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NEW YORK -- Marathon Oil Corp. provided investors with a comprehensive report on its global operations, and outlined its strategic plans to achieve profitable growth.
"Marathon continues to deliver on our strategic commitments," stated Clarence P. Cazalot Jr., president and CEO. "We have achieved consistent production growth, executed on major projects, significantly improved operational reliability, reduced controllable costs, operated a top-tier downstream business with superior profitability, and generated significant value through a successful portfolio optimization program."
Cazalot maintained that the company has "a very high level of investment largely behind us -- including the Alvheim/Vilje and Volund developments offshore Norway; oil sands mining in Canada; and the Garyville Major Expansion project in Louisiana -- and now it's time to realize the benefits of those projects. Marathon's upstream margins are very competitive and should remain so as production increases, and we focus on reducing costs per barrel," he continued. "Our downstream business has performed well throughout this challenging economic environment, and we expect this to continue and strengthen as the Garyville refinery expansion comes online."
David E. Roberts Jr., executive vice president, Upstream, highlighted Marathon's strategy to continue to generate production and resource growth, developing projects that create value beyond 2012. He said the focus is on three key growth areas: deepwater, unconventional oil and gas, and oil sands.
"Our upstream business is, in essence, the simple calculus of adding resources that can be converted to profitable production or monetized in an efficient manner," Roberts said. "Through a combination of well-executed exploration and selective acquisitions, Marathon has tripled the company's resource base since 2001, with a resource life approaching 40 years."
Through the first nine months of 2009, Marathon said it demonstrated strong upstream production growth and expects the full year to be approximately 6 percent above 2008 levels. For the period 2008-2011, the company continues to expect an upstream production compound annual growth rate (CAGR) of approximately 4 percent.
Marathon's exploration drilling program for 2010 includes three to four significant wells in the Gulf of Mexico, two high-risk, high-potential wells in Indonesia, as well as activity in Norway, Libya, Angola and onshore resource plays of the United States.
Gary R. Heminger, executive vice president, Downstream, said Marathon's downstream business has consistently performed at the top of its peer group in the domestic market and, through the first nine months of 2009, ranked first in profitability per barrel of crude throughput among this group.
Janet F. Clark, executive vice president and CFO, reiterated Marathon's focus on financial discipline. As part of that strategy, Clark said the company's capital investment focus will increasingly shift away from downstream toward upstream opportunities.
Marathon Oil Third Quarter Net Drops