Marathon Oil (MRO)

Chief Executive Officer

Mr. Cazalot's base salary, annual bonus award and long-term incentive awards are determined in the same manner as the compensation of other executive officers.

Under Mr. Cazalot's leadership, the highlights of Marathon's 2004 achievements that influenced his incentive compensation are as follows:

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Realized continued strong exploration success with a total of six discoveries in four countries

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Strengthened core areas by advancing several key international development projects which will serve as the basis for production growth in the coming years, such as:

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Approval of the Alvheim plan of development and operations in Norway

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Completion of the condensate project and advancement of the liquefied petroleum gas ("LPG") expansion project in Equatorial Guinea

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Approval for the Corrib development in Ireland

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Added net proved reserves of approximately 221 million barrels of oil equivalent while producing 122 million barrels of oil equivalent, resulting in a 181% reserve replacement ratio

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Advanced our Integrated Gas Strategy by:

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Sanctioning Equatorial Guinea liquefied natural gas ("LNG") project, with construction on schedule for first deliveries of LNG in late 2007

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Successfully completing a gas-to-liquids demonstration plant

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Signing LNG supply agreement for Elba Island LNG regas terminal capacity rights

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Strengthened MAP assets by:

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Completing Catlettsburg, Kentucky refinery repositioning project

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Increasing crude oil capacity at Garyville, Louisiana refinery

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Achieving record refinery crude and feedstock throughputs for fourth quarter and full year.

After reviewing the achievements of the Company under his leadership and competitive CEO pay data provided by an independent consultant, the Committee approved a base salary of $1,100,000 for Mr. Cazalot, effective April 1, 2005.

For 2004, Mr. Cazalot's annual bonus target was set at the median level as compared to other CEO bonus targets among our peer companies. Target levels of performance on both a Company and individual level exceeded established performance goals set forth for Mr. Cazalot, therefore, he was paid a bonus of $1,900,000 for 2004. This annual bonus award was based upon the Company's focused execution of its key business strategies and the improved profitability of each of its three business segments. Like all other officers, he also received long-term incentive awards in the form of performance shares and Stock SARs in May 2004. Mr. Cazalot's long-term incentive awards were based on the Committee's evaluation of his performance and achievements as well as industry comparative data. As a result of these decisions, the Committee believes Mr. Cazalot's total compensation is competitive among his industry peers.

Douglas C. Yearley, Chair
William L. Davis
Shirley Ann Jackson
Philip Lader
Dennis H. Reilley
Seth E. Schofield

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