Marathon Oil (MRO)

Supply and Transportation

We obtain most of the crude oil we refine from negotiated contracts and purchases or exchanges on the spot market. In 2007, U.S.-sourced crude oil averaged 527 mbpd, or 52 percent, of the crude oil processed at our refineries, including a net 15 mbpd from our production operations included in the E&P segment. Canada was the source for 14 percent, or 138 mbpd, of crude oil processed in 2007. Other foreign sources supplied 34 percent, or 345 mbpd, of the crude oil processed by our refineries, including 180 mbpd from the Middle East. This crude oil was acquired from various foreign national oil companies, producing companies and trading companies. The following table provides information on the sources of crude oil for each of the last three years.

Supply and Transportation

Supply and Transportation

        We obtain most of the crude oil we refine from negotiated contracts and purchases or exchanges on the spot market. In 2006, U.S. sourced crude oil averaged 470 mbpd, or 48 percent of the crude oil processed at our refineries, including a net 14 mbpd from our production operations. In 2006, Canada was the source for 13 percent, or 130 mbpd of crude oil processed and other foreign sources supplied 39 percent, or 380 mbpd, of the crude oil processed by our refineries, including 198 mbpd from the Middle East. This crude oil was acquired from various foreign national oil companies, producing companies and trading companies. The following table provides information on the sources of crude for each of the last three years.

Sources of Crude Oil Refined

        We operate a system of pipelines, terminals and barges to provide crude oil to our refineries and refined products to our marketing areas. At December 31, 2006, we owned, leased, operated or held equity method investments in 68 miles of crude oil gathering lines, 3,718 miles of crude oil trunk lines and 3,855 miles of refined product trunk lines.

        Excluding equity method investees, our owned or operated common carrier pipelines transported the volumes shown in the following table for each of the last three years.

Pipeline Barrels Handled

        At December 31, 2006 we had interests in the following pipelines:

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100 percent ownership of Ohio River Pipe Line LLC, which owns a refined products pipeline extending from Kenova, West Virginia to Columbus, Ohio, known as Cardinal Products Pipeline;



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60 percent interest in Muskegon Pipeline LLC, which owns a refined products pipeline extending from Griffith, Indiana to North Muskegon, Michigan;



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51 percent interest in LOOP LLC ("LOOP"), the owner and operator of the only U.S. deepwater oil port, located 18 miles off the coast of Louisiana, and a crude oil pipeline connecting the port facility to storage caverns and tanks at Clovelly, Louisiana;



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59 percent interest in LOCAP LLC, which owns a crude oil pipeline connecting LOOP and the Capline system;

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50 percent interest in Centennial Pipeline LLC, which owns a refined products system connecting Gulf Coast refineries with the Midwest market;



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37 percent interest in the Capline system, a large diameter crude oil pipeline extending from St. James, Louisiana to Patoka, Illinois;



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17 percent interest in Explorer Pipeline Company, a refined products pipeline system extending from the Gulf of Mexico to the Midwest;



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17 percent interest in Minnesota Pipe Line Company, LLC, which owns a crude oil pipeline extending from Clearbrook, Minnesota to Cottage Grove, Minnesota, which is in the vicinity of our St. Paul Park, Minnesota refinery; and



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6 percent interest in Wolverine Pipe Line Company, a refined products pipeline system extending from Chicago, Illinois to Toledo, Ohio.

        Our 87 owned and operated light product and asphalt terminals are strategically located throughout the Midwest, upper Great Plains and Southeast. These facilities are supplied by a combination of pipelines, barges, rail cars and trucks. Our marine transportation operations include towboats (15 owned) and barges (180 owned, 4 leased) that transport refined products on the Ohio, Mississippi and Illinois rivers, their tributaries and the Intercoastal Waterway. We lease and own over 2,000 rail cars of various sizes and capacities for movement and storage of petroleum products and over 100 tractors and tank trailers.

Supply and Transportation

        MAP obtains the crude oil it processes from negotiated contracts and spot purchases or exchanges. In 2004, MAP's net purchases of U.S. produced crude oil for refinery input averaged 416,000 bpd, including a net 20,000 bpd from Marathon. In 2004, Canada was the source for 14 percent or 130,000 bpd of crude oil processed and other foreign sources supplied 42 percent or 393,000 bpd of the crude oil processed by MAP's refineries, including approximately 245,000 bpd from the Middle East. This crude was acquired from various foreign national oil companies, producing companies and traders.

        MAP operates a system of pipelines and terminals to provide crude oil to its refineries and refined products to its marketing areas. At December 31, 2004, MAP owned, leased, or had an ownership interest in approximately 2,860 miles of crude oil trunk lines and 3,850 miles of product trunk lines. At December 31, 2004 MAP had interests in the following pipelines:

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100 percent ownership of Ohio River Pipe Line LLC, which owns the Cardinal Products Pipeline, a refined products pipeline extending from Kenova, West Virginia to Columbus, Ohio;



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50 percent interest in Centennial Pipeline LLC, which owns a system connecting Gulf Coast refineries with the Midwest market;



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47 percent interest in LOOP LLC ("LOOP"), which is the owner and operator of the only U.S. deepwater oil port, located 18 miles off the coast of Louisiana;



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50 percent interest in LOCAP LLC, which owns a crude oil pipeline connecting LOOP and the Capline system;



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37 percent interest in the Capline system, a large diameter crude oil pipeline extending from St. James, Louisiana to Patoka, Illinois; and



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33 percent interest in Minnesota Pipe Line Company, which owns a crude oil pipeline extending from Clearbrook, Minnesota to Cottage Grove, Minnesota, which is in the vicinity of MAP's St. Paul Park, Minnesota refinery.

        MAP's 84 light product and asphalt terminals are strategically located throughout the Midwest, upper Great Plains and Southeast. These facilities are supplied by a combination of pipelines, barges, rail cars and/or trucks. MAP's marine transportation operations include towboats and barges that transport refined products on the Ohio, Mississippi and Illinois rivers, their tributaries and the Intercoastal Waterway. MAP also leases and owns rail cars in various sizes and capacities for movement and storage of petroleum products and a large number of tractors, tank trailers and general service trucks.

        Marathon also has interests in two refined product pipelines which are not part of MAP:

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17 percent interest in Explorer Pipeline Company, which is a light-product pipeline system extending from the Gulf of Mexico to the Midwest; and



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6 percent interest in Wolverine Pipe Line Company, a light-product pipeline system extending from Chicago, Illinois to Toledo, Ohio.

        The above discussion of the RM&T segment includes forward-looking statements concerning anticipated completion of the Detroit refinery capital projects. Some factors that could affect the Detroit projects include unforeseen problems arising from construction, regulatory approval constraints, availability of materials and labor, unforeseen hazards such as weather conditions and other risks customarily associated with construction projects. These factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements.

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