Marathon Petroleum Navigates Global Challenges in Q1 2022

FINDLAY, Ohio — As the country and the world emerge from the COVID-19 pandemic, Marathon Petroleum Corp. (MPC) is grappling with supply and demand challenges on a global scale.

"Year over year, demand trends have been, for the most part, positive and the market seems to have reached a post-COVID point of stability," MPC President and CEO Michael Hennigan said during the company's first-quarter 2022 earnings call, held earlier this month. "Distillate remains stable, jet continues to recover, and gasoline has been more resilient than we would have expected given normal seasonality and recent geopolitical events."

According to Hennigan, sanctions and boycotts driven by the conflict between Russia and Ukraine have increased supply uncertainties — on top of already tight product inventories.

"We expect continued volatility in 2022, with an advantage for safe, reliable and low-cost operators. We are focused on optimizing our maintenance schedules to maximize uptime and allow us to do what we can to produce volumes to meet the market demand," he said. "As we do this, we remain steadfast in our commitment to safely operate our assets, protect the health and safety of our employees, and support the communities in which we operate.

"With this in mind, we anticipate the U.S. refining system running at higher utilization rates in the coming quarters to meet rising demand," Hennigan added.

For the first three months of 2022, MPC reported net income of $845 million, compared to a net loss of $242 million for the first quarter of 2021.

Adjusted EBITDA was $2.6 billion in the quarter, compared to $1.6 billion for the year-ago period. The first quarter of 2021 included $332 million of adjusted EBITDA from discontinued operations, according to the company.

Broken out by segment, refining and marketing's adjusted EBITDA was $1.4 billion in Q1 2022, vs. $23 million a year ago. The segment was driven by higher margins and throughput in all regions. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $145 million in the first quarter of 2022 and $112 million in the first quarter of 2021. First-quarter 2021 segment adjusted EBITDA also excludes winter storm effects of $31 million.

The midstream segment's adjusted EBITDA was $1.4 billion in the first quarter of 2022, vs. $1.3 billion for the first quarter of 2021. First-quarter 2021 segment adjusted EBITDA excludes winter storm effects of $16 million.

"MPC's first-quarter results reflect the continued recovery for our products and services, which supported higher margins and higher throughput across regions," Hennigan said.

Findlay-based MPC is an integrated, downstream energy company. It operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.

MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.