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Marathon Oil Corporation 2004 Annual Report
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Letter
Marathon lives its values through employees who work with the highest regard for our stockholders, our partners, each other and the communities where we operate.
Marathon continues to place the highest emphasis on protecting the health and safety of people and the communities in which it works. Our Health, Environment and Safety vision is straightforward: our people and workplaces are safe, our operations are clean, and we practice responsible action wherever we work.

Safety and Environmental Performance
The MS 150 Bike Tour is a 180-mile ride to raise funds for multiple sclerosis research. As captain of Marathon's team of 60 riders,  I work to organize the team and set up ride logistics, but most importantly to raise funds  to fight the devastating effects of MS. Marathon has given us its full support, and last year we raised $50,000. Passing a person with MS in a wheelchair holding a sign that says 'Thank you very much' emotionally impacts every rider. We are able to help this group of people because Marathon is there with us.Both Marathon and MAP had record-setting safety performance during 2004. Marathon's upstream operations marked its best performance in safety since initiating combined employee/contractor reporting statistics in 2000. The year-end Recordable Incidence Rate of 1.22 reflects an 18 percent improvement over 2003, an accomplishment largely attributed to improved contractor safety.
     Marathon's European Business Unit celebrated two major safety achievements. The Peterhead supply base surpassed 10 years without a lost-time incident (LTI). Also, Marathon's three Brae platforms collectively reached two million work hours without an LTI. In Equatorial Guinea, the workforce reached more than two million worker hours without an LTI.
     In comparison with its peers, Marathon's upstream operations continue to outperform the industry oil spill average as reported by the International Association of Oil and Gas Producers.
     At MAP, both the employee Occupational Safety and Health Administration (OSHA) recordable rate and the combined employee/contractor OSHA rates reached record lows with a combined rate of less than one. Five of the company's seven refineries completed the year without a single LTI. The Catlettsburg, Robinson, St. Paul and Garyville refineries had a combined employee/contractor OSHA recordable rate of less than one. MAP's Marine Transportation organization achieved its best safety record since the formation of MAP.
     Despite major construction and maintenance at three plant sites and record run rates across the refinery system, MAP continued to reduce environmental incidents. MAP's Marine Transportation organization completed the year without a single spill, extending its record to nearly 93 million barrels shipped without a spill, and won the 2004 Admiral William Benkert Silver Award for Environmental Excellence presented by the U.S. Coast Guard.

Ethics and Integrity
Marathon is dedicated to upholding the highest ethical standards and principles throughout its worldwide operations. Our standards are detailed in the Company’s Code of Business Conduct and are reinforced through training. MAP received the 2004 Better Business Bureau International Torch Award for Marketplace Ethics, which honors corporations that demonstrate outstanding commitment to relationships with their consumers, employees, suppliers, competitors, stockholders and surrounding communities.
     Marathon continues to lead an Equatorial Guinea capacity-building initiative with other U.S. energy companies to agree on a framework and action plan for transparency and social development. During 2004, Marathon announced its support of the EITI, which promotes transparent reporting by governments of aggregated revenues derived from mineral resource extraction. Also during 2004, Marathon became a participant in the Voluntary Principles on Security and Human Rights, which recognizes the importance of the promotion and protection of human rights throughout the world and engages in dialogue focusing on global security and human rights issues.

Social Responsibility
Marathon actively supports the communities where our employees live and work. In Equatorial Guinea, the Company is helping to improve the quality of life of local people. Marathon and its partners are leading a five-year, $8 million program to combat malaria — the leading cause of childhood mortality on Bioko Island. Due to this effort, a 50 percent reduction in the infant mortality rate is predicted. Also, the Company established a training program to prepare Equato-Guineans for a variety of vocational jobs and is providing jobs for 1,000 nationals during the construction of expansion projects.
     Last year, the Marathon Oil Company Foundation donated $3 million in support of educational, health and human services, civic and community, environmental and social causes. Through its Global Volunteer Awards program, the Foundation honored 50 exemplary employee volunteers by contributing a total of $50,000 to designated eligible charities in recognition of their efforts.
     During 2004, Marathon was honored as the recipient of the Outstanding Philanthropic Corporation Award from the Association of Fundraising Professionals in partnership with theHouston Business Journal.
Houston-based volunteers helped pack and distribute backpacks with toys and books for economically-disadvantaged schoolchildren as part of the      Company and employee response to the Indian Ocean tsunami disaster in late December is consistent with Marathon’s tradition of providing assistance globally. In early 2005, Marathon and MAP announced plans to contribute $500,000 to tsunami relief efforts managed by the American Red Cross and UNICEF. The Companies also matched contributions made by employees, annuitants, Marathon brand dealers, jobbers and wholesale customers to these relief organizations on a dollar-for-dollar basis for a total contribution of $1.1 million.

Valuing Diversity
Diversity continues to be a core value at Marathon. Our diversity strategy is to create a workplace culture that is inclusive, respects the individual and values the contribution of every employee. The Company supports diversity initiatives designed to foster awareness and learning, collaboration, and assist in building high-performance teams for business success.
     Diversity councils remain a cornerstone for implementing our diversity strategy. In 2004, a new council was formed for the European Business Unit. Today, more than 30 employees participate in three diversity councils representing 12 Marathon locations.
     In September, Marathon established the Corporate Scholars Program with the United Negro College Fund. This four-year, $1.5 million commitment will provide scholarship and internship opportunities for approximately 30 outstanding minority, full-time undergraduate and graduate students studying earth sciences, engineering, mathematics and/or physics.
     Our Supplier Diversity Program is a proactive business initiative that seeks to give all business enterprises equal access to supply and service opportunities within Marathon. In 2004, expenditures with minority- and women-owned and small, disadvantaged businesses totaled more than $135 million.
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