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This excerpt taken from the MRO 8-K filed Jan 27, 2005. Strengthened Core AreasDuring 2004, Marathon continued to make significant progress in advancing key development projects that will help serve as the basis for the company’s production growth profile in the coming years.
In Norway, the company made substantial progress in advancing the development of the Marathon-operated Alvheim area. A key milestone occurred in October when the Norwegian Ministry of Petroleum and Energy approved the company’s Alvheim PDO which will consist of a floating production, storage and offloading (FPSO) vessel with subsea infrastructure for five drill centers and associated flow lines. The PDO also outlines transportation of produced oil by shuttle tanker, and transportation of produced natural gas to the existing UK SAGE system using a new 14-inch, 24-mile cross border pipeline. Tendering for all major construction contracts is nearing completion and Marathon anticipates awarding contracts for FPSO topsides construction and hull modifications during the first quarter 2005. The approved Alvheim PDO includes the Kneler, Boa and Kameleon fields in which Marathon holds a 65 percent interest and serves as operator.
Also during 2004, agreement was reached to utilize the Alvheim infrastructure to develop the nearby Vilje discovery, in which Marathon holds a 46.9 percent interest. The Vilje PDO was submitted by the operator, Norsk Hydro, to the Norwegian Government in December 2004. The combined Alvheim/Vilje developments are expected to ramp up production to more than 50,000 net barrels per day (bpd) during 2007.
In Equatorial Guinea, Marathon continued its significant expansion programs with the completion and continued ramp-up of production from the condensate expansion project. As of year-end 2004, gross condensate production averaged approximately 43,000 bpd. At full capacity, the condensate expansion will
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increase total liquids production to approximately 57,000 gross bpd (32,000 bpd net to Marathon). The company’s LPG expansion project is on schedule for start-up during the second quarter of 2005. The project is mechanically complete and commissioning is in progress. Upon completion of the LPG expansion, gross liquids production will increase to approximately 79,000 bpd (44,500 bpd net to Marathon) during the second half of 2005.
In Ireland, the An Bord Pleanála announced that it has upheld the Mayo County Council’s decision to grant planning permission for the proposed natural gas terminal at Bellanaboy Bridge, County Mayo, which is to be built to bring gas from the Corrib field ashore. This decision represents a major step forward for the Corrib gas project, in which Marathon holds an 18.5 percent interest. Construction began in December and first gas production is targeted for mid-year 2007.
In Libya, Marathon continues to work with its partners, including the Libyan Government, to finalize the terms of the group’s reentry agreement following the lifting of U.S. sanctions in early 2004. The parties continue to make progress toward a final agreement and they are optimistic that it will be finalized in the near future. Marathon holds a 16.33 percent interest in the approximately 13 million acre Waha Concession.
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