USX-Marathon Group 1998 budget at $ 1.497 bn

USX Corporation has approved a 1998 Marathon Group capital, investment and exploration budget of $ 1.497 bn, Thomas J. Usher, chairman and CEO, announced. Usher commented, "This spending plan provides the foundation for the company's future growth."
Victor G. Beghini, vice chairman - Marathon Group of the USX Corporation and president of Marathon Oil Company, noted this year's budget will include 100 % of the Marathon Ashland Petroleum LLC (MAP) capital requirements. Beghini added, "Marathon women and men achieved outstanding financial, operational, safety and environmental successes in 1997. We will bring to completion several important projects in 1998 and utilise the innovation of Marathon and MAP personnel to continue our growth into the 21st century."
The Group's capital and investment program of $ 1.234 bn includes $ 692 million for production activities and $ 469 mm for refining, marketing and transportation. The world-wide exploration budget for 1998 amounts to $ 263 mm, compared to 1997 expenditures of $ 217 mm. Planned domestic exploration expenditures represent 64 % of the total, mainly attributable to increased activities in the Gulf of Mexico.
In the United States, upstream capital spending is planned at $ 470 mm, 16 % below 1997's level. The lower expenditures in 1998 are reflective of the substantial completion of several significant Gulf of Mexico projects in 1997. In the fourth quarter of 1997, production began from Green Canyon 244 (Troika), while initial production from Gulf projects Ewing Bank 963 (Arnold) and 917 (Oyster) will occur in the first half of 1998. Spending in 1998 includes the continued Gulf of Mexico developments for Viosca Knoll 786 (Petronius) and the 1997 Stellaria discovery at Green Canyon 112, which are expected to begin production next year.
Upstream capital and investment plans include $ 222 mm for international operations, $ 46 mm lower than 1997. The reduction reflects the 1997 completion of the West Brae field in the U.K. North Sea and lower direct investment by Marathon in the Sakhalin II project for development of the Piltun-Astokhskoye (PA) field in the Russian Far East. In the fourth quarter of 1997, production began from West Brae, while production from PA is expected to commence in the middle of next year. Although project expenditures for PA remain high, third-party financing by Sakhalin Energy Investment Company, Ltd., in which Marathon owns 37.5 %, is expected to reduce the need for direct investment by Marathon in 1998.
Downstream capital spending, reflecting commencement of MAP operations on January 1, 1998, is budgeted at $ 469 mm. Capital spending for refining operations is planned at $ 195 mm, while $ 205 mm is for marketing and another $ 65 mm is attributable to supply and transportation related activities. Marathon and Ashland Inc.'s agreement to combine the major elements of their downstream operations significantly expands MAP's reach into the Mid-western and South-eastern U.S. marketing areas. Marathon has a 62 % interest in MAP.