Marathon To Spend $1.8 Billion in 2002

Marathon Oil Corporation announced that it has approved a budget of $1.8 billion for its 2002 capital, investment and exploration (CAPEX) programs. This represents an increase of 3 percent over actual expenditures of $1.73 billion during 2001, excluding acquisitions.

The budget includes exploration and production (upstream) capital investments of $607 million on existing assets and those under development; $289 million for exploration spending; and $794 million for refining, marketing and transportation projects, with the balance earmarked for other energy-related businesses and corporate activities.

Commenting on the announcement, Marathon President and CEO Clarence P. Cazalot, Jr., said, "This CAPEX budget has been structured to enable us to fund the investments we have identified in our 2002 business plan, each of which supports our goal of delivering profitable growth and increased shareholder value."

In addition to the base CAPEX budget, Marathon anticipates 2002 upstream acquisition expenditures of approximately $1.1 billion, including the recently completed $993 million acquisition of CMS's interests in Equatorial Guinea and previously announced acquisitions in Norway adjacent to the company's production infrastructure. In 2001, upstream acquisition investments totaled $534 million, the majority of which was attributable to Marathon's acquisition of Pennaco Energy.

International and domestic upstream operations will be allocated $293 million and $314 million, respectively, compared to 2001 actual expenditures of $259 million and $359 million. Marathon's 2002 worldwide exploration budget of $289 million is $118 million less than 2001 actual exploration expenditures of $407 million, due largely to reduced capital lease investments.

Refining, marketing and transportation (downstream) capital expenditures, which include 100 percent of Marathon Ashland Petroleum LLC (MAP), are expected to be $794 million compared to actual 2001 expenditures of $576 million. This allocation will cover planned investments of $441 million in refining, marketing and brand related projects. In addition, approximately $353 million is being allocated for investments associated with MAP's Speedway SuperAmerica, Pilot Travel Centers and transportation operations. Adjusting these investments to Marathon's 62-percent ownership interest in MAP, the 2002 budget reflects a capital allocation of approximately 34 percent of Marathon's total CAPEX budget to the downstream segment.

Marathon is budgeting $53 million for other energy-related businesses and corporate capital investments during 2002 compared with actual expenditures of $97 million in 2001. This will include $11 million for natural gas and crude oil marketing and transportation projects, as well as $42 million for various corporate capital expenditures.