Marathon Oil Corp. Industry Profile

Marathon Oil is a major corporation
within two (2) industries:

• Petroleum Refining (NAICS 324110)
• Oil and Gas Extraction (NAICS 211111)

 Made up of entities engaged in refining crude
petroleum into refined petroleum.

 Petroleum refining involves one or more of
the following activities:
 Fractionation
 Straight distillation of crude oil
 Cracking

(IBISWorld, Petroleum Refining)

Main products, services, and activities in the Petroleum Refining
industry:

 Gasoline and gasoline production
 Kerosene production
 Diesel fuel and diesel fuel production
 Jet fuel and jet fuel production
 Residual fuel oil and residual fuel oil production
 Lubricant production
 Aliphatic and aromatic chemicals as by-products
production
 Petroleum coke
 Still gases
 LPG

(IBISWorld, Petroleum Refining)

According to IBISWorld, revenue will continue
to grow and the industry will continue to
become more refined in the next five (5)
years.

Involves “operating and/or developing oil and
gas field properties and establishments
primarily engaged in recovering liquid
hydrocarbons from oil and gas field gases.”
(IBISWorld – Oil)

Includes:
 exploration for crude petroleum and natural gas
 drilling, completing, and equipping wells
 operation of separators, emulsion breakers, distilling
equipment, and field gathering lines for crude
petroleum and natural gas
 all other activities in the preparation of oil and gas up
to the point of shipment from the producing property.

“This industry includes the production of crude
petroleum, the mining and extraction of oil from oil shale
and oil sands, the production of natural gas, sulfur recovery
from natural gas, and the recovery of hydrocarbon liquids
from oil and gas field gases. Establishments in this industry
operate oil and gas wells on their own account or for others
on a contract or fee basis.”
(IBISWorld – Oil)

Both industries have the most establishments
in Texas and Louisiana.

Why?
Both states have major ports.

(IBISWorld – Oil)

Number of establishments and companies
increasing while number of employees
decreasing.

Why?
Economic problems in the U.S. and
increase in companies hiring contractors

(IBISWorld – Oil)

 Global Operations
 North America
 Africa
 Europe
 72 Trillion Dollar Revenue at close of 2010
 2.5 Billion Dollars in Annual Net Income
 4th largest US based fully integrated energy
company
 29th largest corporation in US

(IBISWorld – Oil)

 Major Product/Services
 Oil and Natural Gas Wells
 Drilling Exploration
 Oil Sands Mining Project
 Integrated Gas Operations
 Refining, Marketing, and Transportation

(IBISWorld – Oil)

 November 1st, Marathon purchased Hilcorp
Resources for 3.5 billion US dollars
 Marathon Oil Corp sells 10% stake in the
Angolan operation for $800 million to finance
Hilcorp purchase
 November 16th, eight month long strike at
Wafa Oil Co. ends in Libya

(Hilcorp, 2011)

Marathon Oil Corp. Industry Profile

Principal Business:

 The exploration for, and production of, crude
oil and natural gas.
 The manufacture of petroleum products.
 The transportation and sale of crude
oil, natural gas and petroleum products.

(Mergent Online, Exxon)

Key Financials: (as of 09/30/2011)

 Revenue: 470,006m
 Net Income: 40,910m

(Mergent Online, Exxon)

Principal Business:
 Exploring for, developing and producing
crude oil and natural gas.
 Refining crude oil into finished petroleum
products.
 Marketing crude oil, natural gas and the
products derived from petroleum.
 Transporting crude oil, natural gas and
petroleum products.

(Mergent Online, Chevron)

Key Financials (as of 09/30/2011)


(Mergent Online, Chevron)

Principal Business:
 Explores for, produces, transports and
markets crude oil, bitumen, natural
gas, liquefied natural gas and natural gas
liquids on a worldwide basis.

(Mergent Online, ConocoPhillips)

Key Financials (as of 09/30/2011)


(Mergent Online, ConocoPhillips)

Principal Business:
 Petroleum refining.
 Wholesale marketing.
 Product supply and distribution.
 Transportation operations.

(Mergent Online, Valero)

Key Financials: (as of 09/30/2011)


(Mergent Online, Valero)

A comparison of Marathon’s
strengths, weaknesses, opportunities, a
nd threats.

Strengths Weaknesses
Involved in all stages of business Concentration in the US

Strong refining operations Partnership
Arrangements
Opportunities Threats
Growth and Expansion Vast Competition

Investments International Risks

Demand for Natural Gas is
Increasing

Involved in all stages of business.
 “Marathon has presence across the entire oil
and gas value chain […] from the exploration
and production to storage and pipeline, till
the end use of operations like
refining, marketing, and retail
distribution…Marathon's presence across the
oil and gas value chain provides it with a
competitive edge that can be leveraged in
the medium to long run.” (Marathon, 24).

Strong refining operations
 “The company has strong refining operations.
It ranks as the fifth largest petroleum refiner
in the US. In FY2010, the company owned
and operated six refineries with an aggregate
refining capacity of 1.142 mmbpd of crude
oil. For the same period, the company’s
refineries processed 1,173 mbpd of crude oil
and 162 mbpd of other charge and blend
stocks. The company’s refined products sales
volumes totaled 1.59 mmbpd in FY2010.”
(Marathon, 25)

Too much concentration in the US
 Marathon Oil Corporation has primary
drilling and production activities in the
United States, specifically the Gulf of Mexico
(Datamonitor, 2011). This region accounts
for the majority of the corporation’s assets
and leaves the potential for
environmental, political, or other local
challenges that could affect the entire region
at once (Datamonitor, 2011).

Partnership Arrangements

 Allowing other corporations to control
Marathon’s Assets operationally doesn’t allow
Marathon the ability to make changes or
adapt to situations that come up
(Datamonitor, 2011). A prime example of
this is recently with the leadership changes
in Lybia. (Datamonitor, 2011)

Growth and Expansion

 Accordingto an article from
Investopedia, “Marathon Oil Corporation has
more than 300,000 net acres prospective for
the Eagle Ford Shale and estimates that
production will be 18,000 BOE per day by the
end of 2011” (Fox). The company has some
aggressive development plans here and will
spend an average of $1.4 billion per year
through 2016, achieving production of more
than 100,000 BOE per day by that year” (Fox)

Investments

 Inthe next several years, Marathon Oil will
spend between $4.5 billion to $5.5 billion a
year with about two-thirds of that in growth
(Marathon Oil Corp at Bank of
AmericaMerril).

The demand for natural gas is increasing

 According to Chesapeake Energy Corp. Chief
Executive Aubrey McClendon, “the U.S. is
beginning a natural-gas "demand revolution"
that will serve as an outlet for the
tremendous amounts of gas coming out of
newly unlocked shale-rock formations”
(Exxon Sees Global Shale Boom).

Vast Competition
 The oil and gas industry has fierce
competition. Some of the major players who
are in direct competition with Marathon Oil
Corporation are Anadarko Petroleum
Corporation, BG Group, Chevron Corporation,
ConocoPhillips, Exxon Mobil Corporation,
Royal Dutch Shell, Valero Energy Corporation,
Sunoco Inc., Hess Corp., Murphy Oil,
Enterprise Products Partners, Tesoro, and
PDV America Inc. among others. (Mergent
Online).

International Risks
 Risks associated with operations conducted
outside of the U.S. include foreign
governmental policies, political and
economic instability, war, acts of
terrorism, and civil disturbances; and
fluctuating currency values (DataMonitor).
Hostilities in the Middle East and the threat
of future terrorist attacks could adversely
affect the economies of the US
(DataMonitor).

These information sources can be used to
update this industry profile regularly.

 Bloomberg www.bloomberg.com
 Datamonitor Company Profiles
www.datamonitor.com
 EDGAR Database www.sec.gov
 EPA www.epa.gov
 Factiva global.factiva.com
 Forbes www.forbes.com
 Fortune money.cnn.com/magazines/fortune/
 Google News http://news.google.com
 Hoover’s Online www.hoovers.com
 J Stor www.jstor.org

 LexisNexis Academic – Business www.lexisnexis.com
 MacRAE’s Blue Book www.macraesbluebook.com
 Mergent Online www.mergentonline.com
 Official Website of Marathon Oil Corp.
www.marathonoil.com
 Reuters www.reuters.com
 Standard and Poors
http://www.standardandpoors.com/home/en/us
 U.S. Bureau of Census www.census.gov
 U.S. Business Reporter http://www.activemedia-
guide.com/industry_profile_cp.htm
 U.S. Geological Survey
http://minerals.usgs.gov/minerals/pubs/
 Westlaw www.westlaw.com

 Abels, Eileen G. and Klein, Deborah P. Business Information:
Needs and Strategies. Bingley: Academic Press, 2008. Print.
 Aldridge, James. “Dow, San Antonio stocks lose steam on
Monday”. San Antonio Business Journal Online. 15 November
2011. Web Nov. 21, 2011. www.factivia.com
 Barr, Diana. “ConocoPhillips names new spinoff Phillips 66”. St.
Louis Business Journal. November 11, 2011. Web Nov.21, 2011.
www.factivia.com
 Bergin, Tom and Farge, Emma. “WRAPUP 1-Kurd, Baghdad oil
officials meet on Exxon spat”. Reuters News. 17 November 2011.
Web Nov. 21, 2011. www.factivia.com
 “Brazilian federal police investigate Chevron oil spill off coast of
Rio de Janeiro”Associated Press Newswires. 17 November 2011.
Web Nov.21, 2011. www.factivia.com
 “ConocoPhillips selling U.S. pipeline business for $2 billion”. St.
Louis Business Journal Online. 17 November 2011. Web
Nov.21, 2011. www.factivia.com
 “Exxon Sees Global Shale Boom.” The Wall Street Journal Online.
8 November 2011. Web. Nov. 30, 2011. www.factiva.com

 McCormack, Caron Howard James. “Regional Report: Middle East and
North Africa”. World Oil, October 2011. Web Nov.12, 2011.
http://www.lexisnexis.com
 "Marathon Oil Corporation." (n.d.): Datamonitor/Life Science Analytics
Company Profiles. Web. 3 Dec. 2011.
 “Marathon Oil Corporation.” Nov. 30, 2011: Online. LexisNexis Academic.
30 Nov. 2011 www.lexisnexis.com
 “Marathon Oil Corp at Bank of AmericaMerrill Lynch Global Energy
Conference - Final”. CQ FD Disclosure. 15 November 2011. Web
Nov.29, 2011. www.factiva.com
 DataMonitor. Marathon Oil Corporation Company Profile, 18 Aug.
2011.Web. Nov.12, 2011.
 http://web.ebscohost.com
 Dreier, Hannah. “Richmond asks Chevron to give up tax refund case.”
McClatchy-Tribune Regional News, 16 November 2011. Web Nov.21, 2011.
www.factivia.com
 Fox, Eric. “Plains Exploration Loves the Eagle Ford Shale” Investopedia.
29 November 2011. http://stocks.investopedia.com/stock-
analysis/2011/Plains-Exploration-Loves-The-Eagle-Ford-Shale-PXP-MRO-
EOG-MUR1129.aspx?partner=YahooSA#axzz1f8ROtr7u

 Gross, Jenny. “Exxon Refinery Shutdown Could Pressure Brent Crude”.
The Wall Street Journal Online. 17 November 2011. Web Nov.21, 2011.
www.factivia.com
 “Hilcorp Resources LLC.” FactSet Mergerstat, LLC Nov. 2, 2011: Online.
LexisNexis Academic. 30 Nov. 2011
 IBISWorld. (2011, October). IBISWorld Industry Report 32411 Petroleum
Refining in the US. Retrieved from IBISWorld Industry Market Research
database.
 Lefebvre, Ben. “ConocoPhillips Reports Unit Outage At Louisiana
Refinery”. Dow Jones Newswires October 11, 2011. Web Nov. 21, 2011.
www.factivia.com
 Mergent Online. Chevron Corporation Company Detail. Web. Nov.
21, 2011. www.mergentonline.com
 Mergent Online. ConocoPhillips Corporation Company Detail. Web. Nov.
 Mergent Online. Exxon Mobile Corporation Company Detail. Web. Nov.
 MergentOnline. Marathon Oil Corporation Company Detail. Web. Nov.
 Mergent Online. Valero Energy Corporation Company Detail. Web. Nov.

 “Research and Markets; Top 10 Global Petrochemical Companies -
Exxon Mobil Benefiting From Large Scale of Operations to Reach
Top Ranking”. Investment Weekly News .19 November 2011. Web
Nov.21, 2011. www.factivia.com
 United States Census Bureau’s American FactFinder.
http://factfinder.census.gov/home/saff/main.html?_lang=en
 “Valero reports equipment failure at McKee refinery”. Reuters
News. 21 November 2011. Web Nov. 21, 2011. www.factivia.com
 “Valero Reports Flaring At Port Arthur Refinery – Filing”. Dow
Jones Business News. 13 November 2011. Web Nov. 21, 2011.
www.factivia.com
 “Wafa Oil Co. Set to Resume Full Production Under New
Management.” The Tripoli Post Nov.
 16, 2011: p.4 Online. LexisNexis Academic. 30 Nov. 2011
 17 November 2011. Web Nov. 21, 2011. www.factivia.com
 Zagorsky, Jay L. Business Information: Finding and Using Data in
the Digital Age. Boston: McGraw-Hill, 2003. Print.

Marathon Oil Corp. Industry Profile

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Marathon Oil Corp. Industry Profile