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BUILDING A SUSTAINABLE BUSINESS 

Marathon Oil is building a sustainable exploration and production business by expanding our global resource base and addressing the social, environmental and economic challenges that come with growth.
Amid projections that absolute global demand for oil and gas will continue increasing for several decades, Marathon Oil and our industry face a challenge: Deliver more energy, safely, in an environmentally responsible manner, while contributing to economic stability, job growth and energy security.

Environmental and energy issues are shaping global economies, as well as the energy industry and its future. In the U.S., unresolved public policy issues, such as taxation, access to energy resources and regulation related to hydraulic fracturing, air quality parameters and offshore drilling safety, affect business profitability. Given this dynamic environment, Marathon Oil’s stakeholders have an interest in the way we conduct our business.

To be sustainable, we must have the financial capacity to invest in the future, maintain existing assets and create shareholder value.
Our strong, diversified portfolio is designed to deliver self-funded and profitable growth of production and resources. We are nimble and can sell non-strategic assets and redeploy capital into opportunities that create greater value.

We seek projects and new ventures where we can apply our proven skill sets and competencies, and act quickly on opportunities. This strategy has enabled Marathon Oil to build our holdings in U.S. onshore liquids-rich resource plays to more than 1 million acres in the past five years.

Sharp technical and commercial skills and advanced technology resources position Marathon Oil to deliver our defined production growth over the next several years and to do so responsibly. We focus on exploration, unconventional resources, enhanced oil recovery and project execution to meet our long-term goals. Maintaining high operating reliability, particularly at our Alvheim floating production storage and offloading vessel in Norway and our Equatorial Guinea liquefied natural gas plant, increases production and revenues.

Marathon Oil strives to minimize our environmental impacts.
Environmental challenges present opportunities. Marathon Oil invests in emerging technologies and develops and improves existing technologies and operating practices to minimize impacts. To continue delivering energy and economic security safely and responsibly, we are focused on carbon emissions, hydraulic fracturing and other issues.

As a partner in the AOSP in Canada, Marathon Oil is participating in the Quest Carbon Capture and Storage Project. The purpose of Quest will be to capture and permanently store deep underground more than 1 million tonnes of carbon dioxide (CO₂) per year from the AOSP. Project partners are expected to make a final investment decision on Quest in 2012, subject to the outcome of the regulatory process and economic feasibility.

We are developing technologies designed to reduce the impacts of current oil sands mining operations and enhance their overall profitability. Marathon Oil is seeking to address multiple issues related to resource recovery, water use, CO₂ emissions and tailings deposition. Next steps include startup of a demonstration plant to validate the technology. Additionally, Marathon Oil is working on an alternative to the hot water process for extracting bitumen from oil sands. If successful, it would lower the oil sands mining energy requirement, increase bitumen recoveries and lower capital expenditures. We are in the evaluation phase of our technology developments for this process, which has the potential to change the way oil sands energy is developed worldwide.

Marathon Oil uses hydraulic fracturing in our U.S. shale assets and may apply this process in other parts of the world. We are aware of the concerns around hydraulic fracturing and we take steps to do it safely, such as pinpointing fracture locations with micro seismic imaging technologies and cleaning and reusing a portion of the process water where possible. Marathon Oil also publicly discloses fracturing fluid constituents in specific wells on www.fracfocus.com.

In addition, Marathon Oil maintains strong internal and external capabilities for preventing, controlling and responding to offshore emergencies. We co-founded the Helix Well Containment Group, an industry consortium which developed a comprehensive and rapid deepwater containment response system in the U.S. We continue to reinforce employees’ right and obligation to stop work if they have safety concerns and we encourage open communication to help keep our operations safe.

Corporate social responsibility activities aim to strategically manage our social impacts and generate a lasting, positive difference in communities where we operate.
Marathon Oil designs corporate social responsibility (CSR) efforts to support our business goals and address stakeholders’ needs and expectations. Our Bioko Island Malaria Control Project in Equatorial Guinea has had a life-saving impact since inception in 2003. In new operating areas such as South Texas, Poland and the Iraqi Kurdistan Region, we are investigating our potential impacts and building relationships to better understand stakeholder concerns and how they might be addressed.

Coupled with strategic CSR efforts, philanthropy provides Marathon Oil the opportunity to invest and partner in communities where we live and work. We concentrate our resources where we can have the greatest impact on education, health, environmental stewardship and other issues that affect the long-term value of our assets and communities. These innovative opportunities include American Heart Association prevention programs, Houston Zoo long-distance education programs and the Houston Museum of Natural Science Energy Conservation Club.

Challenges such as water management and carbon emissions that were once local or regional in scope can now have consequences on a national or global scale. Marathon Oil believes that individual companies, our industry, governments and non-governmental organizations must take a long-term, strategic view of the challenges we face and work together to address them. To this end, Marathon Oil is actively engaged with our stakeholders to achieve sustainable solutions.