SEC Probes Marathon's Payments in Equitorial Guinea

The Securities and Exchange Commission is investigating payments that Marathon Oil made to the government of Equatorial Guinea and affiliated officials.

Marathon said it's cooperating with the SEC probe, which is examining possible violations of U.S. anti-bribery laws. The investigation began July 15.

The Houston-based oil company produces natural gas and methanol in the tiny West African nation and has proposed developing a terminal for exporting liquefied natural gas there.

Marathon, with operations in 28 U.S. states and nine countries, established a presence in Equatorial Guinea after it acquired CMS Energy's interest there in January 2002.

The SEC probe, Marathon said in a regulatory filing, stems from a Senate panel's investigation into U.S. oil companies with operations in Equatorial Guinea.

A report prepared by the Senate Permanent Subcommittee on Investigations found that U.S. companies wired money into the personal accounts of Equatorial Guinea officials or their relatives for land purchases, office leases and security services. Oil firms also contributed funds to support students from Equatorial Guinea studying abroad.

"There was no finding in the Subcommittee's report that Marathon violated the U.S. Foreign Corrupt Practices Act or any other applicable laws or regulations," the company said in Tuesday's filing.

In a June 15 subcommittee hearing, Marathon executive Steven Guidry told lawmakers that the company "takes compliance with the Foreign Corrupt Practices Act very seriously." Executives from ExxonMobil and Amerada Hess also testified.

Guidry, who heads Marathon's central African business operations, added that the company audits compliance with the Foreign Corrupt Practices Act on an annual basis.

In afternoon trading, shares of Marathon fell $1.20, or 3.2 percent, to $36.47 amid a broad pullback in the energy sector.