Marathon Oil Essay

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Marathon Oil (Marathon Oil Corp.) is one of the largest integrated oil companies in the United States. It is engaged in exploration  and production of crude  oil and natural gas. It was incorporated in 1965, and now employs about 30,000 people (as of January 1, 2008). The company  is headquartered in Houston,  Texas, and  it has exploration  and  production activities in the United States, Angola, Equatorial Guinea, Gabon, Indonesia, Ireland, Libya, Norway, Ukraine, and the United  Kingdom  (UK). Marathon  Oil is quoted  in the New York Stock Exchange with the ticker symbol MRO. Marathon  Oil has approximately 60,000 shareholders (as of January 1, 2008).

The United  States  is the  company’s largest  geographic market (92 percent of the revenues in 2006). Marathon Oil generates revenues through three major business divisions: refining, marketing, and transportation  division (86 percent  of the revenues in 2006); exploration  and  production division (14 percent  of the  revenues  in  2006); and  integrated  gas division (less than 1 percent of the revenues in 2006).

Specifically, Marathon Oil is engaged in worldwide exploration  and production of crude oil and natural gas and domestic refining, marketing,  and transportation of crude oil and petroleum products. The company’s principal operating subsidiaries are Marathon Oil  Company  and  Marathon   Ashland  Petroleum, LLC. The company has exploration and development activities in the  following countries: United  States, Norway, Equatorial Guinea, Angola, and Canada (principal exploration  activities); United States, UK, Ireland, Norway, Equatorial Guinea, Gabon, and Russia (principal development activities).

Marathon  Oil also operates  other  businesses that market and transport its own and third-party natural gas, crude oil, and other products manufactured from natural  gas primarily  in the  United  States, Europe, and west Africa. Marathon  Oil’s key products include crude oil, natural gas, condensed and natural gas liquids, propane, heavy fuel oil, asphalt, sulfur gasoline, graphite electrodes, aromatics, aliphatic hydrocarbons, liquid hydrocarbons, cumene, base lube oil, polymer-grade  propylene,  slack wax, refined  products, merchandise,  and transportation. The company also offers service stations.

The company was formed in 1887 under the name Ohio Oil Company in northwestern Ohio, which was the  leading center  for crude  oil production at that time.  Then  it  was known  as USX Corporation.   In 1962 the company changed its name to Marathon  Oil Company. In 1998 Marathon  Oil and Ashland, Inc., formed Marathon  Ashland Petroleum, LLC to refine, market, and transport crude oil and petroleum  products. Marathon Oil now owns 100 percent of Ashland’s shares. The company changed its name to Marathon Oil Corporation in 2001. The company formed a joint venture with Pilot Corporation in 2001—Pilot Travel Centers LLC, which operates travel centers that offer diesel fuel and  gasoline as well as various services, including on-premises brand-name restaurants. Marathon Oil grows with various acquisitions. In 2002 the company acquired GlobexEnergy, Inc., and acquired Western Oil Sands, Inc., in 2007.

In  2008  the  executive  team   of  Marathon   Oil included  Thomas  J. Usher  (chairman),  Clarence  P. Cazalot, Jr. (president,  chief executive officer), Gary R. Heminger  (executive vice president),  Janet Clark (chief financial officer), William F. Schwind, Jr. (secretary, general counsel), Michael K. Stewart (controller), Paul C. Reinbolt (treasurer), and Jerry Howard, Philip G. Behrman, Steven B. Hinchman,  David E. Roberts, Jr., and Janet Clark (senior vice presidents). The company’s board of directors included Charles F. Bolden, Jr.; Clarence P. Cazalot, Jr.; David A. Daberko; William L. Davis; Shirley Ann Jackson; Philip Lader; Charles R. Lee; Dennis H. Reilley; Seth E. Schofield; John W. Snow; Thomas J. Usher; and Douglas C. Yearley.

There are many reasons why Marathon  Oil is successful. First, it is a giant that holds onto the entire oil and gas value chain. It is among the world’s leading integrated companies in the energy industry that operates in different countries.  Marathon  Oil’s  presence in exploration  and production,  storage and pipeline, refining, marketing, and retail distribution  boosts its competitive advantage over rivals. The second reason is the geographical locations of its facilities in terms of refining, marketing, and transportation—Marathon Oil has extensive operations  in various regions. The company  strategically  located  its business  to  serve major markets  by establishing a comprehensive  terminal and transportation system, along with extensive marketing  operations.  Third, the  company  has had an impressive financial performance  in previous years and a continuous  trend of strong profitability.

Bibliography:   

  1. Marathon Oil, www.marathon.com (cited March  2009);
  2. SEC-EDGAR, www.sec.gov (cited March 2009).

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