restrictions on Business Activities. Except as Publicly Disclosed by
         Gulf Indonesia or disclosed in writing to Conoco or Bidco prior to the
         date hereof, there is no agreement, judgment, injunction, order or
         decree binding upon Gulf Indonesia or any of its Subsidiaries that has
         or could reasonably be expected to have the effect of prohibiting,
         restricting or materially impairing any business of Gulf Indonesia or
         such Subsidiary, other than such agreements, judgments, injunctions,
         orders or decrees which could not reasonably be expected, individually
         or in the aggregate to, have a material adverse effect on Gulf
         Indonesia and its Subsidiaries taken as a whole.

(h)      Foreign Corrupt Practices Act. There have been no actions taken by or
         on behalf of Gulf Indonesia or its Subsidiaries that would cause Gulf
         Indonesia or any of its Subsidiaries to be in violation of the Foreign
         Corrupt Practices Act of the United States of America or the Corruption
         of Foreign Public Officials Act (Canada).

3.2      INVESTIGATION

         Any investigation by Conoco, Bidco and their respective advisors shall
not mitigate, diminish or affect the representations and warranties of Gulf
Indonesia pursuant to this Agreement.

3.3      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         The representations and warranties of Gulf Indonesia contained in this
Agreement shall expire and be terminated on the earlier of the consummation of
the Compulsory Acquisition or Subsequent Acquisition Transaction, as applicable,
and the date on which this Agreement is terminated in accordance with its terms.
Conoco and Bidco agree that, notwithstanding the survival of the representations
and warranties of Gulf Indonesia after the take up and payment of

                                      -16-


Gulf Indonesia Shares under the Offer, Gulf Indonesia shall have no liability in
damages to Conoco or Bidco for breaches of Gulf Indonesia's representations and
warranties.

                                   ARTICLE IV
               REPRESENTATIONS AND WARRANTIES OF CONOCO AND BIDCO

4.1      REPRESENTATIONS AND WARRANTIES

         Each of Conoco and Bidco hereby represents and warrants to and in
favour of Gulf Indonesia as follows and acknowledges that Gulf Indonesia is
relying upon such representations and warranties in connection with the entering
into of this Agreement:

         (a)      Organization and Qualification. Each of Conoco and Bidco is a
                  corporation duly incorporated, validly existing and in good
                  standing under the laws of its jurisdiction of incorporation
                  or continuance.

         (b)      Authority Relative to this Agreement. Each of Conoco and Bidco
                  has the requisite corporate authority to enter into this
                  Agreement and to carry out its obligations hereunder. The
                  execution and delivery of this Agreement and the making by
                  Bidco of the Offer contemplated hereby and the consummation of
                  the transactions contemplated hereby have been duly authorized
                  by the respective Boards of Directors of Conoco and Bidco and
                  no other corporate proceedings on the part of Conoco and Bidco
                  are necessary to authorize this Agreement or the making or
                  completion of the Offer or the consummation of the
                  transactions contemplated hereby. This Agreement has been duly
                  executed and delivered by each of Conoco and Bidco, as
                  applicable, and constitutes a legal, valid and binding
                  obligation of each of Conoco and Bidco, as applicable,
                  enforceable against each of them in accordance with its terms,
                  subject to the qualification that such enforceability may be
                  limited by bankruptcy, insolvency, reorganization or other
                  laws of general application relating to or affecting rights of
                  creditors generally and equitable remedies, including specific
                  performance, that are discretionary and may not be ordered.

         (c)      No Violations.

                  (i)      Neither the execution and delivery of this Agreement
                           by Conoco and Bidco nor the making or completion of
                           the Offer, a Compulsory Acquisition or a Subsequent
                           Acquisition Transaction contemplated hereby nor
                           compliance by Conoco and Bidco, as applicable, with
                           any of the provisions hereof or thereof will: (1)
                           violate, conflict with, or result in a breach of any
                           provision of, require any consent, approval or notice
                           under, or constitute a default (or an event which,
                           with notice or lapse of time or both, would
                           constitute a default) or result in a right of
                           termination or acceleration or create an encumbrance
                           under any of the terms, conditions or provisions of
                           their respective charters or by-laws or any material
                           contract or other instrument or obligation to which
                           Conoco or Bidco is a

                                      -17-


                           party or to which it, or any of its properties or
                           assets is subject or by which it is bound; (2)
                           subject to compliance with the statutes and
                           regulations referred to in Schedule B, "Appropriate
                           Regulatory Approvals", violate any Law applicable to
                           Conoco or Bidco or any of their respective properties
                           or assets (except, in the case of each of clauses (1)
                           and (2) above, for such violations, conflicts,
                           breaches, defaults, terminations, accelerations or
                           creations of encumbrances which, or any consents,
                           approvals or notices which if not given or received,
                           could not reasonably be expected to prevent or
                           materially delay the ability of Bidco to make or
                           complete the Offer, the Compulsory Acquisition or the
                           Subsequent Acquisition Transaction or any of the
                           other transactions contemplated hereby); or (3) cause
                           the suspension or revocation of any authorization,
                           consent, approval or licence currently in effect
                           which could reasonably be expected to prevent or
                           materially delay the making and completion of the
                           Offer, the Compulsory Acquisition or the Subsequent
                           Acquisition Transaction, as applicable, or any of the
                           other transactions contemplated hereby.

                  (ii)     Subject to obtaining the Appropriate Regulatory
                           Approvals set forth in Schedule B and other than in
                           connection with or in compliance with the provisions
                           of applicable Securities Laws, (1) there is no legal
                           impediment to the making or completion of the Offer,
                           a Compulsory Acquisition or any Subsequent
                           Acquisition Transaction by Bidco, and (2) no filing
                           or registration with, or authorization, consent or
                           approval of, any Governmental Entity is required to
                           be obtained or made by Conoco or Bidco, as
                           applicable, in connection with the execution,
                           delivery and performance of this Agreement or the
                           making or completion of the Offer, a Compulsory
                           Acquisition or any Subsequent Acquisition
                           Transaction, or the delivery of the Offering
                           Documents and the Statement, except for such filings
                           or registrations which, if not made, or for such
                           authorizations, consents or approvals which, if not
                           received, could not reasonably be expected to prevent
                           or materially delay the making and completion of the
                           Offer by Bidco, a Compulsory Acquisition or any
                           Subsequent Acquisition Transaction, as applicable, or
                           any of the other transactions contemplated hereby.

(d)      Sufficient Funds. Bidco will have, at the date of the Offer and
         throughout the period of and after the Offer, sufficient funds or
         adequate arrangements (as such term is understood for purposes of
         Section 167 of the Securities Act) for financing in place to ensure
         sufficient funds to purchase all Gulf Indonesia Shares tendered under
         the Offer.

                                      -18-


4.2      INVESTIGATION

         Any investigation by Gulf Indonesia and its advisors shall not
mitigate, diminish or affect the representations and warranties of Conoco and
Bidco pursuant to this Agreement.

4.3      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         The representations and warranties of Conoco and Bidco contained in
this Agreement shall expire and be terminated on the earlier of the consummation
of the Compulsory Acquisition or Subsequent Acquisition Transaction, as
applicable, and the date on which this Agreement is terminated in accordance
with its terms. Gulf Indonesia agrees that, notwithstanding the survival of the
representations and warranties of Conoco and Bidco after the take up and payment
of Gulf Indonesia Shares under the Offer, Conoco and Bidco shall have no
liability in damages to Gulf Indonesia for breaches of the representations and
warranties of Conoco and Bidco.

                                    ARTICLE V
                                    COVENANTS

5.1      COVENANTS OF GULF INDONESIA REGARDING THE CONDUCT OF BUSINESS

(1) Gulf Indonesia covenants and agrees that, during the period from the date of
this Agreement until the earlier of the consummation of the Compulsory
Acquisition or Subsequent Acquisition Transaction, as applicable, and the time
that this Agreement is terminated in accordance with its terms, unless Conoco
shall otherwise agree in writing, and except in respect of transactions entered
into with Conoco or Bidco, or transactions specifically identified to, and
approved by the Board of Directors of Gulf Indonesia prior to the date of this
Agreement and except as is otherwise expressly permitted by this Agreement or
the Offer:

         (a)      the business of Gulf Indonesia and its Subsidiaries shall be
                  conducted only in, and Gulf Indonesia and its Subsidiaries
                  shall not take any action except in, the usual and ordinary
                  course of business and consistent with past practice, and Gulf
                  Indonesia shall use all commercially reasonable efforts to
                  maintain and preserve its and their business organization,
                  assets, employees, advantageous business relationships and the
                  attendant goodwill of Gulf Indonesia and its Subsidiaries and
                  to contribute to retention of that goodwill to and after the
                  consummation of a Compulsory Acquisition or a Subsequent
                  Acquisition Transaction, as applicable;

         (b)      Gulf Indonesia shall not, and shall not permit any of its
                  Subsidiaries to, directly or indirectly: (i) issue, grant,
                  sell or pledge or agree to issue, grant, sell or pledge any
                  shares of Gulf Indonesia or its Subsidiaries or other equity
                  interests of Gulf Indonesia or its Subsidiaries, or options,
                  warrants, rights or units to acquire any such shares or
                  interests, securities convertible into or exchangeable or
                  exercisable for, or otherwise evidencing a right to acquire,
                  shares of Gulf Indonesia or its Subsidiaries or other equity
                  interests of Gulf Indonesia or its Subsidiaries, other

                                      -19-


                  than (A) the issuance of Gulf Indonesia Shares issuable
                  pursuant to the terms of Gulf Indonesia Options, (B) the
                  granting of Gulf Indonesia Options in the ordinary course
                  consistent with past practice, (C) in transactions between two
                  or more Gulf Indonesia wholly-owned Subsidiaries or between
                  Gulf Indonesia and a Gulf Indonesia wholly-owned Subsidiary,
                  (D) pledges made pursuant to pledge commitments contained in
                  written agreements entered into prior to the date hereof, and
                  (E) as required under applicable Law, or existing contracts;
                  (ii) redeem, purchase or otherwise acquire any of its
                  outstanding securities, unless otherwise required by the terms
                  of such securities and other than in transactions between two
                  or more Gulf Indonesia wholly-owned Subsidiaries or between
                  Gulf Indonesia and a Gulf Indonesia wholly-owned Subsidiary;
                  (iii) adopt a plan of liquidation or resolution providing for
                  the liquidation, dissolution, merger, consolidation, spin-off,
                  demerger or a reorganization of Gulf Indonesia or any of its
                  Subsidiaries; or (iv) enter into, modify or terminate any
                  contract, agreement, commitment or arrangement with respect to
                  any of the foregoing;

         (c)      Gulf Indonesia shall conduct itself so as to keep Conoco
                  informed as to the material decisions or actions required to
                  be made or taken by Gulf Indonesia's Board of Directors with
                  respect to the operation of its business; provided, in each
                  case, that such disclosure is not otherwise prohibited by
                  reason of a confidentiality obligation owed to any person or
                  otherwise prevented by applicable Law;

         (d)      Gulf Indonesia shall not, and shall not permit any of its
                  Subsidiaries to, directly or indirectly: (i) sell, pledge,
                  lease, dispose of or encumber any assets of Gulf Indonesia or
                  of any Subsidiary, except in the ordinary course of business
                  consistent with past practice; (ii) acquire (by merger,
                  amalgamation, consolidation or acquisition of shares or assets
                  or otherwise) any corporation, partnership or other person or
                  other business organization or division thereof, or, except
                  for investments in securities made in the ordinary course of
                  business consistent with past practice, make any investment
                  either by the purchase of securities, contributions of capital
                  (other than to wholly-owned Subsidiaries), property transfer,
                  or, except in the ordinary course of business consistent with
                  past practice, purchase of any property or assets of any other
                  person, if any of the foregoing would be material to the
                  business or financial condition of Gulf Indonesia and its
                  Subsidiaries taken as a whole; (iii) commence or undertake a
                  substantial expansion of its business facilities or operations
                  or an expansion that is out of the ordinary and regular course
                  of business consistent with past practice in light of current
                  market and economic conditions, (iv) incur any indebtedness
                  for borrowed money or any other liability or obligation or
                  issue any debt securities or assume, guarantee, endorse or
                  otherwise as an accommodation become responsible for the
                  obligations of any other person, or make any loans or
                  advances, except (A) in the ordinary course of business
                  consistent with past practice, (B) for refinancing of existing
                  debt on substantially the same or more favourable terms, and
                  (C) for daylight employee assistance loans in connection

                                      -20-


                  with the exercise of options; (v) pay, discharge or satisfy
                  any claims, liabilities or obligations other than the payment,
                  discharge or satisfaction, in the ordinary course of business
                  consistent with past practice, of liabilities reflected or
                  reserved against in the Financial Statements or incurred in
                  the ordinary course of business consistent with past practice;
                  (vi) authorize, recommend or propose any release or
                  relinquishment of any contractual right, other than in the
                  ordinary course of business consistent with past practice;
                  (vii) waive, release, grant or transfer any rights of material
                  value or modify or change any existing material licence,
                  lease, contract or other document, other than in the ordinary
                  course of business consistent with past practice; (viii)
                  except in the ordinary course of business consistent with past
                  practice or as required by applicable Laws, enter into or
                  modify in any material respect any contract, agreement,
                  commitment or arrangement which new contract or series of
                  related new contracts or modification to an existing contract
                  or series of related existing contracts could reasonably be
                  expected to have a material adverse effect on Gulf Indonesia
                  and its Subsidiaries taken as a whole; or (ix) authorize or
                  propose any of the foregoing, or enter into or modify any
                  contract, agreement, commitment or arrangement to do any of
                  the foregoing; provided, however, that the foregoing shall not
                  apply to any action, expenditure, transaction or agreement
                  (including a series of transactions) included in the 2002
                  budget approved by the Board of Directors of Gulf Indonesia on
                  December 10, 2001 (including budget amendments approved by the
                  Board of Directors of Gulf Indonesia prior to June 1, 2002) or
                  with a value of less than $5 million individually or $10
                  million in the aggregate (for greater certainty in the case of
                  any joint venture, partnership or similar arrangement to which
                  Gulf Indonesia is a party, value shall be measured only as the
                  value of Gulf Indonesia's proportionate interest);

         (e)      Gulf Indonesia shall not, and shall not permit any of its
                  Subsidiaries to, (i) grant or promise to grant to any officer
                  or director, other than as disclosed to Conoco in writing
                  prior to the date hereof, an increase or improvement in
                  compensation or benefits in any form, (ii) other than in the
                  ordinary course of business consistent with past practice
                  (including annual increases), grant or promise to grant to any
                  other employee any increase in compensation or benefits in any
                  form other than to the extent required under any existing
                  collective bargaining agreements or union contracts, (iii)
                  make any loan to any officer or director except for daylight
                  employee assistance loans in connection with the exercise of
                  options, (iv) take any action with respect to the grant or
                  increase of any severance or termination pay to, or the
                  entering into or amendment of any employment or consulting
                  agreement with, any employee of Gulf Indonesia or any of its
                  Subsidiaries, or with respect to any increase of benefits
                  payable under its current severance or termination pay
                  policies, (v) except as provided in clause (f), take any
                  action to accelerate any rights or benefits, or make any
                  material determinations not in the ordinary course of business
                  consistent with past practice under any Gulf Indonesia Plan,
                  collective bargaining agreements or union contracts, or (vi)
                  except as

                                      -21-


                  required by Law, establish, adopt, enter into or amend any
                  collective bargaining arrangement;

         (f)      Gulf Indonesia shall, whether through its Board of Directors
                  or otherwise, accelerate the vesting of any unvested Gulf
                  Indonesia Options or accelerate the release of, or the expiry
                  date of any hold period relating to, any Gulf Indonesia Shares
                  held in any employee share purchase plan so that any
                  entitlement to a Gulf Indonesia Share becomes exercisable or
                  fully vested prior to expiry of the Offer, but shall not
                  otherwise amend, vary or modify such plans or the Gulf
                  Indonesia Stock Plans; Gulf Indonesia shall take all actions
                  required so that all Gulf Indonesia Options not exercised
                  prior to expiry of the Offer shall cease to be exercisable
                  after the Expiry Time and no stock appreciation rights or
                  restricted stock units shall remain outstanding. Gulf
                  Indonesia may make arrangements to permit holders of Gulf
                  Indonesia Options to exercise such options on a conditional
                  basis (conditional on Bidco taking up and paying for the Gulf
                  Indonesia Shares). Alternatively, Gulf Indonesia may make
                  arrangements to cancel Gulf Indonesia Options in exchange for
                  a cash payment equal to the difference, if any, between the
                  price per Gulf Indonesia Share under the Offer and the
                  applicable exercise price. Gulf Indonesia will use
                  commercially reasonable efforts to encourage the exercise of
                  the Gulf Indonesia Options in the context of the Offer;

         (g)      Gulf Indonesia shall notify Conoco of any material adverse
                  change in respect of Gulf Indonesia or its Subsidiaries
                  forthwith upon Gulf Indonesia becoming aware of same;

         (h)      Gulf Indonesia shall not take, and shall not permit any
                  Subsidiary to take any action (including, without limitation
                  and for greater certainty, any action that would otherwise be
                  permitted to be taken under the terms of this Agreement), if
                  such action could reasonably be expected to prevent,
                  materially impede or make more difficult or burdensome in any
                  material respect, the obtainment of the Appropriate Regulatory
                  Approvals or any of the transactions contemplated hereby;

         (i)      Gulf Indonesia shall not, and shall not permit its
                  Subsidiaries to (A) declare, set aside or pay any dividends
                  on, or make any other distributions in respect of, any of its
                  capital stock, other than dividends and distributions by a
                  direct or indirect wholly owned subsidiary of Gulf Indonesia
                  to Gulf Indonesia or (B) split, combine or reclassify any of
                  its capital stock or issue or authorize the issuance of any
                  other securities in respect of, in lieu of or in substitution
                  for shares of its capital stock;

         (j)      Gulf Indonesia shall not, and shall not permit its
                  Subsidiaries to make or revoke any material Tax election,
                  other than consistent with past practice, unless required by
                  applicable Law, or resolve any Tax audit or other similar
                  proceeding in respect of material Taxes payable by Gulf
                  Indonesia or its Subsidiaries; and




                                      -22-


         (k)      Gulf Indonesia shall not, and shall not permit its
                  Subsidiaries to, make any change in any method of accounting
                  or accounting practice or policies for financial accounting
                  policies other than those required by GAAP or required by
                  applicable Law or Securities Authorities.

5.2  COVENANTS OF GULF INDONESIA REGARDING THE PERFORMANCE OF OBLIGATIONS AND
     SUPPLY OF INFORMATION

(1) Gulf Indonesia shall and shall cause its Subsidiaries to perform all
obligations required to be performed by Gulf Indonesia or any of its
Subsidiaries under this Agreement, co-operate with Conoco and Bidco in
connection therewith, and do all such other acts and things as may be reasonably
requested by Conoco and are necessary or desirable in order to consummate and
make effective, as soon as reasonably practicable, the transactions contemplated
in this Agreement and, without limiting the generality of the foregoing, Gulf
Indonesia shall and where appropriate shall cause its Subsidiaries to:

         (a)      apply for and use all commercially reasonable efforts to
                  obtain all Appropriate Regulatory Approvals relating to Gulf
                  Indonesia or any of its Subsidiaries (including promptly
                  complying with all requests for information) and, in doing so,
                  to keep Conoco reasonably informed as to the status of the
                  proceedings related to obtaining the Appropriate Regulatory
                  Approvals, including, but not limited to, providing Conoco
                  with copies of all related applications and notifications, in
                  draft form, and requests for information in order for Conoco
                  to provide its reasonable comments;

         (b)      defend all lawsuits or other legal, regulatory or other
                  proceedings challenging or affecting this Agreement or the
                  consummation of the transactions contemplated hereby; and

         (c)      use all commercially reasonable efforts to obtain all
                  necessary waivers, consents and approvals required to be
                  obtained by Gulf Indonesia or its Subsidiaries from other
                  parties to loan agreements, leases, licences or other
                  contracts, provided that such waivers, consents and approvals
                  may be conditional on Conoco taking up Gulf Indonesia Shares
                  under the Offer and to the extent such waivers, consents and
                  approvals require an adverse modification to the terms of such
                  documents or prepayment of any funds or the incurring of
                  additional obligations, shall be subject to Conoco's prior
                  written consent.

(2) Gulf Indonesia shall give Conoco the opportunity to participate, at its own
expense, in the defence or settlement of any shareholder litigation against Gulf
Indonesia relating to any transaction contemplated hereby; provided, however,
that no such settlement shall be agreed to without Conoco's prior written
consent (which consent shall not be unreasonably withheld or delayed if such
settlement only involves monetary payment).

(3) Gulf Indonesia covenants and agrees that none of the information supplied or
to be supplied by Gulf Indonesia for inclusion or incorporation by reference in
the Offering





                                      -23-

Documents, the Statement, the Schedule 14D-9 or the management proxy circular or
information statement described in Section 2.7(b) will, at the time such
document is filed with the Securities Authorities, at any time it is amended or
supplemented or at the time it is first published, sent or given to the Gulf
Indonesia Shareholders, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading.

5.3      COVENANTS OF CONOCO AND BIDCO REGARDING THE PERFORMANCE OF OBLIGATIONS
         AND SUPPLY OF INFORMATION

         (1) Each of Conoco and Bidco shall, and Conoco shall cause its other
subsidiaries to, perform all obligations required to be performed by Conoco,
Bidco or any of Conoco's subsidiaries under this Agreement, co-operate with Gulf
Indonesia in connection therewith, and do all such other acts and things as may
be necessary or desirable in order to consummate and make effective, as soon as
reasonably practicable, the transactions contemplated in this Agreement and,
without limiting the generality of the foregoing:

         (a)      Bidco shall make the Offer, which Offer shall be made by Bidco
                  in accordance with the provisions of this Agreement and in
                  compliance with all applicable Laws, including Securities
                  Laws;

         (b)      Bidco shall, subject to the terms and conditions hereof and of
                  the Offer, take up the Gulf Indonesia Shares validly deposited
                  under the Offer and not withdrawn and pay for such Gulf
                  Indonesia Shares in accordance with applicable Securities Laws
                  and the terms of this Agreement;

         (c)      Conoco and Bidco shall and where appropriate Conoco shall
                  cause its other subsidiaries to apply for and use all
                  commercially reasonable efforts to obtain all Appropriate
                  Regulatory Approvals relating to Conoco, Bidco or any of
                  Conoco's subsidiaries (including promptly complying with all
                  requests for information) and, in doing so, to keep Gulf
                  Indonesia reasonably informed as to the status of the
                  proceedings related to obtaining the Appropriate Regulatory
                  Approvals, including, but not limited to, providing Gulf
                  Indonesia with copies of all related applications and
                  notifications, in draft form, and requests for information in
                  order for Gulf Indonesia to provide its reasonable comments;

         (d)      If at the Expiry Time, the conditions in paragraphs (b) and
                  (c)(i) of Schedule A have not been satisfied or waived, Bidco
                  shall extend the Offer from time to time until such condition
                  has been satisfied or waived, provided that Bidco shall not be
                  required to extend the Offer more than 20 days past the
                  Initial Expiry Time unless the condition has not been
                  satisfied due to the breach by Bidco and Conoco of their
                  obligations hereunder; and

         (e)      Conoco and Bidco shall and where appropriate Conoco shall
                  cause its other subsidiaries to defend all lawsuits or other
                  legal, regulatory or other proceedings





                                      -24-


                  challenging or affecting this Agreement or the making or
                  completion of the Offer, a Compulsory Acquisition or a
                  Subsequent Acquisition Transaction or any of the other
                  transactions contemplated hereby.

         (2) Each of Conoco and Bidco agrees that Bidco will not, except for the
Minimum Condition, amend, modify or change the terms and conditions of the Offer
(which, for greater certainty, does not include waiving, in whole or in part, a
condition of the Offer) in a manner that is materially adverse to the Gulf
Indonesia Shareholders in the aggregate, and will not amend, modify, change or
waive the Minimum Condition, in each case without the prior written consent of
Gulf Indonesia (which shall be evidenced by a resolution of both the Independent
Committee and the Board of Directors of Gulf Indonesia), other than to (i)
extend the Offer at the sole discretion of Bidco, if, at the initial or extended
date on which the Offer is scheduled to expire, any of the conditions to the
Offer shall not be satisfied or waived by Bidco, until such time as such
conditions are satisfied or waived by Bidco, (ii) extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Securities Authorities applicable to the Offer or any period required by
applicable Law, or (iii) comply with the legal obligations of Bidco with respect
to any amendment, modification or change of the Offer. In addition, Bidco may
make available a "subsequent offering period", in accordance with Rule 14d-11 of
the Exchange Act, of not greater than 20 business days, provided that such
"subsequent offering period" complies with applicable Canadian Law.

         (3) Conoco hereby unconditionally and irrevocably guarantees the
performance of all covenants and obligations of Bidco in this Agreement or its
permitted assignee. Conoco agrees that Gulf Indonesia shall not have to proceed
first against Bidco before exercising its right under this guarantee against
Conoco. Conoco agrees that this guarantee will not be discharged except by
complete performance of the covenants and obligations of Bidco under this
Agreement.

         (4) Conoco and Bidco covenant and agree that none of the information
supplied or to be supplied by Conoco or Bidco for inclusion or incorporation by
reference in the Offering Documents, the Statement, the Schedule 14D-9 or the
management proxy circular or information statement described in Section 2.7(b)
will, at the time such document is filed with the Securities Authorities, at any
time it is amended or supplemented or at the time it is first published, sent or
given to Gulf Indonesia Shareholders, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.

5.4      MUTUAL COVENANTS

         Each of the Parties covenants and agrees that, except as contemplated
in this Agreement, during the period from the date of this Agreement until the
earlier of the consummation of the Compulsory Acquisition or Subsequent
Acquisition Transaction, as applicable, and the time that this Agreement is
terminated in accordance with its terms:

         (a)           it shall, and shall cause its subsidiaries to use all
                  commercially reasonable efforts to satisfy (or cause the
                  satisfaction of) the conditions precedent to its obligations
                  hereunder as set forth in Article VI to the extent the same is
                  within its





                                      -25-


                  control and to take, or cause to be taken, all other action
                  and to do, or cause to be done, all other things reasonably
                  requested by the other parties and are necessary, proper or
                  advisable under all applicable Laws to complete the Offer and,
                  subject to prior satisfaction of the Minimum Condition, a
                  Compulsory Acquisition or Subsequent Acquisition Transaction,
                  as applicable, and any of the other transactions contemplated
                  hereby, as applicable, including using its commercially
                  reasonable efforts to: (i) effect all necessary registrations,
                  filings and submissions of information requested by
                  Governmental Entities required to be effected by it in
                  connection with the Offer, a Compulsory Acquisition or any
                  Subsequent Acquisition Transaction, as applicable, and any of
                  the other transactions contemplated hereby, as applicable;
                  (ii) oppose, lift or rescind any injunction or restraining
                  order against it or other order or action against it seeking
                  to stop, or otherwise adversely affecting its ability to make
                  and complete the Offer, any Compulsory Acquisition or any
                  Subsequent Acquisition Transaction, as applicable, and any of
                  the other transactions contemplated hereby, as applicable; and
                  (iii) co-operate with each other Party in connection with the
                  performance by it and its Subsidiaries of their obligations
                  hereunder all as subject to the other terms of this Agreement;

         (b)           it shall not take any action which would reasonably be
                  expected to impede the making or completion of the Offer, a
                  Compulsory Acquisition or any Subsequent Acquisition
                  Transaction, as applicable, except as permitted by this
                  Agreement;

         (c)           it shall use its reasonable commercial efforts to conduct
                  its affairs so that all of its representations and warranties
                  contained herein shall be true and correct in all material
                  respects both on and as of the Expiry Date and the date on
                  which a Compulsory Acquisition or Subsequent Acquisition
                  Transaction, as applicable, is consummated as if made thereon
                  (other than representations and warranties specific to a
                  particular date which shall remain true and correct in all
                  material respects as of that date); and

         (d)           it shall notify forthwith the other Parties of any breach
                  of a representation, warranty, covenant or condition by it of
                  which it becomes aware or any event occurring subsequent to
                  the date of this Agreement that would render any
                  representation or warranty made by it contained in this
                  Agreement untrue.




                                      -26-


                                   ARTICLE VI
                                   CONDITIONS

6.1      MUTUAL CONDITIONS

         The obligations of Gulf Indonesia, Conoco and Bidco hereunder,
including the obligation to make and consummate the Offer, are subject to
fulfilment of the following conditions on or before the Expiry Date or such
other time prior thereto as is specified below:

         (a)      there shall not be in force and non-appealable any injunction,
                  order or decree issued by a court or other Governmental Entity
                  of competent jurisdiction in Canada, the United States or
                  elsewhere restraining or enjoining the consummation of the
                  Offer, any Compulsory Acquisition, any Subsequent Acquisition
                  Transaction or the other transactions contemplated by this
                  Agreement; and

         (b)      this Agreement shall not have been terminated pursuant to
                  Article VIII.

         The foregoing conditions are for the mutual benefit of Gulf Indonesia,
Conoco and Bidco and may be waived, in whole or in part, by Gulf Indonesia, in
favour of Gulf Indonesia, and by Conoco and Bidco, acting jointly, in favour of
Conoco and Bidco, as appropriate, in writing at any time and, unless otherwise
provided in the written waiver, will be limited to the specific condition
waived.

6.2      ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CONOCO AND BIDCO

         (a) The obligation of Conoco to cause Bidco to make the Offer and the
obligation of Bidco to make the Offer are subject to the fulfilment of the
conditions that at the time that Bidco proposes to make the Offer, (i) there
does not exist any prohibition at Law or legal restraint (other than those
referred to in paragraph (b) in Schedule A) against Bidco making the Offer or
taking up and paying for the Gulf Indonesia Shares validly deposited to the
Offer and not withdrawn; and (ii) the Board of Directors of Gulf Indonesia shall
have concurrently issued in the Schedule 14D-9 and the Statement an affirmative
recommendation to the Gulf Indonesia Shareholders to accept the Offer and
deposit their Gulf Indonesia Shares to the Offer.

         (b) Bidco's obligation to complete the Offer is subject to the
conditions set out in Schedule A.

6.3      CONDITIONS PRECEDENT TO THE COMPULSORY ACQUISITION OR SUBSEQUENT
         ACQUISITION TRANSACTION

         The obligation of Bidco to commence and complete the Compulsory
Acquisition or Subsequent Acquisition Transaction as contemplated in Section 2.7
shall be subject to fulfilment of the following conditions both at the time
immediately before the Compulsory Acquisition or Subsequent Acquisition
Transaction is commenced and at the time it is completed:

         (a)      the conditions set out in Sections 6.1(a) and 6.1(b); and





                                      -27-


         (b)           the conditions set out in Sections 6.2(a)(i) and 6.2(b)
                  (excluding the condition set forth under clause (a) of
                  Schedule A, it, however, being agreed that Bidco is not
                  required to commence a Compulsory Acquisition or Subsequent
                  Acquisition Transaction unless the Minimum Condition has been
                  satisfied) with references to the Offer being construed as
                  references to the Subsequent Acquisition Transaction or
                  Compulsory Acquisition, as applicable, and all references to
                  Expiry Date being construed as references to the effective
                  time of the Subsequent Acquisition Transaction or Compulsory
                  Acquisition, as applicable.

6.4      WAIVER OR SUSPENSION OF CONDITIONS

         The conditions in Sections 6.2 and 6.3 are for the benefit of Conoco
and Bidco and, subject to Section 5.3(2), may be waived, in whole or in part, by
Conoco and Bidco, acting jointly, in writing at any time and, unless otherwise
provided in the written waiver, will be limited to the specific condition
waived.

6.5      MERGER OF CONDITIONS

         The conditions set out in Sections 6.1 and 6.2 (except to the extent
such conditions are also conditions to the Compulsory Acquisition or Subsequent
Acquisition Transaction) shall be conclusively deemed to have been satisfied,
waived or released upon the taking up by Bidco of any Gulf Indonesia Shares
pursuant to the Offer.

                                   ARTICLE VII
                              ADDITIONAL AGREEMENTS

7.1      OTHER FILINGS

         As promptly as practicable hereafter, Gulf Indonesia, Conoco and Bidco
shall each prepare and file, any filings required in connection with the Offer
and the other transactions contemplated by this Agreement required under
applicable Law or necessary to obtain all necessary consents, waivers, permits,
orders and approvals.

7.2      FURTHER ASSURANCES

         Subject to the terms and conditions herein provided and to fiduciary
obligations under applicable Law as advised by legal counsel in writing, each of
the Parties agrees to use all commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to permit Bidco to make and complete the Offer and the other
transactions contemplated by this Agreement as promptly as practicable, and to
co-operate with each other in connection with the foregoing, including using
commercially reasonable efforts to obtain all necessary consents, waivers,
permits, orders and approvals as are required to be obtained under any
applicable Law.





                                      -28-


7.3      RECOMMENDATIONS

Neither the Board of Directors of Gulf Indonesia nor the Independent Committee
shall withdraw or modify, or propose to withdraw or modify, in a manner adverse
to Conoco or Bidco, its approval or recommendation of the Offer or this
Agreement, or approve or recommend or propose publicly to approve or recommend
any Acquisition Proposal, unless the Board of Directors of Gulf Indonesia, or
the Independent Committee, determines in good faith, after consultation with
outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Gulf Indonesia Shareholders under applicable Law in
which event, notwithstanding anything to the contrary herein, the Independent
Committee and the Board of Directors of Gulf Indonesia, as applicable, may so
withdraw or modify its approval and recommendation of the Offer and may
communicate such change to the Gulf Indonesia Shareholders and holders of Gulf
Indonesia Options.

7.4      EXPENSE REIMBURSEMENT

         (a)      Subject to Section 7.4(b), each Party shall pay all fees,
                  costs and expenses incurred by such Party in connection with
                  this Agreement and the Offer and the transactions contemplated
                  herein.

         (b)      Bidco will pay all of the costs incurred by Gulf Indonesia in
                  obtaining the valuation opinion from RBC Dominion Securities
                  Inc.

         Bidco's obligations under this Section 7.4(b) shall survive termination
or expiry of this Agreement.

7.5      ACCESS TO INFORMATION

         From the date hereof until the earlier of the consummation of the
Compulsory Acquisition or Subsequent Acquisition Transaction, as applicable, and
the termination of this Agreement, Gulf Indonesia shall, and shall cause its
Subsidiaries and its respective officers, directors, employees and agents to,
afford to Conoco and to the officers, employees, agents and representatives of
Conoco such access as Conoco may reasonably require at all reasonable times to
their officers, employees, agents, properties, books, records and contracts, and
shall furnish Conoco with all data and information as Conoco may reasonably
request.

7.6      INSURANCE AND INDEMNIFICATION

         (a) Gulf Indonesia and Conoco agree that Conoco will, or will cause
Gulf Indonesia to, maintain in effect without any reduction in scope or coverage
for 10 years from the date that is the later of the Expiry Date and the date a
Compulsory Acquisition or Subsequent Acquisition Transaction is completed,
customary policies of directors' and officers' liability insurance providing
protection comparable to the protection provided by the policies maintained by
Gulf Indonesia which are in effect immediately prior to the Expiry Date and
providing protection in





                                      -29-


respect of claims arising from facts or events which occurred prior to the later
of the Expiry Date and the date a Compulsory Acquisition or a Subsequent
Acquisition Transaction is completed.

         (b) Conoco agrees that all rights to indemnification or exculpation now
existing, or authorized prior to the execution hereof, in favour of present and
former officers and directors of Gulf Indonesia shall survive the completion of
the Offer and Conoco covenants and agrees to cause Gulf Indonesia to fulfil its
obligations under such rights to indemnification or exculpation, failing which
Conoco shall fulfil such obligations.

         (c) It is agreed that the provisions of this Section 7.6 are held in
trust by Gulf Indonesia for the benefit of the present and former officers and
directors of Gulf Indonesia and shall survive the completion of the Offer, any
Compulsory Acquisition and any Subsequent Acquisition Transaction as well as the
termination of this Agreement.

7.7      BROKERS

         Gulf Indonesia and Conoco represent and warrant to each other that,
except for RBC Dominion Securities Inc. in the case of Gulf Indonesia and
JPMorgan and Merrill Lynch Canada Inc. in the case of Conoco and Bidco, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission, or to the reimbursement of any of its expenses, in
connection with this Agreement or the Offer. Gulf Indonesia has provided to
Conoco a correct and complete copy of all agreements relating to the
arrangements between it and its financial advisors which are in effect at the
date hereof and agrees not to amend the terms of any such agreements relating to
the payment of fees and expenses without the prior written approval of Conoco.

                                  ARTICLE VIII
                TERM, TERMINATION, BREACHES, AMENDMENT AND WAIVER

8.1      TERM

         This Agreement shall be effective from the date hereof until the
earlier of the consummation of the Compulsory Acquisition or Subsequent
Acquisition Transaction, as applicable, and the termination of this Agreement in
accordance with its terms.

8.2      TERMINATION

         (a) If any condition contained in Sections 6.1 or 6.2 is not satisfied
on the dates specified in the condition or the date the Offer is scheduled to
expire (after all extensions pursuant to Section 5.3(1)(d)), as applicable,
then, so long as neither Conoco nor Bidco is in material breach of this
Agreement, Conoco and Bidco may by notice to Gulf Indonesia terminate this
Agreement and the obligations of the parties hereunder (except as otherwise
herein provided), but without detracting from the rights of Conoco and Bidco
arising from any breach by Gulf Indonesia but for which the condition would have
been satisfied.





                                      -30-


         (b) If any condition contained in Section 6.3 is not satisfied on the
dates specified in the condition, and so long as neither Conoco nor Bidco is in
material breach of this Agreement, then Conoco and Bidco may by notice to Gulf
Indonesia terminate this Agreement and the obligations of the parties hereunder
(except as otherwise herein provided), but without detracting from the rights of
Conoco and Bidco arising from any breach by Gulf Indonesia but for which the
condition would have been satisfied.

         (c) If any condition contained in Section 6.1 is not satisfied on the
dates specified in the condition or the date the Offer is scheduled to expire
(after all extensions pursuant to Section 5.3(1)(d)), as applicable, so long as
Gulf Indonesia is not then in material breach of this Agreement, then Gulf
Indonesia (as determined by the Independent Committee) may by notice to Conoco
and Bidco terminate this Agreement and the obligations of the parties hereunder
(except as otherwise herein provided), but without detracting from the rights of
Gulf Indonesia arising from any breach by Conoco or Bidco but for which the
condition would have been satisfied.

         (d)      This Agreement may also:

                  (i)      be terminated by the mutual agreement of Conoco,
                           Bidco and Gulf Indonesia (as determined by the
                           Independent Committee);

                  (ii)     be terminated by Conoco and Bidco if the Board of
                           Directors of Gulf Indonesia or the Independent
                           Committee shall have (A) withdrawn or modified, or
                           proposed to withdraw or modify in a manner adverse to
                           Bidco or Conoco, the approval or recommendation of
                           the Board of Directors of Gulf Indonesia or the
                           Independent Committee of this Agreement or the Offer
                           or (B) approved or recommended, or proposed publicly
                           to approve or recommend, any Acquisition Proposal;

                  (iii)    be terminated by Gulf Indonesia (as determined by the
                           Independent Committee) if (A) any representation and
                           warranty of Conoco or Bidco in this Agreement
                           qualified as to materiality is not true and correct
                           and any representation and warranty not so qualified
                           is not true and correct in all material respects
                           (except to the extent that such representations and
                           warranties speak as of an earlier date); or if (B)
                           Conoco or Bidco is in breach in a material respect of
                           any of their respective covenants in this Agreement;
                           in each case so long as Gulf Indonesia is not then in
                           material breach of this Agreement; or

                  (iv)     be terminated by Gulf Indonesia in order to
                           concurrently enter into a definitive written
                           agreement with respect to a Superior Proposal;

in each case, prior to the Expiry Date in the case of the Offer and prior to the
completion of a Compulsory Acquisition or Subsequent Acquisition Transaction in
the case of a Compulsory Acquisition or Subsequent Acquisition Transaction.





                                      -31-


         (e) Gulf Indonesia may not elect to terminate this Agreement pursuant
to Section 8.2(d)(iii) for a breach of a representation, warranty or covenant by
Conoco or Bidco, unless Gulf Indonesia has delivered a written notice to Conoco
specifying in reasonable detail all breaches of representations, warranties and
covenants which Gulf Indonesia is asserting as the basis for the right of
termination, and such breach of a representation, warranty or covenant is not
cured within 20 business days from the date of receipt by Conoco of such notice.

         (f) If Conoco or Bidco does not complete a Compulsory Acquisition or
Subsequent Acquisition Transaction on or prior to the Outside Date, then, any of
Conoco, Bidco or Gulf Indonesia (in the case of Gulf Indonesia, as determined by
the Independent Committee), may terminate this Agreement, provided a party may
not terminate this Agreement based on this Section 8.2(f) if failure to
consummate a Compulsory Acquisition or Subsequent Acquisition Transaction by the
Outside Date results from a breach of this Agreement by such party (or in the
case of Conoco or Bidco a breach by either of them) unless the party not in
breach otherwise consents.

         (g) If this Agreement is terminated in accordance with the foregoing
provisions of this Section 8.2, no Party shall have any further liability or
obligation hereunder except as provided in Section 7.4 and as otherwise
expressly contemplated hereby; provided that nothing herein shall relieve any
Party from any liability for any wilful and knowing breach of a representation
or warranty herein or any material breach of a covenant herein prior to such
termination.

8.3      AMENDMENT

         This Agreement may, at any time and from time to time on or before the
consummation of a Compulsory Acquisition or Subsequent Acquisition Transaction,
be amended by mutual written agreement of the Parties; provided, however, that
any amendment that adversely affects the rights of the Gulf Indonesia
Shareholders shall require the approval of the Independent Committee.

8.4      WAIVER

         Subject to Sections 5.3(2) and 6.4, any Party may (i) extend the time
for the performance of any of the obligations or acts of the other Parties, (ii)
waive compliance with any of the other Parties' agreements or the fulfilment of
any conditions to its own obligations contained herein, or (iii) waive
inaccuracies in any of the other Parties' representations or warranties
contained herein or in any document delivered by another Party; provided,
however, that any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such Party and, unless otherwise
provided in the written waiver, will be limited to the specific breach or
condition waived; provided that any extension or waiver that adversely affects
the rights of the Gulf Indonesia Shareholders shall require the approval of the
Independent Committee.




                                      -32-


                                   ARTICLE IX
                               GENERAL PROVISIONS

9.1      NOTICES

         All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered or sent if delivered personally or sent by facsimile
transmission, or as of the following business day if sent by prepaid overnight
courier, to the Parties at the following addresses (or at such other addresses
as shall be specified by either Party by notice to the other given in accordance
with these provisions):

         (a)      if to Conoco:

                  Conoco Inc.
                  600 North Dairy Ashford
                  Houston, Texas  77079
                  Attention:        Wayne Byers
                  Telephone:        281-293-1859
                  Facsimile:        281-293-5037

                  with a copy to:

                  Cravath, Swaine & Moore
                  Worldwide Plaza
                  825 Eighth Avenue
                  New York, NY  10019

                  Attention:        Richard Hall
                  Telephone:        212-474-1293
                  Facsimile:        212-474-3700

                  - and -

                  Blake, Cassels & Graydon LLP
                  Box 25, Commerce Court West
                  199 Bay Street, 28th Floor
                  Toronto, Ontario  M5L 1A9

                  Attention:        Alan Bell
                  Telephone:        416-863-2662
                  Facsimile:        416-863-2653




                                      -33-


         (b)      if to Bidco:

                  Conoco Canada Resources Limited
                  #1600, 401-9th Ave SW.
                  Calgary, Alberta
                  T2P 3C5

         with a copy to Conoco and the persons receiving copies of notices send
         to Conoco.


         (c)      if to Gulf Indonesia:

                  Gulf Indonesia Resources Limited
                  Wisma 46, Kota BNI, 21st Floor
                  Jalan Jenderal Sudirman Kavling
                  Jakarta 10220 - Indonesia

                  Attention:  Paul C. Warwick, President and Chief Executive
                              Officer

                  with a copy to:

                  Mr. Robert Allen
                  1200 Smith Street
                  Suite 1111
                  Houston, Texas
                  77002 - 4310

                  Telephone:        713-951-9287
                  Facsimile:        713-659-2435


                  - and -

                  Macleod Dixon LLP
                  3700, 400 - 3rd Avenue S.W.
                  Calgary, Alberta
                  T2P 4H2

                  Attention:        Robert Engbloom
                  Telephone:        403-267-9505
                  Facsimile:        403-264-5973

                  - and -

                  Bennett Jones LLP
                  4500 Bankers Hall East



                                      -34-

                  855 - 2nd Street S.W.
                  Calgary, Alberta
                  T2P 4K7

                  Attention:        Robert Rooney
                  Telephone:        403-298-3420
                  Facsimile:        403-265-7219

9.2      MISCELLANEOUS

         This Agreement: (i) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
Parties with respect to the subject matter hereof; and (ii) and, except as
specifically provided in Section 7.6 does not confer upon any other person any
rights or remedies hereunder. The Parties shall be entitled to rely upon
transmission of an executed facsimile copy of this Agreement, and such facsimile
copy shall be legally effective to create a valid and binding agreement between
the Parties.

9.3      GOVERNING LAW

         This Agreement shall be governed, including as to validity,
interpretation and effect, by the laws of the Province of Alberta and the laws
of Canada applicable therein, and shall be construed and treated in all respects
as an Alberta contract.

9.4      ATTORNMENT

         The parties hereby irrevocably and unconditionally consent to and
submit to the courts of the Province of Alberta for any actions, suits or
proceedings arising out of or relating to this Agreement or the matters
contemplated hereby (and agree not to commence any action, suit or proceeding
relating thereto except in such courts) and further agree that service of any
process, summons, notice or document by single registered mail to the addresses
of the parties set forth in this Agreement shall be effective service of process
for any action, suit or proceeding brought against either party in such court.
The parties hereby irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the matters contemplated hereby in the courts of the Province of Alberta and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding so brought has
been brought in an inconvenient forum.

9.5      INJUNCTIVE RELIEF

         The Parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any Court of the Province of Alberta having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.





                                      -35-


9.6      TIME OF ESSENCE

         Time shall be of the essence in this Agreement.

9.7      BINDING EFFECT AND ASSIGNMENT

         This Agreement shall be binding on and shall enure to the benefit of
the Parties and their respective successors and permitted assigns. Except as
expressly permitted by the terms hereof, neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any of the Parties
without the prior written consent of the other Parties, except that Bidco may
assign, in its sole discretion, any or all of its rights, interests or
obligations under this Agreement to Conoco or to any other direct or indirect
wholly-owned subsidiary of Conoco, provided that Conoco shall continue to be
liable to Gulf Indonesia for any default in performance by the assignee.

9.8      SEVERABILITY

         If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.

9.9      COUNTERPARTS

         This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.




                                      -36-


         IN WITNESS WHEREOF Conoco, Bidco and Gulf Indonesia have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.

                                      CONOCO INC.

                                      by:  /s/ Robert E. McKee III
                                           -------------------------------------

                                           Robert E. McKee III
                                           Executive Vice President,
                                           Exploration Production


                                      CONOCO CANADA RESOURCES LIMITED

                                      by:  /s/ Henry W. Sykes
                                           -------------------------------------

                                           Henry W. Sykes
                                           President


                                      GULF INDONESIA RESOURCES LIMITED

                                      by:  /s/ Paul C. Warwick
                                           -------------------------------------

                                           Paul C. Warwick
                                           President and Chief Executive Officer

                                      by:  /s/ Robert H. Allen
                                           -------------------------------------
                                           Robert H. Allen
                                           Chairman




                                   SCHEDULE A

                            TO THE SUPPORT AGREEMENT

                             CONDITIONS OF THE OFFER

         Bidco shall have the right to (i) withdraw the Offer and not to take up
and pay for, (ii) extend the time during which the Offer is open or (iii) not,
subject to any applicable rules and regulations of Securities Laws, including
Rule 14e-1(c) under the Exchange Act (relating to Bidco's obligation to pay for
or return tendered Shares promptly after the termination or withdrawal of the
Offer), pay for, any Gulf Indonesia Shares deposited to the Offer, unless each
of the following conditions is satisfied or waived by Bidco at or prior to the
Expiry Time (provided that the Minimum Condition may not be waived by Bidco
without the consent of Gulf Indonesia (which shall be evidenced by a resolution
of both the Independent Committee and the Board of Directors of Gulf
Indonesia)):

         (a)      at the Expiry Time there shall have been validly deposited to
                  the Offer and not properly withdrawn that number of Gulf
                  Indonesia Shares representing more than 50% of the Gulf
                  Indonesia Shares outstanding (calculated on a fully diluted
                  basis, taking into account in the money Gulf Indonesia
                  Options) other than Gulf Indonesia Shares owned by Bidco, its
                  directors and executive officers, its affiliates, the
                  directors and executive officers of its affiliates (other than
                  the directors of Gulf Indonesia who are independent of Bidco
                  under Rule 61-501 of the Ontario Securities Commission) or any
                  persons acting jointly or in concert with Bidco (the "Minimum
                  Condition");

         (b)      all sanctions, rulings, exceptions, waivers, permits, orders,
                  consents or approvals of any Governmental Entity (whether in
                  Canada, the United States, Indonesia or elsewhere) which, in
                  Bidco's reasonable judgment, are necessary in connection with
                  the Offer and the acquisition of any Gulf Indonesia Shares
                  pursuant to the Offer, any Compulsory Acquisition or any
                  Subsequent Acquisition Transaction shall have been obtained on
                  terms and conditions reasonably satisfactory to Bidco;

         (c)      (i) no act, action, suit, proceeding, obligation or opposition
                  shall have been threatened or taken before or by any
                  Governmental Entity or by any other person (in the case of
                  such other person, which has a reasonable likelihood of
                  success), and (ii) no law, regulation, rule, statute,
                  judgement, order, injunction, or policy, shall have been
                  enacted, promulgated, amended or applied, in either case in
                  the reasonable judgment of Bidco:

                  A.       to (i) cease trade, enjoin, prohibit or impose
                           limitations, damages or conditions on (x) the
                           purchase by, or sale to, Bidco of the Gulf Indonesia
                           Shares or any of them or the consummation of the
                           transactions contemplated by this Agreement, (y) the
                           right of Bidco to own or exercise full rights of
                           ownership of the Gulf





                                      -2-

                           Indonesia Shares or any of them, or (z) the ability
                           of Bidco or Conoco to exercise full ownership rights
                           over or operate the businesses or assets of Gulf
                           Indonesia and its Subsidiaries (hereinafter
                           collectively referred to as the "Gulf Indonesia
                           Group"), or (ii) compel Bidco or Conoco (or any of
                           their respective affiliates) to dispose of or to hold
                           separate any portion of their business or assets or
                           to dispose or to hold separate any portion of the
                           business or assets of or any member of the Gulf
                           Indonesia Group;

                  B.       which has materially adversely affected or, if the
                           Offer were consummated, could materially adversely
                           affect the Gulf Indonesia Group considered as a
                           whole; or

                  C.       which challenges or would prevent completion of the
                           Offer or which would have a material adverse effect
                           on the ability of Bidco to complete a Compulsory
                           Acquisition or any Subsequent Acquisition
                           Transaction;

         (d)      there shall not exist any prohibition at law or legal
                  restraint against Bidco taking up and paying for any Gulf
                  Indonesia Shares deposited under the Offer or completing a
                  Compulsory Acquisition or any Subsequent Acquisition
                  Transaction;

         (e)      Bidco shall have determined in its reasonable judgment that
                  there does not exist and has not occurred (or, if there does
                  exist or shall have previously occurred, there shall not have
                  been disclosed prior to the date of this Agreement, generally
                  or to Conoco or Bidco) any material adverse change to the Gulf
                  Indonesia Group considered as a whole; and

         (f)      all representations and warranties of Gulf Indonesia in the
                  Agreement qualified as to materiality shall be true and
                  correct and those not so qualified shall be true and correct
                  in all material respects as of the date of the Agreement and
                  as of the Expiry Date as if made on and as of such date
                  (except to the extent that such representations and warranties
                  speak as of an earlier date) and Gulf Indonesia shall have
                  performed in all material respects all covenants to be
                  performed by it under the Agreement.






                                   SCHEDULE B

                            TO THE SUPPORT AGREEMENT

                        APPROPRIATE REGULATORY APPROVALS

PART A  - UNITED STATES AND CANADA

- -        Compliance with any applicable requirements of the NBCA and Securities
         Laws, including the U.S. Securities Act of 1933 and the Exchange Act,
         each as amended.

PART B - INDONESIA

- -        Compliance with any applicable Laws regulating investment (as
         appropriate).

- -        To the knowledge of Gulf Indonesia there are no formal approvals in
         respect of all material production sharing contracts, technical
         assistance contracts, joint operating bodies, easements, rights of way,
         permits, leases or licences required as a result of the acquisition of
         all of the Gulf Indonesia Shares by Bidco; however, it is customary to
         notify Pertamina, MIGAS, and other Indonesian Governmental Entities of
         transactions of this nature.







                                TABLE OF CONTENTS



                                                                                                     PAGE

                                                                                                  
ARTICLE I    INTERPRETATION...........................................................................1

1.1          Definitions..............................................................................1

1.2          Interpretation Not Affected by Headings..................................................5

1.3          Number and Gender........................................................................5

1.4          Date for Any Action......................................................................5

1.5          Currency.................................................................................5

1.6          Accounting Matters.......................................................................6

1.7          Schedules................................................................................6

ARTICLE II   THE OFFER................................................................................6

2.1          Actions by Conoco and Bidco..............................................................6

2.2          Actions by Gulf Indonesia................................................................7

2.3          Schedule 14D-9...........................................................................8

2.4          Preparation of Filings...................................................................9

2.5          Shareholder Communications...............................................................9

2.6          Withholding..............................................................................9

2.7          Compulsory Acquisition or Subsequent Acquisition Transaction.............................9

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF GULF INDONESIA........................................11

3.1          Representations and Warranties..........................................................11

3.2          Investigation...........................................................................15

3.3          Survival of Representations and Warranties..............................................15

ARTICLE IV   REPRESENTATIONS AND WARRANTIES OF CONOCO AND BIDCO......................................16

4.1          Representations and Warranties..........................................................16

4.2          Investigation...........................................................................18

4.3          Survival of Representations and Warranties..............................................18

ARTICLE V    COVENANTS...............................................................................18

5.1          Covenants of Gulf Indonesia Regarding the Conduct of Business...........................18

5.2          Covenants of Gulf Indonesia Regarding the Performance of Obligations and Supply of
             Information.............................................................................22

5.3          Covenants of Conoco and Bidco Regarding the Performance of Obligations and Supply
             of Information..........................................................................23



                                      -i-


                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                                    PAGE

                                                                                                 
5.4          Mutual Covenants........................................................................24

ARTICLE VI   CONDITIONS..............................................................................26

6.1          Mutual Conditions.......................................................................26

6.2          Additional Conditions Precedent to the Obligations of Conoco and Bidco..................26

6.3          Conditions Precedent to the Compulsory Acquisition or Subsequent Acquisition
             Transaction.............................................................................26

6.4          Waiver or Suspension of Conditions......................................................27

6.5          Merger of Conditions....................................................................27

ARTICLE VII  ADDITIONAL AGREEMENTS...................................................................27

7.1          Other Filings...........................................................................27

7.2          Further Assurances......................................................................27

7.3          Recommendations.........................................................................28

7.4          Expense Reimbursement...................................................................28

7.5          Access to Information...................................................................28

7.6          Insurance and Indemnification...........................................................28

7.7          Brokers.................................................................................29

ARTICLE VIII TERM, TERMINATION, BREACHES, AMENDMENT AND WAIVER.......................................29

8.1          Term....................................................................................29

8.2          Termination.............................................................................29

8.3          Amendment...............................................................................31

8.4          Waiver..................................................................................31

ARTICLE IX   GENERAL PROVISIONS......................................................................32

9.1          Notices.................................................................................32

9.2          Miscellaneous...........................................................................34

9.3          Governing Law...........................................................................34

9.4          Attornment..............................................................................34

9.5          Injunctive Relief.......................................................................34

9.6          Time of Essence.........................................................................35

9.7          Binding Effect and Assignment...........................................................35

9.8          Severability............................................................................35



                                      -ii-


                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                                    PAGE

                                                                                                 
9.9          Counterparts............................................................................35

Schedule A ...........................................................................................1

Schedule B ...........................................................................................1



                                     -iii-

EX-99.F

                                                                     Exhibit (f)

                                CHAPTER B-9.1
                  BUSINESS CORPORATIONS ACT (NEW BRUNSWICK)


131(1) Subject to sections 132 and 166, a holder of shares of any class of a
corporation may dissent if the corporation is subject to an order under
paragraph 128(4)(d) that affects the holder or if the corporation resolves to

    (a) amend its articles under section 113 to add, change or remove
    restrictions on the transfer of shares of a class or series of the shares
    of the corporation;

    (b) amend its articles under section 113 to add, change or remove any
    restriction upon the business or businesses that the corporation may carry
    on;

    (c) amend its articles under section 113 to provide that meetings of the
    shareholders may be held outside New Brunswick at one or more specified
    places;

    (d) amalgamate with another corporation, otherwise than under section 123;

    (e) be continued under the laws of another jurisdiction under section 127;
    or

    (f) sell, lease or exchange all or substantially all its property under
    subsection 130(1).

131(2) A holder of shares of any class or series of shares entitled to vote
under section 115 may dissent if the corporation resolves to amend its
articles in a manner described in that section.

131(3) In addition to any other right he may have, but subject to subsection
(26), a shareholder who complies with this section is entitled, when the
action approved by the resolution from which he dissents becomes effective, or
an order is made under subsection 128(5), to be paid by the corporation the
fair value of the shares held by him in respect of which he dissents,
determined as of the close of business on the day before the resolution is
adopted or an order is made, but in determining the fair value of the shares
any change in value reasonably attributable to the anticipated adoption of the
resolution shall be excluded.

131(4) A dissenting shareholder may only claim under this section with respect
to all the shares of a class held by him on behalf of any one beneficial owner
and registered in the name of the dissenting shareholder.

131(5) A dissenting shareholder shall send to the registered office of the
corporation, at or before any meeting of shareholders at which a resolution
referred to in subsection (1) or (2) is to be voted on, a written objection to
the resolution, unless the corporation did not give notice to the shareholder
of the purpose of the meeting or of his right to dissent.

131(6) The corporation shall, within ten days after the shareholders adopt the
resolution, send to each shareholder who has sent the objection referred to in
subsection (5) notice that the







resolution has been adopted, but such notice is not required to be sent to any
shareholder who voted for the resolution or who has withdrawn his objection.

131(7) A dissenting shareholder shall, within twenty days after he receives a
notice under subsection (6), or, if he does not receive such notice, within
twenty days after he learns that the resolution has been adopted, send to the
corporation a written notice containing

    (a) his name and address;

    (b) the number and class of shares in respect of which he dissents; and

    (c) a demand for payment of the fair value of such shares.

131(8) Not later than the thirtieth day after the sending of a notice under
subsection (7), a dissenting shareholder shall send the certificates
representing the shares in respect of which he dissents to the corporation or
its transfer agent.

131(9) A dissenting shareholder who fails to comply with subsection (8) has no
right to make a claim under this section.

131(10) A corporation or its transfer agent shall endorse on any share
certificate received under subsection (8) a notice that the holder is a
dissenting shareholder under this section and shall return forthwith the share
certificates to the dissenting shareholder.

131(11) On sending a notice under subsection (7), a dissenting shareholder
ceases to have any rights as a shareholder other than the right to be paid the
fair value of his shares as determined under this section except where

    (a) the dissenting shareholder withdraws his notice before the corporation
    makes an offer under subsection (12),

    (b) the corporation fails to make an offer in accordance with subsection
    (12) and the dissenting shareholder withdraws his notice, or

    (c) the directors revoke a resolution to amend the articles under
    subsection 113(2), terminate an amalgamation agreement under subsection
    122(6), abandon an application for continuance under subsection 127(5), or
    abandon a sale, lease or exchange under subsection 130(7),

in which case his rights as the holder of the shares in respect of which he
had dissented are reinstated as of the date he sent the notice referred to in
subsection (7), and he is entitled, upon presentation and surrender to the
corporation or its transfer agent of any certificate representing the shares
that have been endorsed in accordance with subsection (10), to be issued a new
certificate representing the same number of shares as the certificate so
presented, without payment of any fee.





131(12) A corporation shall, not later than fourteen days after the later of
the day on which the action approved by the resolution is effective or the day
the corporation received the notice referred to in subsection (7), send to
each dissenting shareholder who has sent such notice

    (a) a written offer to pay for his shares in an amount considered by the
    directors of the corporation to be the fair value thereof, accompanied by
    a statement showing how the fair value was determined; or

    (b) if subsection (26) applies, a notification that it is unable lawfully
    to pay dissenting shareholders for their shares.

131(13) Every offer made under subsection (12) for shares of the same class or
series shall be on the same terms.

131(14) Subject to subsection (26), a corporation shall pay for the shares of
a dissenting shareholder within ten days after an offer made under subsection
(12) has been accepted, but any such offer lapses if the corporation does not
receive an acceptance thereof within thirty days after the offer has been
made.

131(15) Where a corporation fails to make an offer under subsection (12) or if
a dissenting shareholder fails to accept an offer, the corporation may, within
fifty days after the action approved by the resolution is effective or within
such further period as the Court may allow, apply to the Court to fix a fair
value for the shares of any dissenting shareholder.

131(16) If a corporation fails to apply to the Court under subsection (15), a
dissenting shareholder may apply to the Court for the same purpose within a
further period of twenty days or within such further period as the Court may
allow.

131(17) If a corporation fails to comply with subsection (12), then the costs
of a shareholder application under subsection (16) are to be borne by the
corporation unless the Court otherwise orders.

131(18) Before making application to the Court under subsection (15) or not
later than seven days after receiving notice of an application to the Court
under subsection (16), as the case may be, a corporation shall give notice to
each dissenting shareholder who, at the date upon which the notice is given,

    (a) has sent to the corporation the notice referred to in subsection (7),
    and

    (b) has not accepted an offer made by the corporation under subsection
    (12), if such offer was made,

of the date, place and consequences of the application and of his right to
appear and be heard in person or by counsel, and a similar notice shall be
given to each dissenting shareholder who, after the date of such first
mentioned notice and before termination of the proceedings






commenced by the application, satisfies the conditions set out in paragraphs
(a) and (b), within three days after he satisfies such conditions.

131(19) All dissenting shareholders who satisfy the conditions set out in
paragraphs (18)(a) and (b) shall be deemed to be joined as parties to an
application under subsection (15) or (16) on the later of the date upon which
the application is brought and the date upon which they satisfy the
conditions, and shall be bound by the decision rendered by the Court in the
proceedings commenced by the application.

131(20) Upon an application to the Court under subsection (15) or (16), the
Court may determine whether any other person is a dissenting shareholder who
should be joined as a party, and the Court shall then fix a fair value for the
shares of all dissenting shareholders.

131(21) The Court may in its discretion appoint one or more appraisers to
assist the Court to fix a fair value for the shares of the dissenting
shareholders.

131(22) The final order of the Court in the proceedings commenced by an
application under subsection (15) or (16) shall be rendered against the
corporation and in favour of each dissenting shareholder who, whether before
or after the date of the order, complies with the conditions set out in
paragraphs (18)(a) and (b).

131(23) The Court may in its discretion allow a reasonable rate of interest on
the amount payable to each dissenting shareholder from the date the action
approved by the resolution is effective until the date of payment.

131(24) Where subsection (26) applies, the corporation shall, within ten days
after the pronouncement of an order under subsection (22), notify each
dissenting shareholder that it is unable lawfully to pay dissenting
shareholders for their shares. 131(25) Where subsection (26) applies, a
dissenting shareholder, by written notice delivered to the registered office
of the corporation within thirty days after receiving a notice under
subsection (24), may

    (a) withdraw his notice of dissent, in which case the corporation shall be
    deemed to consent to the withdrawal and the shareholder is reinstated to
    his full rights as a shareholder, or

    (b) retain a status as a claimant against the corporation, to be paid as
    soon as the corporation is lawfully able to do so or, in a liquidation, to
    be ranked subordinate to the rights of creditors of the corporation but in
    priority to its shareholders.

131(26) A corporation shall not make a payment to a dissenting shareholder
under this section if there are reasonable grounds for believing that

    (a) the corporation is or would after the payment be unable to pay its
    liabilities as they become due; or






    (b) the realizable value of the corporation's assets would thereby be less
    than the aggregate of its liabilities.

131(27) Upon application by a corporation that proposes to take any of the
actions referred to in subsection (1), the Court may, if satisfied that the
proposed action is not in all the circumstances one that should give rise to
the rights arising under subsection (3), by order declare that those rights
will not arise upon the taking of the proposed action, and the order may be
subject to compliance with such terms and conditions as the Court thinks fit
and notice of any such application and a copy of any order made by the Court
upon such application shall be served upon the Director.

131(28) The Director may appoint counsel to assist the Court upon the hearing
of an application under subsection (27).








                                CHAPTER B-9.1
                  BUSINESS CORPORATIONS ACT (NEW BRUNSWICK)


133(1) In this section "dissenting offeree" means, where an offer is made for
all the shares of a class of shares of a corporation, a holder of a share of
that class who does not accept the offer and includes a subsequent holder of
that share who acquires it from the first mentioned holder.

133(2) If within one hundred and twenty days after the date of an offer to
purchase shares the offer is accepted by the holders of not less than ninety
percent of the shares of any class of shares to which the offer relates, other
than shares held at the date of the offer by or on behalf of the offeror or an
affiliate or associate of the offeror, the offeror is entitled, upon complying
with this section, to acquire the shares held by the dissenting offerees.

133(3) An offeror may acquire shares held by a dissenting offeree by sending
by registered mail within sixty days after the date of termination of the
offer, and in any event within one hundred and eighty days after the date of
the offer, an offeror's notice to each dissenting offeree and to the Director
stating that

    (a) the offerees holding more than ninety per cent of the shares to which
    the offer relates accepted the offer;

    (b) the offeror is bound to take up and pay for or has taken up and paid
    for the shares of the offerees who accepted the offer;

    (c) a dissenting offeree is required to elect

        (i) to transfer his shares to the offeror on the terms on which the
        offeror acquired the shares of the offerees who accepted the offer, or

        (ii) to demand payment of the fair value of his shares in accordance
        with subsections (9) to (16) by notifying the offeror within twenty
        days after he receives the offeror's notice;

    (d) a dissenting offeree who does not notify the offeror in accordance
    with subparagraph (c)(ii) shall be deemed to have elected to transfer his
    shares to the offeror on the same terms that the offeror acquired the
    shares from the offerees who accepted the offer; and

    (e) a dissenting offeree must send his shares to which the offer relates
    to the offeree corporation within twenty days after he receives the
    offeror's notice.

133(4) Concurrently with sending the offeror's notice under subsection (3),
the offeror shall send to the offeree corporation a notice of adverse claim
with respect to each share held by a dissenting offeree.







133(5) A dissenting offeree to whom an offeror's notice is sent under
subsection (3) shall, within twenty days after he receives that notice, send
his share certificates of the class of shares to which the offer relates to
the offeree corporation.

133(6) Within twenty days after the offeror sends an offeror's notice under
subsection (3), the offeror shall pay or transfer to the offeree corporation
the amount of money or other consideration that the offeror would have had to
pay or transfer to a dissenting offeree if the dissenting offeree had elected
to transfer his shares under subparagraph (3)(c)(i).

133(7) The offeree corporation shall be deemed to hold in trust for the
dissenting shareholders the money or other consideration it receives under
subsection (6), and the offeree corporation shall deposit the money in a
separate account in a bank or other body corporate any of whose deposits are
insured under the Canada Deposit Insurance Corporation Act, Chapter C-3 of the
Revised Statutes of Canada, 1970, and shall place the other consideration in
the custody of a bank or such other body corporate.

133(8) Within thirty days after the offeror sends an offeror's notice under
subsection (3), the offeree corporation shall

    (a) issue to the offeror a share certificate in respect of the shares that
    were held by dissenting offerees;

    (b) give to each dissenting offeree who elects to transfer his shares
    under subparagraph (3)(c)(i) and who sends his share certificates as
    required under subsection (5), the money or other consideration to which
    he is entitled, disregarding fractional shares, which may be paid for in
    money; and

    (c) send to each dissenting shareholder who has not sent his share
    certificates as required under subsection (5) a notice stating that

        (i) his shares have been cancelled,

        (ii) the offeree corporation or some designated person holds in trust
        for him the money or other consideration to which he is entitled as
        payment for or in exchange for his shares, and

        (iii) the offeree corporation will, subject to subsections (9) to
        (16), send that money or other consideration to him forthwith after
        receiving his shares.

133(9) If a dissenting offeree has elected to demand payment of the fair value
of his shares under subparagraph (3)(c)(ii), the offeror may, within twenty
days after it has paid the money or transferred the other consideration under
subsection (6), apply to the Court to fix the fair value of the shares of that
dissenting offeree.

133(10) If an offeror fails to apply to the Court under subsection (9), a
dissenting offeree may apply to the Court for the same purpose within a
further period of twenty days.





133(11) A dissenting offeree is not required to give security for costs in an
application made under subsection (9) or (10).

133(12) Upon an application under subsection (9) or (10)

    (a) all dissenting offerees referred to in subparagraph (3)(c)(ii) whose
    shares have not been acquired by the offeror shall be joined as parties
    and are bound by the decision of the Court; and

    (b) the offeror shall notify each affected dissenting offeree of the date,
    place and consequences of the application and of his right to appear and
    be heard in person or by counsel.

133(13) Upon an application to the Court under subsection (9) or (10) the
Court may determine whether any other person is a dissenting offeree who
should be joined as a party, and the Court shall then fix a fair value for the
shares of all dissenting offerees.

133(14) The Court may in its discretion appoint one or more appraisers to
assist the Court to fix a fair value for the shares of a dissenting offeree.

133(15) The final order of the Court shall be made against the offeror in
favour of each dissenting offeree and for the amount for his shares as fixed
by the Court.

133(16) In connection with proceedings under this section, the Court may make
any order it thinks fit and, without limiting the generality of the foregoing,
it may

    (a) fix the amount of money or other consideration that is deemed to be
    held in trust under subsection (7);

    (b) order that that money or other consideration be held in trust by a
    person other than the offeree corporation;

    (c) allow a reasonable rate of interest on the amount payable to each
    dissenting offeree from the date he sends or delivers his share
    certificates under subsection (5) until the date of payment; and

    (d) order that any money or other consideration payable to a shareholder
    who cannot be found be disposed of in accordance with subsection 153(1).

133(17) Where an offeror has not exercised the right conferred by subsection
(2), a dissenting shareholder may, within thirty days after the date on which
the notice referred to in subsection (3) could be sent, require the offeror to
acquire the shares held by the dissenting shareholder and subsections (3) to
(16) shall apply mutatis mutandis.


1991, c.27, s.5.