Exhibit 10.5

                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

                             - BRADLEY T. KATZUNG -



         This Second  Amendment To Employment  Agreement  ("Amendment")  is made
effective  as of the 1st day of January,  1998,  by and between  Saba  Petroleum
Company, a Delaware corporation ("Company"), and Bradley T. Katzung ("Employee")
and amends and modifies that certain Employment Agreement  ("Agreement") between
the two parties dated November 8, 1993, and the first amendment to the Agreement
dated April 15, 1994.

                                    Recitals

         A.       WHEREAS,  it is in the best interest of the Company to promote
                  Employee to the position of Executive Vice President,  General
                  Manager - U.S. of Saba  Petroleum  Company,  subject to and in
                  accordance with the terms and provisions set forth below.

         B. WHEREAS,  after review and  consideration of the Agreement,  Company
and Employee agree to amend and modify the Agreement as set forth below:

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1.   Subject to the terms, conditions and provisions of the Agreement,  the
          Company  promotes  Employee  to  Executive   Vice-President,   General
          Manager-U.S. of Saba Petroleum Company.

     2.   Annual salary for Employee will be $125,000.00 and will be reviewed on
          an annual basis on the anniversary date of the Agreement.

     3.   The  incentive  bonus plan as  described  in  Paragraph 4 of the first
          amendment to the Agreement will cease on December 31, 1997.

     4.   All other terms and conditions of the Agreement, as amended, remain in
          full force and effect.

         IN WITNESS WHEREOF,  the parties have executed this Amendment effective
as of the day first written above.

COMPANY:                                             EMPLOYEE:

Saba Petroleum Company,
a Delaware corporation

By:  _____________________                  ________________________
         Ilyas Chaudhary, Chairman/CEO               Bradley T. Katzung