Energising the market
Marathon Oil has a vision of being recognised as a pacesetter in the energy industry, creating sustainable value growth through innovative energy solutions and unique partnerships.
As an integrated international energy company engaged in exploration and production, oil sands mining, integrated gas and refining, marketing and transportation, Marathon aims to realise its vision by applying a differentiated business model that takes it beyond the work of a conventional integrated oil and gas business.
Based in Houston, Texas and with operations in countries around the world, including the US, Canada, Indonesia, Ireland, Norway and the UK, Marathon is among the world’s leading integrated energy companies. It applies innovative technologies to discover and develop valuable energy resources in order to provide high-quality products to the marketplace, while delivering value to all the company’s stakeholders. Marathon’s exploration work aims to add profitable production to existing core areas – the US, Equatorial Guinea, Libya and the North Sea – and to develop potential new core areas – Angola and Indonesia.
Norway is a growing core region for the business, which complements operations in the UK sector of the North Sea. In 2002 Marathon Petroleum Norge AS was approved for its first operation on the Norwegian continental shelf. Marathon’s managing director, Kristin Færøvik outlines the company’s most recent Norwegian developments: “The flagship of our business, the floating, production, storage and offloading (FPSO) vessel came into operation on the 8th June. We had a very ambitious schedule and we’ve achieved a lot in the last few years in Norway. In 2002 we came back as an active player on the Norwegian shelf and we went on to appraise the Alvheim area in 2003; we submitted our plan for development and operation in 2004 and now we are producing a lot through the Alvheim facility.”
Marathon manages Alvheim with ConocoPhillips Scandinavia AS and Lundin Norway AS as co-owners. The company holds a 65 per cent interest in the Alvheim development and serves as the operator of the facility, which is located in Norway. Kristin explains what attracted Marathon to Alvheim: “The field is in a mature area, which other large companies really had left behind, but we recognised the opportunity; if we could aggregate the resource we would have enough materiality to move forward.” The subsea infrastructure of Alvheim is made up of four drill centres and associated flow lines and the field is estimated to contain resources of approximately 180 million gross barrels of oil equivalent.
In nearby areas, Marathon holds an interest in two satellite fields, Vilje and Volund. Kristin elaborates: “What’s unique about Alvheim is that we organised the third parties from day one; the Vilje third party field is on stream now. The valves were opened there on the 31st July, and on the 1st August the oil reached the FPSO. In addition to that we have another Alvheim satellite on the go; the Volund project that we also operate, is well underway. We’re starting subsea installation at the site this year and we’re going to put in place all the seabed infrastructure so we can start drilling in late 2008 or early 2009, then we’ll be ready to put Volund on stream in 2009.”
In line with Marathon’s vision for the future, the organisation has a strategic growth plan in place. Kristin comments: “We do have quite a few interesting prospects for the coming years in the vicinity of our line and we want to continue to take advantage of those. As for our other activities, the 20th licensing round in Norway could be an important stepping stone for building a new core area in Norway, and we’re currently assessing the opportunities.”
Kristin is also confident that business within the Norwegian sector is booming: “The sector looks good at the moment, and the NCS is estimated to have 25 per cent of resources yet to find. The NCS has seen a lot of exploration success recently too. Although the discoveries we’ve made have been smaller than previous ones, there is still evidence of an untouched potential on the shelf. We want to be competing for acreage and building a larger portfolio here in Norway and Alvheim has given us a very good platform for this, because the design life of the facility is 20 years, so we have a basis here from which to grow.”
In terms of progression, Kristin is positive about Marathon’s position within the industry: “There is no doubt that the market is competitive; we have seen a huge influx of new companies to Norway recently. However, compared with quite a few of those start up companies, we have the financial and technical strength to go forward with a major development. We can contribute from exploration and appraisal right through to operations; we’ve demonstrated with Alvheim that we are capable of taking on a very large and complex project and we want to take this experience with us so we can continue our success in the future.”
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