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Marathon's Upstream Business Goes It Alone

Friday marks a new day for Marathon Oil Corp. as an independent upstream company after completing the spinoff Thursday of its downstream businesses.

After relaunching three-year-old plans early this year, the board of directors in May voted to spin off the refinery operations into newly formed Marathon Petroleum Corp. (MPC) (see Daily GPI, Jan. 14). The split was delayed in February 2009 because of the uncertain economic outlook (see Daily GPI, Feb. 4, 2009).

The newly formed MPC, headquartered in Findlay, OH, would stand on its own and is expected to become the fifth largest U.S. refiner. MPC's three business units are Refining & Marketing, Speedway and Pipeline Transportation. Gary Heminger will be CEO of MPC.

Marathon Oil, as a global exploration and production company, would keep its principal operations headquartered in Houston under a new logo. Marathon Oil will operate and report through three segments: Exploration & Production, Oil Sands Mining, and Integrated Gas.

Clarence Cazalot will remain CEO of the Houston company, which recently has begun to recast itself as a shale player. In early June Marathon announced a $3.5 billion transaction to double its acreage in the Eagle Ford Shale (see Daily GPI, June 2). Marathon also has positions in the Bakken, Anadarko Woodford and Niobrara shales.

"When we look at the opportunity set that presents itself to us today on a global basis, we, and I believe many of our peers, see the resource opportunities in the U.S. as perhaps at the top of the list," Cazalot said during a conference call in June.

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