Marathon Oil Workers with T-Shirts that show their values

Local Content: Procurement

Marathon Oil wants to work with contractors and suppliers who share our commitment to safety, environmental stewardship, ethical business conduct, sound labor practices and human rights. Our standards, policies and procedures for contractors and suppliers primarily serving field operations are encompassed in the elements of our Responsible Operations Management System (ROMS) related to third-party services and health, environment and safety (HES). In addition, contracts address our expectations that contractors and suppliers align with our values, adhere to our policies, and comply with all applicable export, anti-corruption and anti-bribery laws and regulations.


Ensuring Safety and Best Practices through Compliance

Our Contractor Management Program, which is aligned with industry recognized practices such as those published by API and IOGP, focuses on contractors who perform higher-risk services with the potential to impact the safety of other workers, the public, environment or the facility. We evaluate and approve vendors before we start working with them. Those who provide personnel for safety-sensitive work in North America must register with ISNetworld, a global online source to manage, evaluate and qualify contractors based on Marathon Oil criteria.

Using risk-based criteria, Marathon Oil identifies suppliers to conduct formal invoice compliance audits approximately once every three years. Our HES team also conducts formal, structured safety leadership engagements with critical and new suppliers, and those with HES performance concerns. Safety leadership engagements may include a review of internal policies and procedures, interviews with contractor leaders and staff, and interviews with the contractor’s field workforce to gauge their understanding of their employer’s policies and programs. These engagements can result in corrective actions with deadlines and could lead to contract termination if performance does not improve.

We seek out suppliers that represent our diverse customer base and communities, while assuring products and services are acquired competitively. For example, in the North Dakota Bakken play, we strive to award business to companies that are 100 percent owned by the Three Affiliated Tribes in compliance with the Tribal Employment Rights Office (TERO) on the Fort Berthold Indian Reservation. We contract with these Tier One suppliers when they are available, and expect them to offer competitive pricing for goods and services, and meet our requirements for HES performance, insurance coverage and financial viability. At year-end 2017, we had contracts in place with 46 Tier One suppliers.

Bakken brought on a new critical supplier of oil hauling services on the reservation in 2017. As part of onboarding this Tier One company to our safety and operational requirements, we reviewed the oil hauling standard in ROMS to ensure the contractor’s employees follow our procedures. During the year, the hauler performed well and we were able to expand our business with the company.

With increased demand for products and services during the industry activity surge, Marathon Oil’s Global Supply Chain organization reorganized to drive cost competitiveness. After reviewing well fracturing services contracts, Supply Chain decided to self-source sand and most diesel fuel instead of keeping these commodities in bundled services. This decision resulted in considerable cost savings and access to resources, which lowered well costs. We are looking at self-sourcing chemicals in the future and investigating additional opportunities for supply chain sustainability.

Marathon Oil Workers at site

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