Employees and contractors at our Brae platform add profitable production from the North Sea. Other core regions include the U.S., Canada and Equatorial Guinea.
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Marathon assets, such as those in the Bakken and Eagle Ford plays, are indicative of our steady growth and the exciting opportunities that are yet to come.
At Marathon, we realize the importance of being transparent and regularly sharing company and industry information with our customers, employees and stakeholders.
Pablo Ondo Zetmayer, a gas plant operator in Equatorial Guinea, is a prime example of Marathon’s globally diverse workforce, which enjoys worldwide experiences and world-class opportunities.
With a focus on safety, innovation and environmental stewardship, Marathon is among the world’s leading independent exploration and production companies.
Our spirit of innovation and commitment to delivering superior products that address even the most complex challenges drives Marathon’s legacy of technical excellence.
STABLE PRODUCTION FUNDS PROFITABLE GROWTH
Marathon Oil’s global portfolio of liquids-focused base assets continues to generate significant operating income and cash flow. To maximize recovery and income from these assets, the Company strives for high operational reliability, disciplined investment and a competitive cost structure.
Major areas of liquid hydrocarbon production are the North Sea offshore Norway and the U.K.; in Africa, Equatorial Guinea (EG) and Libya; in the U.S., the Gulf of Mexico, Wyoming, Oklahoma and Texas; and in Canada from the Athabasca Oil Sands Project (AOSP). Primary natural gas assets are located in EG, Alaska, Wyoming, Oklahoma, Texas, the Gulf of Mexico, Colorado and Louisiana.
Marathon Oil’s record of strong reliability continued in 2011 with 96 percent average operational reliability for all major operated exploration and production (E&P) assets. The Company also drilled and participated in a number of development and exploration wells in base assets, completed the expansion of the AOSP and sold non-core assets in the Gulf of Mexico and Louisiana.
The Alvheim floating production, storage and offloading (FPSO) vessel has outperformed production expectations through superior reliability and continued development of satellite production. Alvheim reached a milestone on Dec. 5, 2011, when cumulative production since its June 2008 start-up reached 150 million gross barrels of oil.
The Company has increased the FPSO’s crude oil production capacity twice; once in 2009 to a capacity of 142,000 gross barrels per day (bpd), and again in 2011 through debottlenecking activities that boosted capacity to approximately 150,000 gross bpd.
Plans in 2012 include development drilling in the Alvheim area and the operated Volund field. Marathon Oil expects an investment decision on development of the Bøyla (formerly Marihøne) discovery in the second quarter. Bøyla first production is expected in the fourth quarter of 2014.
The Company owns interests in the Brae complex and the Foinaven field in the U.K. sector of the North Sea. In addition to equity volumes, Marathon Oil also contracts third party volumes processed through the Brae infrastructure, enabling the Company to extend the facilities’ life.
Base assets in EG include the Alba Field (63 percent working interest), and equity interests in the Alba liquefied petroleum gas (LPG) plant, Atlantic Methanol Production Company LLC (AMPCO) and a liquefied natural gas (LNG) production facility on Bioko Island. High reliability has helped boost production and income from these assets. An extended maintenance turnaround of all processing facilities in EG is planned to start late in the first quarter of 2012 and be completed early in the second quarter.
Marathon Oil owns a 20 percent outside-operated interest in the AOSP, which includes the Muskeg River and Jackpine mines, the Scotford upgrader and rights to more than 215,000 acres of potentially mineable land in Alberta, Canada. The existing AOSP operations provide stable, long-life Organization for Economic Co-operation and Development (OECD) production with upside potential from future mining expansions as well as in-situ opportunities.
Following expansion, the Scotford upgrader came online in the second quarter and achieved full capacity in the third quarter of 2011, complementing the mine expansion that started operations in September 2010. As a result, Marathon Oil has more than 50,000 bpd of net production and upgrading capacity in the Canadian oil sands. Phase 1 of an AOSP debottlenecking project is expected to generate an additional 2,000 net barrels of synthetic crude oil production when it is completed in the fourth quarter of 2012.
Civil unrest in Libya necessitated suspension of production of approximately 45,000 net barrels of oil equivalent per day (boed) in February 2011. In January 2012, Libya produced 190,000 gross barrels of oil per day (bbld) (25,000 net bbld), and sales are planned to resume in the first quarter of 2012. The return of Marathon Oil’s operations in Libya to pre-conflict levels is unknown at this time; however, the Company and its partners in the Waha Concessions are assessing the condition of these assets and determining when the full resumption of operations will be viable.
Marathon Oil’s 2012 capital budget of approximately $1.2 billion for base assets includes approximately $900 million primarily for in-fill drilling in Norway and the Rocky Mountains, and appraisal drilling in the Gulf of Mexico. In addition, $275 million is allocated for Oil Sands Mining to initiate AOSP debottlenecking projects and the Quest Carbon Capture and Storage project.
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Marathon’s commitment to the community is deeply rooted in our core values. Our employee-run Books for Bioko program collects supplies for schools in Equatorial Guinea.
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