Due to the influence of economic and political factors in the world's major oil and gas production and consumption areas, the fluctuation of world supply and demand leads to the change of oil price, and the WTI price of 1998 has dropped to the lowest level in 24 years. To mitigate the impact of falling oil prices. 1999 Marathon plans to increase oil production 17% (about 230,000 barrels per day, including the share of marathon production). The increase in oil production mainly comes from the Piltun-Astokhskoye oilfield put into production in the middle of 199 and the southern Tchatamba oilfield put into production in the third quarter of 199. 1999, the company plans to increase the natural gas production by 1 1% to 138 billion cubic feet/day. By the year 2000, the oil and gas production will be basically stable at the level of 1999. In 2006, 5438+0, oil production will increase by 10%- 15%, and natural gas production will increase by 4%.
To this end, Marathon has increased its investment in foreign oil and gas exploration and development. At present, Marathon holds 37.5% of the shares of Sakhalin Energy Investment Co., Ltd. (hereinafter referred to as Sakhalin Energy). The company is responsible for the overall development and management of Sakhalin Phase II project. 1998 65438+Feb. 3 1 Marathon Company invested 275 million dollars in Sakhalin Phase II project. The second phase of Sakhalin Island includes the development of P-A oil field and Lunskoye condensate gas field 8- 12 miles away from Sakhalin Island. According to the reserve evaluation results approved by Russian State Reserve Committee, the reserves of P-A Oilfield and Luns Dan Coe condensate gas field are 65.438+0 billion barrels of oil and 654.38+0.4 trillion cubic feet of natural gas respectively. According to the evaluation of 1997, the output of the first stage of P-A oilfield development plan reached 45,000 barrels per day from the middle of 1999 to the beginning of 2000 (this output is estimated according to 12 months, and the daily output should reach 90,000 barrels according to the freeze-free period of 6 months). At the same time, the Luns Dan Coe condensate gas field is also evaluated, which will sell natural gas after 2005.
Improve downstream profitability and market share through mergers. The downstream development of marathon is mainly in the United States. The company's strategy is to expand market share through mergers and acquisitions to form an integration advantage.
1998 after the merger of Marathon and Aslan Company to form a map company, the pre-tax profit can reach1500,000 US dollars, and the annual retail, wholesale and refining profit of 200/kloc-0 is expected to exceed the target of 200 million US dollars and obtain 350 million US dollars. MAP plans to improve the crude oil processing capacity and light oil output of Robinson, il and il refineries, and the project is expected to be completed in 200 1. MAP and another company are building a polypropylene and polyethylene plant with an annual output of 800 million pounds in Garyville Refinery. The equipment for producing polypropylene is built, owned and operated by MAP, and the equipment for producing polyethylene is built, owned and operated by its partner company. Marathon plans to build a refined oil pipeline from its Catlettsburg refinery to Columbus, central Ohio, with an initial transportation capacity of 50,000 barrels per day. The pipeline is expected to be put into use in the first half of 2000. The strategy of improving downstream profitability and market share through the implementation of the above projects.
Using financial derivatives to avoid market risks. The business activities of Marathon Company are affected by the price fluctuation of raw materials or products such as natural gas, electricity and petroleum feed. Therefore, the company mainly uses derivative products to avoid the risks brought by the basic commodity business activities (procurement, production or sales of crude oil, natural gas and petroleum products) with large price changes.
Company managers believe that although derivatives can't rule out the company's risks, the use of derivatives can have a positive impact on the company's annual and quarterly operating performance, and may also limit the company's profits when the price changes in the direction favorable to the company. This method is combined with risk assessment procedures and internal control to obtain competitive prices of its products and services, and the price risk is reduced to a relatively small level by using price locking contracts (such as natural gas supply and marketing contracts) and derivative commodity instruments (such as futures, options and OTC hedging transactions for crude oil, natural gas and petroleum products sales).