Marathon Oil Corp. Industry Profile


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LIS 7205 Industry Profile Presentation by Keisha Gordon, Justin Farr, Lisa Jones, and Melanie Moyer.

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Marathon Oil Corp. Industry Profile

  1. 1. An Industry Overview
  2. 2. Marathon Oil is a major corporation within two (2) industries: • Petroleum Refining (NAICS 324110)• Oil and Gas Extraction (NAICS 211111)
  3. 3.  Made up of entities engaged in refining crude petroleum into refined petroleum. Petroleum refining involves one or more of the following activities:  Fractionation  Straight distillation of crude oil  Cracking (IBISWorld, Petroleum Refining)
  4. 4. Main products, services, and activities in the Petroleum Refiningindustry:  Gasoline and gasoline production  Kerosene production  Diesel fuel and diesel fuel production  Jet fuel and jet fuel production  Residual fuel oil and residual fuel oil production  Lubricant production  Aliphatic and aromatic chemicals as by-products production  Petroleum coke  Still gases  LPG (IBISWorld, Petroleum Refining)
  5. 5. According to IBISWorld, revenue will continueto grow and the industry will continue tobecome more refined in the next five (5)years.
  6. 6. Involves “operating and/or developing oil andgas field properties and establishmentsprimarily engaged in recovering liquidhydrocarbons from oil and gas field gases.”(IBISWorld – Oil)
  7. 7. Includes:  exploration for crude petroleum and natural gas  drilling, completing, and equipping wells  operation of separators, emulsion breakers, distilling equipment, and field gathering lines for crude petroleum and natural gas  all other activities in the preparation of oil and gas up to the point of shipment from the producing property.“This industry includes the production of crudepetroleum, the mining and extraction of oil from oil shaleand oil sands, the production of natural gas, sulfur recoveryfrom natural gas, and the recovery of hydrocarbon liquidsfrom oil and gas field gases. Establishments in this industryoperate oil and gas wells on their own account or for otherson a contract or fee basis.”(IBISWorld – Oil)
  8. 8. Both industries have the most establishments in Texas and Louisiana. Why? Both states have major ports. (IBISWorld – Oil)
  9. 9. Number of establishments and companiesincreasing while number of employeesdecreasing.Why?Economic problems in the U.S. andincrease in companies hiring contractors(IBISWorld – Oil)
  10. 10. Who is Marathon as a company?
  11. 11.  Global Operations  North America  Africa  Europe 72 Trillion Dollar Revenue at close of 2010 2.5 Billion Dollars in Annual Net Income 4th largest US based fully integrated energy company 29th largest corporation in US(IBISWorld – Oil)
  12. 12.  Major Product/Services  Oil and Natural Gas Wells  Drilling Exploration  Oil Sands Mining Project  Integrated Gas Operations  Refining, Marketing, and Transportation (IBISWorld – Oil)
  13. 13.  November 1st, Marathon purchased Hilcorp Resources for 3.5 billion US dollars Marathon Oil Corp sells 10% stake in the Angolan operation for $800 million to finance Hilcorp purchase November 16th, eight month long strike at Wafa Oil Co. ends in Libya(Hilcorp, 2011)
  14. 14. Principal Business: The exploration for, and production of, crude oil and natural gas. The manufacture of petroleum products. The transportation and sale of crude oil, natural gas and petroleum products.(Mergent Online, Exxon)
  15. 15. Key Financials: (as of 09/30/2011) Revenue: 470,006m Net Income: 40,910m(Mergent Online, Exxon)
  16. 16. Principal Business: Exploring for, developing and producing crude oil and natural gas. Refining crude oil into finished petroleum products. Marketing crude oil, natural gas and the products derived from petroleum. Transporting crude oil, natural gas and petroleum products.(Mergent Online, Chevron)
  17. 17. Key Financials (as of 09/30/2011) Revenue: 247,748m Net Income: 27,067m(Mergent Online, Chevron)
  18. 18. Principal Business: Explores for, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas and natural gas liquids on a worldwide basis.(Mergent Online, ConocoPhillips)
  19. 19. Key Financials (as of 09/30/2011) Revenue: 242,054m Net Income: 11,087m(Mergent Online, ConocoPhillips)
  20. 20. Principal Business: Petroleum refining. Wholesale marketing. Product supply and distribution. Transportation operations.(Mergent Online, Valero)
  21. 21. Key Financials: (as of 09/30/2011) Revenue: 109,919m Net Income: 1,607m(Mergent Online, Valero)
  22. 22. A comparison of Marathon’sstrengths, weaknesses, opportunities, a nd threats.
  23. 23. Strengths WeaknessesInvolved in all stages of business Concentration in the USStrong refining operations Partnership ArrangementsOpportunities ThreatsGrowth and Expansion Vast CompetitionInvestments International RisksDemand for Natural Gas isIncreasing
  24. 24. Involved in all stages of business. “Marathon has presence across the entire oil and gas value chain […] from the exploration and production to storage and pipeline, till the end use of operations like refining, marketing, and retail distribution…Marathons presence across the oil and gas value chain provides it with a competitive edge that can be leveraged in the medium to long run.” (Marathon, 24).
  25. 25. Strong refining operations “The company has strong refining operations. It ranks as the fifth largest petroleum refiner in the US. In FY2010, the company owned and operated six refineries with an aggregate refining capacity of 1.142 mmbpd of crude oil. For the same period, the company’s refineries processed 1,173 mbpd of crude oil and 162 mbpd of other charge and blend stocks. The company’s refined products sales volumes totaled 1.59 mmbpd in FY2010.” (Marathon, 25)
  26. 26. Too much concentration in the US Marathon Oil Corporation has primary drilling and production activities in the United States, specifically the Gulf of Mexico (Datamonitor, 2011). This region accounts for the majority of the corporation’s assets and leaves the potential for environmental, political, or other local challenges that could affect the entire region at once (Datamonitor, 2011).
  27. 27. Partnership Arrangements Allowing other corporations to control Marathon’s Assets operationally doesn’t allow Marathon the ability to make changes or adapt to situations that come up (Datamonitor, 2011). A prime example of this is recently with the leadership changes in Lybia. (Datamonitor, 2011)
  28. 28. Growth and Expansion Accordingto an article from Investopedia, “Marathon Oil Corporation has more than 300,000 net acres prospective for the Eagle Ford Shale and estimates that production will be 18,000 BOE per day by the end of 2011” (Fox). The company has some aggressive development plans here and will spend an average of $1.4 billion per year through 2016, achieving production of more than 100,000 BOE per day by that year” (Fox)
  29. 29. Investments Inthe next several years, Marathon Oil will spend between $4.5 billion to $5.5 billion a year with about two-thirds of that in growth (Marathon Oil Corp at Bank of AmericaMerril).
  30. 30. The demand for natural gas is increasing According to Chesapeake Energy Corp. Chief Executive Aubrey McClendon, “the U.S. is beginning a natural-gas "demand revolution" that will serve as an outlet for the tremendous amounts of gas coming out of newly unlocked shale-rock formations” (Exxon Sees Global Shale Boom).
  31. 31. Vast Competition The oil and gas industry has fierce competition. Some of the major players who are in direct competition with Marathon Oil Corporation are Anadarko Petroleum Corporation, BG Group, Chevron Corporation, ConocoPhillips, Exxon Mobil Corporation, Royal Dutch Shell, Valero Energy Corporation, Sunoco Inc., Hess Corp., Murphy Oil, Enterprise Products Partners, Tesoro, and PDV America Inc. among others. (Mergent Online).
  32. 32. International Risks Risks associated with operations conducted outside of the U.S. include foreign governmental policies, political and economic instability, war, acts of terrorism, and civil disturbances; and fluctuating currency values (DataMonitor). Hostilities in the Middle East and the threat of future terrorist attacks could adversely affect the economies of the US (DataMonitor).
  33. 33. These information sources can be used to update this industry profile regularly.
  34. 34.  Bloomberg Datamonitor Company Profiles EDGAR Database EPA Factiva Forbes Fortune Google News Hoover’s Online J Stor
  35. 35.  LexisNexis Academic – Business MacRAE’s Blue Book Mergent Online Official Website of Marathon Oil Corp. Reuters Standard and Poors U.S. Bureau of Census U.S. Business Reporter http://www.activemedia- U.S. Geological Survey Westlaw
  36. 36.  Abels, Eileen G. and Klein, Deborah P. Business Information: Needs and Strategies. Bingley: Academic Press, 2008. Print. Aldridge, James. “Dow, San Antonio stocks lose steam on Monday”. San Antonio Business Journal Online. 15 November 2011. Web Nov. 21, 2011. Barr, Diana. “ConocoPhillips names new spinoff Phillips 66”. St. Louis Business Journal. November 11, 2011. Web Nov.21, 2011. Bergin, Tom and Farge, Emma. “WRAPUP 1-Kurd, Baghdad oil officials meet on Exxon spat”. Reuters News. 17 November 2011. Web Nov. 21, 2011. “Brazilian federal police investigate Chevron oil spill off coast of Rio de Janeiro”Associated Press Newswires. 17 November 2011. Web Nov.21, 2011. “ConocoPhillips selling U.S. pipeline business for $2 billion”. St. Louis Business Journal Online. 17 November 2011. Web Nov.21, 2011. “Exxon Sees Global Shale Boom.” The Wall Street Journal Online. 8 November 2011. Web. Nov. 30, 2011.
  37. 37.  McCormack, Caron Howard James. “Regional Report: Middle East and North Africa”. World Oil, October 2011. Web Nov.12, 2011. "Marathon Oil Corporation." (n.d.): Datamonitor/Life Science Analytics Company Profiles. Web. 3 Dec. 2011. “Marathon Oil Corporation.” Nov. 30, 2011: Online. LexisNexis Academic. 30 Nov. 2011 “Marathon Oil Corp at Bank of AmericaMerrill Lynch Global Energy Conference - Final”. CQ FD Disclosure. 15 November 2011. Web Nov.29, 2011. DataMonitor. Marathon Oil Corporation Company Profile, 18 Aug. 2011.Web. Nov.12, 2011. Dreier, Hannah. “Richmond asks Chevron to give up tax refund case.” McClatchy-Tribune Regional News, 16 November 2011. Web Nov.21, 2011. Fox, Eric. “Plains Exploration Loves the Eagle Ford Shale” Investopedia. 29 November 2011. analysis/2011/Plains-Exploration-Loves-The-Eagle-Ford-Shale-PXP-MRO- EOG-MUR1129.aspx?partner=YahooSA#axzz1f8ROtr7u
  38. 38.  Gross, Jenny. “Exxon Refinery Shutdown Could Pressure Brent Crude”. The Wall Street Journal Online. 17 November 2011. Web Nov.21, 2011. “Hilcorp Resources LLC.” FactSet Mergerstat, LLC Nov. 2, 2011: Online. LexisNexis Academic. 30 Nov. 2011 IBISWorld. (2011, October). IBISWorld Industry Report 32411 Petroleum Refining in the US. Retrieved from IBISWorld Industry Market Research database. Lefebvre, Ben. “ConocoPhillips Reports Unit Outage At Louisiana Refinery”. Dow Jones Newswires October 11, 2011. Web Nov. 21, 2011. Mergent Online. Chevron Corporation Company Detail. Web. Nov. 21, 2011. Mergent Online. ConocoPhillips Corporation Company Detail. Web. Nov. 21, 2011. Mergent Online. Exxon Mobile Corporation Company Detail. Web. Nov. 21, 2011. MergentOnline. Marathon Oil Corporation Company Detail. Web. Nov. 12, 2011. Mergent Online. Valero Energy Corporation Company Detail. Web. Nov. 21, 2011.
  39. 39.  “Research and Markets; Top 10 Global Petrochemical Companies - Exxon Mobil Benefiting From Large Scale of Operations to Reach Top Ranking”. Investment Weekly News .19 November 2011. Web Nov.21, 2011. United States Census Bureau’s American FactFinder. “Valero reports equipment failure at McKee refinery”. Reuters News. 21 November 2011. Web Nov. 21, 2011. “Valero Reports Flaring At Port Arthur Refinery – Filing”. Dow Jones Business News. 13 November 2011. Web Nov. 21, 2011. “Wafa Oil Co. Set to Resume Full Production Under New Management.” The Tripoli Post Nov. 16, 2011: p.4 Online. LexisNexis Academic. 30 Nov. 2011 17 November 2011. Web Nov. 21, 2011. Zagorsky, Jay L. Business Information: Finding and Using Data in the Digital Age. Boston: McGraw-Hill, 2003. Print.