A MESSAGE FROM OUR BOARD
As the chair of the Health, Environmental, Safety and Corporate Responsibility (HES&CR) Committee of Marathon Oil’s board of directors, I appreciate the opportunity to share what the company is doing to understand and mitigate our HES&CR risks.
We are solution driven and we believe we’re taking action to continuously improve our environmental, social and governance (ESG) performance, while delivering the energy the world needs.
Marathon Oil has a variety of stakeholders, and we have to balance their interests and expectations. Shareholders are important, as are our employees and communities. If we don’t operate responsibly and generate a profit, we aren’t serving our shareholders and employees. If we don’t generate profits, our communities won’t garner the jobs and economic strength that we bring with our presence.
The company has had a sustained emphasis on safety and it remains at the core of our values. There’s no amount of oil or natural gas production that justifies working unsafely. On this we are immovable: Safety is never part of the balancing act.
We’re applying the same mindset to other areas where we want to improve. For example, we believe we’ve made progress on our environmental performance, but we recognize there’s more to do. While we’ve cut methane intensity significantly over the past five years, the management team is actively exploring a number of potential avenues to further mitigate emissions, including technology, infrastructure, innovation and collaboration, and the board believes we’ll find a solution. In addition, we’re demonstrating our commitment to progress by publishing a report in 2019 on how we assess and manage the potential risks of climate change to our business.
Marathon Oil is equally as diligent about cutting our water consumption and preventing spills as we are about reducing air emissions. Our employees are taking ownership of these environmental challenges, and we're confident they will continue to deliver results that support our standing as a good corporate citizen.
Marathon Oil’s commitment to social responsibility is genuine and strategic. As a community partner, we invest in building strong, healthy, educated communities. The Bioko Island Malaria Elimination Project in Equatorial Guinea and the Imagine Learning math education program in the South Texas Eagle Ford are just two examples of the company’s targeted approach to addressing social risks in the communities where we operate.
We’ve worked hard to concentrate and simplify our portfolio to generate a competitive advantage and deliver value to our shareholders. This strategic focus has not only differentiated our financial performance, but has also lowered our overall enterprise risk. We’ve divested international assets and mature, higher-cost and higher-risk operations that no longer compete for capital allocation. Although we pivoted to shale-focused U.S. operations, we’ve maintained diversity in our assets via our multi-basin strategy. Today, we believe Marathon Oil is less exposed to geopolitical and execution risk, and our low-cost, high-margin U.S. assets ensure a low enterprise break-even that mitigates commodity price volatility, delivering a lower risk of stranding assets. Our short-cycle U.S. unconventional shale opportunities provide a platform for continuous improvement across all metrics, including environmental, as real-time performance data accelerates the learning curve and encourages innovation.
We’re a company that thrives on delivering differentiated performance and we have a track record of transformative actions to adapt to the business opportunities of today and into the future. This same adaptability places us in good stead to manage current and future ESG risks such as climate change. Companies with good governance, strong business ethics, and good safety and environmental performance tend to be the same companies that have good financial results. We believe that this is no coincidence, and that understanding and responding to dynamic ESG risks is part of our broader license to operate.
Marathon Oil wants to be part of producing the energy our country and the world need and we want to do it responsibly. The HES&CR Committee and the board believe the company is moving in the right direction for all of our stakeholders, and we are well positioned to make progress because of our human capital, innovation and collaborative relationships. Marathon Oil will address our ESG issues and risks, and we will be open and forthright with our investors and other stakeholders about where we stand and where we’re focused.
Thank you for your interest in what Marathon Oil is doing to manage our ESG risks. Please share your thoughts and suggestions for improving our annual report on our nonfinancial performance.
Chairman, HES&CR Committee
Marathon Oil Corporation Board of Directors
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