Supply Chain Management
Marathon Oil’s vice president of Global Supply Chain oversees our supplier relationships, which are governed by the Third-Party Services element of our Responsible Operations Management System (ROMS), Procurement and Contracting Policy, Anti-Corruption Compliance Policy, Code of Business Conduct and our health, environmental and safety (HES) standards and policies.
Marathon Oil is committed to working with suppliers who uphold the law and applicable regulations, including those related to employment, the environment and safety. We maintain the same expectations for all of our suppliers regardless of where they perform their work.
In 2022, our supply chain focus was centered on maintaining access to resources given the instability caused by geopolitical events and the lingering pandemic. We responded to new supply chain disruptions, such as shortages of labor, raw materials and electrical components, by planning proactively with our critical suppliers. Early scoping and transparent communication, combined with a robust expediting program, helped to keep supply chain disruptions to a minimum in a challenging year. In 2022, we also enhanced our Vendor Disclosure Questionnaire to automate and improve the efficiency of supplier onboarding.
Supply Chain Monitoring
Before a supplier is approved to work with Marathon Oil, we conduct a thorough assessment of its health, environment and safety (HES) performance and capabilities. Our vetting process includes determining technical capabilities, complexity and risk of the associated service and a supplier’s HES record. Potential suppliers within specified higher-risk categories may need to successfully complete an added layer of due diligence and be approved by Marathon Oil’s Law function before engagement. In addition, we proactively research companies developing emerging technologies that meet our criteria of safety and commercial viability and those that help us reduce greenhouse gas (GHG) emissions.
Our supplier agreements mandate adherence to relevant standards and policies including our Code of Business Conduct. Once approved, suppliers access Marathon Oil’s Anti-Corruption Compliance Policy and participate in our Anti-Corruption training. Supplier contracts also include information on how to report potential violations of our code, policies and standards. We make our Integrity Helpline available to suppliers and all third parties.
Our Global Supply Chain team monitors compliance with our Procurement and Contracting Policy as well as our Anti-Corruption Compliance Policy and Code of Conduct. Suppliers may also undergo contract compliance audits utilizing either internal resources or a third-party independent auditor. We update our HES policies and standards to reflect changes in laws or regulations, incorporate recommendations arising from audits and incident investigations and share lessons learned with employees, contractors and suppliers to raise awareness and drive performance improvement.
Our Responsible Operations Management System (ROMS), described in more detail here, has an Audit and Improvement element that promotes adherence to our standards and regulatory requirements for both our business units and suppliers. We also regularly assess critical vendors for financial stability and, when beginning work with a new critical supplier, visit their operations in-person when possible.
Additional HES Assessments for Safety-Sensitive Suppliers
We develop management plans for safety-sensitive suppliers aligned with recognized industry HES practices, such as those published by the American Petroleum Institute (API) and the International Association of Oil & Gas Producers (IOGP). These plans are based on the supplier’s potential to impact the safety of other workers, the public, the environment and our facilities. Suppliers who provide personnel for safety-sensitive work in the United States must first register with ISNetworld, a global online source that manages, evaluates and qualifies suppliers based on Marathon Oil’s criteria.
Our HES team conducts formal, structured safety leadership engagements with critical and new suppliers, as well as those with HES performance concerns. These engagements may include a review of suppliers’ internal policies and procedures and interviews with their leadership and field workforce to gauge their understanding of their employer’s policies and programs. In 2022, Marathon Oil’s executive vice president of Operations as well as our regional leadership conducted a series of safety leadership engagements with critical suppliers, making clear our expectations that suppliers be as committed to safety and operational excellence as we are.
All safety-sensitive suppliers are required to complete our HES orientation course inclusive of our Life Critical Expectations before they’re allowed on our work sites. We also work with suppliers on corrective actions with specific deadlines. If safety and operational performance does not improve, the contract could be terminated.
Supporting Local Content
Our ongoing investment in local content is a key part of supporting the communities in which we work. Through our supplier diversity efforts, we focus on increasing collaboration and capacity with local suppliers. In Equatorial Guinea, we continue to increase the procurement of goods and services from local suppliers while also focusing on elevating the skills and capabilities of our new suppliers, many of whom are working with a major operator for the first time. For more information on how we regularly engage with Indigenous communities about ongoing and new business opportunities, see here.
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