SUSTAINING THE BENEFITS OF OUR BUSINESSMarathon Oil has operated a world-class integrated gas business in Equatorial Guinea (EG), West Africa, since 2002.
Through investments in our facilities at Punta Europa on Bioko Island, we have established the largest petroleum sector facility in the country and the largest methanol producer on the African continent. As we’ve built this business, we’ve developed a largely national workforce, contributed to local economic sustainability, and helped develop human capacity focused on health and education. Our long-term commitment to eradicating endemic malaria on Bioko Island has improved public health and the quality of life. We’ve accomplished this with a focus on being a responsible, safe and ethical operator, while generating substantial free cash flow.
Now, as the country’s natural gas and associated liquids production declines, we’re working with the government of Equatorial Guinea on the next phase of our business there: creation of a Gas Mega Hub at Punta Europa. The hub will process gas from proximate fields in Equatorial Guinea and neighboring countries, starting with delivering gas from the offshore Alen Field by pipeline to Punta Europa for processing. We’re pursuing other avenues to capture resources for future phases of development. Our goal is to keep all Punta Europa facilities operating at maximum capacity for the foreseeable future – and maintain the countless economic and social benefits the oil and gas industry brings to the country.
Through recruiting, training, workforce integration, and educational and vocational programs, we seek to increase the number of national citizens in our workforce in Equatorial Guinea. We employ over 1,000 national citizens, directly or indirectly at Marathon EG Production Limited (MEGPL), and Equatoguineans grew to be 83% of the total MEGPL workforce in 2018. We’re also developing and promoting Equatoguineans into supervisory and leadership roles.
Over the past five years, more than 80 Equatoguinean students attending universities outside of the country have received on-the-job experience during academic breaks. Our partnerships with local education institutions like “12 de Octubre” Technical College and the National University of Equatorial Guinea (UNGE) make this internship program possible. In addition, four Equatoguineans are seeking degrees at the University of Houston and Prairie View A&M University in Texas, USA, on MEGPL scholarships.
We contribute to economic sustainability in Equatorial Guinea by increasing local supplier capabilities in our operations. Since 2013, we’ve spent almost U.S. $857 million with Equatoguinean vendors that are 35% to 100% locally owned, and in 2018, 78% of our contracts were awarded to locally owned contractors.
Our local procurement staff shares information on upcoming contracts at regular meetings with local vendors and provides a procurement plan to the Ministry of Mines and Hydrocarbons National Content Director twice per year. In 2018, MEGPL hosted 280 local business owners in national content workshops to inform them about Phase I of the Gas Mega Hub Project, tender opportunities, and national laws and regulations for doing business with the petroleum industry. Half of these vendors have active contracts with MEGPL for goods and services. We continue to work with the EG National Alliance of Hydrocarbons Services Company (NAHSCO) in all presentations, seminars and workshops.
Prospective vendors must submit questionnaires describing their company structure, ownership and, if applicable, their safety systems and capabilities for safety-sensitive work. We only work with vendors if their questionnaire is approved. Our contracts address the U.S. Foreign Corrupt Practices Act (FCPA), ethical business conduct, labor, human rights and other issues.
To help local businesses through the process, MEGPL, Equatorial Guinea LNG Holdings Limited (EG LNG) and Atlantic Methanol Production Company (AMPCO) established the Punta Europa National Content Committee. The committee created a simplified new vendor set-up process across the three companies, identifies and consistently engages local providers of materials and services, and offers seminars to discuss commercial processes and underscore the company’s commitment to health and safety.
Maintaining Safe, Clean Operations
We improve safety performance and minimize environmental impact in Equatorial Guinea through investments in health, environment and safety (HES) activities. MEGPL, EG LNG and AMPCO had a combined Total Recordable Incident Rate (TRIR) of 0.16 in 2018, with over 4.7 million hours worked, compared to a TRIR of 0.17 during 2017. AMPCO achieved a full year without an OSHA recordable event and EG LNG recorded over 5 million manhours without a Lost Time Incident (LTI).
Our safety improvement efforts in 2018 included more than 1,000 leadership safety engagements and more than 5,000 behavior-based safety observations. To address the most common causes of incidents and injuries, we conducted awareness campaigns focused on driving, dropped objects and hand safety.
In addition, our Workforce HES Committee sponsored a safety campaign that monitored and reinforced positive driving behavior in Punta Europa. The committee, which serves as the safety link between management and employees, engaged with employees on the driving safety campaign, and on the importance of stress management and its impact on health.
In 2018, MEGPL and EG LNG fully aligned their practices and systems with the expectations of our Responsible Operations Management System (ROMS) through proactive gap assessments, and Tier II and Tier III audits. These audits helped in developing action plans for continuous improvement. The companies also established a combined ROMS steering committee to ensure consistent implementation across both entities.
MEGPL’s primary social investment in Equatorial Guinea is the Bioko Island Malaria Elimination Project (BIMEP), a 15-year, multi-system public health program. The BIMEP combats the endemic mosquito-borne disease with a series of integrated malaria control measures centered on indoor residual spraying, distributing long-lasting insecticide nets (LLIN), intermittent preventive therapy for pregnant women, malaria case management, epidemiological surveillance, vector monitoring and advocacy. In addition to these standard malaria control efforts, BIMEP has introduced a malaria vaccine component. All BIMEP malaria control interventions are provided free of charge to all residents on Bioko Island.
In addition, through the BIMEP, we are striving to improve lives in line with two U.N. Sustainable Development Goals (SDG):
- SDG3: Ensure healthy lives and promote well-being for all at all ages
- SDG9: Build resilient infrastructure, promote sustainable industrialization and foster innovation
The BIMEP, in partnership with the EG Ministry of Health and Social Welfare, has invested more than U.S. $124 million in this effort since 2004. The BIMEP and vaccine project are implemented by Medical Care Development International, an American nongovernmental organization (NGO), and funded through a public-private partnership of Marathon Oil, Noble Energy, AMPCO and the Government of Equatorial Guinea. Of the investment in the BIMEP, U.S. $83 million has been applied to build national capacity with a malaria intervention team employing over 250 Equatoguineans as spray team members, case management doctors, laboratory technicians, entomology technicians, geographical information system technicians, and community outreach workers dedicated to malaria education and behavioral change nationwide.
The BIMEP has led to positive impacts on all economic sectors, the health sector and all socio-economic levels of Equatoguinean society, especially people with the least means. The BIMEP’s major accomplishments in the fight against malaria include:
- 76% reduction in the malaria parasite prevalence (from 45% in 2004 to 10.9% in 2018)
- In excess of 63% reduction of all-cause mortality among children under 5 years old (largely attributed to malaria interventions)
- 90% reduction in severe anemia under 5 years old (from 15% in 2004 to 1.5% in 2018)
- 99% reduction in the rate of transmission of the parasite by the vectors (from more than 1,000 infected bites per person per year in 2004 to less than 10 potentially infected bites per person per year in 2018)
- Elimination of one of the three main malaria vector species (An. funestus)
- 77% reduction in anemia and 68% reduction in parasite prevalence in pregnant women
- Improved access to diagnostic services and malaria treatments
- Continues to provide LLINs and intermittent preventive treatment to pregnant women visiting prenatal care facilities
These outcomes opened the door to fund development of a candidate vaccine that protects recipients from malaria infection. Marathon Oil and our BIMEP partners have invested U.S. $41 million for five trials of a highly promising vaccine product to block malaria transmission in humans and mosquitos. Trials of the PfSPZ Vaccine® developed by the U.S. biotechnology company Sanaria, Inc., are underway.
The positive effects of the vaccine initiative continue to ripple through Equatorial Guinea. Over 45 Equatoguinean doctors, nurses, lab technicians, pharmacists and other support staff have been trained to run the vaccine trials. Infrastructure created by the BIMEP enables the Government of Equatorial Guinea to participate in the international medical science research arena. Equatorial Guinea established its first internationally recognized national ethics review committee, and instituted a food and drug regulatory office within the Equatoguinean Ministry of Health and Social Welfare. In February 2019, the Ministry opened a reference laboratory where the BIMEP research team will train and support Equatoguinean laboratory and clinical professionals to carry out diagnostics and biological analytics at an international level. The lab will then seek to become a World Health Organization (WHO) certified reference lab with the goal of serving Equatorial Guinea and the Central African Economic and Monetary Community (CEMAC) region.
Capacity Building for Health and Education
We invest in human capacity building focused on health and education in Equatorial Guinea. In 2018, MEGPL provided U.S. $780,000 to fund a pediatric nurse training program in partnership with the Foundation for Nursing Development, the EG Ministry of Health and Social Welfare and the National University of Equatorial Guinea (UNGE). The program is training 55 nurses in the most up-to-date methods and skills required to practice pediatric nursing in a low-tech environment. The group of pediatric nurses is projected to graduate in June 2020. We decided to make this investment based on the success of our first experience with the program, which graduated 60 nurse midwives who went on to work with pre- and post-natal mothers and newborns in every health district in Equatorial Guinea. Evaluations of the first class of graduates have shown increased use of district health centers to provide prenatal and neonatal care.
In addition, we support smaller projects that benefit the community, such as the Books for Bioko program. Since 2004, Marathon Oil employees worldwide have raised over U.S. $1 million for much-needed books and supplies for more than 6,000 students in nine Malabo schools.
To further develop human capacity in Equatorial Guinea, MEGPL annually hosts workshops to train local NGOs in writing effective grant proposals and developing accurate budgets to support their community-based work improving the lives of Equatoguineans through education, health and capacity building. This effort is allowing MEGPL to shift our funding strategy from infrastructure to human capacity building projects. We plan to continue hosting these workshops for Equatoguinean NGOs to expand our human capacity building focus over the next five years.
We are committed to helping Equatoguinean youth improve their academic and social opportunities. To ensure youth with eyesight issues get proper care and medical attention, MEGPL started the Ver Bien EG Project in 2017. Our corporate social responsibility staff is trained to screen children for eyesight issues in certain private and public primary schools on Bioko Island. After screening over 3,000 youth and delivering over 250 prescription eyeglasses, MEGPL decided it was time to take Ver Bien to the national stage. In 2018, MEGPL partnered with the Equatoguinean Association for the Blind (ONCIGE) to run a trial eye screening and vision exam program serving 10 rural primary schools on Bioko Island. Because of the project’s success, the German Embassy, through its Gesellschaft für Internationale Zusammenarbeit, donated U.S. $29,000 to purchase equipment to help ONCIGE open an office in Bata to serve mainland Equatorial Guinea. In 2019, MEGPL will invest U.S. $150,000 to launch the Ver Bien EG program focusing on Bioko Island and Bata, where we expect to serve nearly 66% of the entire country’s school age population.
Respecting Human Rights
We adhere to well-established and effective security and human rights policies in Equatorial Guinea, and have had no known security-related incidents resulting in a human rights violation in our operations since acquiring the asset. We employ a proprietary guard force to protect our onshore facilities and engage with the Navy of Equatorial Guinea to protect offshore facilities. In 2018, we worked with the Government of Equatorial Guinea and the U.S. Coast Guard to review the International Ship and Port Facility Security to enhance safety and security at the country’s ports.
Marathon Oil’s operations in Equatorial Guinea continue to demonstrate how an oil and gas company can run a safe and responsible enterprise, promote strong governance and build long-term shareholder value. Marathon Oil supports transparent reporting of revenue flows from oil and gas production as a means to strengthen governance and manage risk. In February 2019, Equatorial Guinea received the endorsement of the Extractive Industries Transparency Initiative (EITI) International Secretariat and a letter of intent for membership from the EITI National Commission. The country has instituted a number of reforms to be able to take part in the EITI, which serves as a global standard for the responsible governance of oil, gas and mineral resources.
Marathon Oil’s operations in Equatorial Guinea continue to demonstrate how an oil and gas company can run a safe and responsible enterprise, promote strong governance and build long-term shareholder value.
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