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Marathon Oil's Alba gas processing plant at Punto Europa, near Malabo (Photo: Marathon Oil)
EGVistas Magazine
Marathon’s investment in
Equatorial Guinea

Interview: Cathy Krajicek,
Country Manager for Marathon Oil
EGVistas MagazineEGVistas Magazine

"High standards of health, environmental, safety and security performance are key aspects of our business. This includes our commitment to a range of corporate social responsibility (CSR) projects aimed at education and training, health care and environmental projects."Marathon Oil is one of the largest American investors in Equatorial Guinea. And while its primary interest is hydrocarbons, it has also become an active partner in addressing some of the pressing health and social needs of Equatorial Guinea. In this interview, Regional Vice President Cathy Krajicek answers our questions about Marathon Oil’s business activities in the country as well as its social programs, including an important anti-malaria project that is showing significant results.

How important is Equatorial Guinea in its role as an African energy supplier, given the instability that surrounds many other oil and gas regions of the world?

Equatorial Guinea has emerged as one of Africa’s key producers of oil and natural gas that is helping meet the world’s growing demand for energy. Equatorial Guinea’s growth has been most significant over the past 12 years, and since acquiring our interests in Equatorial Guinea in 2002, Marathon Oil has participated in that growth of the country’s oil and gas sector. In this regard, we have worked with the Equatorial Guinea government and our partners to make substantial investments in all aspects of our operations to develop this country’s rich oil and gas resources. These activities have served to showcase Equatorial Guinea to the international community, illustrating the progress it is making and its commitment to future growth.

Is there a good potential for the development of additional oil and gas resources in Equatorial Guinea?

Marathon Oil is always seeking opportunities to grow our business in areas where we operate, and Block A12, which we recently acquired, represents an exciting exploration opportunity in Equatorial Guinea. The exploration plan for Block A12 includes drilling the Sodalita West prospect as part of a wider drilling campaign, including the exploration prospect Rodo within the Alba Block. Once the results of these wells are analyzed a decision will be made on further exploration, which could include drilling appraisal wells on any discoveries as well as further potential exploration wells.

The EG LNG facility, in which Marathon Oil holds a significant interest, introduced Equatorial Guinea as a new player in the world of liquefied natural gas (LNG), and there is potential for LNG expansion projects through successful exploration activities and cross-border commercial opportunities. The EG LNG plant could become a catalyst for a regional gas hub to connect stranded gas elsewhere in the Gulf of Guinea, which would benefit not only regional producers but would also positively impact the environment through the reduction of flared gas. It is a potential win-win for the entire Gulf of Guinea region.

However, cross-border commercial agreements are not easy to implement, but the potential benefits to Equatorial Guinea and the surrounding region should not be discounted. We encourage the leaders of the region to come together on this issue for their mutual benefit.

What is your experience as a major American investor in Equatorial Guinea?

Marathon Oil’s entry into Equatorial Guinea dates to January 2002. The nation had been producing oil and gas since the mid-1990s, and our entry into Equatorial Guinea brought us the addition of a major underdeveloped gas resource with existing onshore and offshore facilities producing natural gas and relatively small quantities of condensate, as well as liquefied petroleum gas and methanol.

Recognizing the growing global demand for energy, we immediately began to expand the gas processing infrastructure. Through a series of expansion projects, we took the total production of hydrocarbon products from 34,000 barrels of oil equivalent per day (boepd) in 2002 to over 200,000 boepd in five years. This was accomplished by installing additional platforms offshore, drilling wells and installing gas re-injection facilities, and the construction of new onshore gas processing facilities.

Our ability to progress complex developments is the direct result of the shared vision and a spirit of cooperation shown by the government of Equatorial Guinea. Together we have built a gas business that may have a life of more than 40 years and is bringing tremendous benefit to the people of Equatorial Guinea.

Do you see a role for American companies in the diversification of the Equatorial Guinea economy, which the government hopes to develop as part of its Horizon 2020 agenda?

Host governments in any country play an important role in attracting and retaining investments. This includes providing a stable legal, commercial and regulatory environment that is conducive to making substantial long-term investments for the mutual benefit of all parties. Equatorial Guinea has a positive business climate that has been conducive to the major investments Marathon Oil has made over the past 12 years. We look forward to continuing to build upon this strong relationship to the mutual benefit of all stakeholders.

Punta Europa near Malabo (Photo: Marathon Oil)

Can you tell us about the programs Marathon Oil supports to benefit the people of Equatorial Guinea, including the Bioko Island Malaria Control Project and the development of a new malaria vaccine?

Marathon Oil recognizes that the ability to do business in any community is a privilege. We honor this with our commitment to responsible operations wherever we conduct business, and this includes doing our utmost to protect our neighbors and the environment. High standards of health, environmental safety and security performance are key aspects of our business. This includes our commitment to a range of corporate social responsibility (CSR) projects aimed at education and training, health care and environmental projects. Such projects include the remodeling of schools and clinics, drilling of water wells, installing a computer lab at the National University and working with UNICEF in a health campaign for primary school children.

One of the best examples of Marathon Oil’s CSR activities in Equatorial Guinea is the Bioko Island Malaria Control Project. When Marathon Oil entered Equatorial Guinea in 2002, we identified malaria as the most significant health threat facing the nation. Malaria was endemic on Bioko Island, with one of the highest transmission rates in Sub-Saharan Africa. Among children, 45 percent between the ages of 2 and 14 suffered from malaria at any one time and malaria was the leading cause of death in the country. It was clear that the elimination or dramatic reduction in malaria transmission on Bioko Island would significantly reduce both the health and economic burden of this disease, and make a dramatic difference to the lives of Equatoguineans.

Working in conjunction with the Government of Equatorial Guinea, Marathon Oil and its partners initiated the Bioko Island Malaria Control Project. The mission of this landmark public- private partnership was to drastically reduce the transmission of malaria on the island.

This was the first time Marathon Oil had ever undertaken such a large public health project, but results have so far exceeded expectations. As a result of government and private party investments totaling $50 million since 2003, malaria transmission is down by well over 50 percent in children 2 to 14 years old, and deaths among children under age 5 have declined by 65 percent.

We are not resting on these achievements, however, and are now working with our partners and the government of Equatorial Guinea on a malaria vaccine that could further expand the health benefits to Equatoguineans facing the threats of this terrible disease. The first phase of a pilot vaccine project in Equatorial Guinea is planned during 2014.

In addition, Marathon Oil believes capacity building is among the most important steps we can take to assist local and regional companies become competitive in Equatorial Guinea. Capacity building is more than training. It is the establishment of sustainable mechanisms that allow a community or nation to empower itself by developing its human capital. When local citizens are well prepared, a community or nation can resolve development issues in a responsible and sustainable manner.

In Equatorial Guinea, Marathon Oil has made significant progress in the recruitment, training and development of our workforce. Today national employees make up approximately 70 percent of the workforce. This includes 20 percent of managers and supervisors, 52 percent of professionals and 42 percent of operations technical employees.

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