The budget includes exploration and production (upstream) spending of $1.1 billion and $732 million for refining, marketing and transportation (downstream) projects, with the remaining $121 million balance earmarked for other energy-related businesses and corporate activities.
Commenting on the announcement, Marathon President and CEO, Clarence P. Cazalot, Jr., said, "This budget reflects Marathon's continuing emphasis on expanding the development of our international upstream portfolio with assets that will enable us to realize long term value-added growth. The budget also will allow us to continue investing in our best-in-class U.S. downstream operations, as well as our core domestic upstream business."
Marathon's 2003 international upstream spending is budgeted at $717 million, which is 65 percent of the company's total upstream budget, versus 2002 actual international expenditures of $501 million or 53 percent of actual upstream spending, excluding acquisitions.
Cazalot added that Marathon plans to divest of approximately $400 million of non-core upstream and downstream assets during 2003, and that the company will use the proceeds to pay down debt and strengthen its core operations.
"We will identify those assets that do not provide Marathon long term value- added growth," noted Cazalot. "This process will involve a review of our global asset portfolio to identify those assets to be sold, with a goal of completing this process, including the sales, by the end of 2003."
Exploration and production capital expenditures are projected to be $1.1 billion during 2003, compared to actual expenditures of $947 million in 2002. International and domestic production operations have been allocated a capital budget of $535 million and $235 million, respectively, compared to 2002 actual capital expenditures of $254 million and $259 million. The majority of the increase in international production expenditures is attributable to the previously announced expansion projects in Equatorial Guinea.
Worldwide exploitation spending is budgeted at $79 million for 2003, relatively flat with 2002 expenditures of $74 million. Exploitation includes data gathering and drilling of wells in and around current producing areas that, while not without risk, have lower risk than most exploration activities.
Marathon's 2003 worldwide exploration expenditures budget of $258 million will be divided between international ($155 million) and domestic ($103 million) operations. Total 2003 exploration expenditures are budgeted to be $102 million less than the 2002 total exploration spending of $360 million, which included lease acquisitions in Norway.
Refining, marketing and transportation (downstream) capital expenditures, which include 100 percent of Marathon Ashland Petroleum LLC (MAP), are expected to be $732 million compared to actual 2002 expenditures of $730 million. Planned investments in refining projects amount to $450 million. The remaining $282 million has been allocated for investments associated with marketing, transportation and other operations. Adjusting these investments to Marathon's 62-percent ownership interest in MAP, the 2003 budget reflects a capital allocation, excluding acquisitions, of 27 percent of Marathon's total capital and exploration expenditures budget to the downstream segment, compared with 30 percent in 2002.
Marathon has budgeted $121 million for other energy related businesses and corporate capital investments during 2003, compared with actual expenditures of $135 million in 2002. The 2003 budget includes $19 million of natural gas, crude oil marketing and transportation projects, $22 million of integrated gas spending, as well as $24 million for various corporate capital expenditures, and capitalized interest of $56 million.
Most Popular Articles