Marathon Oil Corporation’s goal is to be recognized as a premier independent exploration and production (E&P) company, a goal that requires the Company to be a sustainable investment, employer, business partner and corporate citizen. Our business strategy drives what we do to achieve long-term viability, while our core values and corporate sustainability commitments guide how we develop oil and gas in a responsible, ethical and safe manner.
Marathon Oil believes that a company must address its nonfinancial risks and responsibilities to achieve business sustainability. Our 2015 Living Our Values Corporate Sustainability Report describes the Company’s headway in addressing critical risks in our operations, the communities where we work and our industry, and demonstrates our accountability to stakeholders for our nonfinancial performance. We work with our employees, business partners, communities, regulators, investors and other stakeholders to earn and keep our license to operate.
Our strategy is to be the lowest-cost, highest-margin North American focused independent E&P company. The low commodity price environment in 2015 prompted Marathon Oil to assess every aspect of our business and maintain the programs that further this strategy and deliver results. This led to difficult but necessary decisions, including cutting our capital spending in half, reducing drilling activity, selling non-core assets and reducing our workforce 20 percent compared to 2014.
Yet, Marathon Oil remained committed to Living Our Values to be healthy and safe, environmental stewards, open and honest, community partners and results focused. We set a new safety record for the Total Recordable Incident Rate for employees and contractors combined, even accounting for the lower level of field activity. Third-party contractors remained a large part of our field workforce, and improved safety performance was partly the result of steps we took to further strengthen our contractor management activities.
As environmental stewards who believe compliance is non-negotiable, we broadened the use of technology to improve our ability to comply with the growing number of federal and state environmental regulations. Recognizing that climate change, global greenhouse gas (GHG) emissions and local air emissions are key stakeholder concerns, we continued a number of programs to lower methane intensity as a means of reducing GHGs in our operations. In the interest of transparency, this report includes enhanced emissions management disclosures regarding climate change, as well as environmental performance data and management practices.
A key accomplishment in 2015 was executive approval of our Responsible Operations Management System (ROMS) to drive continuous improvement and reduce operational risk across the enterprise. ROMS supports our commitment to high standards of health, environmental, safety and security (HES&S) performance. To assure ROMS’ effectiveness, each element has an executive owner accountable for setting priorities and reporting progress. ROMS is complemented by Corporate Sustainability Guidelines we developed in 2015 to assist in managing our commitments to economic, environmental, safety and social sustainability in our communities.
As part of our 2015 business assessment, Marathon Oil reviewed our social investments and philanthropic spending with community partners. As a result, we are supporting select education and public health initiatives most likely to deliver positive outcomes in our communities. We believe investing to develop educated, healthy communities will build a sustainable workforce for the future.
As we move toward sustainability, Marathon Oil can look to our successful Alba B3 compression project offshore Equatorial Guinea as a model. The project has been executed safely and remains on budget and on schedule, with hook-up and commissioning nearly complete. Start-up is expected in mid-2016. The project supports economic sustainability by extending the life of our Alba field beyond 2030 to provide stable production and cash flow. This in turn allows Marathon Oil to continue contributing to social programs that build national capacity and improve wellbeing in Equatorial Guinea.
Our clear emphasis is on creating a business that is sustainable for the benefit of our key stakeholders. Guided by our values, Marathon Oil took the necessary steps in 2015 to manage through a challenging period, and we are now laying the groundwork to accelerate production when the price of oil rebounds. We remain committed to operating safely and cost-effectively, complying with regulations, protecting the environment, investing in our employees, creating value for shareholders and positively impacting our communities. Thank you for taking the time to learn about our approach to managing risk, addressing stakeholder concerns and overcoming challenges as we build our business for the long term.
Lee M. Tillman
President and Chief Executive Officer