Marathon Oil (MRO)

16.  Commitments and Contingencies

Marathon is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment.  The ultimate resolution of these contingencies could, individually or in the aggregate, be material to Marathon’s consolidated financial statements.  However, management believes that Marathon will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably.  Certain of the Company’s commitments are discussed below.

Guarantees — During the third quarter of 2007, Marathon entered an agreement, which terminates December 31, 2009, with its partners in LOOP LLC (“LOOP”) under which each partner will contribute cash in lieu of LOOP procuring separate insurance for certain catastrophic events.  If such an event occurs, each partner is to contribute cash in proportion to its ownership interest.  Marathon’s maximum potential undiscounted payments under this agreement are $101 million.

Contract commitments — At September 30, 2007 and December 31, 2006, Marathon’s contract commitments to acquire property, plant and equipment totaled $2.459 billion and $1.703 billion. During the first nine months of 2007, the majority of additional contract commitments were related to the expansion of the Company’s Garyville, Louisiana, refinery.

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10.   Commitments and Contingencies

Marathon is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to Marathon's consolidated financial statements. However, management believes that Marathon will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably. Certain of the Company's commitments are discussed below.

Contract commitments – At March 31, 2007 and December 31, 2006, Marathon's contract commitments to acquire property, plant and equipment totaled $2.242 billion and $1.703 billion. During the first quarter of 2007, the majority of additional contract commitments were related to the expansion of the Company's Garyville, Louisiana, refinery.