Marathon Oil outlines business strategy
  by: OilOnline
  Thursday, February 28, 2002

Marathon Oil Corp. announced that the company will continue to build upon its strong 2001 performance with a business strategy designed to create sustainable value growth through innovative energy solutions and unique partnerships.

This and other key elements of Marathon's strategies and business plans were outlined today during a meeting with security analysts. In his comments before the analysts, Marathon president and CEO Clarence P. Cazalot, Jr., posed the question of how Marathon can compete in a consolidating environment where the market puts a premium on size. ``Marathon's view is that the real issue confronting the energy industry is not how large a company can grow, but rather, how it can achieve profitable growth and create value,'' said Cazalot. ``We intend to meet this challenge and differentiate Marathon by adopting a business model that enables our company to use its size as an advantage -- linking our technical strength, commercial skills and international stature with a willingness to do things differently, and to do so with the speed and agility of a small enterprise.''

Cazalot noted that Marathon's 2001 performance illustrates the company's intent to deliver on its commitments. Specifically, the company generated competitive returns in its upstream businesses through $150 million in cost reductions, portfolio rationalizations, and a nearly two percent growth in production. The company's deepwater exploration program also yielded one Gulf of Mexico success on the Ozona prospect but recent drilling at the Redwood prospect, also in the Gulf of Mexico, was unsuccessful. The company also established a new profitable core area in Equatorial Guinea and rejuvenated its portfolio offshore Norway. The acquisition of Pennaco during 2001 has strengthened Marathon's natural gas position, while Marathon Ashland Petroleum (MAP), the company's U.S. refining and marketing joint venture, continued to deliver industry-leading downstream performance. Cazalot added that all of these accomplishments were achieved while Marathon maintained its top quartile health, environment and safety performance.

Looking ahead, in the area of exploration and production, Marathon plans to optimize earnings and cash flow from existing producing assets with a planned three percent production volume growth during 2002. In addition, the company plans to re-balance exploration between core areas and deepwater, create value growth through business development and exploration, and access profitable new long-life core areas like the recently acquired assets in Equatorial Guinea.