Marathon-Led Equatorial Guinea LNG Project on Track for 2007

Marathon Oil reports that it and Compania Nacional de Petroleos de Guinea Ecuatorial (GEPetrol), the National Oil Company of Equatorial Guinea, have achieved key milestones in the development of the companies' liquefied natural gas (LNG) project in Equatorial Guinea which remains on track to begin first shipments of LNG in fourth quarter 2007.

All major commercial agreements including the upstream gas supply agreement, the LNG concession agreement with the Government of Equatorial Guinea and the shareholders agreement for the newly formed Equatorial Guinea Train 1 operating company have been finalized. In addition, the Government of Equatorial Guinea has approved and published an LNG Decree Law securing the fiscal terms and conditions for implementing the project. GEPetrol will hold a 25 percent equity participation in the project and will fund its participation through the dedication of oil revenues from current oil production. These funding arrangements are expected to be finalized in the near future, at which time the companies will announce a final investment decision.

The LNG project will produce a minimum of 3.4 million metric tons per year. BG Gas Marketing Ltd (BGML), a subsidiary of BG Group plc, will purchase production from this LNG project for a period of 17 years. Construction of the project is progressing on schedule with site preparation, construction of accommodation facilities and equipment mobilization fully underway.