2010 Factbook Final

8/6/2019 2010 Factbook Final

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Contents

Marathon Oil Corporation(NYSE:MRO) is an integrated international energy company engaged in exploration and production; oil sands

mining; integrated gas; and re ining, marketing and transportation. Headquartered in Houston, Texas, Marathon has

exploration or production activities in the United States, Angola, Canada, Equatorial Guinea, Indonesia, IKR (Iraqi

Kurdistan Region), Libya, Norway, Poland and the United Kingdom. Marathon is the i th largest re iner in the U.S

The Companys retail marketing system comprises approximately 6,450 locations in 18 states.

In January 2011, the Board o Directors o Marathon Oil Corporation announced that it had approved plans to spin

o Marathons downstream business, creating two independent, highly ocused energy companies Marathon Oil

Corporation and Marathon Petroleum Corporation. The spin-o is expected to be e ective June 30, 2011.

FINANCIAL HIGHLIGHTS ................. ................. ................ ......... 1MARATHON OVERVIEW ............... ................. ................. ........... 2UPSTREAM ............... ................ ................. ................. ................ . 6EXPLORATION AND PRODUCTION ....................... ................. 6Worldw de Product on Summary ................ ................. ................. 7North Amer ca ............... ................ ................. ................. .............. 8

Alaska ............... ................. ................. ................ ................. ...... 8Colorado ................. ................ ................. ................. ................ . 8North Dakota ................ ................. ................. ................ ............ 9

Oklahoma ................ ................ ................. ................. ............... 10Pennsylvan a/West V rg n a ............... ................ ................. .... 11Texas .............. ................. ................. ................ ................. ....... 11Wyom ng ................. ................ ................. ................. ............... 11Gul o Mex co ................ ................. ................. ................ ....... 12Canada ................. ................. ................ ................. ................. . 14

A r ca ............... ................ ................. ................. ................ .......... 15Angola ............... ................. ................. ................ ................. .... 15Equator al Gu nea ................. ................. ................ ................. . 15L bya ............... ................. ................. ................ ................. ....... 16

As a ................. ................ ................. ................. ................ .......... 20indones a ................. ................ ................. ................. ............... 20

Europe ................ ................. ................. ................ ................. ....... 21Norway ................. ................. ................ ................. ................. . 21Poland ............... ................. ................. ................ ................. .... 22Un ted K ngdom ................. ................. ................ ................. .... 23

M ddle East ................. ................ ................. ................. ............... 25iKR (iraq Kurd stan Reg on) ................ ................ ................. .... 25

INTEGRATED GAS ................ ................ ................. ................. .L que ed Natural Gas ............... ................. ................. ............Methanol ................ ................ ................. ................. ................ 2

OIL SANDS MINING ............... ................. ................. ................TECHNOLOGY ............... ................. ................ ................. .........

Convent onal Technology ................ ................ ................. ........ 2New Technology ............... ................ ................. ................. ..... 2Emerg ng Technology ................ ................. ................ ..............

DOWNSTREAM ............... ................ ................. ................. ........

REFINING, MARKETING ANDTRANSPORTATION ................ ................. ................. ................Re n ng ............... ................ ................. ................. ................ ....

Garyv lle, Lou s ana ................ ................. ................. ..............Catlettsburg, Kentucky ................. ................ ................. ........... 3Rob nson, ill no s .............. ................. ................. ................ ....Detro t, M ch gan ................ ................. ................ ................. ..Canton, Oh o .............. ................. ................. ................ ............Texas C ty, Texas ................ ................. ................ ................. ... 3St. Paul Park, M nnesota ............... ................. ................ ......... 3

Re nery Un t and Product on Capac ty Summary ............... ....Marathon Brand ................ ................. ................. ................ ......... 3Wholesale and Other ................. ................ ................. ................. 33Term nal, Transport and Ra l ................ ................. ................ ......Mar ne ............... ................ ................. ................. ................ .........Marathon P pe L ne LLC ................ ................ ................. ............Speedway LLC ................ ................. ................. ................ ............

GLOSSARY ...............................................................................CAUTIONARY STATEMENT ...................................................

Ed tors Note: The n ormat on n th s publ cat on s current through December 31, 2010, unless otherw se noted. All volumes are net sales. Total resource volu

s stent w th Secur t es and Exchange Comm ss on modern zed de n t ons.


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nanc al H ghl ghts Twelve Months Ended December 31

(a) Our bus nesses n ireland and Gabon were sold n 2009. Prev ous per ods have been recast to refect t hese bus nesses as d scont nued operat ons.(b)As o end o per od presented.(c) Excludes acqu s t ons and ncludes accruals.(d)Excludes d scont nued operat ons.(e) includes natural gas acqu red or nject on and subsequent resale o 18, 22 and 32 mmc d n the years ended December 31, 2010, 2009 and 2008, respect vely.( )includes natural gas acqu red

or nject on and subsequent resale o 7, 8 and 12 bc n the years ended December 31, 2010, 2009 and 2008, respect vely.(g) Under Secur t es and Exchange Comm ss on regulat ons, beg nn ng December 31, 2009, o l sands mncluded n o l and gas produc ng act v t es and the related reserves are reported as synthet c cr ude o l.(h)Total average da ly volume o all re ned product sales to wholesale, branded and reta l (Speedway LLC) customers.

in December 2010, Marathon closed a transact on or the sale o most o ts M nnesota downstream assets. included n the transact on were the 74,000 barrel per day St. Paul Park re nery and term nals, 166 conven ence stores, SuperMoms bakery and comm ssary, SuperAmer ca ranch s ng LLC, nterests n p pel ne assets n M nnesota and assoc ated nventor es.

Dollars n m ll ons, except where notedRevenuesincome rom operat onsincome rom cont nu ng operat onsNet ncomePer common share data ( n dollars)(b)

income rom cont nu ng operat ons bas c

Net ncome bas cincome rom cont nu ng operat ons d lutedNet ncome d lutedD v dends

Average shares outstand ng d luted ( n m ll ons)Cash and cash equ valents(b)Long-term debt(b)Stockholders equ ty(b)Total assets (b)

Net cash rom operat ng act v t es ( rom cont nu ng operat ons)Cap tal expend tures(c) (d)

Average da ly net sales:(d)Explorat on and Product on Segment

L qu d hydrocarbons (mbpd)

Natural gas (mmc d)(e)

Barrels o o l equ valent (mboepd)O l Sands M n ng Segment

Synthet c Crude (mbpd)integrated Gas Segment

L que ed natural gas (mtpd)Methanol (mtpd)

Annual net sales:(d)Explorat on and Product on Segment

L qu d hydrocarbons (mmbbl)Natural gas (bc )( )Barrels o o l equ valent (mmboe)

O l Sands M n ng SegmentSynthet c Crude (mmbbl)

integrated Gas Segment

L que ed natural gas (thousand metr c tonnes)Methanol (thousand metr c tonnes)Net proved reserves:(b)

O l and Gas Produc ng Act v t esL qu d hydrocarbons (mmbbl)Synthet c crude o l (mmbbl)(g)Natural gas (bc )Barrels o o l equ valent (mmboe)

O l Sands M n ng SegmentB tumen (mmbbl)(g)

Re nery operat ons:Re nery runs crude o l re ned (mbpd)Re nery runs other charge and blend stocks (mbpd)

Consol dated re ned product sales (mbpd):(h)Volume exclud ng match ng buy/sell transact ons

Speedway LLC:Gasol ne and d st llate sales (m ll ons o gallons)Merchand se sales

Number o reta l market ng outlets:(b)Marathon BrandSpeedway

Number o employees(b)

2010$ 72,321

5,3172,5682,568

$ 3.62

$ 3.62$ 3.61$ 3.61$ 0.99

7123,9517,601

23,77150,0145,8734,571

245

878391

29

6,8591,049

89320143

11

2,504383

630572

2,6171,638

n/a

1,173162

1,585

3,300$ 3,195

5,0951,358

29,677

2009$ 53,287

3,5901,1841,463

$ 1.67

$ 2.06$ 1.67$ 2.06$ 0.96

7112,0578,436

21,91047,0525,2105,891

243

941400

32

6,6421,192

89344146

12

2,424435

622603

2,7241,679

n/a

957196

1,378

3,232$ 3,109

4,6131,603

28,855

2008 (a)

$ 76,5896,7793,3843,528

$ 4.77

$ 4.97$ 4.75$ 4.95$ 0.96

7131,2857,087

21,40942,6866,5337,004

205

979369

32

6,285975

75357135

12

2,300357

636n/a

3,3511,195

388

944207

1,352

3,215$ 2,838

4,5771,617

30,360


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MARATHON OVERVIEWOperating across the globe, Marathon is among the worlds leading integrated energy companies applying innovative technologies to discover and develop valuable energy resources, providing high-quality products

to the marketplace and delivering value to all o the Companys stakeholders. In 2011, Marathon delivered on its ongoing commitment to ocus on operational per ormance across its business segments. This included strong reliability at major operations in Norway and Equatorial Guinea, ramp-up o operations at the Jackpine Mine in Canada, continued solid per ormance o the Garyville, Louisiana, refnery and strong same store sales growth at Speedway retail operations.

UPSTREAMEXPLORATION AND PRODUCTIONMarathons explorat on act v t es are ocused on add ng pro table product on to ex st ng core areas (the U.S., Equator al

L bya and the North Sea) and develop ng potent al new core areas (indones a, iraq Kurd stan Reg on and Poland). Marathoproduct on operat ons supply l qu d hydrocarbons and natural gas to the grow ng world energy markets. Worldw de product

operat ons are currently ocused n North Amer ca, A r ca and Europe. The Company also holds ownersh p nterests n bot

ated and outs de-operated o l sands leases n Canada that could be developed us ng n-s tu methods o extract on.

OIL SANDS MININGMarathon owns a 20 percent outs de-operated nterest n the Athabasca O l Sands Project (AOSP), wh ch ncludes the ex st

Muskeg R ver and Jackp ne m nes, the Scot ord Upgrader, and add t onal prospect ve acreage n Alberta, Canada. These as

g ve Marathon access to stable, long-l e Organ zat on or Econom c Cooperat on and Development (OECD) product on.

INTEGRATED GAS

Marathons ntegrated gas bus ness adds value through the development o opportun t es created by demand or natural gas. Tbus ness complements the Companys explorat on and product on operat ons and opens a w de array o nvestment opportun

des gned to add susta nable value growth.


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DOWNSTREAMREFINING, MARKETING AND TRANSPORTATIONMarathon has extens ve re n ng, market ng and transportat on operat ons concentrated pr mar ly n the M dwest, Gul Coas

Southeast reg ons o the U.S. Marathon ranks as the th largest crude o l re ner n the U.S. and the largest n the M dwest. Stteg cally located to serve major markets, Marathons operat ons nclude a s x-plant re n ng network, a comprehens ve term n

transportat on system, and extens ve market ng operat ons. Th s also ncludes Marathons wholly owned reta l market ng sub

ary Speedway LLC, the ourth largest cha n o company-owned and -operated reta l gasol ne and conven ence stores n the U

LIVING OUR VALUESMarathon has a h story o operat onal success rooted n L v ng Our Values a ph losophy encompass ng longstand ng comm

to health and sa ety, env ronmental stewardsh p, honesty and ntegr ty, corporate c t zensh p and a h gh per ormance team cul

We recogn ze that our act ons and operat ons a ect a broad range o stakeholders nclud ng nvestors, commun t es, em

ees, customers, suppl ers, bus ness partners and host governments. We bel eve these core values pos t on us to be an ndustry

partner, employer and ne ghbor o cho ce.

Health and Sa ety:We conduct our bus ness w th a h gh regard or the health and sa ety o our employees, contractors and ne g

bor ng commun t es. H gh standards o health, sa ety and secur ty per ormance underp n our culture o cont nual mprove

Environmental Stewardship:We are committed to minimizing environmental impacts by reducing wastes, emissions and other releases.

Business Ethics: We uphold high standards of business ethics and integrity, enforce strict principles of corporate governance and

support transparency in all of our operations.

Corporate Citizenship:We live by our principles of corporate social responsibility and make a difference through our philanthropic,

social development and volunteer programs.

High Per ormance Team:We create sustainable value through a high performance team culture and provide a collaborative, support-

ive work environment where employees are encouraged to reach their full professional potential.


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4 MARATHON OIL CORPORATION

A MRO B C D E F G

% L

i q u

i d s

H I J K

10

20

30

40

50

60

70

80

A MRO B C D E F G

U p s t r e a m

I n c o m e

, $ / B O E

H I J K

5

10

15

20

0

A B C D E F G MRO

R / P

, Y r s

.

H I J K0

5

10

15

20

Proved reserves eoY 2010

Proved reserves - % Liquids eoY 2010 UPSTREAM INCOME - $/SALES BOE - 2010

reserve/Production ratio (r/P) eoY 2010

E ect ve w th the sp n-o , Marathon O l Corporat on (MRO) w ll be a global upstream company w th a strong port ol o o assets dleveraged to crude o l product on and w th explorat on ups de. MRO w ll cont nue to be based n Houston and trade under ts t cker sy

Source: Company annual reportsBOE volume based on 6:1 and 13:1 gas/oil ratioMRO & MUR include Oil Sands Mining Operations

Source: Company annual reportsBOE volume based on 6:1 gas/oil ratio YE2010 Reserves/2010 ProductionMRO & MUR include Oil Sands Mining Operations

Source: Company annual reportsBOE volume based on 6:1 gas/oil ratioMRO & MUR include Oil Sands Mining Operations

Source: Company annual reportsBOE volume based on 6:1 gas/oil ratioMRO upstream includes a ter tax income o E&P, OSM & Integrated Gas.MUR includes OSM. MRO, MUR & HES exclude R&M

A B C D E MRO F G H I J K0

500

1000

1500

2000

2500

3000

3500

M M B O E

6:1

13:1

MRO comparator group consists o : Apache, Anadarko, Chesapeake, Devon, EnCana, EOG Resources, HESS, Murphy Oil, Noble Energy, Occidental Petroleum, Talisman


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5MARATHON PETROLEUM CORPORATI

A B C D MPC E F

M B / D

G H I

500

1000

1500

2000

0

A CB MPC FE G H ID

3

6

9

12

15

0

GA FC EMPC HB D I

50

100

150

200

250

300

0

GC D EA B F H IMPC

3

6

9

12

15

0

downstream Position u.s. crude refining caPacitY (1) downstream Position # of u.s. refineries

downstream Position average crude caPacitY of

U.S. REFINERIES(1)

downstream Position neLson comPLexitY index (1)

When Marathon Petroleum Corporat on (MPC) becomes a separate publ c company, t s expected to be the th largest U.S. re ner. Mw ll be concentrated pr mar ly n the M dwest, Gul Coast and Southeast reg ons o the U.S. MPC w ll be headquartered n ndlaant c pated to trade on the NYSE under the t cker symbol MPC.

(1) O&GJ U.S. Refning Survey, data as o 1/1/2011, with minor adjustments.MPC comparator group consists o : BP, ConocoPhillips, Chevron, Royal Dutch Shell, Sunoco, Tesoro, Valero Energy, ExxonMobilNote: Refning capacities are barrels per calendar day (BPCD) unless noted.

Majors and Integrateds

Independent Reners

MPC


Independent Reners

MPC


Independent Reners

MPC


Independent Reners

MPC


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UPSTREAM BUSINESS:

Exploration & Production, Integrated Gas and Oil Sands Mining

Marathon s the ourth largest U.S.-based ully ntegrated energy company. The Company conducts explorat on, development or produ

n the U.S., Angola, Canada, Equator al Gu nea, indones a, iKR (iraq Kurd stan Reg on), L bya, Norway, Poland and the U.K.

Upstream ocuses on commerc al z ng and develop ng ex st ng unproved reserves; captur ng new resource and value through explort ve acqu s t ons; ma nta n ng sa e, low-cost rel able operat ons; execut ng major developments on t me and at a compet t ve cotechnolog es to ncrease value.

Marathon cont nues to grow an nventory o strong Upstream projects across the globe. Th s ncludes developments n Norway and Aued nvestment n major U.S. resource plays, nclud ng the Bakken Shale n North Dakota, the l qu ds-r ch port on o the Anadarkoarea n Oklahoma, the N obrara area n Southeast Wyom ng and Colorado, and the Eagle ord play n Texas. The Company also made

nto the iraq Kurd stan Reg on, expanded ts large acreage pos t on n the develop ng shale gas play n Poland, and cont nued moact v t es n indones a.

Dur ng the 12 months ended December 2010, Explorat on and Product on sales rom cont nu ng operat ons averaged 245 thousand ba(mbpd) o l qu d hydrocarbons and 878 m ll on cub c eet per day (mmc d) o natural gas, or 391 thousand barrels o o l equ valenDur ng the same per od, O l Sands M n ng had net synthet c crude o l sales o 29 mbpd.

rom 2001 through 2010, the Company expanded ts P50 resource base rom 1.9 b ll on barrels o o l equ valent (bboe) to 6.0* bboeper od, the Company ncreased proved reserves approx mately 60 percent rom 1.0 bboe to 1.6* bboe. Beg nn ng n 2009, regulat onreserves were changed and now nclude synthet c crude o l related to Marathons nterest n the AOSP. Total resource at year-end 2010The total resource represents a h gh s de, or P90 est mate.

Total P50 Resource Growing Resource and Proved Reserves

I N C R E A S E D PROVED RESERVES : 60%I N C R E A S E D TOTAL P 50 RESOURCES : 316%

YEAR- EN D 20011. 9 BBOE

YEAR- EN D 20106. 0 BBOE

53 %PROVED

47%UNPROVED

27%PROVED

73 %UNPROVED

Total Resource

YEAR- EN D 2010**9. 8 BBOE

Y EA R E ND2010**

16 %PROVED

84 %UNPROVED

* includes 0.6 bboe proved and 2.0 bboeunproved resources rom Canad an O l SaO l Sands M n ng proved reserves are n

n 2010 SEC d sclosures.

** includes 0.6 bboe proved and 4.0 bboeunproved resources rom Canad an O l Sa

UPSTREAM


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2010 WORLDWIDE PRODUCTIONAverage Da ly Net Sales, 12 Months Ended December 2010

Totals Area LiquidsMBPDGas

MMCFDTotal

MBOEPD

Percent WorldwideProduction

United StatesAlaska 0 104 17 4

Colorado 0 21 4 1

Lou s ana 1 4 1 0

New Mex co 2 2 3 1

North Dakota 12 4 13 3

Oklahoma 3 66 14 4

Texas 4 34 10 3

Wyom ng 18 100 34 9

Gul o Mex co 30 26 34 9

Other 0 3 1 0

Total U.S. 70 364 131 34

A ricaEquator al Gu nea 38 405 105 27

L bya 45 4 46 12

Total A r ca 83 409 151 39

Europe

Norway 75 35 80 20Un ted K ngdom 17 70 29 7

Total Europe 92 105 109 27

Total WorldwideProduction 245 878 391 100

Note: Throughout tables, 0s equal de m n m s product on. Dashes equal no product on.

U . S .OFFSHORE

1 2 %

EUROPE

3 7 %

U . S .ONSHORE

1 7 %AFRICA3 4 %

Liquids Production245 MBPD

Gas Production878 MMCFD

Total Production391 MBOEPD

AFRICA

3 9 %

U . S .OFFSHORE

3 %

EUROPE

1 2 %

U . S .ONSHORE

3 8 %AFRICA

4 7 %

U . S .OFFSHORE

9 %

EUROPE

2 7 %

U . S .O N S H O R E2 5 %

UPSTREAM


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spac ngs to y eld a total o 701 wells. Thprogram has the potent al to add net peakproduct on o up to 118 mmc d net o gby 2023. Net gas sales or the 12 monthsended December 2010 averaged 21 mmcrepresent ng 6 percent o Marathons totaU.S. natural gas sales.

in 2010, Marathon began leas ng n themerg ng l qu ds-r ch N obrara Shale pthe DJ Bas n. The Company holds approxmately 177,000 net acres n the DJ Bas nnorthern Colorado and southeast Wyom nThe N obrara ormat on s character ze

The Company currently has 77 wells onproduct on w th an add t onal 41 wells dr lledbut not completed. These wells w ll becompleted when market cond t ons are more

avorable.Key m lestones n 2010 ncluded dr ll ng

16 wells and complet ng 33 wells to reta nthe ent re acreage pos t on, commencemento se sm c perm tt ng and complet on o awater handl ng system on the Mesa. Overthe next 10 years, Marathon expects to dr llan add t onal 314 wells on 20-acre spac ngsand potent ally another 266 wells on 10-acre

UNITED STATESMarathon ma nta ns strong assets n

bas ns n Alaska, Colorado, Lou s ana, NorthDakota, Oklahoma, Texas, Wyom ng and theGul o Mex co that have h gh resource poten-

t al. U.S. net l qu d hydrocarbon sales or the12 months ended December 2010 averaged70 mbpd, or 29 percent o the Companysworldw de l qu d hydrocarbon sales. Netnatural gas sales averaged 364 mmc d, or 41percent o Marathons worldw de gas sales.

ALASKAMarathon has been explor ng or and

develop ng hydrocarbons n Alaska or morethan 55 years, w th development act v t es o-

cused on natural gas n the Cook inlet reg on.The Company has operated and non-operated

nterests n 10 elds n Alaska and ranks asone o the largest gas producers. Net gassales or the 12 months ended December2010 averaged 104 mmc d, represent ng 28percent o Marathons total U.S. natural gassales. Complement ng the natural gas produc-t on operat ons, Marathon operates naturalgas storage and a rst-class ac l ty orhandl ng dr ll ng and product on sol ds.

in 2010, Marathon dr lled two product onwells n the Cook inlet reg on n the N n lch k

eld, and as a non-operated major ty nterestowner also part c pated n two product onwells n the McArthur R ver eld. Thesewells target the Grayl ng Gas Sands, Tyonekand Beluga reservo rs.

COLORADOAcqu red n 2006, Marathons leasehold

pos t on n Colorado ncludes approx mately9,000 net acres n the P ceance Bas n, w thP50 resource o approx mately 649 bc . Theacreage, located n Gar eld County n theGreater Grand Valley eld Complex, s fankedby, and on-trend w th, adjacent product on.

The pr mary reservo r s the W ll ams orkormat on o the Mesaverde Group, wh ch s

character zed as a mass ve 3,000- oot-th cksequence o stacked overpressured fuv alsands n a cont nuous gas accumulat on.

McArthur River

BeaverCreek

Cannery Loop

Ninilchik

20 mi

K E N A I

N A T I O N A L

W I L D L I F E

R E F U G E

Kenai Gas

C OO K

I NL E

T

Gas Development Oil Development

A L A S K A

LNG Plant

Alaska Average Da ly Net Sales, 12 Months Ended December 2010Key Fields WorkingInterest Operator OilMBPD GasMMCFD TotalMBOEPD

Beaver Creek 100% Marathon 0 7 1

Cannery Loop 100% Marathon -- 12 2

Kena Gas 100% Marathon -- 38 6

McArthur R ver 51% Chevron -- 28 5

N n lch k 60% Marathon -- 18 3

Other Var es Var es -- 1 0

Total -- -- 0 104 17

EXPLORATION AND PRODUCTION NORTH AMERICA


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9

The Company draws upon ts extens vexper ence n reservo r character zat onzontal dr ll ng, well st mulat on, operatexecut on and commerc al and market nexpert se n the Rocky Mounta n Bas nleverage th s substant al pos t on n theBakken play. The Company currently has sr gs n the Bas n. Marathon ant c pates approx mately 275 gross wells over the ne

our years (70 to 75 dur ng 2011), ncludtechnology project wells that are a cont nut on o an extens ve program started n 2w th the potent al to have approx mately mboed o net peak product on by 2013.

Marathon s target ng the M ddle Bakand Three orks reservo rs n the Hector

acres n 2010. Marathons acreage s locatedw th n the establ shed W ll ston Bas n n Dunn,McKenz e, McLean, Mountra l and W ll amscount es n North Dakota, and R chland,Roosevelt and Sher dan count es n Montana,w th est mated P50 resource o 133 mmboe.Th s pos t on prov des Marathon access tos gn cant resources n North Amer ca.

The Bakken Shale s character zed as a 30to 70 oot sandy dolom t c hor zon encasedw th n a h ghly organ c black shale sourcerock. Ex st ng wells n the area are typ callydr lled to a true vert cal depth o approx -mately 10,000 eet w th hor zontal extens onso 10,000 eet or greater.

nterbedded r ch source rock and br ttle chalkbeds. The ormat on has been a known o ltarget or years that s now be ng explo tedby new hor zontal dr ll ng and stage rac ngcomplet on techn ques developed n the Bak-

ken and other resource plays. Ex st ng wellsn the area are typ cally dr lled to a true vert -

cal depth o approx mately 7,000 eet w thhor zontal extens ons o 4,500 eet or greater.Marathon plans to part c pate n 8 to 12 grosswells n the DJ Bas n n 2011 as t tests thev ab l ty o the play. The Company expectsthat w th the success ul development o th sprogram, the play could y eld a net resourcepotent al o 125 to 175 m ll on barrels o o lequ valent (mmboe).

NORTH DAKOTAMarathon holds 391,000 net acres n

the Bakken o l play n North Dakota andeastern Montana, w th a work ng nteresto approx mately 80 percent n ts company-operated assets. The Company cont nuesto strengthen ts Bakken pos t on throughselect ve acqu s t ons and grass-roots leas ng,acqu r ng approx mately 50,000 add t onal

Colorado Average Da ly Net Sales, 12 Months Ended December 2010Key Fields WorkingInterest Operator

OilMBPD

GasMMCFD

NGLMBPD

TotalMBOEPD

P ceance Bas n(CO) Var es Marathon 0 21 0 4

North Dakota Average Da ly Net Sales, 12 Months Ended December 2010Key Fields WorkingInterest Operator

OilMBPD

GasMMCFD

NGLMBPD

TotalMBOEPD

Bakken Var es Var es 12 4 0 13

Bakken Shale ~391,000 net acres ~133 MMBOE P50 resource

Marcellus Shale ~8 0,00 0 net acres ~150 MMBOE ne t

resour ce pote ntia l

Woodford Shale ~88,000 net acres ~300 MMBOE ne t

resource potential

Haynesville Shale ~20,000 net acr es ~125 -1 75 MMBOE net

resource potential

Eagle Ford Po tentia l ~75, 000 net acres

~50-110 MMBOE netresource potential

Piceance Basin ~9 ,000 net acres ~108 MMBOE P50 resource

DJ Basin (Niobrara) ~177,000 net acres ~125-175 MMBOE net

resource potential

Powder River Basin ~90,000 net acres ~26 MMBOE P50 resource

Gas Development

Oil Development

Oil & Gas Development

exPLoration and Production north america


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10

Ajax and Myrm don core areas and w ll beg ndevelopment o ts D omedes and Aeneasareas n 2011. The Company s also explor ngadd t onal ormat ons n the W ll ston Bas n,such as the Lodgepole, N sku and Duperow

reservo rs. Marathons use o state-o -the-artautomated r gs helps to ach eve best- n-class dr ll ng per ormance, reduc ng wellcosts and cycle t mes, wh le prov d ng sa er,more energy-e c ent per ormance. Comple-t ons methods employed n the Bakken area product o reservo r character zat on andresults o technology appl cat on to opt m zethe econom c outcomes.

Net sales or the 12 months endedDecember 2010 averaged 12 mbpd o l qu d

hydrocarbons and 4 mmc d o natural gas,represent ng 17 percent and 1 percent oMarathons total U.S. l qu d hydrocarbon andnatural gas sales, respect vely.

OKLAHOMAMarathon has been act vely nvolved n

explorat on and product on n Oklahomaor more than 70 years. The Company has

well-establ shed product on n the AnadarkoBas n rom operat ons nclud ng the Cement,

Huntley, Rocky, Knox, Strong C ty, Wheatland,Elk C ty, Marlow, Watonga and Ammun t on

elds. Marathons Oklahoma sales or the 12months ended December 2010 averaged 3mbpd o l qu d hydrocarbons and 66 mmc do natural gas, represent ng 4 percent and 18percent o Marathons total U.S. l qu d hydro-carbon and natural gas sales, respect vely.

Marathon has been an act ve part c pantn the emerg ng Wood ord resource play n

the Anadarko Bas n o western Oklahoma.S nce 2008, the Company has part c pated

n 18 wells (5 operated, 13 non-operated) nthe emerg ng Anadarko Wood ord resourceplay. Year-end 2010 product on rom allcompleted Anadarko Wood ord wells totaledapprox mately 2 mboepd. The Company cur-rently holds 88,000 net acres n the core othe Anadarko Wood ord play, w th a work ng

nterest o approx mately 60 percent n ts

Company-operated assets, mostly held byproduct on.

Marathon w ll be execut ng a more aggres-s ve Company-operated Anadarko Wood ordprogram n 2011. Th s program w ll ramp up

rom three to e ght dr ll ng r gs dur ng 2011.The Company plans to part c pate n 45 to 75gross wells n the Anadarko Wood ord through2011, 20 to 25 o wh ch w ll be Company-operated. Program ocus w ll be n the l qu ds-r ch condensate and o l w ndows o the play.Marathon expects that w th the success ul

development o th s program, the play couy eld an add t onal 200 to 300 net locatw th net resource potent al o 300 mmbo

Marathon had d scover es extend ng tRocky eld n Wash ta County and theley eld n Caddo County n 2010 throsuccess ul explorat on and appra sal drMarathon holds more than 10,000 net un-developed acres n key strateg c exploratprojects along the W ch ta Mt. ront andDeep Anadarko Bas n. in 2011, the Comp

KnoxMarlowHuntley

Wilburton

CementRocky

Strong CityElk City

Pearwood

Mimms CreekBridges East(Haynesville Shale)

Watonga (Woodford Shale)

PermianBasin

Seminole

Ammunition

L O U I S I A N A

O K L A H O M A

N E W

M E X I C O

T E X A S

G U

L F

OF

M E XI C O

M E X I C O

U S A

Wheatland

100 mi

Gas Development Oil Development Oil & Gas Development

Haynesville

U S A

Louisiana, Oklahoma & TexasAverage Da ly Net Sales, 12 Months Ended December 2010

Key Fields WorkingInterest OperatorOil

MBPDGas

MMCFDNGL

MBPDTotal

MBOEPD

Haynesv lle (LA) Var es Marathon 0 4 0 1

Ammun t on (OK) 42% Var es 0 7 0 1Cement (OK) 37% Var es 0 5 -- 1

Knox (OK) 45% Var es 0 9 1 2

Rocky (OK) 60% Var es 0 6 -- 1

Br dges East (TX) Var es Marathon 0 4 0 1

M mms Creek (TX) Var es Marathon 0 9 -- 1

Pearwood (TX) Var es Marathon -- 9 -- 1

Perm an Bas n (TX/NM) Var es Var es 3 2 0

Other Var es Var es 2 49 2 12

Total -- -- 5 104 3 25



13/40

11

plans to part c pate n up to ve convent onalexplorat on and appra sal wells.

PENNSYLVANIA AND WEST VIRGINIAMarathon holds approx mately 80,000 net

acres n the Marcellus Shale resource playn the Appalach an Bas n n Pennsylvan a

and West V rg n a. Est mated net resourcepotent al s 150 mmboe.

The Company s us ng ts extens ve exper -ence n reservo r character zat on, hor zon-tal dr ll ng, well st mulat on, operat onalexecut on and commerc al and market ngexpert se that t has exh b ted n the Bakkenplay n North Dakota. The Company dr lledseven operated wells and part c pated n two

non-operated wells dur ng 2009 and 2010. in2011, explorat on act v ty w ll ocus on thesouthwest Pennsylvan a and northeast WestV rg n a port ons o the play.

in ebruary 2011, Marathon entered nto ajo nt venture w th a company on a large por-t on o ts Marcellus Shale acreage pos t on.Under the agreement terms, the companyw ll earn 50 percent o approx mately 60,000acres under a dr ll ng carry. The company alsohas an opt on to acqu re Marathons rema n-

ng acreage wh le Marathon reta ns the r ghtto cont nue to market the acreage to others.

TEXASMarathons onshore Texas net sales or the

12 months ended December 2010 averaged4 mbpd o l qu d hydrocarbons and 34 mmc do natural gas, represent ng 6 percent and 10percent o Marathons total U.S. l qu d hydro-carbon and natural gas sales, respect vely.

Pr mary product on areas where Marathons act ve are: the M mms Creek eld (9 mmc d)

located n East Texas, wh ch produces romthe t ght Boss er and Cotton Valley sands morethan 2 m les below the sur ace; the Pearwood

eld area (9 mmc d), wh ch produces rom theCotton Valley Carbonate shoal reservo rs; andthe Oletha eld (5 mmc d), wh ch produces

rom the Trav s Peak ormat on under andaround Lake L mestone. uture recomplet onsand development dr ll ng s planned n the

Cotton Valley Carbonate shoal, Trav s Peak,Boss er and James L me ormat ons n theseand other asset areas o East Texas.

in 2009 and 2010, Marathon ocused act v tyon the Haynesv lle and Boss er Shale plays

n East Texas and Lou s ana. The Company spos t oned w th more than 20,000 net acres nthese plays, wh ch s mostly held n produc-t on. The Company part c pated n three wells

n the Haynesv lle/Boss er area n 2010 (twooperated, one non-operated), w th an est -mated net product on rate mpact o 4.6 mmc d

n 2010 and 5.6 mmc d n 2011. Est mated netresource potent al s 125 to 175 mmboe.

in the ourth quarter o 2010, Marathoncompleted an agreement w th Denal O l &

Gas or entry nto the Eagle ord Shale orma-t on n W lson and Atascosa count es. Underthe terms o the agreement, Marathon w ll

dr ll and complete our wells to earn appmately 17,000 net acres. The Company alshas the opt on to purchase Denal s rema

ng approx mately 58,000 net acres n thEagle ord Shale n these two count es.

entry bu lds on Marathons strategy targetunconvent onal, l qu ds-r ch resource p

WYOMINGMarathon has almost 100 years o expe

ence n explorat on and development nWyom ng. The Company cont nues to belead ng per ormer n enhanc ng the reco o l rom ractured carbonate and sandreservo rs n the mature B ghorn Bas nW nd R ver Bas n elds. Marathon s W

m ngs number one o l producer.Marathons net l qu d hydrocarbon sale

Wyom ng or the 12 months ended Decem


U S A

Bighorn Basin

Oregon Basin Garland

Wind River Basin Greater GreenRiver Basin

Wamsutter

SpringCreek

W Y O M I N G

50 mi

Gas Development Oil Development Oil & Gas Development

Powder

River Basin

Wyoming Average Da ly Net Sales, 12 Months Ended December 2010Key Fields WorkingInterest Operator

OilMBPD

GasMMCFD

NGLMBPD

TotalMBOEPD

Garland (WY) 100% Marathon 2 1 0 2

Oregon Bas n (WY) 100% Marathon 5 4 0 6

Powder R ver Bas n (WY) Var es Marathon/Others -- 76 -- 13

Spr ng Creek (WY) 100% Marathon 3 -- -- 3

Wamsutter (WY) 40% Marathon/Devon/BP 0 14 0 2


Total -- -- 18 100 0 34


14/40

12

assessed ts capac ty to manage a cata-stroph c o shore event. Marathon bel ethe Company and the ndustry are targetthe r ght ssues to address o shore sa erespons bly and e ect vely. The Compaperm ts pend ng or explorat on n theMex co. At year-end, there had been no dwater perm ts ssued to the ndustry s nDeepwater Hor zon nc dent.

The ollow ng s a summary o Maras gn cant product on and developmentprojects n the Gul :

Droshky (Green Canyon 244):Located

n approx mately 3,000 eet o water nGreen Canyon Block 244, about 160 m le

net sales or the 12 months ended December2010 averaged 30 mbpd o l qu d hydrocar-bons and 26 mmc d o natural gas, represent-

ng 43 percent and 7 percent o Marathonstotal U.S. l qu d hydrocarbon and natural gassales, respect vely. The Company currentlyhas s gn cant nterests n seven produc ng

elds, o wh ch Marathon operates our.The Company has rebu lt ts nventory o

prospects or uture explorat on act v ty nthe deepwater Gul o Mex co. Marathonhas nterests n more than 21 prospects, w thunr sked resource potent al o approx mately1 bboe net.

ollow ng the Deepwater Hor zon tragedyn the Gul o Mex co, Marathon thoroughly

2010 averaged 18 mbpd, represent ng26 percent o the Companys U.S. l qu dhydrocarbon sales. Net natural gas salesaveraged 100 mmc d, represent ng 28 percento Marathons U.S. natural gas sales. The

Company plans to dr ll approx mately 20Company-operated wells n the B g Horn,W nd R ver and Powder R ver bas ns n 2011.

Marathon has convent onal gas operat onsn the Greater Green R ver Bas n o South-

west Wyom ng, w th pr mary ocus n theWamsutter eld.

The Company holds 90,000 net acres nWyom ngs coalbed natural gas resources

n the Sher dan area o the Powder R verBas n, most o wh ch the Company operates.Marathon also reta ned 75,000 net acres odeep r ghts n the a rway area.

Marathon also holds acreage n the DJBas n n southeastern Wyom ng. or more

n ormat on please see page 8.

GULF OF MEXICOThe Gul o Mex co cont nues to be a core

area or Marathon, w th prom s ng explora-t on potent al. Marathons Gul o Mex co

L O U I S I A N A

T E X A S

Cactus

Fawn

Jayc eeKeating

Cale desiSh enandoah

Channel

Anegada

Kon-ti ki

Solomon

LongBoat

Coronado

Belmont

Eris

Catalina

Captiva

Ventura

Kodiak

Panther

Delray

Daytona

Neptu neSalty Dawg

San dpiperHamptonBlackPearl

Flying Dutchman

Shiner Droshky

Troika

Lobster

Arno ldMantaRa y

MelbourneMandalay

Guava

Princess/Ursa

Petronius

PerseusAndromeda

Aardwolf

Stegodon RaptorS.E. Aardwolf

Mammoth

MadagascarKakadu

GalahSilveradoMontreal

InnsbruckMauna

Kea

Point Reyes

GunintUrchin

Smuggler

Commando

Hypnos

Argali

StonesKey Largo

Ston es S.W.

Ced ar

Skylark

N. Raptor

Ozona

MakiraIsland

Meteor

50 mi

Emerald

Bull

Bals a

U S A

Marathon Producing Properties Marathon Appraisal/Development Projects Marathon Exploration Leases Operated

Marathon Exploration Leases Outside Operated Marathon Overriding Royalty Interest Properties

U.S. Gul o Mexico Average Da ly Net Sales, 12 Months Ended December 2010Key Fields WorkingInterest Operator

OilMBPD

GasMMCFD

NGLMBPD

TotalMBOEPD

Droshky 100% Marathon 11 8 1 13

Ew ng Bank (Lobster,Oyster and Arnold)

66.67%,66.67%, 62.5% Marathon 4 3 0 5

Neptune 30% BHP B ll ton 3 2 0 3

Petron us 50% Chevron 7 7 0 8


Total -- -- 29 26 1 34



15/40

13

Petronius/Perseus (Viosca KnollBlocks 786/830):Marathon holds a 50percent work ng nterest n these blocksapprox mately 130 m les southeast o NOrleans. Chevron USA holds the rema n

work ng nterest and serves as operator. TPetron us development cons sts o a comant tower structure w th product on and d

ng ac l t es. The plat orm was set ovpredr lled wells, dr lled to several sandstreservo rs approx mately 10,000 eet besea level. The tower s 2,001 eet tall and

nstalled n 1,754 eet o water. Petroncapable o prov d ng process ng and tratat on serv ces to adjacent th rd-party e

Shenandoah (Walker Ridge Block 52):Marathon holds a 10 percent work ng nt

n the Shenandoah d scovery located n er R dge Block 52. Th s d scovery encoalmost 300 eet o net pay. The well targethe Lower Tert ary trend, s located n 5

eet o water and was dr lled to a total msured depth o about 30,500 eet. Anadarthe operator and holds a 30 percent work-

ng nterest, along w th ConocoPh ll ppercent) and Cobalt (20 percent).

Stones (Walker Ridge Block 508):in2005, Marathon part c pated n the Stoned scovery well. Th s well targeted the LowTert ary trend. in 2008, Marathon and ts pners dr lled a success ul appra sal well. Twell was dr lled at a water depth o 7,500 to a total depth o 29,400 eet, w th o l lo

n mult ple reservo rs. Th s s a large podevelopment n the Paleogene trend. Shellholds a 35 percent work ng nterest and seas operator; Marathon and Petrobras each ha 25 percent work ng nterest; and ENi S.holds the rema n ng 15 percent.

work ng nterest. The Gunf nt appra sal wellswere subject to the dr ll ng morator um thatwas l ted n October 2010. Appra sal act v tyw ll l kely beg n n 2011.

Neptune (Atwater Valley Blocks 573,574, 575, 617 & 618):D scovered n 1995,Neptune was the rst d scovery n the Atwater

oldbelt trend, approx mately 120 m les othe coast o Lou s ana. Marathon holds a 30percent work ng nterest n Neptune, wh chcons sts o ve Outer Cont nental Shel blocks.Marathons partners n Neptune are BHP B ll -ton, wh ch holds a 35 percent work ng nterestand serves as operator; Woods de PetroleumL m ted, w th a 20 percent work ng nterest;

and Maxus (US) Explorat on, a subs d ary oRepsol YP , w th a 15 percent work ng nterest.

Product on commenced n July 2008. elddevelopment cons sts o seven subsea wellst ed back to a m n -tens on leg plat orm (TLP).The m n -TLP s s tuated above the S gsbeeEscarpment on Green Canyon Block 613 n ap-prox mately 4,300 eet o water. The subseawells are located below the escarpment napprox mately 6,000 eet o water. The o land gas are exported v a the ex st ng Caesar

and Cleopatra trunk l nes.

Ozona (Garden Banks Block 515):TheOzona d scovery s located n approx mately3,000 eet o water, about 175 m les south-east o Sab ne, Texas. Marathon holds a 68percent work ng nterest n the Ozona eld,and serves as operator. Maruben holds therema n ng 32 percent work ng nterest. Ozonawas sanct oned or development n October2008. it s ant c pated that a prev ously dr lledappra sal well w ll be completed n the rsthal o 2011. The well w ll be t ed back toShells Auger plat orm, w th rst product onexpected n 2011, w th an ant c pated netpeak rate o about 5.6 mbpd o o l and 13mmc d o natural gas, a ter royalt es.

southwest o New Orleans, Lou s ana,Droshky s a major subsea project cons st ngo our development wells t ed back to theth rd-party Green Canyon 65 plat orm w thdual, 18-m le fowl nes. Marathon owns a

100 percent work ng nterest n Droshky,wh ch peaked at approx mately 45 mboednet, cons st ng o approx mately 39 mbpd ol qu d hydrocarbons and 39 mmc d o naturalgas. Sanct oned n October 2008, rst o l wasach eved n July 2010.

Three o the our wells are currently pro-duc ng, wh le product on rom the ourth wellhas been delayed. Marathon plans to reenterthe ourth well n the rst quarter o 2011.

Ewing Bank (Arnold, Lobster and Oys-ter, Blocks 963/873/917):Located 130 m lessouth o New Orleans, th s 1994 developmentserves as a product on hub plat orm. Dur ngthe 12 months ended December 2010, netsales averaged 4 mbpd o l qu d hydrocarbonsand 3 mmc d o natural gas.

Gun int (Mississippi Canyon Block948):in 2008, Marathon part c pated n asuccess ul d scovery well on the Gunf nt

prospect, located on M ss ss pp CanyonBlock 948, n the deepwater Gul o Mex co.The well s located approx mately 160 m lessoutheast o New Orleans, and was dr lled nabout 6,100 eet o water, to a total depth oapprox mately 29,280 eet. The well encoun-tered more than 550 eet o net hydrocarbon-bear ng sands n the M ddle and LowerM ocene reservo rs.

Marathon owns a 12.5 percent work ng n-terest n M ss ss pp Canyon Block 948. NobleEnergy inc. holds a 37.5 percent work ng

nterest n the well and w ll serve as operatoror the block. BP Explorat on & Product on

inc. operated the explorat on well w th a 25percent work ng nterest. Samson O shoreCompany owns the rema n ng 25 percent



16/40

14

CANADACanadas o l sands are set to play a maj

role n meet ng the worlds grow ng enedemand. Th s unconvent onal resource second largest o l reserve n the world, w

recoverable reserves currently est matedat 171 b ll on barrels. it s ant c pated approx mately 80 percent o th s resourctoo deep to m ne and w ll be explo ted u

n-s tu extract on techn ques. The rema20 percent o the resource s shallow enoto ut l ze m n ng techn ques and s d

n the O l Sands M n ng sect on on paMarathon holds ownersh p nterests n

both operated and outs de-operated o lsands leases that have the potent al to be

developed us ng n-s tu recovery methoThese leases cover approx mately 143,00gross acres (52,000 net), near ort McMuAlberta. Recoverable resources are est -mated at greater than 1 b ll on barrels ob tumen (1.1 b ll on barrels at a P50 reslevel) rom several projects:

100 percent working interest in the B-wood project;

Approximately 60 percent working in

n the Marathon-operated Namur projec 20 percent working interest in the C

operated Ells R ver project; and 33.33 percent working interest in the

operated Salesk project.

Marathon and Chevron have completedn t al explorat on o the r respect ve

projects. in t al test dr ll ng on the B rprospect con rmed b tumen presence, anadd t onal 70 test wells are planned n 2to assess reservo r qual ty.


McClelland Lake

609

310

351

309

352353

472

442

17

13

89 88

15

31

36

632 631

90

9

A T H A B A S C A R I V E R

KearlLake

FortMcKay

Ells River

Saleski

Birchwood

Jackpine MineExpansion

MuskegRiver Mine

Jackpine Mine

North AsphaltCreek

Pierre River Mine

Namur

Fort McMurray

349

348673

675

350

732

889

548

557

556555

557

20013199

192

294

733

732

455

418

419

N

Mining In Situ

C A N A D A


17/40

15

ANGOLAMarathons hold ngs o shore Angola

nclude 10 percent work ng nterests n Block31 and Block 32, where the Company and tspartners have dr lled more than 30 success ul

explorat on wells. Marathon s encouraged byts successes n th s explorat on trend.

Block 31:Marathons partners n Block 31are BP Explorat on Angola (26.67 percent andoperator), Esso Explorat on and Product onAngola (25 percent), Sonangol (20 percent),Stato l Angola A.S. (13.33 percent) and TotalExplorat on and Product on Angola (5 per-cent). Marathon and ts coventurers are pro-ceed ng w th the PSVM Development, wh ch

w ll use a foat ng product on, storage ando foad ng ( PSO) vessel. Development dr ll ngbegan n 2010, w th rst product on targeted

or 2011/2012. A total o 48 product on andnject on wells are planned, w th a net peak

rate o 15 mbpd projected dur ng 2012. TheCompany and ts partners are evaluat ng asecond potent al hub.

Block 32:Marathons partners n Block 32are Total Explorat on and Product on Angola

(30 percent and operator), Sonangol (20 per-cent), Ch na Sonangol internat onal Hold ng(20 percent), Esso Explorat on and Product onAngola (15 percent) and Petrogal (5 per-cent). Stud es are under way to establ sh adevelopment n the eastern part o the blockand assess the development potent al o theother d scover es. At least one development

s planned on Block 32.

EQUATORIAL GUINEAMarathon establ shed ts explorat on and

product on area n the Alba eld n Equator alGu nea n early 2002. The Companys currenthold ngs nclude a 63 percent work ng nterest

n the Alba eld, a 52 percent work ng nter-est n the Alba l que ed petroleum gas (LPG)plant, a 45 percent work ng nterest n Atlant cMethanol Product on Company LLC (AMPCO)and a 60 percent nterest n a l que ed naturalgas (LNG) product on ac l ty on B oko island.

Net sales or the 12 months ended Decem-ber 2010 averaged 27 mbpd o condensate and11 mbpd o natural gas l qu ds (NGL) or totalnet l qu d hydrocarbon sales o 38 mbpd. Th s

represents 22 percent o the Companys nnat onal l qu d hydrocarbon sales. Net nagas sales averaged 405 mmc d dur ng th

25 mi

A F R I C A

MRO Acreage Oil Discovery

Block 3110% WI

Block 3210% WI

Potential Eastern Development Area

PSVM Development Area

Ceres

Juno

Hebe

Urano AstraeaPalas

GengibreMostarda

Canela

Titania

Gindungo

Plutao

VenusMart

SaturnoTerra

Salsa

Manjericao Caril

Miranda

Louro

CominhosColorau

Cordelia

Alho

Portia

Dione

Leda

Oberon

Cola

Tebe

Angola Block 31 (Work ng interest 10 Percent) Well Water Depth Total Depth Test FlowRate BPD Year Drilled

Tebe 5,700' 11,400' 5,000 2009

Oberon 5,300' 12,300' 5,000 2009

Leda 6,800' 19,300' 5,000 2009

D one 5,500' 10,700' 5,000 2008

Port a 6,500' 15,600' 5,000 2008

Cordel a 7,573' 13,337' 2,063 2007

M randa 7,990' 17,004' 3,822 2007

T tan a 7,060' 17,516' 2,050 2006

Terra 7,637' 20,996' No DST 2006

Urano 6,444' 20,110' 1,970 2006

Hebe 6,588' 15,823' 5,956 2005

Astraea 4,908' 12,598' 6,513 2005

Juno 5,253' 10,499' 2,676 2005

Ceres 5,358' 14,220' 5,644 2005Palas 5,256' 12,367' 5,330 2005

Venus 6,600' 14,784' No DST 2004

Mart 6,489' 13,756' 5,200 2003

Saturno 5,919' 15,444' 5,000 2003

Plutao 6,628' 14,607' 5,357 2002

EXPLORATION AND PRODUCTION AFRICA


18/40

16

E Q U AT O R I A LG U I N E A

G A B O N

C A M E R O O N

B I O K O I S L A N D

34 mi A F R I C A

E . G .

C A M E R O O N

Estrella

Alba Field

Apatito

AgateGardenia

Block D

AlbaBlock

Sub Area B

Alba BlockSub Area A

Alba BlockSub Area B

MethanolPlant

LPGPlant

B I O K O I S L A N D

LNG Plant

MRO Acreage Gas Discovery Oil & Gas Development

Equatorial Guinea Average Da ly Net Sales, 12 Months Ended December 2010

Key Fields WorkingInterest Operator Oil MBPD Gas MMCFDNGL

MBPD Total MBOEPD

Alba 63% Marathon 27 405 11 105

Angola Block 32 (Work ng interest 10 Percent)

Well Water Depth Total Depth Test Flow RateBPD Year Drilled

Alho 5,273' 16,343' 5,400 2007

Colorau 5,884' 10,995' 2,130 2007

Com nhos 5,227' 14,751' 6,258 2007Louro 6,178' 16,136' No DST 2007

Car l 5,489' 13,675' 6,300 2007

Salsa 5,925' 13,205' 3,686 2006

Manjer cao 6,487' 13,072' M n -DST 2006

Mostarda 5,768' 14,748' 5,347 2006

Geng bre 1 5,587' 14,541' 4,724 2005

Canela 5,053' 11,975' 6,800 2004

G ndungo 4,739' 15,670' 7,400 & 5,700rom two zones 2003

Cola 5,113' 15,505' No DST 2004

per od, represent ng 79 percent o Marathnternat onal gas sales.Approx mately 130 mmc d gross o th

gas rema n ng a ter the condensate and Lare removed s suppl ed to the AMPCO

on B oko island, where t s used to manacture 3,000 tonnes o methanol per day

add t on, Marathon and ts partners opera 3.7 m ll on gross metr c tonnes per an(mmtpa) gas l que act on ac l ty thatal gned w th, and ntegrated nto, Maragas process ng operat ons on B oko islaApprox mately 650 gross mmc d o the

eld dry gas s suppl ed to the LNG prot on ac l ty as eedstock. Approx mattr ll on gross cub c eet (tc ) o dry ga

the Marathon-operated Alba eld w ll bprocessed through the plant under a contraw th BG Gas Market ng Ltd. See page 2more n ormat on on th s project.

LIBYAMarathon s a member o the Waha Gr

wh ch acqu red explorat on and productr ghts n L bya n the m d-1950s. Marand ConocoPh ll ps each hold a 16.33 pework ng nterest n the Waha Concess o

Hess Corporat on has an 8.16 percentwork ng nterest, and the L byan Nat oO l Corporat on (NOC) holds a 59.16 pework ng nterest.

The Concess ons encompass almost13 m ll on acres n the S rte Bas n. Thbas n s one o the most prol c o l andproduc ng areas o L bya, conta n ng sundeveloped o l and gas resources. Provereserves are est mated at 242 mmboe. Duthe 12 months ended December 2010, theCompanys net l qu d hydrocarbon saleswere 45 mbpd. Th s represents 26 percenMarathons nternat onal l qu d hydrocsales. Net natural gas sales averaged 4mmc d dur ng th s per od, represent ngpercent o Marathons nternat onal gas

Marathons explorat on program n 201ncluded the dr ll ng o 10 wells, nclud

2 carry over wells rom 2009. The Compandr lled 28 development wells n L bya n

exPLoration and Production africa


19/40

17

Add t onally, the Waha Group ma nta ns an ac-t ve se sm c acqu s t on program across theseconcess ons. Comm ss on ng and start-up othe aregh Phase ii project were completed nNovember 2010. The project s expected to add

180 mmc d and 15 gross mboepd to Wahasproduct on capac ty and has the potent al todevelop 35 mmboe net resource.

The Waha Group s also plann ng or thedevelopment o two o l and gas elds n theWaha-operated concess ons the NorthG alo eld development and the NC-98 elddevelopment. These planned gas recycle proj-ects are located n the southeastern sect ono L byas S rte Bas n. The North G alo eld sexpected to generate peak rates o 180 gross

mmc d and 100 gross mbpd n 2019. The NC-98 eld, wh ch s a gas condensate reservo r,

s expected to produce 400 gross mmc d ogas and 80 gross mbpd at ts peak n 2019.

in ebruary 2011, c v l unrest occurred nparts o North A r ca, nclud ng L bya, whereMarathon has explorat on and product onoperat ons. Please see Marathons 2010 orm10-K or more n ormat on.

Libya Average Da ly Net Sales, 12 Months Ended December 2010

Key Fields Working Interest Operator Oil

MBPD

Gas

MMCFD

Total

MBOEPDWaha

Concess ons 16.33% Waha 45 4 46

G UL

F O

F S

I RT E

60 mi

L I B Y A

Es SiderTerminal

Bahi

Dahra Jofra NC-98

Masrab

FareghDefaBelHedan

SamahKhalifa

Balat

Zaggut

Waha

Harash

Gialo

MRO Acreage Oil Development Oil & Gas Development

A F R I C A

EXPLORATION AND PRODUCTION AFRICA


20/40

18

Production

Integrated Gas

Exploration

Oil Sands Mining

Reneries

N O R T H D A K O T A2010 Total Production 13 MBOEPDPercent of Worldwide Production 3%

A L A S K A2010 Total Production 17 MBOEPDPercent of Worldwide Production 4%

C A N A D A

T E X A S2010 Total Production 10 MBOEPDPercent of Worldwide Production 3%

G U L F O F M E X I C O2010 Total Production 34 MBOEPDPercent of Worldwide Production 9%

W Y O M I N G2010 Total Production 34 MBOEPDPercent of Worldwide Production 9%

C O L O R A D O2010 Total Production 4 MBOEPDPercent of Worldwide Production 1%

O K L A H O M A2010 Total Production 14 MBOEPDPercent of Worldwide Production 4%

P E N N S Y LVA N I A /W E S T V I R G I N I A

L O U I S I A N A2010 Total Production 1 MBOEPD

R E F I N E R I E S :Crude CapacityGaryville, Louisiana: 464,000 BPDCatlettsburg, Kentucky: 212,000 BPDRobinson, Illinois: 206,000 BPDDetroit, Michigan: 106,000 BPDCanton, Ohio: 78,000 BPDTexas City, Texas: 76,000 BPD

B R A N D E D M A R K E T I N G :Marathon Brand:~ 5,100 locations in 18 states

Speedway:~1,350 locations in seven states


21/40

19

U N I T E D K I N G D O M2010 Total Production 29 MBOEPDPercent of Worldwide Production 7%

N O R WAY2010 Total Production 80 MBOEPDPercent of Worldwide Production 20%

I K R ( I R A Q I K U R D I S TA N R E G I O N )368,000 net acres4 Blocks

P O L A N D2.3 million net acres11 Concessions

L I B YA2010 Total Production 46 MBOEPDPercent of Worldwide Production 12%

E Q U A T O R I A LG U I N E A2010 Total Production 105 MBOEPDPercent of Worldwide Production 27%

I N D O N E S I A2 million net acres3 Blocks

A N G O L A258,000 net acres2 Blocks


22/40

20 exPLoration and Production asia

INDONESIAMarathon holds approx mately 2 m ll on

net acres (3.3 m ll on gross acres) across thePasangkayu, Bone Bay and Kumawa blocks nindones a.

The Company holds a 70 percent work-ng nterest n the 870,000 acre Pasangkayu

Block, located on and o shore the sland oSulawes n the Makassar Stra t, d rectlyeast o the prol c Kute Bas n o l and gasproduct on reg on. Approx mately 25 percento the block s located onshore Sulawes ,w th the rema n ng 75 percent n waterdepths up to 7,200 eet. Water depths orthe o shore prospects range rom 1,500 eetto 6,000 eet. Marathon s gned a Product onShar ng Contract (PSC) w th the indones an

government n 2006. The Company completed3-D se sm c acqu s t on n 2008. Marathonleads a consort um o s x compan es, wh chsecured a two-year r g contract or indones a.Dr ll ng operat ons on the Bravo-1 w ldcat

well were conducted n Pasangkayu n 2010.The Bravo-1 well was n shed n late 2010,and although a th ck reservo r sect on wasencountered, no commerc al hydrocarbonaccumulat on was present. The Romeoprospect rema ns prospect ve and w ll be ullyevaluated n 2011. Romeo has gross unr skedresource potent al o 250 to 500 mmboe.

Marathon holds a 55 percent work ng nter-est and operatorsh p n the Bone Bay Blocko shore South Sulawes . The block coversan area o approx mately 1.23 m ll on acres.

it s a h gh-potent al, under-explored arew th water depths rang ng between 165 a6,500 eet. The Bone Bay Block s aboutm les southeast o Marathons PasangkayBlock. Marathon acqu red 2-D se sm c

2009/2010, and dr ll ng s planned or 2The Company also holds a 55 percent n

est and operatorsh p n the Kumawa BlocKumawa Block encompasses approx mate1.24 m ll on acres and s o shore West Eastern indones a, n the Sema reg on, prox mately 180 m les south o the produTangguh LNG ac l ty. The Kumawa Blo

n a h gh-potent al, under-explored area wwater depths rang ng rom 2,400 to more 4,000 eet. The Company acqu red 2-D se

n 2010, and dr ll ng s planned or 201

96 mi

I N D O N E S I A K A L I M A N T A N

Kutei Basin~15 billion boe

PasangkayuBlock

S U L A W E S I

P A P U A

Bone BayBlock

KumawaBlock

MRO Acreage Oil DevelopmentGas Development


23/40

21EXPLORATION AND PRODUCTION EUROPE

NORWAYNorway s a strateg c core area or

Marathon, where the Company operates 10l censes on the Norweg an Cont nental Shel .Net sales n Norway averaged 75 mbpd o

l qu d hydrocarbons and 35 mmc d o gasor the 12 months ended December 2010.

Th s represents 43 percent o the Companysnternat onal l qu ds sales and 7 percent onternat onal natural gas sales.

ALVHEIMMarathon holds a 65 percent work ng

nterest n, and serves as operator o , theAlvhe m area. Marathons partners n Alvhe mare ConocoPh ll ps Skand nav a AS, w th a 20

percent work ng nterest, and Lund n NorwayAS, w th the rema n ng 15 percent.

The Alvhe m area compr ses the Kneler,Boa, Kameleon and East Kameleon eldsand s est mated to conta n P50 resource o116 mmboe. Currently there are 11 produc-

ng wells and two water d sposal wells. Adr ll ng program target ng an add t onal three

n ll product on wells s planned n 2011. Anadd t onal n ll well s planned n 2012.

Alvhe m was developed us ng a purpose-

des gned PSO vessel. The subsea n rastruc-ture compr ses ve dr ll centers and assoc atedfow l nes. The development prov des or thetransport o o l by shuttle tanker and transpor-tat on o natural gas to the U.K. Scott sh AreaGas Evacuat on (SAGE) system. rst produc-t on began n June 2008. improved rel ab l ty,comb ned w th opt m zat on work, ncreasedthe throughput o the PSO to 142 mbpd, up

rom the or g nal des gn o 120 mbpd.

VILJEMarathon holds a 46.9 percent work ng n-

terest n the V lje eld, w th partners Stato l(operator) hold ng a 28.9 percent work ng

nterest and Total E&P Norge AS w th a 24.2percent work ng nterest. V lje has two sub-sea templates and two product on wells, st ed back n a 12-m le p pel ne to the Alvhe m

PSO and s est mated to conta n P50 re-source o 27 mmboe. Product on commenced

MRO Acreage Gas DevelopmentProspect Oil Development Oil & GasDevelopment

N O R W A Y

A

BPL531 Veslemy

PL438 Skalle

20 mi

B

PL 025

PL 187

U K

N O R W A Y

Marihne

PL 340

PL 341

PL 341

PL 341

PL 150

PL 203

PL 036DPL 036C

PL 088BS

PL 203

PL 547 S

PL 340 BS

PL 505

Vilje

PL 203

Gekko

Viper

Volund

AlvheimArea

Earb Sr

20 mi

A

WestBrae

North Brae

Beinn

EastBrae

Braemar

South Brae

Brynhild

Kingsher

CentralBrae


24/40

22

VIPERThe V per o l d scovery on PL 203,

mmed ate v c n ty o the Volund eannounced n November 2009. Marathonholds a 65 percent work ng nterest n V

Marathon and ts partners are evaluat ngposs ble t e back to the Alvhe m PSO.

EXPLORATIONMarathon Petroleum Norge AS currently

holds nterests n more than 760,000 grosacres ( nclud ng Gudrun and Brynh ld) oNorway. Explorat on act v t es w ll con2011 w th the Company-operated Caterpand Earb Sr wells. The Caterp llar explowell n PL 340 BS s an o set o the M

d scovery. The well s planned as a dev awell target ng the Hermod Paleocene grou

ollow ng on rom the Caterp llar explowell, Marathon w ll dr ll the Earb explorawell n PL 505. Marathon has l cense n

n the Barents Sea w th dr ll ng act v texpected to commence n 2011.

POLAND

Marathon holds a 100 percent work ngnterest n 11 concess ons n Poland, tot

approx mately 2.3 m ll on net acres and sn ng the ull geograph c extent o the couLower Paleozo c shale play. The Companyacqu red these concess ons between Deceber 2009 and October 2010. Marathon plancommence propr etary 2-D se sm c acqu

n the rst quarter o 2011, w th n t alant c pated to start n late 2011.

187 on the Norweg an Cont nental Shel w than e ect ve date o January 1, 2011.

The compan es expect complet on o thetransact on n the rst quarter o 2011, sub-ject to Norweg an governmental approval.

The transact on ncludes Marathons 20percent nterest n PL 025 (Gudrun eld

development) and PL 187 (Brynh ld d scovery),and 12.5 percent nterest n PL 048E (E r nd scovery). Marathon has no product on orbooked proved reserves assoc ated w ththese l censes.

MARIHNEin 2009, Marathon and ts partners an-

nounced the Mar hne (PL 340) d scovery, therst o several prospects near the Alvhe mPSO w th t eback potent al. The explorat on

well and two s detrack wells encountered o lcolumns n the Paleocene Hermod sandstone.Marathon holds a 65 percent work ng nterest

n PL 340. Marathon and ts partners areevaluat ng potent al development opt onsv a t eback to the Alvhe m PSO. Conceptselect on work s expected to be completedby m d-year w th ront end eng neer ng anddes gn ( EED) stud es commenc ng n thesecond hal o 2011.

n August 2008. A development o V lje Souths under cons derat on.

VOLUNDThe Volund eld s approx mately 5 m les

south o the Alvhe m PSO. Marathon holdsa 65 percent work ng nterest n Volund and

serves as operator, wh le Lund n NorwayAS holds the rema n ng 35 percent work ng

nterest.Volund started product on n September

2009 and was ut l zed as a sw ng producerwhen capac ty at Alvhe m allowed t. inApr l 2010, the eld was opened or regularproduct on.

Volund s the second eld developed as asubsea t eback to Alvhe m, rmly establ sh ngthe Alvhe m PSO as a new o l process nghub on the Norweg an Cont nental Shel .The Volund eld s est mated to conta n P50resource o 29 mmboe.

GUDRUNThe Company entered a sales agreement

w th Stato l Petroleum AS n December 2010or all o Marathons rema n ng nterests n

product on l censes PL 025, PL 048E and PL

Norway Average Da ly Net Sales, 12 Months Ended December 2010Key Fields Working Interest Operator OilMBPD

GasMMCFD

TotalMBOEPD

Alvhe m PSO Var es Marathon 75 35 80

Norway Exploration Port olioLicense/Block Working Interest Operator Other Owners

PL 036 C 65% Marathon ConocoPh ll ps, Lund n

PL 036 D 46.9% Stato l Total E&P

PL 088 BS 65% Marathon ConocoPh ll ps, Lund n

PL 150 65% Marathon Lund n

PL 203 65% Marathon ConocoPh ll ps, Lund n

PL 340 65% Marathon ConocoPh ll ps, Lund n

PL 340 BS 65% Marathon ConocoPh ll ps, Lund n

PL 341 12% Det NorskeBayerngas, GD Suez E&P,North Energy, Tal sman,

W ntershall

PL 438 17.5% Lund n Petoro, RWE Dea, Tal sman

PL 505 50% Marathon Lund n, VNG NorgePL 505 BS 50% Marathon Lund n, VNG Norge

PL 531 30% Marathon Concedo, RWE, Tal sman

PL 547 S 40% Marathon Tal sman, VNG Norge, Lund n

exPLoration and Production euroPe

MRO Acreage

P O L A N D

110 mi

Kwidzyn Lidzbark

SokowSiedlce

Brodnica

OrzechwParczew

Plonsk SCiechanw

RypinPlonsk SE


25/40

23

Approx mately 85 mboepd are currently pcessed and/or transported through the Brae

n rastructure. in 2010, the sanct on o tnew projects took the number o th rd-pa

elds us ng the Brae system to 30. Marats undertak ng the tops de mod cat o

construct on o a new 800 tonne module accommodate the 30th Brae t e-back to thBP-operated Deven ck eld.

On East and North Brae, low pressureoperat ons projects cont nue to help maxgas recovery and ma nta n h gh gas delab l ty rates nto the U.K. market.

As part o a comm tment to the h gheststandards n sa ety and rel ab l ty, Marathon

s nvest ng approx mately $50 m ll on n theBrae eld power generat on system. Theo shore heavy l t act v ty to nstall two newpower generators on the Brae Alpha plat ormwas completed n the th rd quarter o 2010,and the new un ts are ant c pated to beonl ne by early 2011.

The strateg c locat on o the Brae plat-orms and connect ng p pel ne n rastructure

cont nue to support s gn cant th rd-partyprocess ng and transportat on bus ness.

Polands Lower Paleozo c shale play may bethe largest and most s gn cant opportun ty

or unconvent onal gas n central Europe ands evolv ng rap dly n the wake o success ul

shale plays n North Amer ca. Natural gas

demand n the large and grow ng Europeanmarket s approx mately 50 to 55 b ll on cub c

eet per day (bc d), w th mports rom outs dethe European Un on account ng or approx -mately 50 percent o total gas requ rements.

UNITED KINGDOMThe Companys U.K. nterests nclude

the Brae Complex and the o naven eld.Marathons net sales rom the U.K. averaged17 mbpd o l qu d hydrocarbons and 70

mmc d o gas or the 12 months endedDecember 2010. Th s represents 9 percent othe Companys nternat onal l qu ds sales and13 percent o nternat onal natural gas sales.

BRAE COMPLEXMarathon s operator and owns a 42 per-

cent work ng nterest n the South, Central,North and West Brae elds; a 38 percentwork ng nterest n the East Brae eld; and a27.8 percent work ng nterest n the Braemar

eld. The Brae Alpha plat orm and ac l t esact as host or the underly ng South Brae

eld, as well as the adjacent Central Braeand West Brae elds. The North Brae and theEast Brae elds are gas-condensate elds.

or the 12 months ended December 2010,net l qu d hydrocarbon sales rom the Braeplat orms averaged 8 mbpd. The exporto Brae eld l qu ds s v a the Marathon-operated Brae- ort es p pel ne, n wh ch theCompany has a 42 percent nterest, and v athe BP-operated ort es p pel ne system toCruden Bay n Scotland. Stab l zed crudel t ngs are made at the rth o orth load ngterm nal near Ed nburgh, Scotland. or the12 months ended December 2010, the Braeplat orms exported average net gas volumeso approx mately 64 mmc d to the SAGEterm nal at St. ergus n northeast Scotland.

EXPLORATION AND PRODUCTION EUROPE

25 mi

Cromarty

Atlantic Ettrick

Callanish

NicolBrenda

BalmoralGlamis

Britannia

Brodgar

BeaulyAndrew

Forties C

Fo r tie s

CyrusFarragon

Thelma/S.E. ThelmaToni

TiffanySouth Sycamore

Birch/Larch/SycamoreEnoch

MillerKingsher

EastBrae

HeimdalSkirne

Vale

Huldra

Beryl

BraemarSage Wye

Brae BCentral Brae

West BraeBrae A

S A G E

N O R W A Y

U K

S C O T L A N D

NO

RT

H S

E A

St. FergusPeterhead

Cruden Bay

N O R W A Y

U K

B

A

A

Foinaven

EastFoinaven

B

Marathon Operated Third Party Oil & Gas Development

UK North Sea Average Da ly Net Sales, 12 Months Ended December 2010

Key Fields WorkingInterest OperatorOil

MBPDGas

MMCFDNGL

MBPDTotal

MBOEPD

Brae Complex Var es Marathon 7 64 1 19

o naven Var es BP 9 6 -- 10

Total -- -- 16 70 1 29


26/40

24 exPLoration and Production euroPe

SAGEThe Brae group owns a 50 percent nterest

n the outs de-operated SAGE p pel ne, wh chprov des transportat on or Brae and Berylarea gas and has a total wet gas capac ty o

approx mately 1.1 bc d. The SAGE term nal atSt. ergus prov des process ng or gas romthe SAGE p pel ne and process ng or 1 bc do th rd-party gas.

FOINAVENMarathon holds a non-operated work ng

nterest n the o naven area, west o the Shet-land islands, n water depths between 1,300and 1,900 eet. The Companys work ng nter-

ests compr se a 28 percent stake n the ma no naven eld, 47 percent o East o naven and

20 percent o the T35 and T25 accumulat ons.The export o o naven l qu ds s v a shuttle

tanker d rect rom the PSO to market. Net l q-

u d hydrocarbon sales rom o naven av9 mbpd or the 12 months ended Decembe2010. All gas sales are to the non-operatedMagnus plat orm or use as nject on gagas volumes rom o naven averaged 6 m

or the 12 months ended December 2010. rent upgrad ng o the PSO w ll extend o th s project through 2021.


27/40

25EXPLORATION AND PRODUCTION MIDDLE EAST

IKR (IRAQI KURDISTAN REGION)in October 2010, Marathon acqu red a pos -

t on n our explorat on blocks n the Kurd stanReg on o iraq, total ng approx mately 368,000net acres (650,000 gross acres). The Company

has s gned product on shar ng contracts(PSCs) or operatorsh p and a 100 percentwork ng nterest (80 percent ownersh p) ntwo open blocks northeast o Erb l Har r andSa en. The Kurd stan Reg onal Governmentholds a ully carr ed 20 percent nterest, wh chMarathon s currently carry ng. Add t on-ally, Marathon has been ass gned work ng

nterests (Wi) n two blocks north-northwesto Erb l Atrush (20 percent Wi) and Sarsang(25 percent Wi). Marathon has comm tted to

a se sm c program and to dr ll ng one wellon each o the two operated blocks dur ngthe n t al three-year explorat on per od. TheAtrush and Sarsang blocks each had oneexplorat on well dr lled n late 2010.

Marathon Operated Blocks

Discoveries

Non-Operated Blocks Oil & Gas Development

I R A Q

15 mi

SarsangAtrush

Harir

Safen

I R A Q

IRAN

T U R K E Y


28/40

26

tomers n Japan. in ebruary 2011, Maratalong w th the plant operator, announced exports w ll cease n spr ng 2011.

ELBA ISLAND

Marathon has del very r ghts or up to58 bc o LNG per year nto the Elba islGeorg a, LNG regas cat on term nal t2021, w th poss ble extens on to 2023. Eisland prov des Marathon w th the ab l

mport short term LNG cargoes wh le ang the fex b l ty to commerc al ze eq

resources n the longer term.

METHANOLMarathon owns a 45 percent nterest n

AMPCO Equator al Gu nea methanol plawh ch suppl es customers n Europe and U.S. The plant converts approx mately 130gross mmc d o natural gas nto methanohas a gross capac ty o approx mately 3,0mtpd. L ke LNG, methanol s an e c eno develop ng and transport ng stranded nral gas to grow ng markets. Methanol s uas an alternat ve uel, as well as a solvent pa nts, varn shes, cements, nks, plast csvar ous ndustr al coat ngs, and n the p

t on o pharmaceut cals and other chemproducts. Methanol net sales were 1,049 mt

or the 12 months ended December 2010.

Marathon and ts partners LNG Tra n 1ac l ty on the northwest s de o B oko island

encompasses a 3.7 mmtpa l que act on plantthat s al gned w th, and ntegrated nto,Marathons Equator al Gu nea gas process ng

operat ons. Natural gas s purchased romthe Alba eld part c pants (Marathon, NobleEnergy, inc. and a government-owned ent ty)under a long-term gas supply agreement. Dur-

ng 2010, the LNG Plant processed 3.7 m ll ongross metr c tonnes o LNG (2.2 m ll on net toMarathon) and operated at a world-class 97.2percent operat onal ava lab l ty.

Approx mately 3 gross tc o dry gas romthe Alba eld w ll be processed through theLNG ac l ty under a 17-year o take agreement

w th BG Gas Market ng Ltd that commencedn 2007. Marathon and ts partners expect to

source add t onal gas n the reg on to supplythe tra n ollow ng exp rat on o the contract.Marathon holds a 60 percent nterest n theLNG project, along w th partners Sonagas(25 percent), M tsu & Co. (8.5 percent) and aMaruben Corporat on subs d ary (6.5 percent).

ALASKAMarathon owns a 30 percent non-operated

nterest n a natural gas l que act on plant nKena , Alaska. Th s ac l ty began rst produc-t on n 1969, and the Company currentlyleases one tanker to transport LNG to cus-

Marathons ntegrated gas strategy sadd ng value through the development o op-portun t es created by the demand or naturalgas. integrated gas complements Marathonsexplorat on and product on operat ons and

opens a w de array o strateg c nvestmentopportun t es des gned to add susta nablevalue growth.

LIQUEFIED NATURAL GASLNG s a key component o Marathons

ntegrated gas strategy. The Company hasestabl shed an Atlant c Bas n LNG bus nessthat encompasses both ends o the LNGprocess the l que act on, or source s de,and the regas cat on, or market ng s de. Th s

bu lds upon a long-runn ng Alaska LNG bus -ness where Marathon, along w th ts partnerConocoPh ll ps, has owned an LNG l que ac-t on plant or more than 40 years.

Marathons total LNG net sales n metr ctonnes per day (mtpd) were 6,859 or the 12months ended December 2010.

EQUATORIAL GUINEAOperat ons n Equator al Gu nea are a key

component o Marathons ntegrated gas

strategy. LNG rom th s West A r can countryprom ses to play an ncreas ngly mportantrole n meet ng energy needs.

uPstream integrated gas


29/40

27UPSTREAM OIL SANDS MINING

OIL SANDS MININGMarathon owns a 20 percent outs de-

operated nterest n the Athabasca O l SandsProject (AOSP), wh ch ncludes the MuskegR ver and Jackp ne m nes, the Scot ord

Upgrader and r ghts to more than 215,000acres o potent ally m neable land n Alberta,Canada. Add t onal d scuss on on n-s tu s

ncluded on page 14.

AOSPThe AOSP s a jo nt venture between

Marathon O l Canada Corporat on (20 percent),Shell Canada Energy (60 percent and operator)and Chevron Canada L m ted (20 percent).

The AOSPs base project encompasses

the Muskeg R ver M ne and the Scot ord Up-grader. The Muskeg R ver M ne ncludes an o lsands extract on and process ng ac l ty, wh lethe Scot ord Upgrader upgrades the b tumen

nto synthet c crude o l.

At full production, the mines 2010 grossproduct on capab l ty was 155 mbpd o b tu-men, a naturally occurr ng heavy o l.

Marathons AOSP interest gives it access tostable, long-l e OECD product on through

several uture phased expans ons.

Expansions: Dur ng the ourth quarter o2010, the Jackp ne M ne began supply ng o lsands ore to the base plant process ng ac l tyand, at ull capac ty, w ll add 100 gross mbpdto the ex st ng Muskeg R ver M ne capac ty.

A ter th s expans on s complete, Marathonw ll have more than 50 mbpd o product onand upgrad ng capac ty n the Canad an o lsands. AOSPs rema n ng land pos t on allows

or urther expans ons and debottleneck ng op-portun t es, prov d ng the Project w th a secureproduct on stream or decades to come.

OIL SANDS MINING PROCESSRecover ng b tumen rom open-p t m nes

nvolves three bas c steps: excavat on, process-ng and upgrad ng. At AOSPs Muskeg R ver

M ne, large mechan cal shovels excavate theo l sands ore, wh ch cons sts o b tumen, water,sand and clay. W th the use o some o thelargest trucks and shovels n the world, the o lsand s del vered to a crusher, where warmwater s added to ac l tate the separat on othe b tumen rom the sand and clay part cles.

The b tumen s then cleaned and processwater removed by a roth treatment ac l ty.The b tumen s d luted w th a l ght hydro-carbon and transported through a 300-m lep pel ne to the Scot ord Upgrader n ort Sas-katchewan, Alberta. The upgrad ng process,called hydrogen-add t on, cracks the large

hydrocarbon molecules and upgrades the bmen nto synthet c crude o ls that are solthe market or urther process ng at re n

Env ronmental care orms an ntegral pthe AOSP. it s ncorporated nto the projedes gn, undertaken dur ng operat on and cr ed through to land reclamat on. or examat the Muskeg R ver M ne, progress ve lareclamat on m n m zes e ects on w ldand plants, reduces v sual mpacts and l mdust spread. Dur ng reclamat on, the land returned to an equ valent capab l ty, us nlatest technology and nnovat ve env ronmpol c es. The m ned areas are lled n wand covered w th top so l that was saved d

ng the str pp ng process. Th s allows rect on to proceed concurrently w th product

Oil Sands Mining Net, 12 Months Ended December 2010 Working Interest Operator BitumenProduction MBPD

Synthetic CrudeSales MBPD

AOSP 20% Shell 24 29

Currently Operating Mines on Lease 13

FutureMining Area

Ore Prep.& Crusher Current

MiningArea

FutureMiningArea

ProductStorage

UtilityCorridor

Ore Prep.& Crusher

AlbianVillage

M u s k e g

R i v e r

A t h a b a s c a R

i v e r

M u s k e g C r e e k

A i r s t r i p

FrothTreatment

Plantsite

PlantsiteFuture

External TailingsDisposal Area

ExternalTailingsDisposal

Area

Muskeg River Mine

Jackpine Mine

13

A L B E R T AC A N A D A


30/40

28

that can be leveraged through the Companexpert se and n rastructure.

B o uels and other renewable energyresources ncrease the d vers ty o suppthe U.S. Marathon s nvest ng n manu

ng, blend ng and d str but ng o b ogrow ng component n the U.S. transpor

uel m x.or more than 20 years, Marathon has

been a lead ng blender o corn-based etha pr mary renewable uel n the U.S. ThCompany has the capab l ty to blend appmately 1.2 b ll on gallons o ethanol perand to sell ethanol-blended gasol ne acromost o ts l ght product gasol ne term

ac l t es n 17 states.

Marathon has also nvested n themanu acture o ethanol through a 50 perc

nterest n a ac l ty n Oh o and a 35nterest n a ac l ty n ind ana. Each

capac ty to manu acture 110 m ll on gaper year o ethanol.

The Company s also study ng opportun next-generat on b o uels and has nvn a company that w ll dent y, patent

deploy m crobes and low-cost processes produc ng cellulos c ethanol rom a rang

o eedstocks. Next-generat on b o uelthose produced rom eedstocks that have

ood value or are grown on land that cannbe used or produc ng ood.

Other emerg ng technolog es undernvest gat on nclude carbon capture an

storage. Marathon s part c pat ng n and academ c projects related to emerg ntechnolog es, such as the Quest project Canada, Massachusetts inst tute o Technogys Carbon Sequestrat on in t at ve aGul Coast Carbon Center.

men extract on technolog es that could unda-mentally change the econom c and env ron-mental ootpr nt o o l sands and other heavyand very heavy o l developments around theworld, non-catalyt c standalone eld upgrad-

ng o heavy o ls, product on o p pel neablesyncrude and convers on o re nery res dues

nto d st llates. Commerc al zat on o o l sandsresearch projects w ll ensure proper allocat ono resources to corporate assets and heavy o l/

n-s tu assets n Canada.

NEW TECHNOLOGYMarathon s develop ng a range o gas con-

vers on technolog es that connect strandedgas to both convent onal and transportat on

uel markets.Marathon s develop ng propr etary

technology or the product on and sh pp ng ostable slurr es o natural gas hydrate (NGH)crystals. Marathon holds a hydrate reactorpatent and s work ng w th an ndustry part-ner to jo ntly develop th s technology. in the

uture, the Company hopes th s technologyw ll have a s gn cant mpact on the handl ngo remote assoc ated gas, o shore ac l t esm n m zat on and gas treat ng/power plant

capac ty management appl cat ons.

EMERGING TECHNOLOGYMarathon has an enterpr se-w de ocus

on technolog es such as alternat ve andrenewable uels, energy e c ency andcarbon ntens ty, and carbon capture andsequestrat on. Emerg ng Technology prov desa orward look at technology development toadapt Marathons bus ness model to addresschallenges ac ng the energy ndustry and to

dent y potent al nvestment opportun t es

Marathons technology strategy s ocusedon prov d ng techn cal serv ces that max m zethe value o ex st ng assets, develop ng andapply ng technology that enables access tonew resources, and nvest ng n emerg ng

technolog es that address challenges ac ngthe energy ndustry.

CONVENTIONAL TECHNOLOGYMarathon leverages ts techn cal capab l -

t es n reservo r character zat on, dr ll ng andcomplet ons, enhanced o l recovery (EOR) andheavy o l/ n s tu-recovery to capture add t on-al resources rom current assets, nclud ngunconvent onal o l and gas reservo rs.

The key to opt m z ng product on and

resource development s qu ck and accu-rate descr pt on o reservo rs. Marathonsexpert se n reservo r character zat on beg nsw th se sm c mag ng, but emphas zes

ntegrat on o all geosc ence, petrophys caland eng neer ng data nto ully ntegratedsolut ons. The bene ts o such an approachare h gher success rates n d scovery, dr ll ngand product on act v t es. integrated solut onsare espec ally cr t cal n solv ng challengesassoc ated w th more complex unconven-

t onal and heavy o l [ n-s tu] reservo rs.The Company has extens ve exper ence n

evaluat ng and operat ng carbon d ox de (CO2)nject on projects, the most w dely used EOR

method n the world. CO2 nject on reducesreservo r orces that trap o l n place, mak ng

t eas er or o l to fow. Add t onal bene tsnclude mproved o l qual ty and reduct ons n

greenhouse gas em ss ons.Marathon s work ng to develop technolo-

g es to mprove the e c ency o ts Canad ano l sands opportun t es, nclud ng novel b tu-

TECHNOLOGY


31/40

29TECHNOLOGY29DOWNSTREAM REFINING, MARKETING AND TRANSPORTAT

Marathon ranks as the th largest crude o l

re ner n the U.S. and the largest n the M d-west. Operat ng n the M dwest, Gul Coastand Southeast reg ons o the U.S., Marathonsre n ng, market ng and transportat on (RM&T)operat ons are strateg cally located to servemajor markets and nclude a s x-plant re n ngnetwork w th 1,142,000 barrels per day (bpd)o crude o l throughput capac ty, a comprehen-

s ve term nal and transportat on system and

extens ve market ng operat ons.Downstream ocuses on sa e, low-cost

rel able operat ons; ensures that the Com-panys re ner es are well pos t oned to addresschanges n the marketplace; captures com-merc al advantages w th n a strong log st cssystem; and seeks to ncrease reta l and brandsales volumes.

Marathon processes a d verse slate o c

o ls procured rom numerous suppl ers. Ttyp cal slate n 2010 cons sted o about 5cent sour crude and 46 percent sweet crudeDur ng 2010, approx mately 61 percent ocrude o l was acqu red rom U.S. producan add t onal 10 percent rom Canada andpercent rom the M ddle East and A r carema n ng 8 percent came rom other ntt onal sour

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