Marathon Oil Company Announces Equatorial Guinea Government Approval of Alba Field Expansion Project

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Sept. 4th 2002

Marathon Oil Company, a wholly owned subsidiary of Marathon Oil Corporation (NYSE: MRO), announced today that the Government of Equatorial Guinea has approved the company's Alba Field Phase 2A expansion project in Equatorial Guinea. This element of Marathon's Equatorial Guinea expansion plans will increase gross condensate production from 17,000 to 46,000 barrels per day. The project is scheduled to be complete by the fourth quarter of 2003.

The expansion plan consists of the installation of two new platforms and the drilling of several new production and gas injection wells offshore, as well as the expansion of onshore condensate processing facilities on Bioko Island. More than 800 million cubic feet per day (mmcf/d) of wet gas will be produced and processed to extract the condensate. Two compressors will be installed to return all gas not used in methanol production or for fuel to the offshore field for re-injection at a rate of approximately 590 mmcf/d.

According to Dave Golder, Marathon's senior vice president of Commercialization and Development, "The Phase 2A expansion is the first major step in creating additional value from the Equatorial Guinea assets acquired earlier this year. Quick alignment with the Government of Equatorial Guinea and our partners in the Alba Production Sharing Contract (PSC) has allowed us to go forward with this project without delay. "

The existing production facilities under the Alba PSC include two offshore platforms, plus an onshore condensate stabilization plant. Other Alba-related facilities on Bioko Island, with differing ownerships, include a liquefied petroleum gas (LPG) processing plant and Atlantic Methanol Company's methanol plant. In addition to gas and condensate production within the Alba PSC, approximately 2,700 barrels per day of LPG is recovered and processed at the Bioko Island LPG facility and approximately 120 mmcf/d of lean gas is processed at the methanol plant, which produces an average of 2,500 metric tons of methanol per day.

Marathon is also finalizing Phase 2B plans to increase production through the expansion of existing LPG facilities from approximately 2,700 to 16,000 barrels per day. Upon approval and completion of both expansion projects, Marathon's net proven reserves in Equatorial Guinea will total approximately 300 million barrels of oil equivalent (BOE). The full-cycle finding and development cost of these reserves is estimated at $4.60 per BOE.

Marathon is the operator of the Alba field, as well as the onshore facilities associated with this Phase 2A expansion, and holds a 63.2-percent equity interest in the Alba Production Sharing Contract. Remaining equity interest holders are Noble Energy, Inc. (NBL) (33.8 percent) and GEPetrol, the state-owned oil company of Equatorial Guinea, (3 percent).

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