<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 11-K

                 ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)
      [X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (No fee required, effective October 7, 1996)

      For the fiscal year ended             DECEMBER 31, 1998
                               ------------------------------------------------

                                       Or

      [ ] Transition report pursuant to Section 15(d) of the Securities 
Exchange Act of 1934 (No fee required)

       For the transition period from                to
                                      --------------     ----------------------

       Commission file number                  1-12317
                             --------------------------------------------------

       A. Full title of the plan and the address of the plan, if different 
from that of the issuer named below NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN
                                    -------------------------------------------

       B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office NATIONAL-OILWELL, INC.
                                          -------------------------------------
                                          10000 RICHMOND AVENUE
-------------------------------------------------------------------------------
                                          4TH FLOOR
-------------------------------------------------------------------------------
                                          HOUSTON, TEXAS  77042-4200
-------------------------------------------------------------------------------



<PAGE>   2

                              REQUIRED INFORMATION

National-Oilwell Retirement and Thrift Plan Financial Statements and Schedules
prepared in accordance with financial reporting requirements of the Employee
Retirement Income Security Act of 1974, as amended.


                                   SIGNATURES

         The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    NATIONAL-OILWELL RETIREMENT AND THRIFT PLAN



   June 24, 1999                    /s/  Daniel L. Molinaro
------------------------            -------------------------------------------
     Date                                Daniel L. Molinaro
                                         Treasurer for National-Oilwell, Inc.
                                         and National-Oilwell Benefits Plan 
                                         Administrative Committee Member


                                       2


<PAGE>   3



                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT  
-------  
<S>      <C>                                
23.1     Consent of Ernst and Young LLP  
99.1     National-Oilwell Retirement and Thrift Plan Financial Statements and
         Schedules prepared in accordance with financial reporting requirements
         of ERISA. (Supplemental Schedule, Item 27(b)--Schedule of Loans or
         Fixed Income Obligations, is omitted because it is not applicable.)

</TABLE>




                                       3







<PAGE>   1
                                                                    Exhibit 23.1


                         CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-46459) pertaining to the National-Oilwell Retirement and Thrift Plan
of our report dated June 7, 1999, with respect to the financial statements and
schedules of the National-Oilwell Retirement and Thrift Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1998.

                                                           /s/ Ernst & Young LLP


June 23, 1999
Houston, Texas





<PAGE>   1
                                                                    EXHIBIT 99.1


                   National-Oilwell Retirement and Thrift Plan

                 Financial Statements and Supplemental Schedules


                          Year ended December 31, 1998





                                    CONTENTS

<TABLE>

<S>                                                                    <C>
Report of Independent Auditors...........................................1

Audited Financial Statements

Statements of Net Assets Available for Benefits..........................2
Statement of Changes in Net Assets Available for Benefits................3
Notes to Financial Statements............................................4


Supplemental Schedules

Item 27(a) - Schedule of Assets Held for Investment Purposes............12
Item 27(d) - Schedule of Reportable Transactions........................13
</TABLE>






<PAGE>   2




                         Report of Independent Auditors

The Benefit Plan Administrative Committee
National-Oilwell Retirement and Thrift Plan

We have audited the accompanying statements of net assets available for benefits
of National-Oilwell Retirement and Thrift Plan as of December 31, 1998 and 1997,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 1998. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan
 and perform the audit to obtain
reasonable assurance about 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.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, schedule of loans or fixed
income obligations as of December 31, 1998, and reportable transactions for the
year ended December 31, 1998, are presented for purpose of additional analysis
and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.

                                                           /s/ Ernst & Young LLP

June 7, 1999




<PAGE>   3





                   National-Oilwell Retirement and Thrift Plan

                 Statements of Net Assets Available for Benefits


<TABLE>
<CAPTION>

                                                                      DECEMBER 31
                                                                  1998            1997
                                                              -----------     -----------
<S>                                                           <C>             <C>      
ASSETS
Cash                                                          $     5,531     $      --
Receivables:
   Employer contributions                                       1,189,087         792,222
   Participant contributions                                      317,109         188,644
   Accrued income                                                 636,009         521,240
   Assets disposed                                                   --            13,151
                                                              -----------     -----------
Total receivables                                               2,142,205       1,515,257
Investments:
   Bank of America Short-Term Investment Fund                        --         7,835,187
   AET Money Market I Fund                                         62,237            --
   Armco, Inc. common stock                                       140,844         219,124
   National-Oilwell, Inc. common stock                          1,682,007            --
   Dodge & Cox Balanced Mutual Fund                                  --         4,885,889
   Ivy International Mutual Fund                                     --         4,516,918
   Vanguard S&P 500 Index Mutual Fund                                --         5,913,084
   The Equitable Life Assurance Society -
      Diversified Common Stock Fund                                  --        13,057,257
   AET Equity Index II Fund                                     8,333,986            --
   IDS Bond Fund                                                1,650,508            --
   AIM Balanced Fund                                            6,335,471            --
   Barron Asset Fund                                            1,557,410            --
   IDS Growth Fund                                             16,239,532            --
   IDS Blue Chip Advantage Fund                                 2,633,670            --
   Janus Worldwide Fund                                         5,574,061            --
   AET Income II Fund                                          14,442,585            --
   Participant loans                                            1,911,394       1,153,533
   Investment contracts with insurance companies (Note 3)      13,728,046      19,464,026
                                                              -----------     -----------
Total investments                                              74,291,751      57,045,018
                                                              -----------     -----------
Total assets                                                   76,439,487      58,560,275

LIABILITIES
Excess contributions to be refunded                                  --             8,324
Assets acquired                                                      --           512,898
Accrued expenses                                                     --            16,990
Other                                                               3,299            --
                                                              -----------     -----------
Total liabilities                                                   3,299         538,212
                                                              -----------     -----------
Net assets available for benefits                             $76,436,188     $58,022,063
                                                              ===========     ===========
</TABLE>



See accompanying notes.


                                                                               2


<PAGE>   4


                   National-Oilwell Retirement and Thrift Plan

            Statement of Changes in Net Assets Available for Benefits


                          Year ended December 31, 1998


<TABLE>
<S>                                                  <C>        
Additions:
   Employer contributions                            $ 3,655,724
   Participant contributions                           3,697,408
   Participant rollovers                                 451,045
   Interest and dividends                              2,554,737
   Net appreciation in fair value of investments       5,398,915
                                                     -----------
Total additions                                       15,757,829
Deductions:
   Benefits paid to participants                       7,581,451
   Administrative expenses                               128,243
                                                     -----------
Total deductions                                       7,709,694
Other changes in net assets:
   Transfers from other qualified plans (Note 1)      10,365,990
                                                     -----------

Net increase                                          18,414,125

Net assets available for benefits at:
   Beginning of year                                  58,022,063
                                                     -----------
   End of year                                       $76,436,188
                                                     ===========
</TABLE>



See accompanying notes.


                                                                               3


<PAGE>   5



                   National-Oilwell Retirement and Thrift Plan

                          Notes to Financial Statements


                                December 31, 1998


1. DESCRIPTION OF THE PLAN

The following description of the National-Oilwell Retirement and Thrift Plan
(the "Plan") is provided for general information only. Participants should refer
to the Summary Plan Description for a more complete description of the Plan's
provisions, a copy of which is available from National-Oilwell (the "Company").

GENERAL

The Plan was established effective April 1, 1987 for the benefit of the
employees of the Company. The Plan is a defined contribution plan covering
substantially all domestic employees who have completed at least one year of
service. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").

CONTRIBUTIONS

Participants may make both pretax and after-tax contributions to the Plan. The
maximum a participant can contribute (both pretax and after-tax combined) is 14%
of compensation, and the minimum is 2%. At its discretion, the Company may match
a portion of the participant's contribution. For 1998 and 1997, the Company
elected to match 25% of the first 6% of each participant's contribution. The
Company may also make an additional discretionary matching contribution as of
the end of each Plan year, which is determined by the Company's financial
performance during the Plan year. For 1998 and 1997, the additional
discretionary match was 40.31% and 43.78% of the first 6% of each participant's
contribution, respectively. The Company also made two other types of
discretionary contributions to the Plan in 1998 and 1997. The first type of
contribution, the Employer Retirement Contribution, is allocated to
participants' accounts based on their years of service. The second discretionary
contribution, the Employer Medical Savings Contribution ("MSA"), was established
to accumulate assets for payment of medical insurance premiums after retirement,
and is allocated to the participants' accounts based on years of service. Each
participant may direct the trustee to invest both the participant's and the
Company's contributions in one or more investment options.



                                                                               4


<PAGE>   6

                  National-Oilwell Retirement and Thrift Plan

                   Notes to Financial Statements (continued)


1. DESCRIPTION OF THE PLAN (CONTINUED)

INVESTMENT OPTIONS

All contributions were invested with the predecessor trustee, Bank of America,
in either a Fixed Income Fund (comprised of the Bank of America Short-Term
Investment Fund and investment contracts with insurance companies); an Equity
Fund (consisting primarily of the Equitable Life Assurance Society - Diversified
Common Stock Fund, a pooled separate account); a Balanced Fund (consisting
primarily of the Dodge & Cox Balanced Mutual Fund); an International Fund
(consisting primarily of the Ivy International Mutual Fund); and an Index Fund
(consisting primarily of the Vanguard S & P 500 Mutual Fund).

Effective April 1, 1998, American Express Trust Company assumed record keeping
and trustee responsibilities of the Plan and the Plan's fund options were
changed to the following participant-directed fund options: AET Equity Index II
Fund, IDS Bond Fund, AIM Balanced Fund, Barron Asset Fund, IDS Growth Fund, IDS
Blue Chip Advantage Fund, Janus Worldwide Fund, National-Oilwell Stock Fund, and
Stable Value Fund (consisting primarily of guaranteed investment contracts and
the AET Income II Fund).

Employees choose between investment options in 5% increments. The Plan also
contains shares of Armco stock which were transferred from the thrift plan of
Armco Inc. Under the current Plan, however, no additional contributions will be
invested in Armco stock.

VESTING

Participants are immediately vested in participant and employer contributions
and the related earnings which have been credited to their accounts.

BENEFIT PAYMENTS

The Plan pays lump-sum benefits on retirement, disability, death, or termination
of employment. In-service withdrawals, subject to certain rules and
restrictions, may also be made from all but the retirement and MSA account
balances.



                                                                               5


<PAGE>   7

                  National-Oilwell Retirement and Thrift Plan

                   Notes to Financial Statements (continued)


1. DESCRIPTION OF THE PLAN (CONTINUED)

PARTICIPANT LOANS

The Plan includes a loan provision that permits participants to borrow up to the
lesser of $50,000 or 50% of the total value of their Plan assets. The loans are
payable in principal installments plus interest at prime plus 1% through payroll
deductions and are due in one- to five-year terms. The loans are considered
individually directed accounts which do not affect the assets of the other Plan
participants.

ADMINISTRATIVE EXPENSES

Certain administrative expenses are paid from the Plan's assets. All other Plan
expenses are paid by the Company.

TRANSFERS FROM OTHER QUALIFIED PLANS

Effective April 1, 1998, the Dreco, Inc. Employees' 401(k) Plan was merged into
the Plan as a result of the Dreco Energy Service Ltd. acquisition occurring in
1997. Approximately $3.2 million in assets was transferred into the Plan related
to the Dreco, Inc. Employees' 401(k) Plan.

Effective April 1, 1998, the PEP, Inc. Employee Profit Sharing/401(k) Plan
merged into the Plan as a result of the PEP, Inc. acquisition occurring in 1997.
Approximately $1.6 million in assets was transferred into the Plan related to
the PEP, Inc. Employee Profit Sharing/401(k) Plan.

Effective October 1, 1998, the Phoenix Energy Products 401(k)/Profit Sharing
Plan was merged into the Plan as a result of the Phoenix Energy Products, Inc.
acquisition occurring in June 1998. Approximately $5.5 million in assets was
transferred into the plan related to the Phoenix Energy Products 401(k)/Profit
Sharing Plan.

PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue contributions at any time and to terminate the
Plan subject to the provisions of ERISA. Participants would be 100% vested in
their accounts in any event.



                                                                               6


<PAGE>   8

                  National-Oilwell retirement and Thrift Plan

                   Notes to Financial Statements (continued)


2. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements of the Plan have been prepared using the accrual method
of accounting. Benefit payments to participants are recorded upon distribution.

INVESTMENT VALUATION

Short-term investments are stated at cost, which approximates fair value.
Investments in corporate common stock and mutual funds are stated at fair value,
based on quotations obtained from national securities exchanges. The investment
contracts with insurance companies included in the Fixed Income Fund and Stable
Value Fund are fully benefit-responsive and, therefore, are recorded at contract
value which approximates fair value. Contract value represents contributions
made under the contract plus interest at the contract rate less funds used to
pay benefits and expenses. The fair value of the participation units owned by
the Plan in the pooled separate account included in the Equity Fund is based on
quoted redemption value on the last business day of the Plan year. Participant
loans are stated at cost, which approximates fair value.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and accompanying notes
and schedules. Actual results could differ from those estimates.

3. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES

The Company currently holds a guaranteed investment contract with Connecticut
General Life Insurance Company ("CIGNA"), a group annuity contract with Kentucky
Commonwealth Life Insurance Company ("Kentucky Commonwealth"), and a group
annuity contract with New York Life Insurance Company ("New York Life").
Withdrawals of the funds' assets not in compliance with the CIGNA or New York
Life contracts are subject to certain penalties.



                                                                               7


<PAGE>   9

                  National-Oilwell Retirement and Thrift Plan

                  Notes to Financial Statements (continued)


3. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES (CONTINUED)

The contract values at December 31, 1998 and 1997 are as follows:


<TABLE>

                                   DECEMBER 31
                             1998            1997
                          -----------     -----------
<S>                       <C>             <C>        
CIGNA                     $ 5,655,553     $ 5,573,969
New York Life               3,757,001       3,702,547
Met Life                         --         5,937,626
Kentucky Commonwealth       4,315,492       4,249,884
                          ===========     ===========
                          $13,728,046     $19,464,026
                          ===========     ===========
</TABLE>


The insurance companies maintain deposits in funds to which interest is added.
The rates in effect for the years ended December 31, 1998 and 1997 are as
follows:


<TABLE>
<CAPTION>

                                        YEAR ENDED DECEMBER 31               MATURITY
                                        1998              1997                DATE
                                      ---------       ---------          ------------------
<S>                                  <C>               <C>              <C>
CIGNA                                  6.07%             6.07%           December 31, 1999
New York Life                          6.10%             6.10%           December 31, 1999
Met Life                               8.22%             8.22%           December 31, 1998
Kentucky Commonwealth                  6.41%             6.41%           January 2, 2001
</TABLE>


All rates are fixed through maturity.



                                                                               8


<PAGE>   10

                   National-Oilwell Retirement and Thrift Plan

                    Notes to Financial Statements (continued)


4. CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION


<TABLE>
<CAPTION>

                                         NET ASSETS                                                                 
                                       AVAILABLE FOR                                                                NETAPPRECIATION
                                        BENEFITS AT                            PARTICIPANT          INTEREST       (DEPRECIATION) IN
                                        DECEMBER 31          EMPLOYER       CONTRIBUTIONS AND          AND            FAIR VALUE OF
                                            1997           CONTRIBUTIONS        ROLLOVERS           DIVIDENDS         INVESTMENTS
                                      ---------------     ---------------     --------------      --------------   -----------------
<S>                                   <C>                 <C>                 <C>                 <C>               <C>
Participant Directed:
   Fixed Income Fund                  $    27,902,549     $       152,361     $      180,668      $      355,101    $       63,232
   Equity Fund                             13,044,526              53,204             78,388               3,676         1,511,341
   Balanced Fund                            5,035,110              29,965             47,812             106,506           216,313
   International Fund                       4,585,969              28,970             44,553                 938           554,531
   Index Fund                               6,104,199              47,383             81,075              31,368           769,304
   Stable Value Fund                               --             558,158            533,312             256,661         1,069,351
   IDS Bond Fund                                   --              96,965            192,012              64,793           (31,288)
   AET Equity Index II Fund                        --             265,067            498,781              12,551           830,645
   AIM Balanced Fund                               --             132,845            279,477              52,272           122,990
   IDS Blue Chip Advantage Fund                    --             197,787            331,480             193,016           225,453
   Janus Worldwide Fund                            --             132,161            236,155             298,905            25,816
   Barron Asset Fund                               --             229,053            379,656              (7,121)          117,323
   IDS Growth Fund                                 --             235,977            481,319             970,442           189,922
   National-Oilwell Stock Fund                     --             161,290            299,561                 779          (241,613)
   Participant loans                        1,130,431                  --                 --             144,556                --
Non-Participant Directed:
   Armco Stock Fund                           219,279                  --                 --                  11           (24,405)
   Other                                           --           1,334,538            484,204              70,283                --
                                      ---------------     ---------------     --------------      --------------    --------------
                                      $    58,022,063     $     3,655,724     $    4,148,453      $    2,554,737    $    5,398,915
                                      ===============     ===============     ==============      ==============    ==============

<CAPTION>
                                                                                                                     NET ASSETS
                                                                                                                    AVAILABLE FOR
                                                                                                TRANSFERS FROM       BENEFITS AT
                                          BENEFIT        ADMINISTRATIVE      INTERFUND         OTHER QUALIFIED       DECEMBER 31
                                          PAYMENTS          EXPENSES         TRANSFERS               PLANS              1998
                                       --------------     ------------    ---------------       ------------       ---------------
<S>                                    <C>                <C>             <C>                   <C>                 <C>
Participant Directed:
   Fixed Income Fund                   $     (654,014)    $    (38,626)   $      (441,139)      $(27,520,132)       $           --
   Equity Fund                               (430,942)         (20,430)          (368,801)       (13,870,962)                   --
   Balanced Fund                             (143,849)          (1,856)           146,116         (5,436,117)                   --
   International Fund                        (106,912)          (1,954)          (219,267)        (4,886,828)                   --
   Index Fund                                 (54,998)          (2,343)           838,292         (7,814,280)                   --
   Stable Value Fund                       (3,466,887)         (25,806)          (446,647)        30,358,261            28,836,403
   IDS Bond Fund                              (47,627)          (1,392)           378,478            998,567             1,650,508
   AET Equity Index II Fund                  (520,704)          (7,190)          (622,148)         7,841,446             8,298,448
   AIM Balanced Fund                         (480,983)          (5,518)          (436,111)         6,670,499             6,335,471
   IDS Blue Chip Advantage Fund               (28,566)          (1,108)           290,848          1,424,760             2,633,670
   Janus Worldwide Fund                      (363,939)          (4,965)           (14,053)         5,263,981             5,574,061
   Barron Asset Fund                          (27,233)            (827)           701,303            163,655             1,555,809
   IDS Growth Fund                           (952,372)         (13,141)        (1,645,038)        16,955,289            16,222,398
   National-Oilwell Stock Fund                (37,089)            (889)         1,577,112              7,871             1,767,022
   Participant loans                         (254,912)              --            333,492            561,787             1,915,354
Non-Participant Directed:
   Armco Stock Fund                           (10,424)             (84)           (70,434)            26,905               140,848
   Other                                           --           (2,114)            (2,003)          (378,712)            1,506,196
                                       --------------     ------------    ---------------       ------------       ---------------
                                       $   (7,581,451)    $   (128,243)   $            --       $ 10,365,990       $    76,436,188
                                      ==============     ============    ===============       ============        ===============

</TABLE>



See accompanying notes.

                                                                               9



<PAGE>   11

                  National-Oilwell Retirement and Thrift Plan

                   Notes to Financial Statements (continued)

5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:


<TABLE>
<CAPTION>

                                                               DECEMBER 31
                                                                   1997
                                                               -----------
<S>                                                            <C>        
Net assets available for benefits per financial statements     $58,022,063
Amounts allocated to withdrawing participants                      115,729
                                                               -----------
Net assets available for benefits per Form 5500                $57,906,334
                                                               ===========
</TABLE>


The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:


<TABLE>
<CAPTION>

                                                                        YEAR ENDED
                                                                     DECEMBER 31 1998
                                                                    -------------------
<S>                                                                 <C>               
Benefits paid to participants per the financial statements          $        7,581,451
Less amounts allocated to withdrawing participants at 
 beginning of year                                                            (111,729)
                                                                    ------------------
Benefits paid to participants per Form 5500                         $        7,469,722
                                                                    ==================
</TABLE>


Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but which have not yet been paid as of that date.

6. INCOME TAX STATUS

The Plan has received a determination letter from the Internal Revenue Service
dated September 18, 1997, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the "IRC") and, therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to operate
in conformity with the IRC to maintain its qualification. The Benefit Plan
Administrative Committee believes the Plan is being operated in compliance with
the applicable requirements of the IRC and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.


                                                                              10


<PAGE>   12

                  National-Oilwell Retirement and Thrift Plan

                   Notes to Financial Statements (continued)


7. YEAR 2000 ISSUE (UNAUDITED)

The Company has determined that it will be necessary to take certain steps in
order to ensure that the Plan's information systems are prepared to handle year
2000 dates. The Company is taking a two phase approach. The first phase
addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Company anticipates substantially completing
this phase of the project by June 1999. Costs associated with modifying software
and equipment are not estimated to be significant and will be paid by the
Company.

For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that they
have developed plans to address their own year 2000 problems as they relate to
the Plan's operations. All third party service providers have indicated that
they will be year 2000 compliant by mid 1999. If modification of data processing
systems of either the Plan, the Company, or its service providers are not
completed timely, the year 2000 problem could have a material impact on the
operations of the Plan. However, the Plan's management is developing a
contingency plan in case the systems are inoperable for an extended period.




                                                                              11

<PAGE>   13




                   National-Oilwell Retirement and Thrift Plan

          Item 27(a) - Schedule of Assets Held for Investment Purposes


                                December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

       IDENTITY OF ISSUE, BORROWER,                                                                                    CURRENT
         LESSOR, OR SIMILAR PARTY                     DESCRIPTION OF INVESTMENT                       COST             VALUE
--------------------------------------------   -----------------------------------------        ---------------     -------------
<S>                                           <C>                                             <C>                  <C>
*Armco Inc.                                    Armco Inc. common stock                          $       408,470     $     140,844

New York Life Insurance Company                Group Annuity Contract #GA 30498                       3,757,001         3,757,001

Connecticut General Life Insurance Company     Guaranteed Investment Contract #25198                  5,655,553         5,655,553

Kentucky Commonwealth Life Insurance Company   Group Annuity Contract #ADA00804FR                     4,315,492         4,315,492

*American Express Trust Company                AET Money Market I Fund                                   62,237            62,237

*National-Oilwell, Inc.                        National-Oilwell, Inc. common stock                    1,649,463         1,682,007

*American Express Trust Company                AET Equity Index II Fund                               7,461,593         8,333,986

*American Express Trust Company                IDS Bond Fund                                          1,673,019         1,650,508

*American Express Trust Company                AIM Balanced Fund                                      6,176,893         6,335,471

*American Express Trust Company                Barron Asset Fund                                      1,400,931         1,557,410

*American Express Trust Company                IDS Growth Fund                                       15,597,996        16,239,532

*American Express Trust Company                IDS Blue Chip Advantage Fund                           2,264,546         2,633,670

*American Express Trust Company                Janus Worldwide Fund                                   5,255,328         5,574,061

*American Express Trust Company                AET Income II Fund                                    14,267,012        14,442,585

*Participant loans                             Loans with various maturities and interest
                                                  rates ranging from 7.24% to 11.0%
                                                                                                             --         1,911,394
                                                                                                ---------------     ------------- 
                                                                                                $    69,945,534     $  74,291,751
                                                                                                ===============     ============= 
</TABLE>



*Party-in-interest

                                                                              12


<PAGE>   14



                   National-Oilwell Retirement and Thrift Plan

                Item 27(d) - Schedule of Reportable Transactions


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001



<TABLE>
<CAPTION>

                                                                                                                              
                                                                                                 PURCHASE         SELLING     
  IDENTITY OF PARTY INVOLVED                        DESCRIPTION OF ASSET                          PRICE            PRICE      
------------------------------                   ----------------------------                  -------------   ---------------
<S>                                             <C>                                           <C>              <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS

American Express Trust Company                   Bank of America Short-Term 
                                                   Investment Fund
                                                       Sales:                                  $          --   $  7,338,232   
                                                                                                          --      5,329,730   
                                                                                                          --      7,813,005   
                                                                                                          --     13,867,452   
                                                                                                          --      4,885,991   

                                                       Purchases:                                  5,328,730             --   
                                                                                                   6,960,280             --   
                                                                                                   6,906,173             --   
                                                                                                   4,884,991             --   
                                                                                                   7,812,005             --   

American Express Trust Company                   AET Equity Index II Fund
                                                       Purchase                                    7,814,280             --   


<CAPTION>

                                                                                                 CURRENT VALUE OF
                                                                                 COST OF             ASSET ON          NET GAIN 
   IDENTITY OF PARTY INVOLVED                    DESCRIPTION OF ASSET             ASSET          TRANSACTION DATE       (LOSS)
------------------------------                   ---------------------------  ------------    --------------------   -------------
<S>                                              <C>                          <C>             <C>                   <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS

American Express Trust Company                   Bank of America Short-Term 
                                                   Investment Fund
                                                       Sales:                 $   7,338,232   $     7,338,232        $        --
                                                                                  5,329,730         5,329,730                 --
                                                                                  7,813,005         7,813,005                 --
                                                                                 13,867,452        13,867,452                 --
                                                                                  4,885,991         4,885,991                 --

                                                       Purchases:                 5,328,730         5,328,730                 --
                                                                                  6,960,280         6,960,280                 --
                                                                                  6,906,173         6,906,173                 --
                                                                                  4,884,991         4,884,991                 --
                                                                                  7,812,005         7,812,005                 --

American Express Trust Company                   AET Equity Index II Fund
                                                       Purchase                   7,814,280         7,814,280                 --
</TABLE>



                                                                              13



<PAGE>   15

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

                                                                                                                              
                                                                                          PURCHASE         SELLING     
   IDENTITY OF PARTY INVOLVED           DESCRIPTION OF ASSET                               PRICE            PRICE      
------------------------------          ----------------------------                  -------------   ---------------
<S>                                    <C>                                           <C>              <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company          AIM Balanced Fund
                                              Purchase                                $   5,331,407   $         --   

American Express Trust Company          IDS Growth Fund
                                              Purchase                                   13,984,226             --   

American Express Trust Company          Janus Worldwide Fund
                                              Purchase                                    4,886,828             --   

American Express Trust Company          AET Income II Fund
                                              Purchases:                                  6,424,308             --   
                                                                                          7,338,232             --   
American Express Trust Company          Metropolitan Life Insurance 
                                           Company Group Annuity Contract 
                                           #20096 
                                             Sale                                                --      6,054,416   

<CAPTION>

                                                                                              CURRENT VALUE OF
                                                                                 COST OF        ASSET ON          NET GAIN 
   IDENTITY OF PARTY INVOLVED           DESCRIPTION OF ASSET                     ASSET        TRANSACTION DATE    (LOSS)
-------------------------------         ---------------------------              ----------   -----------------   ---------
<S>                                     <C>                                    <C>            <C>                 <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED

American Express Trust Company          AIM Balanced Fund
                                              Purchase                       $   5,331,407   $     5,331,407    $        --

American Express Trust Company          IDS Growth Fund
                                              Purchase                          13,984,226        13,984,226             --

American Express Trust Company          Janus Worldwide Fund
                                              Purchase                           4,886,828         4,886,828             --

American Express Trust Company          AET Income II Fund
                                              Purchases:                         6,424,308         6,424,308             --
                                                                                 7,338,232         7,338,232             --

American Express Trust Company          Metropolitan Life Insurance 
                                           Company Group Annuity Contract 
                                              #20096 
                                                Sale                             6,054,416         6,054,416             --
</TABLE>


                                                                              14


<PAGE>   16

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

                                                                                                                              
                                                                                                 PURCHASE         SELLING     
   IDENTITY OF PARTY INVOLVED                        DESCRIPTION OF ASSET                         PRICE            PRICE      
------------------------------                   ----------------------------                  -------------   ---------------
<S>                                    <C>                                                    <C>               <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)


American Express Trust Company                   AET Money Market I Fund
                                                       Sale                                    $          --   $  2,956,937   
                                                       Purchase                                    3,019,173             --   

American Express Trust Company                   Dodge & Cox Balanced Mutual 
                                                 Fund
                                                       Sale                                               --      5,328,730   

American Express Trust Company                   Ivy International Mutual 
                                                 Fund
                                                       Sale                                               --      4,884,991   

American Express Trust Company                   Vanguard S&P 500 Index Mutual 
                                                 Fund
                                                       Sale                                               --      7,812,005   
                                                                                                          

<CAPTION>

                                                                                                    CURRENT VALUE OF
                                                                                      COST OF         ASSET ON           NET GAIN 
   IDENTITY OF PARTY INVOLVED                   DESCRIPTION OF ASSET                   ASSET        TRANSACTION DATE      (LOSS)
-----------------------------                 -------------------------            ------------    ------------------   -----------
<S>                                         <C>                                  <C>              <C>                   <C>
CATEGORY (i) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   AET Money Market I Fund
                                                       Sale                        $   2,956,937   $     2,956,937      $        --
                                                       Purchase                        3,019,173         3,019,173               --

American Express Trust Company                   Dodge & Cox Balanced Mutual 
                                                 Fund
                                                       Sale                            4,511,873         5,328,730          816,857

American Express Trust Company                   Ivy International Mutual 
                                                 Fund
                                                       Sale                            3,485,061         4,884,991        1,399,930

American Express Trust Company                   Vanguard S&P 500 Index Mutual 
                                                 Fund
                                                       Sale                            5,814,031         7,812,005        1,997,974
                                                                                       
</TABLE>



                                                                              15



<PAGE>   17

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

                                                                                                                             
                                                                                                 PURCHASE          SELLING   
     IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                        PRICE             PRICE    
---------------------------------                    -------------------------              --------------      -------------
<S>                                                 <C>                                    <C>                 <C>

CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS


American Express Trust Company                   Equitable Life Assurance Society -
                                                    Diversified Common Stock Fund
                                                       Sales:                                $            --   $  6,960,280  
                                                                                                          --      6,906,173  

American Express Trust Company                   Bank of America Short-Term 
                                                  Investment Fund
                                                       Sales                                              --     44,787,322  
                                                       Purchases                                  36,952,135             --  

American Express Trust Company                   Vanguard S&P 500 Index Mutual 
                                                  Fund
                                                       Sales                                              --      7,839,262  
                                                       Purchases                                   1,156,874             --  

American Express Trust Company                   Dodge & Cox Balanced Mutual 
                                                 Fund
                                                       Sales                                              --      5,351,979  
                                                       Purchases                                     249,777             --  


<CAPTION>

                                                                                               CURRENT VALUE OF
                                                                                 COST OF           ASSET ON            NET GAIN 
     IDENTITY OF PARTY INVOLVED             DESCRIPTION OF ASSET                  ASSET       TRANSACTION DATE         (LOSS)
--------------------------------        ------------------------------        -------------   ------------------   -------------
<S>                                    <C>                                   <C>             <C>                  <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS

American Express Trust Company          Equitable Life Assurance Society -
                                           Diversified Common Stock Fund
                                              Sales:                          $   1,920,094   $     6,960,280      $   5,040,186
                                                                                  1,920,094         6,906,173          4,986,079

American Express Trust Company          Bank of America Short-Term 
                                         Investment Fund
                                              Sales                              44,787,322        44,787,322                 --
                                              Purchases                          36,952,135        36,952,135                 --

American Express Trust Company          Vanguard S&P 500 Index Mutual 
                                         Fund
                                              Sales                               5,834,411         7,839,262          2,004,851
                                              Purchases                           1,156,874         1,156,874                 --

American Express Trust Company          Dodge & Cox Balanced Mutual 
                                        Fund
                                              Sales                               4,531,830         5,351,979            820,149
                                              Purchases                             249,777           249,777                 --
</TABLE>



                                                                              16


<PAGE>   18

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

                                                                                                                             
                                                                                              PURCHASE           SELLING   
  IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                        PRICE              PRICE    
-------------------------------                 ----------------------------                ---------------    --------------
<S>                                             <C>                                          <C>              <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   Ivy International Mutual Fund
                                                       Sales                                   $          --   $  5,209,957  
                                                       Purchases                                     138,507             --  

American Express Trust Company                   The Equitable Life Assurance Society
                                                    Diversified Common Stock Fund
                                                       Sales                                              --     14,652,373  
                                                       Purchases                                      83,775             --  

American Express Trust Company                   AET Equity Index II Fund
                                                       Sales                                              --      2,214,255  
                                                       Purchases                                   9,693,868             --  

American Express Trust Company                   IDS Bond Fund
                                                       Sales                                              --        916,660  
                                                       Purchases                                   2,609,832             --  

<CAPTION>


                                                                                                 CURRENT VALUE OF
                                                                                   COST OF          ASSET ON            NET GAIN 
     IDENTITY OF PARTY INVOLVED                DESCRIPTION OF ASSET                 ASSET        TRANSACTION DATE        (LOSS)
--------------------------------           -----------------------------        -------------   ------------------  --------------
<S>                                       <C>                                   <C>            <C>                 <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company             Ivy International Mutual Fund
                                                 Sales                          $   3,722,832   $     5,209,957     $    1,487,125
                                                 Purchases                            138,507           138,507                 --

American Express Trust Company             The Equitable Life Assurance Society
                                              Diversified Common Stock Fund
                                                 Sales                              4,564,392        14,652,373         10,087,981
                                                 Purchases                             83,775            83,775                 --

American Express Trust Company             AET Equity Index II Fund
                                                 Sales                              2,232,275         2,214,255            (18,020)
                                                 Purchases                          9,693,868         9,693,868                 --

American Express Trust Company             IDS Bond Fund
                                                 Sales                                936,813           916,660            (20,153)
                                                 Purchases                          2,609,832         2,609,832                 --
</TABLE>





                                                                              17

<PAGE>   19

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001

<TABLE>
<CAPTION>

                                                                                                                             
                                                                                                 PURCHASE          SELLING   
     IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                        PRICE             PRICE    
--------------------------------                 -----------------------------               ---------------   --------------
<S>                                             <C>                                          <C>               <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   AIM Balanced Fund
                                                    Sales                                    $            --   $  1,525,261  
                                                    Purchases                                      7,810,312             --  

American Express Trust Company                   Barron Asset Fund
                                                    Sales                                                 --        267,839  
                                                    Purchases                                      1,716,243             --  

American Express Trust Company                   IDS Blue Chip Advantage Fund
                                                    Sales                                                 --        270,813  
                                                    Purchases                                      2,535,381             --  


<CAPTION>

                                                                                                     CURRENT VALUE OF
                                                                                      COST OF           ASSET ON          NET GAIN 
     IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET             ASSET        TRANSACTION DATE       (LOSS)
---------------------------------               ------------------------------    --------------   -------------------  -----------
<S>                                            <C>                               <C>              <C>                <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   AIM Balanced Fund
                                                    Sales                          $   1,633,419   $     1,525,261      $ (108,158)
                                                    Purchases                          7,810,312         7,810,312              --

American Express Trust Company                   Barron Asset Fund
                                                    Sales                                315,312           267,839         (47,473)
                                                    Purchases                          1,716,243         1,716,243              --

American Express Trust Company                   IDS Blue Chip Advantage Fund
                                                    Sales                                270,835           270,813             (22)
                                                    Purchases                          2,535,381         2,535,381              --
</TABLE>




                                                                              18

<PAGE>   20

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

                                                                                                                           
                                                                                               PURCHASE          SELLING 
   IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                        PRICE             PRICE    
-------------------------------                 -------------------------                    -------------     ------------
<S>                                             <C>                                         <C>               <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   IDS Growth Fund
                                                       Sales                                 $            --   $  2,786,966
                                                       Purchases                                  18,567,013             --

American Express Trust Company                   Janus Worldwide Fund                                                      
                                                       Sales                                              --      1,169,010
                                                       Purchases                                   6,436,433             --

American Express Trust Company                   AET Income II Fund
                                                       Sales                                              --     14,035,807
                                                       Purchases                                  28,076,012             --

American Express Trust Company                   Metropolitan Life Insurance 
                                                    Company Group Annuity Contract
                                                    # 20096                                               
                                                       Sales                                              --      6,054,416
                                                       Purchases                                     116,790             --


<CAPTION>

                                                                                                       CURRENT VALUE OF
                                                                                         COST OF           ASSET ON       NET GAIN 
   IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                  ASSET        TRANSACTION DATE   (LOSS)
-------------------------------                 -------------------------             -------------   ------------------  --------
<S>                                            <C>                                   <C>             <C>                 <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   IDS Growth Fund
                                                       Sales                          $   2,969,017   $     2,786,966   $  182,051)
                                                       Purchases                         18,567,013        18,567,013           --

American Express Trust Company                   Janus Worldwide Fund                                                            
                                                       Sales                              1,181,105         1,169,010      (12,095)
                                                       Purchases                          6,436,433         6,436,433           --

American Express Trust Company                   AET Income II Fund
                                                       Sales                             13,809,000        14,035,807       226,807
                                                       Purchases                         28,076,012        28,076,012           --

American Express Trust Company                   Metropolitan Life Insurance 
                                                    Company Group Annuity Contract
                                                    # 20096                          
                                                       Sales                              6,054,416         6,054,416           --
                                                       Purchases                            116,790           116,790           --


</TABLE>

                                                                              19

<PAGE>   21

                   National-Oilwell Retirement and Thrift Plan

          Item 27(d) - Schedule of Reportable Transactions (continued)


                          Year ended December 31, 1998


                             EIN: 76-0211719 PN: 001


<TABLE>
<CAPTION>

                                                                                                                             
                                                                                                 PURCHASE          SELLING   
     IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                        PRICE             PRICE    
---------------------------------                 ---------------------------                  -------------   ------------
<S>                                               <C>                                          <C>             <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   AET Money Market I Fund
                                                    Sales                                      $          --   $  2,956,936  
                                                    Purchases                                      3,019,173             --  

National Oilwell, Inc.                           National Oilwell, Inc. common stock
                                                    Sales                                                 --        366,294  
                                                    Purchases                                      2,308,542             --  

<CAPTION>

                                                                                                       CURRENT VALUE OF
                                                                                         COST OF           ASSET ON        NET GAIN
     IDENTITY OF PARTY INVOLVED                       DESCRIPTION OF ASSET                ASSET        TRANSACTION DATE     (LOSS)
---------------------------------                 ---------------------------         -------------   -----------------  ----------
<S>                                               <C>                                 <C>             <C>                <C>
CATEGORY (iii) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS (CONTINUED)

American Express Trust Company                   AET Money Market I Fund
                                                    Sales                             $   2,956,936   $     2,956,936    $      --
                                                    Purchases                             3,019,173         3,019,173           --

National Oilwell, Inc.                           National Oilwell, Inc. common stock
                                                    Sales                                   659,079           366,294     (292,785)
                                                    Purchases                             2,308,542         2,308,542           --


</TABLE>






                                                                              20