How did Marathon Oil’s story begin in the Kurdistan Region?
Marathon Oil has a growth strategy that focuses on capturing opportunities that will create long-term shareholder value. This strategy has included analyzing various business opportunities around the world. We believe the Kurdistan Region to be one of the key resource basins we are targeting as a potential growth opportunity. Marathon Oil extensively analyzed the Region and the opportunities here by conducting our due diligence first to conclude that the Kurdistan Region was, and continues to be, an excellent match as a place where Marathon Oil can do business. So, after a period of discussions with the KRG, we entered the Region on October 20, 2010. Our approach was to have a balanced portfolio with four blocks. In two blocks [Harir and Safen] we entered as operator and the other two blocks [Sarsang and Atrush] we entered as non-operator. I believe that our entry was unique in the Kurdistan Region. At the same time, however, we utilized the same approaches that we have implemented in our other operations around the world. Our goal continues to be to enter a new area bringing the necessary high-level of expertise without compromising our ability to focus on safely delivering sustainable benefits to the local communities in which we are operating along with a firm commitment to protect the environment.
How has the company’s presence in Kurdistan evolved since 2010?
Late 2012, the French major Total became our partner in our two operated blocks with a 35% interest in each. So, our Kurdistan Region portfolio, which was already balanced, became further enhanced by this addition. Looking back to 2010 in the Kurdistan Region, if you examine the operators present at that time I believe you will see that Marathon Oil was one of the first large, publicly traded oil and gas companies from the USA to enter this Region. In that sense, we believe that Marathon Oil helped pave the way for other larger companies to enter. Over the past three years, there have been significant changes. We have witnessed the entry of the larger companies while very few of the smaller pioneer companies have remained. We have seen not only the growth, but also the maturing of the oil and gas industry here, particularly in regard to the services industry. Significant inroads are also apparent in infrastructure development supporting the oil and gas industry. This includes the physical infrastructure of roads and pipeline systems, as well as additional storage and power generation. I think these and other areas will continue to progress, as will Marathon Oil in terms of this industry’s growth and its overall success.
What are the company’s plans for the future in the Region?
Marathon Oil was very fortunate in that very early after our entry in 2010 we participated in oil discoveries in both of our non-operated blocks [Atrush and Sarsang]. Late last year, together with our partners in Atrush block, we declared commerciality. Since then, we have filed a field development plan in early May of this year, which will move us forward to full development activities in the next few years. At the same time, we have further exploration and appraisal activities taking place in the Sarsang Block. Hopefully, we will have further discoveries as these activities in Sarsang Block progress. We are also very hopeful that we will see success in our own operated blocks, particularly the area that we are currently testing in Harir.