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                                                                  EXHIBIT 10(n)



                               December 14, 1995





Mr. Bruce A. Smith
301 Morningside
San Antonio, Texas 78298

Dear Bruce:

         The purpose of this letter agreement is to extend the term of the
Employment Agreement made as of September 14, 1992, between you and Tesoro
Petroleum Corporation, as subsequently amended by instruments dated December
14, 1994, and September 29, 1995 (the "Employment Agreement").

         The current expiration date of the term of the Employment Agreement is
December 14, 1995.  By our mutual agreement, the term of the Employment
Agreement is hereby extended and shall continue through January 31, 1996.
Accordingly, Section 4 of the Employment Agreement is hereby amended as
follows:

                          4.      Term.  This Agreement shall commence
                 effective as of September 14, 1992, and if not terminated
                 earlier as herein provided, shall terminate on January 31,
                 1996.  Notwithstanding the foregoing, if the Company shall not
                 have offered to the Employee the opportunity to enter into a
                 new employment agreement prior to January 31, 1996, with
                 terms, in all respects, no less favorable to the Employee than
                 the terms of this Agreement and with a term lasting until at
                 least January 31, 1998, the Employee shall have the right to
                 elect, by written notice delivered to the Company prior to
                 March 1, 1996, to terminate his employment and such
                 termination shall be deemed to have been for Good Reason in
                 accordance with Section 5 and the Employee shall be entitled
                 to all payments and benefits as if he had terminated his
                 employment for Good Reason in accordance with Section 5 on
                 January 30, 1996.






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         All other terms of the Employment Agreement shall continue in full
force and effect as provided therein until January 31, 1996.

         If the foregoing correctly sets forth our understanding of the subject
of this letter, please indicate your acceptance by signing below.

                                       Very truly yours,

                                       TESORO PETROLEUM CORPORATION


                                       By  /S/ James C. Reed, Jr.               
                                         -----------------------------------
                                       James C. Reed, Jr.
                                       Executive Vice President, General 
                                       Counsel and Secretary


         Accepted and agreed to effective the 14th day of December 1995.



                                           /S/ Bruce A. Smith                 
                                       ------------------------------------- 
                                       Bruce A. Smith