Chinese Oil Majors Collect Stake in Angola's Block 32 for $1.3B

Marathon announced that its subsidiary, Marathon International Petroleum Angola Block 32 Limited, has entered into a definitive agreement with CNOOC International Limited (CNOOC), and Sinopec International Petroleum Exploration and Production Corporation (SINOPEC) under which CNOOC and SINOPEC will purchase an undivided 20 percent participating interest in the Production Sharing Contract and Joint Operating Agreement in Block 32 offshore Angola. The transaction has a total value of $1.3 billion, excluding any purchase price adjustments at closing, with an effective date of Jan. 1, 2009. Marathon will retain a 10 percent working interest in Block 32.

The companies expect to close the transaction by year-end 2009, subject to Government and regulatory approvals. For transfer of working interests in Angola, the concessionaire and the other Block 32 partners have rights of first refusal.

"This sale demonstrates the significant amount of value being created through Marathon's exploration success in Angola and elsewhere around the world. With the divestiture of a portion of our Angola interest, we are able to bring better balance to our overall portfolio by capturing the sizable amount of value we have created and redeploying capital into other growth regions for the Company. At the same time, maintaining a 10 percent interest in both Blocks 31 and 32 provides Marathon with exposure to this important resource base," said David E. Roberts, Jr., Marathon executive vice president, Upstream.

"Our worldwide exploration success rate of over 60 percent with 48 significant discoveries over the past seven years -- and a very attractive portfolio of global opportunities yet to come -- further illustrates Marathon's value creation capability and places us well on track for continued growth," Roberts said.

Twelve previously announced discoveries on Block 32 include: Gindungo, Canela, Cola, Gengibre, Mostarda, Salsa, Caril, Manjericao, Louro, Cominhos, Colorau and Alho. Conceptual development studies are underway in order to establish the feasibility of a first development area in the central southeastern part of Block 32.

The concessionaire of Block 32 is Sonangol, Angola's state-owned oil company. The operator is TOTAL Exploration and Production Angola (Block 32 Ltd) with 30 percent interest. Sonangol P&P holds a 20 percent interest; Esso Exploration and Production Angola (Block 32) holds a 15 percent interest; and Petrogal holds a 5 percent interest.

Marathon's financial advisor for this transaction is Standard Chartered Bank.

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