Marathon Sets $2.26 Billion Budget For 2004

Marathon Oil has approved a 2004 capital, investment and exploration expenditure budget of approximately $2.26 billion. This represents a 3.7 percent increase over actual expenditures of $2.18 billion during 2003, excluding acquisitions of approximately $250 million.

Adjusting these investments to Marathon's 62-percent ownership interest in U.S. refining, marketing and transportation subsidiary Marathon Ashland Petroleum LLC (MAP), and excluding capitalized interest, approximately 60 percent of the 2004 budget is allocated to exploration and production activities, 25 percent to refining, marketing and transportation projects, and 15 percent to integrated gas and corporate expenditures.

Exploration and Production
Worldwide production capital expenditures are projected to be $810 million during 2004. Key production investments will continue in Equatorial Guinea where the company is completing projects that will significantly increase gas condensate and liquefied petroleum gas production. In addition, Marathon will be targeting investments in support of the company's production growth and development projects in Russia, Norway and the Gulf of Mexico.

Marathon's 2004 worldwide exploration and exploitation budget of $302 million includes plans to drill 11 significant exploration wells in Angola, Equatorial Guinea, Norway, the Gulf of Mexico and Nova Scotia. Exploitation activities will focus on projects primarily in the United States. 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.

Refining, Marketing and Transportation
Refining, marketing and transportation capital expenditures, which include 100 percent of MAP, are expected to total $788 million. These expenditures will be allocated primarily to refinery expansion and upgrading projects, as well as investments necessary to meet required low sulfur (Tier 2) gasoline and ultra-low sulfur diesel fuel specifications.

Integrated Gas
Marathon has budgeted $263 million for integrated gas investments during 2004. The majority of these expenditures will be made in support of the company's proposed Equatorial Guinea liquefied natural gas project.

Corporate and Capitalized Interest
During 2004, corporate spending and capitalized interest is expected to total approximately $96 million. The corporate capital budget will include investments in information technology, as well as other corporate support areas.