Marathon Oil worker walking to worksite

CEO message

TO OUR STAKEHOLDERS 

Sustainability is at the core of Marathon Oil’s business strategy. As we pursued profitable and sustainable growth in 2017, we remained committed to responsible, safe and ethical operations.

We focused on meeting our obligations to key stakeholders, including addressing workplace safety, protecting the environment, making a difference in our communities and delivering returns to shareholders.

 

the year in review

lee M. Tillman, president and chief executive officer

Headshot of Lee M. Tillman, President and CEO

 

We Are Accountable for Our Nonfinancial Performance

Conference presentationWe believe that the way we conduct our business is as important as our operational and financial results, and we are accountable to our stakeholders for our nonfinancial performance as well as our profitability. This 2017 Living Our Values Corporate Sustainability Report presents Marathon Oil’s progress in the areas of governance, society, workforce and the environment. It is only with a commitment to earn and keep our license to operate that Marathon Oil can execute our business plan, while addressing the concerns of investors, business partners, communities, governments and other stakeholders.

 


We Are Advancing Our Business Strategy

Marathon Oil initiated a strategic portfolio transformation five years ago, and advanced it further with the divestment of our Canadian oil sands business and entry into the Northern Delaware of the Permian Basin in 2017, and the sale of our interests in Libya in early 2018. Our strategy and capital are now concentrated on our core U.S. unconventional resource plays: the South Texas Eagle Ford, North Dakota Bakken, the Oklahoma STACK/SCOOP plays and the Permian Basin. To reinforce this shift and to realize our vision to be the premier independent exploration and production company, our collective focus is on strong and consistent operational execution, reliability and integrity management to meet our operational and financial obligations, and on creating long-term shareholder value.


We Are Addressing Safety, Environmental and Social Challenges

The Environmental Partnetsip Logo

After our record 2016 performance as measured by the Total Recordable Incident Rate (TRIR), our 2017 safety performance was disappointing as we significantly ramped up activity and experienced an influx of new entrants, particularly in our contract service providers. To be blunt, simply too many contractors and employees were injured in Marathon Oil operations in 2017. I have made it clear to all Marathon Oil leaders and employees at every level and in every business unit, and to our contractors, that I expect this company to lead our industry in safety performance. I also expect Marathon Oil employees and contractors to take personal responsibility for their own safety and the safety of the people around them, slow down, ask questions and stop the job if necessary. No task is so important that it can’t be done safely. We are taking a multifaceted approach to tackle this issue, and we will not hesitate to seek alternatives to contractors who do not share our safety culture and improve their safety performance.

Reducing our impact on the environment, and complying with laws and regulations, remains a constant driver of our operational activities. When we protect the air, water, land and wildlife, we fulfill our obligation of environmental stewardship and enable sustainability. We continued to apply technology and improve operational efficiency to reduce our emissions, and became a founding member of The Environmental Partnership, which encourages continuous improvement in environmental performance throughout our industry. We also recognize that water is a valuable resource and constantly look for ways to manage water responsibly, including recycling and reusing water, and utilizing non-freshwater sources where practical.

Our growth in 2017 highlighted the value of our commitment to be a responsible operator and good corporate citizen. As we entered the Permian Basin, expanded our operations in Oklahoma, invested in increased activity in Bakken, continued improving well performance in the core of the Eagle Ford, and managed the impacts of Hurricane Harvey in Houston and Eagle Ford, we took care to foster and strengthen our community relationships. Our social investment strategy to create a pathway to success for children through education, training and community support continued to have a positive impact in our U.S. unconventional resources and in our integrated gas business in Equatorial Guinea.

 

We Are Proud of Our Progress

Marathon Oil has demonstrated our ability to adjust and to respond to opportunities, challenges and changes in the marketplace. Our strategy is transparent, embedded across the enterprise and aligns fully with our Company performance metrics. Our compensation structure continues to hold Marathon Oil executives accountable for results, including more visibility on both returns and per-share metrics, not just production. In short, Marathon Oil is well prepared to create long-term value.

We are well positioned for sustainability because of the dedication of our employees and the commitment of our board of directors. The way Marathon Oil employees took care of each other, their communities and our business during and after Hurricane Harvey was truly inspiring and exemplified the core values that we hold paramount. Our board continued to guide our business strategy and enhance our approach to governance, while being responsive to our shareholders. We welcomed two new board members in March 2018, Doug Foshee and Lisa Hyland, who bring strong industry experience, diverse perspectives, demonstrated leadership and a strategic mindset to Marathon Oil.

In 2018, long-time board member Philip Lader retired from our board. As the chairman of our Health, Environmental, Safety and Corporate Responsibility (HES&CR) committee, his consistent leadership set the tone for Marathon Oil management’s approach to nonfinancial performance and fostered transparency. I want to thank Phil for the high expectations and standards of sustainability he instilled in us, and I look forward to an equally beneficial relationship with Lisa Hyland, the new chair of the HES&CR committee.

Thank you for your continuing interest in what Marathon Oil is doing to achieve sustainability in all aspects of our business.

Sincerely,

 

Lee Tillman
President and CEO

Marathon Oil employees making good boxes for Hurricane Harvey

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Hurricane Harvey

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Marathon Oil and our workforce were deeply affected by the record-shattering storm. But we cared for each other, our neighbors and communities, while continuing critical business functions and safeguarding our South Texas Eagle Ford asset.

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Digital Oilfield Capabilities

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We’re expanding digital oilfield capabilities throughout our U.S. unconventional resource plays. They’re allowing us to automate field operations, transmit and manage large amounts of data, perform site and equipment surveillance remotely, and analyze and optimize operations.

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Equatorial Guinea

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Since 2002, Marathon Oil has been the operator of a world-class integrated gas business in Equatorial Guinea. We’re striving to bring progress, opportunities and national capacity to the community and host nation, while building long-term shareholder value.

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