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Oil & Gas Journal

Sam Fletcher
Senior Writer

Development of integrated natural gas projects to link stranded natural gas resources with key markets in areas where production is declining is "a new part of our business" and an "exciting area for us," said Clarence P. Cazalot Jr., CEO and president of Marathon Oil Corp., Houston.

"We had a strategic view several years ago that the US and UK and other key consuming markets were going to be short of supply in the coming years. That seems to be happening a little faster than we originally thought," Cazalot said at a recent meeting of the Texas Alliance of Energy Producers and the Houston Wildcatters in Houston.

"We saw the opportunity to access undeveloped but discovered major gas resources in the international arena, commercialize that either through LNG or gas-to-liquids-type technologies, and supply the developed markets, particularly the US," he said. "We just sanctioned, brought to final investment decision, and have construction under way on a major LNG project in Equatorial Guinea."
That project involves "about 3.4 million tons/year of LNG that will be exported from there—gas utilized out of our Alba field," Cazalot said. Most of that LNG will be imported into Lake Charles, La., "through [BG Group PLC's] regasification facility, where it can access the major trunk lines and be used all the way up to the Northeast US," he said.
Marathon "brought that project on in about 2½ years from the time we acquired that asset, which is just an outstanding performance," he said. "Our efforts now are under way to find even more gas, both through successful exploration or [acquisition of] gas that has already been discovered out there or is being flared." Marathon will "take that gas, run it through our facility, extend the life, run it at a higher rate, and even look at the expansion through a second train," said Cazalot.

Upstream change afoot
Although Cazalot pointed out that Marathon at 117 years old is "a company with a great history, a long history, a successful history, and the future is even brighter for us," he acknowledged that the company has not always performed at its highest possible level.
"Over the years, there were those who claimed that we couldn't find oil in a service station," he said. However, Cazalot claimed, "That is no longer the case" under Philip G. Behrman, the company's senior vice-president of worldwide exploration.

"One of the changes that has taken place at Marathon is a blend of experience, taking the best of what Marathon has groomed and developed over the many years and complementing that with the expertise from throughout the industry," said Cazalot, who formerly served as vice-president of Texaco Inc. and president of Texaco Exploration & Production Inc. prior to joining Marathon. "That has allowed us to see the difference, to take an objective view of our strategies and our company and of the challenges we face and make the hard choices and make the changes that were needed," he said.