2015 corporate sustainability report -...

Living Our Values2015 Corporate Sustainability Report

Marathon Oil Corporation’s Living Our Values Corporate Sustainability Report is issued in a digital-only format. This allows stakeholders to assemble and print specific sections

into a customized report that meets their individual information needs. As a result of this customization, PDFs that are created will not include a table of contents or page

numbers. For the complete version of Marathon Oil’s 2015 Sustainability report, please visit: http://www.marathonoil.com/Social_Responsibility/Reporting/

GOING FURTHER.DOING MORE.

Marathon Oil Corporation’s 2015 Living Our Values Corporate Sustainability Reportillustrates our efforts to advance our nonfinancial performance and to promote

economic, social and environmental sustainability where we live and work. We

provide examples of how we are “living our values” – to be healthy and safe,

environmental stewards, open and honest, community partners and results

focused – through our business activities.

Unless otherwise stated, all information and performance data relate to exploration and productionoperations. In some cases, we include information on our non-operated assets, such as Equatorial Guinea LNGHoldings Limited (EG LNG) that is material to our corporate sustainability performance.

Our reporting follows the Oil & Gas Industry Guidance on Voluntary Sustainability Reporting, a joint publication ofIPIECA, the American Petroleum Institute (API) and the International Association of Oil & Gas Producers(IOGP). This framework for the petroleum industry helps Marathon Oil select indicators to demonstrate ourperformance related to governance, society, the workplace and the environment. Our approach to reporting isalso informed by the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines. We includequantitative and qualitative metrics to provide relevant and meaningful information about our operations andnonfinancial performance.

This report was reviewed by Marathon Oil subject matter experts, legal and accounting staff, executives andthe Board of Directors. It was not evaluated by any third party or external assurance agency, except for thefinancial and operational highlights excerpted from the 2015 Form 10-K Annual Report.

Materiality Determination

Report materiality was based on a review of risks identified during the Enterprise Risk Management processand on engagements with Marathon Oil managers and subject matter experts; socially responsible investors(SRIs) and other investors; business partners; industry associations; nongovernmental organizations; andnonprofit and community partners. Investment reports and media coverage also informed the materialitydetermination. In addition, we reviewed peer company reports to benchmark our reporting practices. Theseinternal and external perspectives help us identify, understand and consider the risks and opportunitiesassociated with new and emerging issues, regulations, standards and leadership practices.

INQUIRIES OR COMMENTS Marathon Oil Corporation The Office of Corporate Communications 5555 San Felipe Street Houston, TX 77056-2723 USA Telephone: +1 713-296-3911 Email: [email protected] www.marathonoil.com

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of

1934. These are statements, other than statements of historical fact, that give current expectations or forecasts of future events, including, without limitation:

Marathon Oil’s operational and financial goals and strategies, including planned expenditures, drilling plans and projects, capital discipline, continuous improvement,

reducing operational risk, workforce reductions, non-core asset sales, and emissions mitigation; our ability to successfully effect those strategies and the expected

timing and results thereof; Marathon Oil’s financial and operational outlook, and ability to fulfill that outlook; expectations regarding future economic and market

conditions and their impact on Marathon Oil; our ability to accelerate production when commodity prices rebound; our ability to expand our operations to create

value for shareholders; and our international projects and the expected timing and results thereof. While we believe the assumptions concerning future events are

reasonable, a number of factors could cause results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry,

including supply/demand levels and the resulting impact on price; changes in political or economic conditions in the jurisdictions in which we operate; capital available

for exploration and development; well production timing; availability of drilling rigs, materials and labor; difficulty obtaining necessary approvals and permits; non-

performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorism and the governmental or military

response thereto; cyber-attacks; changes in safety, health, environmental and other regulations; other geological, operating and economic considerations; and the risk

factors, forward-looking statements and challenges and uncertainties described in Marathon Oil’s Annual Report on Form 10-K for the year ended December 31,

2015, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.MarathonOil.com. We undertake no obligation to revise or

update any forward-looking statements as a result of new information, future events or otherwise.

© 2016 Marathon Oil Company

MARATHON OIL AT A GLANCE

Marathon Oil Corporation (NYSE: MRO) is an independent global energy company. Based in Houston, Texas,the Company operates in North America, Europe and Africa. Each of the Company’s three reportable operatingsegments is organized based upon both geographic location and the nature of the products and services itoffers. The three segments are:

North America Exploration and Production (E&P) – explores for, produces and markets crude oil andcondensate, natural gas liquids (NGLs) and natural gas in North America.

International E&P – explores for, produces and markets crude oil and condensate, NGLs and natural gasoutside of North America and produces and markets products manufactured from natural gas, such asliquefied natural gas (LNG) and methanol in Equatorial Guinea.

Oil Sands Mining – mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, andupgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil.


TO OUR STAKEHOLDERS

Marathon Oil Corporation’s goal is to be recognized as a

premier independent exploration and production (E&P)

company, a goal that requires the Company to be a

sustainable investment, employer, business partner and

corporate citizen. Our business strategy drives what we do

to achieve long-term viability, while our core values and

corporate sustainability commitments guide how we develop

oil and gas in a responsible, ethical and safe manner.

Marathon Oil believes that a company must address its nonfinancial risks and responsibilities to achievebusiness sustainability. Our 2015 Living Our Values Corporate Sustainability Report describes the Company’sheadway in addressing critical risks in our operations, the communities where we work and our industry, anddemonstrates our accountability to stakeholders for our nonfinancial performance. We work with ouremployees, business partners, communities, regulators, investors and other stakeholders to earn and keep ourlicense to operate.

Our strategy is to be the lowest-cost, highest-margin North American focused independent E&P company. Thelow commodity price environment in 2015 prompted Marathon Oil to assess every aspect of our business andmaintain the programs that further this strategy and deliver results. This led to difficult but necessarydecisions, including cutting our capital spending in half, reducing drilling activity, selling non-core assets andreducing our workforce 20 percent compared to 2014.

Living Our Values

Yet, Marathon Oil remained committed to Living Our Values to be healthy and safe, environmental stewards,open and honest, community partners and results focused. We set a new safety record for the Total RecordableIncident Rate for employees and contractors combined, even accounting for the lower level of field activity.Third-party contractors remained a large part of our field workforce, and improved safety performance waspartly the result of steps we took to further strengthen our contractor management activities.

As environmental stewards who believe compliance is non-negotiable, we broadened the use of technology toimprove our ability to comply with the growing number of federal and state environmental regulations.Recognizing that climate change, global greenhouse gas (GHG) emissions and local air emissions are keystakeholder concerns, we continued a number of programs to lower methane intensity as a means of reducingGHGs in our operations. In the interest of transparency, this report includes enhanced emissions managementdisclosures regarding climate change, as well as environmental performance data and management practices.

A key accomplishment in 2015 was executive approval of our Responsible Operations Management System(ROMS) to drive continuous improvement and reduce operational risk across the enterprise. ROMS supportsour commitment to high standards of health, environmental, safety and security (HES&S) performance. Toassure ROMS’ effectiveness, each element has an executive owner accountable for setting priorities andreporting progress. ROMS is complemented by Corporate Sustainability Guidelines we developed in 2015 toassist in managing our commitments to economic, environmental, safety and social sustainability in ourcommunities.

As part of our 2015 business assessment, Marathon Oil reviewed our social investments and philanthropicspending with community partners. As a result, we are supporting select education and public health initiativesmost likely to deliver positive outcomes in our communities. We believe investing to develop educated, healthycommunities will build a sustainable workforce for the future.

As we move toward sustainability, Marathon Oil can look to our successful Alba B3 compression projectoffshore Equatorial Guinea as a model. The project has been executed safely and remains on budget and onschedule, with hook-up and commissioning nearly complete. Start-up is expected in mid-2016. The projectsupports economic sustainability by extending the life of our Alba field beyond 2030 to provide stableproduction and cash flow. This in turn allows Marathon Oil to continue contributing to social programs thatbuild national capacity and improve wellbeing in Equatorial Guinea.

Our clear emphasis is on creating a business that is sustainable for the benefit of our key stakeholders. Guidedby our values, Marathon Oil took the necessary steps in 2015 to manage through a challenging period, and weare now laying the groundwork to accelerate production when the price of oil rebounds. We remain committedto operating safely and cost-effectively, complying with regulations, protecting the environment, investing inour employees, creating value for shareholders and positively impacting our communities. Thank you for takingthe time to learn about our approach to managing risk, addressing stakeholder concerns and overcomingchallenges as we build our business for the long term.

Sincerely,

Lee M. Tillman President and Chief Executive Officer


A MESSAGE FROM OUR BOARD

Amid this year’s energy industry pressures, Marathon Oil

Corporation’s board and management have not been

distracted from the Company’s longstanding central tenet,

“Living Our Values.”

We trust these principles, outlined in this online report and the companionbrochure, are not merely an advocacy platform for Marathon Oil’s license tooperate. The objectives, standards of accountability and concrete actionsembody the manner in which our people around the world undertake their dailyresponsibilities.

Admittedly, Marathon Oil’s management is challenged by the prolonged market downturn and ever-increasingdemands of exploration and production operations. Yet every Marathon Oil employee continues to seek notonly improved financial and nonfinancial results and to control risks, but also to demonstrate their fundamentalcommitment to sustainability.

We believe that this underlying motivation will yield significant benefits to our stakeholders and fellowworkers, the industry more broadly and the communities where we operate.

Wherever one stands in the debate on global climate change, there is broad and reasoned consensus on thevalue of sustainability. And that is reflected in the continued increase in our transparency on environmentalperformance, detailing water and waste management, spills and releases and – particularly – air emissions.

In addition to improving processes to enhance sustainability, your Company’s management – while preparingfor the return to higher activity levels – is taking the current environment as an opportunity to strengthencompliance, workforce training and risk management.

This report – conforming with the common framework of the petroleum industry’s corporate sustainabilityreporting – summarizes Marathon Oil’s record and progress on these specific matters, as well as aspects ofgovernance and our interactions with government authorities and the broader public. We invite your review ofhow Marathon Oil’s board and management, in the interests of sustainability as well as financial results, aredealing with the environmental, social, political and workplace issues of our business, both recurring and new.

We acknowledge that our shareholders properly focus on how the Company is optimizing our economic value.Marathon Oil’s board shares that objective. But we trust there is a common understanding of how stewardship,citizenship and sustainability are irrevocably intertwined with our financial performance.

We hope this report’s specificity and commitments inform your evaluation of our achievements and furtherambitions. Your comments on our progress and suggestions as to how these efforts may be further invigoratedare most welcome.

Philip Lader Chairman, HES&CR Committee Marathon Oil Corporation Board of Directors


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PERFORMANCE SUMMARY

Sustainability Performance Highlights

Category 2015 2014 Change

Fatalities (Employee and Contractor Workforce) 0 0 N/A

Global Safety Performance - Total Recordable Incident Rate (TRIR) 0.39 0.75 -48.0%

Social Investments - Philanthropic and Sustainable (million dollars) $24.20 $29.30 -17.4%

Global Greenhouse Gas Emissions (million tonnes CO₂e) a, b, c, d 4.64 4.29 8.2%

Global Greenhouse Gas Intensity (tonnes CO₂e on a weighted basis/production) a, b, c 24.47 23.25 5.2%

Methane Emissions (million tonnes CO₂e) a, b, c 0.64 0.57 12.3%

Methane Intensity (tonnes CO₂e on a weighted basis/production) a, b, c 3.36 3.10 8.4%

Energy Use (trillion BTU) a 56.10 56.20 -0.2%

Global Spill Events to the Environment ≥ 1 bbl - number a, e 47 54 -13.0%

Global Spill Volumes to the Environment ≥ 1 bbl - barrels a, e 3,605 1,151 213.2%

Employees - Minorities as a Percentage of Workforce (U.S.) f, g 23.80 23.10 3.0%

Employees - Females as a Percentage of Workforce (Global) f 25.20 27.40 -8.0%

a Excludes East Texas/North Louisiana (discontinued assets).

b Greenhouse Gas (GHG) carbon dioxide equivalent (CO₂e) emissions are based on carbon dioxide, methane and nitrous oxide from Marathon Oil-operatedfacilities only.

c Discontinued assets (Norway, and Green River and Powder River Basins in Wyoming) were removed from previous years' data for comparing year-on-yearperformance.

d Gross production of all hydrocarbons increased by 5 percent in 2014.

e Data includes spills outside of secondary containment greater than or equal to 1 barrel.

f Workforce statistics reflect year-end data.

g As defined by U.S. Equal Employment Opportunity Commission.

Financial and Operating Highlights (dollars in millions, except per share data) a

Category 2015 2014

Total Revenues and Other Income 5,861 11,258

Income (Loss) from Operations (2,691) 1,599

Income Tax Expense (Bene�t) on Continuing Operations (754) 392

Income (Loss) from Continuing Operations (2,204) 969

Discontinued Operations - 2,077

Net Income (Loss) (2,204) 3,046

Income (Loss) from Continuing Operations - Basic (3.26) 1.42

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Discontinued Operations - Basic - 3.06

Net Income (Loss) - Basic (3.26) 4.48

Income (Loss) from Continuing Operations - Diluted (3.26) 1.42

Discontinued Operations - Diluted - 3.04

Net Income (Loss) - Diluted (3.26) 4.46

Dividends 0.68 0.80

Long-term Debt b 7,276 5,295

Stockholders’ Equity b 18,553 21,020

Capital Expenditures c, d 2,936 5,495

Average Daily Net Sales:

North America Exploration and Production Segment (mboed) 269 238

International Exploration and Production Segment (mboed) d, e 116 127

LNG (mtd) f 5,884 6,535

Methanol (mtd) f 937 1,092

Condensate and LPG (boed) f 13,041 12,208

Oil Sands Mining Segment Synthetic Crude Oil (mbbld) g 53 50

Net Proved Reserves: b

Crude Oil and Condensate, Natural Gas Liquids, Natural Gas and Synthetic Crude Oil (mmboe) 2,163 2,198

Number of Employees b 2,610 3,330

a Marathon Oil sold our Angola assets and our Norway business and they are reflected as discontinued operations in 2014.

b Reflects year-end data.

c Capital expenditures includes accruals.

d Excludes discontinued operations.

e Includes natural gas acquired for injection and subsequent resale of 8 and 6 mmcfd in the years ended December 31, 2015 and 2014, respectively.

f Reflects net share of equity method investee volumes.

g Includes blendstocks.


STAKEHOLDER ENGAGEMENT MAP

Marathon Oil engages with stakeholders through formal and informal means. Our stakeholders voice concerns,provide suggestions and help us in our efforts to seek continuous improvement in conducting our business in amore responsible and productive manner. Below is a snapshot of the priorities and mechanisms we use todiscuss and resolve issues.


MANAGEMENT SYSTEMS

Marathon Oil identifies and monitors our most significant risks and mitigation

activities using the recently enhanced Enterprise Risk Management process, with

input from executive management, business units and internal audit.

Internal champions, together with the business units, participate in the assessment process that considerscurrent and potential future risks and creates detailed assessments at all levels. Business units are responsiblefor managing identified risks day-to-day.

Marathon Oil informs our Board of Directors and executive management on our risks and reports the mostsignificant risks in our 2015 Annual Report on Form 10-K. In 2015, these risks included, but were not limitedto, global oil and natural gas prices, supply and demand; operational costs; OPEC production controls; the levelof operational activity in response to market conditions; political instability in producing regions; changes inweather patterns and climate; natural disasters; and governmental regulations and taxes.

RESPONSIBLE OPERATIONS MANAGEMENT SYSTEM (ROMS)

Our Responsible Operations Management System (ROMS) is the framework to drive continuous improvementand reduce operational risk across the enterprise. The goals of ROMS, which replaces our previousmanagement system, are to promote safety and environmental protection and to ensure reliable operationsand asset integrity. There are 14 elements with expectations to assist our business units in identifying,addressing and managing their operational risk. The system is scalable to individual business units’ size andtype of operations.

ROMS supports our commitment to high standards of health, environmental, safety and security (HES&S)performance, while HES&S standards clarify our expectations for organizational performance to driveconsistency. Our Corporate Sustainability Guidelines complement ROMS by outlining how we demonstrateour commitment to economic, environmental, safety and social sustainability in the communities where weoperate.

By standardizing and simplifying all Marathon Oil standards and tools, ROMS reduces redundancy andhighlights opportunities for continuous improvement. Greater consistency will accelerate employeeonboarding and transitions among assets, and improve effectiveness and knowledge transfer. ROMS alsoallows us to quickly identify trends and make decisions based on improved information tracking and sharing.

To develop ROMS, a steering team of executives, senior leaders and subject matter experts reviewed ourexisting management systems, peer and industry management systems, and industry standards such as ISO14001 and the American Chemistry Council’s Responsible Care performance system.

Subject matter experts performed a gap analysis for each element and identified opportunities forimprovement, including:

Enhancing the Management of Change (MOC) standard process to meet ROMS expectations.

Improving the risk assessment process by setting minimum expectations, as well as creating a single riskassessment timeline and consequence matrix that applies to all business units and the Enterprise RiskManagement process.

Creating a training standard that sets minimum expectations for operations-related training andcompetency activities to ensure consistency across the Company.

To assure accountability for ROMS’ effectiveness, each element has an executive owner responsible for settingpriorities and expectations, and tracking and reporting progress to the executive steering team. In addition,technical advisors work with subject matter experts and other resources on implementation, evaluation,prioritization, resource needs and progress. The business units have a similar structure to further driveaccountability. Our business units are expected to complete a gap analysis for each element in 2016 and fullyimplement ROMS in 2017.

ROMS Element Owners

ROMS ELEMENT EXECUTIVE OWNER TECHNICAL ADVISOR

Leadership and Accountability CEO Technology and Innovation VP

Regulatory ComplianceTechnology and InnovationVP

Environmental Manager

Risk Assessment and Management Conventional VP Conventional HES Manager

Management of Change Conventional VP Conventional HES Manager

Design and Construction Resource Plays VP Technology Application VP

Safe Work Practices Conventional VP Health and Safety Manager

Training and CompetencyTechnology and InnovationVP

Resource Plays HES Manager

Operations, Maintenance and IntegrityManagement

Resource Plays VP Reliability and Process Safety Manager

Operational Readiness Resource Plays VP Production Operations Director

Emergency Preparedness and CommunityAwareness

HES&S and ReliabilityDirector

Security and Emergency Preparedness Manager

Event ManagementTechnology and InnovationVP

Technical Delivery VP

Third-Party Services Global Supply Chain Director Resource Plays HES Manager

Governance and Document ControlTechnology and InnovationVP

Worldwide Offshore Drilling and CompletionsDirector

Audit and ImprovementHES&S and ReliabilityDirector

Health and Safety Manager

HES&S STANDARDS, PRACTICES AND AUDITS

Our HES&S standards set expectations and requirements for performance to drive consistency throughoutMarathon Oil. These standards are reviewed regularly and updated to reflect changes in laws or regulations,incorporate recommendations arising from audits and incident investigations, and continuously improveperformance.

Our HES&S programs make personnel aware of these requirements and their role in meeting the expectationsof these standards. The Company’s tiered HES&S audit program promotes adherence to these standards andcompliance with regulations. Business units develop plans and corrective actions to address audit findings andwe have processes to ensure corrective actions are completed. HES&S leadership and executive managementare informed of key audit findings and trends so they can prioritize solutions for identified gaps or issues.


CORPORATE COMMITMENTS

Corporate-level commitments covering governance, society, the environment,

safety and our workforce guide our sustainability activities. Marathon Oil’s

operations are responsible for working with key stakeholders to identify and

implement programs to fulfill these commitments at the local level and to drive

continuous improvement. Highlights of our 2015 commitments and progress and

2016 focus areas are summarized below.

Commitments 2015 Progress 2016 Focus

Participate in the public policyprocess and maintain employeeawareness on issues relevant to ourCompany and industry.

Promoted responsible, state-based regulation of hydraulicfracturing and seismicity; safe andreliable infrastructure; taxstructures that encourageinvestment; regulations thatpromote clean air and water whileenabling energy development; andreliable permitting processes.

Collaborated with industry andsuccessfully secured U.S. oilproducers’ ability to export crudeoil globally.

Conducted oil and gas educationsessions and tours for legislatorsand regulators.

Promote responsible,state-based regulation.

Host educationsessions and tours forlegislators andregulators.

Conduct our business with highstandards for responsibleoperations, business ethics andintegrity, corporate governance andtransparency.

Approved our new ResponsibleOperations Management System(ROMS).

Conducted mandatory anti-corruption compliance training forall designated employees.

Continued our commitments totransparency (USEITI, UKEITI,Canada, Equatorial Guinea andKurdistan Region of Iraq).

Conducted emergency responsedrills in all operated business unitsand corporate-level spill responseexercise in Bakken asset.

Business units areexpected to complete agap analysis for eachROMS element.

Register with Canadiangovernment to complywith its ExtractiveSector TransparencyMeasures, and disclosepayments under UKEITI if required.

Increase asset-levelcapabilities to identify,plan and managesecurity andoperational risks.

Governance


Work with stakeholders tounderstand how our operationsimpact local communities.

Developed CorporateSustainability Guidelines tosupport economic, environmental,safety and social sustainability incommunities where we operate.

Developed stakeholderengagement tool kit to help assetsidentify and engage stakeholdersand plan engagements.

Increased spending $4 millionyear over year with TribalEmployment Rights Office (TERO)Tier One suppliers in NorthDakota and put contracts in placewith 35 new Tier One suppliers.

Developed local content and builtnational capacity in EquatorialGuinea as part of Alba B3 project.

Addressed a major communityconcern by reducing heavy trucktraffic from our Eagle Fordoperations, primarily bytransporting more crude oil andproduced water by pipeline.

Continue hiring andcoaching TERO TierOne suppliers to buildcapacity and contributeto suppliersustainability.

Prepare for oil priceand drilling activityupturn by focusingSupply Chain onverifying supplierfinancial viability,partnering withvendors who can helpus compete, optimizingcost, improvingefficiency andproviding transparencyto run our businessmore effectively.

Partner with communityorganizations to develop andsupport projects that addressexisting social issues related toeducation, health and theenvironment.

Implemented Bioko Island MalariaControl Program interventions tomaintain low, pre-eliminationmalaria transmission rates, andsupported first clinical trial ofcandidate malaria vaccine.

Continued support for theNational University of EquatorialGuinea’s (UNGE) English as aSecond Language Programtraining program.

Sponsored national nurse midwifetraining program in EquatorialGuinea through the auspices ofEquatoguinean Ministry of Healthand Social Welfare, and UNGE.

Continue distributingbed nets to targetedfamilies and freemalaria combinationdrug therapy throughgovernment healthfacilities, as well as runsecond trial to testPfSPZ© vaccineprotectiveness inchildren and adults.

Hand over functioningEnglish LanguageProgram to the UNGEin Equatorial Guinea.

Maintain and promote

Society

Continued supporting educationfrom kindergarten throughcollege, including science,technology, engineering and math(STEM) focused curriculumenhancements, collegescholarships and asset-levelvolunteer programs.

Promoted community wellbeingthrough ongoing partnership withAmerican Heart Association,including providing state-mandated CPR training for highschools students near our EagleFord assets.

Provided approximately 170scholarships to develop a futureworkforce for the oil and gasindustry, including multi-year Marathon Oil DiversityScholarships.

midwife trainingprogram in EquatorialGuinea.

Expand ReasoningMind math educationprogram in KarnesCounty IndependentSchool District in SouthTexas Eagle Fordelementary schools tobuild on improved mathskills and teachersatisfaction.

Expand AmericanHeart Association CPRkits to Oklahomastudents who need CPRtraining to graduatefrom high school.

Manage security activities in aresponsible and ethical manner inaccordance with the best practicesassociated with the VoluntaryPrinciples on Security and HumanRights.

Continued efforts to create onecomprehensive environmental,social and health impactassessment (ESHIA) for planningoil and gas activities.

Revamped security training, and provided scenario-based trainingand new vetting program for allguard force personnel worldwide.

Continue to respecthuman rights andactively engage inindustry discussionsaround security andhuman rights.


Reduce spills and releases, minimizewastes, and promote watermanagement, conservation andbiodiversity.

Increased emissions managementdisclosures in this report toinclude climate changeinformation in continuing effortsto be responsive to stakeholders.

Proactively used infrared camerasto identify solutions to reduce airemissions.

Reduced water consumption inour U.S. onshore operations by 34percent from 2014 due to lowerdrilling and completion activity.Approximately 72 percent ofwater used was nonfresh water.

Decreased by 13 percent thenumber of spill events to theenvironment greater than or equalto a barrel from 2014, while thetotal volume of spills increased 68percent.

Implement strategy toreduce methaneintensity 50 percent by2020 in our Oklahomaoperations, primarily byleak detection, flaremonitoring andreplacing high-bleedpneumatic controllerswith low-bleed devices.

Environment


Strive for an accident and injuryfree workplace, with safe andhealthy work practices andconditions throughout ouroperations.

Continued work to improvecontractor HES performance,including implementing riskmanagement plans for contractorswith poor performance. Numberof contractor recordable injuriesdeclined by 15 percent from 2014.

Reduced Company’s TotalRecordable Incident Rate (TRIR)by 48 percent and set new safetyperformance record with a TRIRof 0.39 for employees andcontractors combined.

Increased focus on hazardawareness and proper gloveselection, which contributed to 66percent decline in recordablehand injuries.

Began addressing dropped objectsincidents that accounted for onethird of the Company’s actual andpotential serious events in 2014.

Established and led industry workgroup to discuss potential healthand safety hazards and bestpractices associated with tankgauging.

Focused on our Serious EventRate, a leading indicator that helpsus prevent events that couldimpact people, the environmentand the Company.

Standardized root cause analysis(RCA) methodology companywideto improve the quality of incidentinvestigations, and trainedindividuals to lead an investigationinvolving RCA.

Implemented a plan forsimultaneous operations in EagleFord to address an identified riskof conducting drilling andcompletions operations onproducing well sites.

Focus safety efforts onROMS implementation,transitioning toelectronic safe workpermitting andconducting acomprehensiveindustrial hygieneassessment.

Continue reducingnumber and severity ofdropped objectsincidents by providingadditional tools.

Complete major AlbaB3 compression projectoffshore EquatorialGuinea with goodoverall safetyperformance.

Safety and Workforce

Started complying with NorthDakota state requirements tofilter crude oil for natural gasliquids to reduce volatility beforeit is transported by rail.

Had zero recordable injuries inOklahoma.

Marathon E.G. Production Limited(MEGPL) had zero recordableinjuries and lost-time events andset a new record in December forlongest time to work without arecordable injury (4.8 millionexposure hours) or lost-time event(6.9 million exposure hours).

Equatorial Guinea LNG HoldingsLimited (EG LNG) employees andcontractors achieved 3 millionexposure hours without arecordable injury.

Maintain an inclusive workenvironment where we attract,develop and retain employees whoactively contribute to growing ourbusiness.

Improved training, competencydevelopment and workforcemanagement programs to ensureemployees are properly trainedand positioned to operate safely ina variety of economic conditions.

Implemented web-based fieldQualifications ManagementSystem (QMS).

Hosted and led the HispanicAlliance for Career Advancement(HACE) eight-week academy foremerging Hispanic womenleaders.

Determine criticalcapabilities required torun the core business inour U.S. unconventionalresource plays to betterpredict needs, manageworkforce effectivelyand operate safely in adynamic pricingenvironment.


LIVING OUR VALUES FOR ETHICAL, RESPONSIBLE OPERATIONS

At Marathon Oil, we are Open and Honest: We hold ourselves to a high standard of

business ethics and integrity and communicate openly and transparently in our

operations.

MANAGEMENT APPROACH

The Marathon Oil Board of Directors oversees Company management and risk management to ensure highlevels of governance, society, workplace and environmental performance for the benefit of our shareholders.Our Corporate Governance Principles explain the composition and functions of the board such as directorselection, evaluation and compensation.

We maintain an independent Board of Directors in accordance with applicable laws, regulations, New YorkStock Exchange rules and our Corporate Governance Principles to ensure proper oversight. Marathon Oilshareholders elect directors annually, with a majority of votes cast required for election. In 2015, Gaurdie E.Banister, Jr., was elected to the board, eight of nine directors qualified as independent, and two women servedas directors. Interested parties, including security holders, may communicate with the board through theMarathon Oil Secretary.

To maintain an independent and effective board, director candidates are screened and evaluated by theCorporate Governance and Nominating Committee, with input from the chairman of the board and the chiefexecutive officer. The committee considers a variety of professional, leadership and personal qualifications forpotential board members.

Marathon Oil directors, executives and senior managers have a financial stake in the Company’s performancethrough stock ownership. Executive compensation is designed to drive financial performance and operationalresults through competitive pay, pay for performance and creation of long-term shareholder value. Theguidelines and practices for director and executive stock ownership and compensation are discussed in ourCorporate Governance Principles and the Marathon Oil Corporation Proxy Statement.

The board’s Compensation Committee considered operational, financial, safety and environmentalperformance in determining executive compensation for 2015. Based on the target metrics and shareholderreturns, the committee decided to keep 2015 base salary flat with 2014 for named executive officers, limitedthe 2015 annual cash bonus program and took other actions in the interest of good corporate governance andsound compensation practices.

As part of our commitment to good governance, Marathon Oil respects local laws and regulations wherever weoperate. Our Code of Business Conduct explains our responsibility to governments and the law and providesguidance to employees, directors, contractors and others for complying with laws and regulations.

PROGRESS ON OUR COMMITMENTS

We are committed to participating in the public policy process and maintaining employee awareness on issuesrelevant to our company and industry. In 2015, we:

Promoted responsible, state-based regulation of hydraulic fracturing and seismicity; safe and reliableinfrastructure; tax structures that encourage investment; regulations that promote clean air and waterwhile enabling energy development; and reliable permitting processes.

Collaborated with industry and successfully advocated for U.S. oil producers’ ability to export crude oilglobally.

Conducted oil and gas education sessions and tours for legislators and regulators.

Our commitment is to conduct our business with high standards for responsible operations, business ethicsand integrity, corporate governance and transparency. To promote awareness and maintain compliance withrelevant laws, regulations and policies, Marathon Oil provides education, training and resources. In 2015, we:

Approved our new Responsible Operations Management System (ROMS).

Implemented a new HES&S audit standard to drive consistency throughout the Company.

Conducted annual, mandatory anti-corruption compliance training for all designated employees.

Deployed a revised Annual Code of Business Conduct Questionnaire.

Continued our commitments to transparency (USEITI, UKEITI, Canada, Equatorial Guinea and theKurdistan Region of Iraq).

Conducted emergency response drills in all of our operated business units and a corporate-level spillresponse exercise covering our Bakken asset.


BUSINESS ETHICS AND PREVENTING CORRUPTION

Marathon Oil believes integrity, ethical business practices, corruption prevention

and transparency of payments are crucial to maintaining our license to operate,

and our relationships with key stakeholders.

The Audit and Finance Committee of our Board of Directors oversees Marathon Oil’s focus on business ethicsand integrity. Internal resources and initiatives to promote and uphold our high standards of integrity andbusiness ethics include:

Business Integrity Office

Integrity Helpline

Policies and procedures related to ethical, legal and regulatory compliance

Financial disclosures

Enterprise Risk Assessment and risk management

Training

Annual Code of Business Conduct Questionnaire

Preventing Corruption

Marathon Oil complies with all applicable anti-corruption laws in the countries where we operate, including theU.S. Foreign Corrupt Practices Act (FCPA) and United Kingdom Bribery Act.

Our anti-corruption compliance program aligns with the U.S. Department of Justice’s recommendations for aneffective corporate compliance program. Designated employees take anti-corruption training, depending ontheir job responsibilities. We also have an annual anti-corruption compliance audit program for our operationsoutside the U.S. and outside-operated interests in countries not in the Organization for Economic Cooperationand Development (OECD).

Grievance System

Marathon Oil promotes an open and inclusive workplace to help avoid grievances. We reinforce a culture oftreating others with dignity, fairness and respect and encourage employees to work with their supervisors andmanagement to resolve any issues that arise. Employees can report issues confidentially through HumanResources, Audit, HES&S, Law and the Business Integrity Office.

Employees, contractors and members of the public can report concerns about our Code of Business Conduct toour Integrity Helpline at any time. Reporting of suspected unethical or illegal activities is anonymous andconfidential, and Marathon Oil forbids retaliation against anyone who reports concerns in good faith.

Transparency of Payments

Marathon Oil supports transparent reporting of revenue flows from oil and gas production as a means toprevent bribery and corruption. We have participated in the Extractive Industries Transparency Initiative (EITI)since 2004 in various countries where we have operations to strengthen governance, foster stakeholdercooperation, aid development of civil society and manage risk. The Company also communicates ouraggregated payments to governments.

Country Status

CanadaThe Extractive Sector Transparency Measures Act was brought into force on June 1, 2015. Marathon Oil will register with thegovernment in June 2016 and will be required to report by May 2017 for the 2016 calendar year.

EquatorialGuinea

Marathon Oil continues to support the Government of Equatorial Guinea in its efforts to become an EITI Candidate. MarathonOil is in the multi-stakeholder National Commission in Equatorial Guinea, which comprises representatives from civil society,companies and government. The Commission was formed to oversee EITI implementation.

Gabon No longer recognized as an EITI implementing country, following delisting in February 2013.

KurdistanRegion ofIraq

Iraq is EITI compliant. In May 2013, it produced an update of its 2010 report, including a chapter on the Kurdistan Region ofIraq’s oil and gas production from revenues from exports.

UK

EITI candidate since October 2014. UK oil and gas operators are required to report under the UK EITI. The disclosure thresholdis £86,000 (~USD$125,000) at a group level for each payment type. For the reporting year 2014, submitted in July 2015,Marathon Oil provided data on corporation tax, petroleum revenue tax and petroleum licence fees. The �rst UK EITI report waspublished in April 2016.

In addition, the EU Accounting Directive requires large listed or UK incorporated oil and gas producers to disclose paymentsmade to the government. The �rst year of reporting will be for 2015, with an anticipated reporting deadline of November 2016.Marathon Oil UK expects these payments to be required to be consolidated in U.S. Dodd Frank reporting.

US

EITI candidate, but not yet meeting all requirements. The USEITI published its �rst report in December 2015, includingpayment data voluntarily reported by Marathon Oil and 30 other extractive industry companies.

In December 2015, the U.S. Securities and Exchange Commission issued a proposed rule on disclosure of resource extractionpayments by certain public companies, with close consideration of EITI guidance. The �nal SEC rule is pending.


PUBLIC POLICY AND POLITICAL CONTRIBUTIONS

Marathon Oil’s commitment is to participate in the public policy process on issues

relevant to our Company and industry. These issues, such as regulations and tax

structures that encourage investment, affect our license to operate, build a

sustainable company and create shareholder value.

We seek to have a voice in regulatory and legislative decisions so that we can continue to comply withregulations while producing oil and gas cost effectively, offering competitive employment opportunities,protecting the environment and having a positive impact on the communities where we operate.

The Company believes that U.S. state governments are typically best positioned to regulate oil and gasoperations. Some proposed federal regulations would slow economic development if enacted because theyduplicate or conflict with state or other federal regulations. In 2015, we continued to share insights andconcerns related to our U.S. unconventional resource plays with legislators and regulators at the federal, stateand local levels.

Political Contributions and Lobbying Activities

Marathon Oil contributed a total of U.S. $12,500 to candidates, political party organizations and political actioncommittees (PACs), where allowed by law, in the U.S. and Canada in 2015. Contributions are made tocandidates who support responsible energy development, are based solely on a candidate’s position onbusiness issues and are made without regard for the individual political preferences of Company executives.

Eligible employees may contribute to candidates for U.S. federal and state elected office through the MarathonOil Company Employees Political Action Committee (MEPAC). MEPAC is registered with the U.S. FederalElection Commission (FEC) and complies with all FEC, state and local rules and reporting requirements. In2015, MEPAC donated approximately $83,500 to 55 candidates, political party organizations and PACs, and$65,000 to the Marathon Oil Company Political Action Committee of Texas (MOCPAC-TX). Our donations tocandidates and PACs at the state and local level in Texas are made through MOCPAC-TX. In 2015, MOCPAC-TX donated approximately $4,500 to four candidates and PACs. MOCPAC-TX is registered with the TexasEthics Commission and complies with all Texas rules and reporting requirements.

During 2015, we made payments to organizations and trade associations that engage in, among other things,lobbying activities. As part of our commitment to good governance and transparency, we voluntarily providethe 2015 Report of Lobbying and Political Contributions, which discusses in greater detail these payments, alongwith our policies and procedures for lobbying and political activities. The report also discloses:

Our corporate contributions made to all tax-exempt 527 organizations that exceed $35,000.

The lobbying portion of our payments and dues made to trade organizations that if made directly byMarathon Oil, would not be deductible under section 162(e) of the Internal Revenue Code and that exceed$35,000. This is based on information provided to us by the trade associations of which Marathon Oil is amember.


EMERGENCY PREPAREDNESS AND RESPONSE CAPABILITIES

Marathon Oil conducts our business with high standards for responsible

operations, which we believe demonstrates good governance.

As a responsible operator, we maintain comprehensive emergency preparedness and response capabilities,including:

Requirements in our Responsible Operations Management System (ROMS)

Response teams at the local, regional and corporate levels, including the Corporate Emergency ResponseTeam (CERT) that operates under the authority of the executive-level Crisis Management Team

A network of response contractors and consultants

Annual training, drills and exercises with government agencies and key stakeholders

Participation in industry associations to share lessons learned and drive improvements

A corporate Security and Emergency Preparedness Group with professionals dedicated full time totraining, drills and participation in industry emergency response activities

Marathon Oil is increasing business unit ownership of security and emergency preparedness, while focusingthe Corporate Security and Emergency Preparedness Group on enterprise-wide activities. This shift is part of amulti-year plan to maintain institutional and role-specific competency at the operating level and to build acorporate effort based on the management system to validate business unit response capabilities. CorporateSecurity subject matter experts will continue to fill incident command roles and coordinate with business unitleaders to maintain effective response capabilities.


SUSTAINABILITY OVERSIGHT

Marathon Oil believes that a company must address its responsibilities for

governance, society, the environment and its workforce to achieve sustainable

business success and create value.

We look beyond our office walls and operational facilities to understand how our decisions, actions andoperations affect others, and how we can address stakeholders’ critical needs.

Our Corporate Sustainability Guidelines outline how the Company will demonstrate our commitment toeconomic, environmental, safety and social sustainability in the communities where we operate. Together withour Responsible Operations Management System (ROMS) and other resources, these guidelines helpemployees manage our business and external stakeholder relationships responsibly.

Marathon Oil expects employees to incorporate sustainability processes and activities such as stakeholderengagement and capacity building when conducting our business. Sustainability commitments are set at thecorporate level and asset managers determine when and how to apply the guidelines to help achieve assetoperational goals and support sustainability locally.

Delivering on sustainability principles is a collaborative effort among internal stakeholders. The executive vicepresident, general counsel and secretary, and vice president of technology and innovation are responsible forimplementing the guidelines, with oversight from the Health, Environmental, Safety and CorporateResponsibility (HES&CR) Committee of our Board of Directors.

The Marathon Oil executive committee, which comprises operating component and support function officers,is accountable to the board for activities related to sustainability.


LIVING OUR VALUES TOWARD SOCIETY

At Marathon Oil, we are community partners: We build stronger communities by

developing relationships with our stakeholders and by investing our time, talent

and resources.

MANAGEMENT APPROACH

To have a positive impact on communities where we work, Marathon Oil focuses on our core values, strives toearn and protect our license to operate, and drives business performance. The principles by which wedemonstrate our commitment to economic, environmental, safety and social sustainability in thesecommunities are outlined in our Corporate Sustainability Guidelines.


Our commitments are to work with stakeholders to understand how our operations impact local communitiesand to partner with community organizations to develop and support projects that address existing socialissues related to education, health and the environment. In 2015, we:

Developed Corporate Sustainability Guidelines to support economic, environmental, safety and socialsustainability in communities where we operate.

Developed a stakeholder engagement tool kit to help our assets identify and engage stakeholders and planengagement events.

Developed local content and built national capacity in Equatorial Guinea by contracting with anEquatoguinean firm that fabricated the bridge and flare structures for our Alba B3 project.

Reduced the number of truckloads of crude oil by connecting 10 central facilities to pipelines in the EagleFord. The average daily volume of crude oil transported by truck dropped approximately 70 percent duringthe year as a result of increased pipeline transportation, as well as the overall drop in production due tolower activity.

Installed approximately 156 miles of pipeline in the Bakken for the Hector Ajax Water Gathering System(HAWGS) along with commissioning 170 Water Allocation Skids (WAS), with five skids to be completed in2016. Approximately 89 percent of the area’s total produced water volume flowed through the pipelinedaily at year-end 2015. Transporting this produced water by pipeline eliminated approximately 115truckloads per day.

Continued supporting education from kindergarten through college, based on our Integrated EducationFunding Model. Our primary efforts were science, technology, engineering and math (STEM) focusedcurriculum enhancements, college scholarships and asset-level volunteer programs.

Implemented Bioko Island Malaria Control Project interventions that resulted in the second lowest malariaprevalence rate to date (15 percent of youth population), supported the first clinical trial of a candidatemalaria vaccine and sponsored a national nurse midwife training program in Equatorial Guinea.

Promoted employee and community wellbeing through our ongoing partnership with the American HeartAssociation, including providing state-mandated CPR training for high school students near our Eagle Fordassets.

Integrated social and security considerations into the environmental, social and health impact assessment(ESHIA) process to create one comprehensive impact assessment for planning oil and gas activities.

Revamped security training to incorporate ethical, legal and operational aspects, and provided scenario-based training for our contract and proprietary guard force personnel worldwide.

Launched and provided training on a new vetting program for all proprietary and contract securitypersonnel.


STAKEHOLDER ENGAGEMENT

We are committed to expanding our operations to create value for shareholders

and further economic progress.

At the same time, we will conduct our business with a high regard for the health and safety of our neighbors,communities, employees, contractors and the environment. Marathon Oil believes stakeholder engagementstrengthens our ability to manage community impacts and risks, access new resources, operate efficiently,avoid project delays and sustain effective relationships.

Our commitment is to work with people interested in Marathon Oil projects or operations to understand howour operations impact local communities and to develop strategies and plans that deliver mutually beneficialresults.

The Company’s sustainability guidelines encourage local asset teams to engage stakeholders to shareinformation about our activities, seek feedback and ensure we understand their concerns and priorities. In2015, we developed a stakeholder engagement tool kit that local asset teams can use to identify stakeholdersand critical impacts, assess risk and plan engagement activities. Stakeholder engagements are tracked in ourSynergi software as needed to manage risk and monitor follow-through and resolution of issues. Engagementstracked in 2015 included landowner and surface owner concerns about potential environmental and safetyissues and Marathon Oil’s actions to follow up and resolve the issues.

In 2015, our Oklahoma asset team developed and implemented a stakeholder engagement program to build onstrong relationships developed over the past 100 years that Marathon Oil has operated in the state. To supportfuture operational expansion in Oklahoma, the program focuses on engaging employees and governmentofficials, building community awareness of Marathon Oil and strengthening key business and strategic vendorpartnerships. Oklahoma is using Synergi to document and verify issues and concerns raised by externalstakeholders and to track and communicate planned engagement activities.


*Total Philanthropic Giving: $6.7 million in corporate giving and $.7 million in

employee giving; Total Sustainable Investments: $16.8 million.

SOCIAL INVESTMENT

We believe social investment helps Marathon Oil contribute to the long-term

sustainability of communities where we operate.

Philanthropic Focus

Our commitment is to partner with communityorganizations to develop and support projects thataddress existing social issues related to education,health and the environment. We often collaboratewith business partners and nonprofit organizationsand seek to connect our partners to furtherstrengthen programs and communities. MarathonOil emphasizes capacity building so communities cansustain social programs beyond our investment andinvolvement.

In light of the drop in commodity prices in 2015,Marathon Oil reduced our philanthropic spending 45percent compared to 2014, while maintainingsupport for programs that align with our businessstrategy and demonstrate positive results. Wecontinue to review all philanthropic giving based onthe sustainability of Marathon Oil and ourcommunities.

Strengthening Education

Marathon Oil invests in education from kindergartenthrough college to strengthen communities and buildthe foundation for the future workforce. We areguided by our Integrated Education Funding Model to drive positive, meaningful change in academicperformance, graduation rates and interest in STEM fields. The model helps us identify and invest in promisingprograms, measure effectiveness and work with stakeholders to address outside factors that can impact theoutcomes of educational programs, such as parental support and underlying social issues. To learn more, pleasesee the case study on our investments in education.

Building Healthier Lives

46%

26%

23%

3%

1%

1%

Marathon Oil Social Investments byGiving AreaTotal Social Investments: $24.2 million*

Education and Training Health and Human Services

Civic, Community, Culture Employee Giving

Environment and Conservation

In Kind and Pro Bono

Building Healthier Lives

Marathon Oil has an ongoing partnership with the American Heart Association (AHA) as part of ourcommitment to the health and wellbeing of our employees, their families and communities where we work.AHA emphasizes prevention and building healthier lives free from cardiovascular disease and stroke, whichhelps ensure a healthy workforce.

Several U.S. states where we operate now mandate that high school students receive cardiopulmonaryresuscitation (CPR) education before they graduate. In 2015, we trained almost 100 high school students in ourSouth Texas Eagle Ford asset using life-saving AHA CPR kits. In 2016, we plan to expand this program to ourOklahoma asset.

Supporting Local Communities

To encourage employees to support our nonprofit community partners, the Marathon Oil Gives programprovides a one to one match for employee donations to Company-supported organizations. In 2015, wematched approximately $500,000 in employee gifts, for a total of $1 million to more than 100 nonprofitorganizations. Marathon Oil Gives also encompasses a matching gift program to U.S. universities and encouragesvolunteerism by contributing $500 annually to qualified nonprofit charitable organizations where eligibleemployees volunteer at least 30 hours outside of their normal workday.

On the local level, our asset teams supported a wide range of community organizations. For example:

We partnered with public and private stakeholders and non-governmental organizations (NGOs) tosupport social programs targeting health, education and community assistance in Equatorial Guinea.

The Oklahoma community relations committee developed and maintained partnerships with local outreachcenters, food pantries, fire departments, scholarship funds and health-related charities.

Our Aberdeen, Scotland, office continued supporting Absafe: The Safe, an interactive safety center torecognize risk in any situation, as well as VSA Friends for Life youth clubs for children and young peoplewith special needs.

Safeguarding the Environment

To act on our core value of environmental stewardship, Marathon Oil seeks opportunities to protect andconserve natural resources, habitats and environments through social investment and philanthropic giving.

In 2015, we continued to support the National University of Equatorial Guinea (UNGE) Pico BasileConservation Project that improves forestry management and develops environmental education programsand interventions. The project developed anti-littering and anti-poaching television spots encouragingEquatoguineans to take care of their environments and to respect the national forest reserves. It alsodeveloped the first documentary on Equatoguinean wildlife conservation, “Secrets of the Forest,” which isbeing shown to primary and secondary school children throughout the country in 2016.

Through our partnership with Green Standards in the U.S., Marathon Oil helped 12 nonprofit organizationswhile minimizing waste. Whenever possible, we donate surplus furniture, appliances and other materials toGreen Standards instead of sending it to a landfill. Green Standards then resells, recycles and donates thesematerials to minimize waste and help communities.

Green Standards Program Impact

Green Standards Program Impact


SECURITY AND HUMAN RIGHTS

Marathon Oil respects the human, cultural and legal rights of individuals and

communities. Our commitment stems from the United Nations Universal

Declaration of Human Rights (UDHR) and the International Labor Organization’s

(ILO) Declaration on Fundamental Principles and Rights at Work.

We promote the goals and principles of the UDHR within our business relationships and work to preventabuses and advance human rights in the communities where we operate.

We have been a participating member in the Association of the Voluntary Principles on Security and HumanRights since 2005 to emphasize our commitment to the UDHR. Due to the fundamental changes in ourbusiness strategy and geographic scope in recent years to focus on North American unconventional resourceplays, Marathon Oil withdrew our membership in the Voluntary Principles association in May 2016. In our twosignificant operating areas outside of the U.S., the U.K. and Equatorial Guinea, we have well-established andeffective security and human rights policies. Additionally, Marathon Oil intends to remain actively engaged indialogue around human rights through our participation in oil and gas industry associations. We will continueto focus on operating safely and securely throughout the world, while respecting human rights.

Before entering a new location, we assess the security and social risks associated with our business activitiesand determine mitigation measures based on the risks we identify. We develop mitigation activities to promotebusiness continuity, protect assets, safeguard personnel and minimize any potentially adverse impacts of ouroperations on stakeholders.

Our commitment is to manage security activities in a responsible and ethical manner in accordance with thebest practices associated with the Voluntary Principles. We manage security through our ResponsibleOperations Management System (ROMS) element for Emergency Preparedness and Community Awareness.This element requires Marathon Oil to identify and engage with local communities, government emergencyresponders and other stakeholders within or adjacent to our operations regarding potential risks and plannedresponse measures. We assess compliance with security and human rights practices using our three-tieredaudit program. In addition, principles in our Corporate Sustainability Guidelines support our activities relatedto human rights, stakeholder engagement and other processes in communities where we operate.

In 2015, Marathon Oil had no known security-related incidents that resulted in a human rights violation. Ourcountry-level implementation focused on our operations in Equatorial Guinea, where we are the operator ofnatural gas production and processing facilities. We employ a proprietary guard force to protect the onshorefacilities and engage with the Navy of Equatorial Guinea for protection of offshore gas production facilities.The launch of an offshore exploration program and maritime facility upgrade project in 2015 gave MarathonOil the opportunity to engage with host country authorities regarding human rights and rules of engagement.

We continue to participate in the IPIECA Responsible Security Task Force, which promotes best practicesassociated with implementation of the Voluntary Principles. Marathon Oil also participated in a group ofVoluntary Principles corporate members that was organized by PAX to draft the Model Clauses for SecurityAgreements guidance.

Our focus areas in 2016 will be to finalize the Environmental, Social, and Health Impact Assessment (ESHIA)process to support activities in new locations, and work with IPIECA’s Responsible Security Task Force andobservers to the Voluntary Principles to further develop the Memorandum of Understanding for the full scopeof security cooperation between a company and a host nation government.


LIVING OUR VALUES TO PROTECT THE ENVIRONMENT

We are environmental stewards, who responsibly grow and improve our business

by effectively applying best-in-class technologies, training and processes to

minimize our environmental impact.

MANAGEMENT APPROACH

Marathon Oil believes protecting the environment is essential, and we reinforce with employees andcontractors that compliance with regulations and laws is not negotiable. We have a long-standing commitmentto environmental stewardship and continuous improvement in our environmental performance. We work tounderstand and manage our environmental risks to produce energy responsibly by using natural resourcesefficiently and actively managing potential impacts on air, water, land and wildlife.

Our Responsible Operations Management System provides a structured approach to managing ourenvironmental risks. We strive to eliminate or reduce the environmental impacts of our operations bydeveloping sound practices for managing emissions, water and waste at the regional and local levels. Weemploy environmental management strategies and processes to:

Promote compliance with all applicable regulations or, in the absence of fully developed regulatorystructures, with World Bank Guidelines in effect at the time of the engineering design of the facilities orequipment.

Identify and prioritize significant sources of air emissions, waste and water use.

Systematically identify, evaluate and implement potential solutions to reduce air emissions, waste andfresh water use and to prevent spills.

Systematically track and report environmental performance data and management practices to internaland external stakeholders.


Our commitment is to reduce spills and releases to the air, minimize wastes, and promote water management,conservation and biodiversity. In 2015, Marathon Oil:

Increased our air emissions disclosures in this report in our continuing efforts to be responsive to ourstakeholders.

Proactively used infrared cameras to identify solutions to reduce air emissions.

Reduced water consumption in our U.S. onshore operations by 34 percent from 2014 due to lower drillingand completion activity. Approximately 72 percent of water used was nonfresh water.

Decreased by 13 percent the number of spill events to the environment greater than or equal to a barrelfrom 2014, while the total volume of spills increased 68 percent.

Participated as part of an operator consortium in North Dakota’s Energy & Environmental Research Center(EERC) on improvements to the efficiency of wellsite operations; design and implementation of newapproaches to exploration, development and production; and other projects.


CLIMATE CHANGE AND AIR EMISSIONS MANAGEMENT

Marathon Oil recognizes the concern about the potential impact of greenhouse gas

(GHG) and other air emissions on global climate. At the same time, we recognize

the need for reliable and affordable energy to meet long-term demand, and the

important role oil and natural gas are projected to play in meeting that demand.

Marathon Oil remains committed to finding and developing oil and natural gas in a safe and responsiblemanner, which includes efforts to reduce GHG and other air emissions from our operations in accordance withour standards, policies and applicable regulations.

Marathon Oil understands that additional climate change laws and regulations may be implemented in thefuture as guided by national policy and supported by more comprehensive global agreements such as thatproposed by the 2015 United Nations Climate Change Conference. Our approach to mitigating the risk ofadditional regulation includes understanding and mitigating our GHG emissions, evaluating climate change riskin our investment decisions and engaging with external stakeholders to understand their perspectives.

2015 Air Emissions Performance

Marathon Oil periodically evaluates and implements air emissions reduction strategies and technologies forour operations, which are described in the Emissions Overview, Methodology and Mitigation Strategiessection. Emissions reduction strategies and technologies are used throughout the drilling and productionlifecycle, including:

Well drilling

Well completions, including hydraulic fracturing

Storage tank controls

Liquids unloading

Equipment optimization

Pneumatic devices

Equipment leaks, including use of infrared cameras

Transportation emissions

Because our business is focused on producing hydrocarbon liquids, we evaluate our performance usingprimarily GHG and methane emissions intensity, expressed as carbon dioxide equivalent (CO2e) emissions per

all hydrocarbon production.

In 2015, the Company’s gross production of hydrocarbons increased by 3 percent. However, the reducedcapital spending program resulted in lower activity and production in many assets, which contributed to a 5percent increase in our global GHG emission intensity. Global CO2 emissions increased by 8 percent, and

methane emissions increased by 11 percent.

a. Excludes East Texas/North Louisiana (discontinued assets)

b. N₂O emissions are marginal and make up less than 1 percent of the CO₂

and N₂O emissions

a Excludes East Texas/North Louisiana (discontinued assets)

b N₂O emissions are marginal and make up less than 1 percent of the CO₂

and N₂O emissions

GHG emissions increased in some growth assets, and decreased or remained relatively constant in our legacyassets.

In Eagle Ford, while production increased by 11 percent, GHG emissions and GHG emission intensitydecreased by 4 percent and 13 percent, respectively. Using central facilities to process more productioncontributed to this decrease by making our operations more efficient and reducing air emissions and theoverall land footprint of our operations.

In Bakken, GHG emissions and GHG emission intensity increased by 23 percent and 10 percent,respectively. While we have connected 98 percent of the production facilities to third-party gas pipelines,flaring of associated gas due to constrained gas pipeline capacity increased GHG emissions. Across thebasin, we captured an average 85 percent of produced gas and met the year-end 2015 target mandated bythe North Dakota Industrial Commission (NDIC). Our strategies to continue reducing the amount of gasflared include enabling third-party gas gatherers to build gas infrastructure by providing our drilling plans,assisting with landowner right-of-way acquisitions and prioritizing connections to the gas infrastructure.Third-party gas gatherers began to increase the amount of gas they processed during the second half of2015, which decreased flaring.

Production (Millions BO

E)

4.14 4.294.64

2013 2014 20150

1

2

3

4

5

170M

175M

180M

185M

190M

195M

Global GHG Emissions aMillion Tonnes CO2e

CO₂ + N₂Ob Methane

Production (Millions BOE)

23.58 23.2524.47

2013 2014 20150

5

10

15

20

25

30

Global GHG Intensity aTonnes CO₂e/thousand BOE

CO₂ + N₂Ob Methane

In the UK, GHG emission intensity increased by 2 percent due to production declines. However, total GHGemissions decreased by 5 percent compared to 2014 as a result of operational efficiencies such asprocessing gas through a single gas compressor train on the East Brae platform, which eliminated emissionsources.

BK: Bakken

EF: Eagle Ford

OK: Oklahoma

WY: Wyoming

GOM: Gulf of Mexico

EG: Equatorial Guinea

UK: United Kingdom

Excludes East Texas/North Louisiana (discontinued assets)

BK: Bakken

EF: Eagle Ford

OK: Oklahoma

WY: Wyoming

GOM: Gulf of Mexico


UK: United Kingdom


Marathon Oil's methane intensity decreased or remained relatively constant in our growth assets primarilydue to improvements in gas capture and operational efficiency. In Oklahoma, methane intensity decreased by 3percent largely due to improvements in flare systems and installation of low-bleed controllers. Continuingcurrent practice, all new wells in Oklahoma will be outfitted with low-bleed controllers. In addition, Oklahomaset an asset-wide goal to reduce methane intensity 50 percent by 2020.

BK EF OK WY GOM EG UK0

0.25

0.5

0.75

1

1.25

Global Emissions by Asset aMillion Tonnes CO₂e

2013 2014 2015


10

20

30

40

50

GHG Intensity by AssetTonnes CO₂e/thousand BOE a

2013 2014 2015

BK: Bakken

EF: Eagle Ford

OK: Oklahoma

WY: Wyoming

GOM: Gulf of Mexico


UK: United Kingdom


BK: Bakken

EF: Eagle Ford

OK: Oklahoma

WY: Wyoming

GOM: Gulf of Mexico


UK: United Kingdom


Marathon Oil also evaluates our performance as a measure of total methane emissions as a percentage of totalhydrocarbon produced and total methane emissions as a percentage of natural gas produced. Our overallmethane emissions ratio remains flat at 0.3 percent.

Methane increases in Bakken were primarily due to increased fugitive emissions from having more facilitiesand their associated flaring.

Our operations in Equatorial Guinea, which account for 56 percent of our total natural gas production, havethe Company’s lowest methane emissions ratio of 0.1 percent.


0.05

0.1

0.15

0.2

0.25

Methane Emissions by AssetMillion Tonnes CO₂e

2013 2014 2015


10

20

30

Methane Intensity by AssetTonnes CO₂e/thousand BOE

2013 2014 2015

BK: Bakken

WY: Wyoming

OK: Oklahoma

EF: Eagle Ford

UK: United Kingdom

GOM: Gulf of Mexico



OK: Oklahoma

UK: United Kingdom

BK: Bakken

WY: Wyoming

EF: Eagle Ford


GOM: Gulf of Mexico


Criteria pollutant emissions, which include nitrogen oxides (NOx), volatile organic compounds (VOCs) andsulfur oxides (SOx), increased from 2014 to 2015. Criteria pollutant emission intensity increased by 22percent. We manage our criteria pollutant emissions in accordance with applicable emissions controlregulations. In countries that do not have emission control regulations, we comply with applicable World BankGuidelines for air quality.

BK WY OK EF UK GOM EG Global0

0.5

1

1.5

2

2.5

Methane Emissions as a % ofNatural Gas Produced

2014 2015

OK UK BK WY EF EG GOM Global0

0.2

0.4

0.6

Methane Emissions as a % of TotalHydrocarbons Produced (BOE)

2015




23,013.3

27,690.6

34,919.1

2013 2014 20150k

10k

20k

30k

40k

Global Criteria Pollutant EmissionsTons

NOx VOC SOx

0.131

0.15

0.183

2013 2014 20150

0.05

0.1

0.15

0.2

Global Criteria Pollutant IntensityTons/thousand BOE

NOx VOC SOx

MANAGING RISKS

Marathon Oil continuously reviews the potential impact that future climate change

regulation may have on our business decisions.

We believe that oil and gas development and production will remain crucial to the world economy, and ourbusiness models are focused on continued operation in this space. We manage climate change risks, along withmany other business risks, through our Enterprise Risk Management, with oversight from Marathon Oil’sBoard of Directors and management. These risks factor into our business decisions using our capital planningsystem.

Our capital planning system relies on many inputs including third-party commodity price forecasting tointegrate various risks including climate change into our business strategy. These third-party forecastingservices, which include IHS, Wood Mackenzie and the PIRA Energy Group, allow us to form price scenarios totest the investment decisions on near- and long-term projects. In addition, projects are stress tested across abroad range of pricing outcomes to ensure they are robust at lower price levels. Price forecasts from theseservices factor in supply and demand in global markets and consider the market penetration of alternative fuelsand potential climate change policies. Each of these services’ forecasts are considered along with Companyspecific insights and guidance to prepare Marathon Oil’s forecast. Additionally, the cost of carbon is factoredinto expense and revenue models for assets in Canada and the UK where current carbon trading regulationsexist. Profitability and capital allocation will be based on expected prices, and specific financial targets orstrategic objectives must be met to sanction a project.

External Engagements

Marathon Oil advocates for reasonable and balanced regulations that allow flexibility to reduce emissions costeffectively, and in 2015 made payments to organizations and trade associations that engage in lobbyingactivities. Through these trade associations, we participate in the U.S. public policy dialogue about criticalenvironmental and energy policies, including rulemaking comment periods regarding climate change issues


WATER MANAGEMENT

Marathon Oil recognizes that water is a valuable resource that we share with the

communities where we operate. Our use of water is guided by the core water

stewardship practices of responsible sourcing, conservation, reuse and disposal.

Our water usage in U.S. onshore operationsdecreased by 34 percent from 2014 to 2015 becauseof reduced drilling and completion activities. In 2015,we used an estimated 40 million barrels of water, ofwhich 3 percent was recycled and 72 percent wasfrom nonfresh water (i.e., water that meets U.S.drinking water quality standards).

In the Eagle Ford, which accounts for approximately85 percent of our water use, we preferentially usenonfresh water sources for drilling and completionactivities. In 2015, we reduced nonfresh water useby 40 percent from 2014 to 2015. We alsopermanently installed recycle technology that wehad been piloting since 2013, and recycled 1.1million barrels of produced water for reuse in eitherstimulation or workover jobs.

This data excludes water usage from internationaloperations where process water is primarily sourcedfrom seawater. We leverage lessons learned acrossour U.S. resource plays, employ best practices, and participate in industry efforts to be good stewards of waterresources and drive technological innovation in water management.

Marathon Oil engages externally to identifysolutions for preserving scarce water resources inour U.S. onshore operations. We participated in amulti-operator effort with the Texas WaterDevelopment Board (TWDB) to voluntarily provideinformation obtained from company-owned brackishwater wells in South Texas. The collaborative effortallowed the TWDB to fulfill the requirements ofTexas legislation to identify brackish groundwaterproduction zones for municipal, industrial andagricultural uses. The proprietary information thecompanies shared also enables the TWDB to moreaccurately map the brackish water zones of keyaquifers, thereby providing a better picture of thispotential future resource.

We also participated in a multi-operator projectsponsored by the South Texas Energy & EconomicRoundtable (STEER) to study four aquifers in theEvergreen Underground Conservation District. Thegoal of the study is to provide the district with

additional scientific data to allow for tailored withdrawal schemes for individual aquifers to better use theresource and protect stressed systems.

74

26

Nonfresh Fresh0

20

40

60

80

2015 U.S. Onshore Water UsageMillion barrels

2014 2015

2.6%

25.8%

71.6%

2015 U.S. Onshore Water Source

Recycled Fresh Nonfresh

SPILLS AND RELEASES

Marathon Oil focuses on preventing spills and releases of oil and gas.

We develop procedures, install mechanical safeguards, and conduct preventive maintenance and equipmentinspections to prevent spills and releases. We periodically update our plans for storm water and spillprevention, control and countermeasures to ensure compliance and continuous improvement. Wheninvestigating spills and discharges to identify their cause, we look at both the actual and potential spill severity.The Company takes incident-specific actions and, if necessary, broad corrective actions including remediation.

Across our operations in 2015, the total number of spill events to the environment greater than or equal to abarrel decreased by 13 percent from 2014, primarily as a result of reduced drilling and completion activities.However, during the same period the total spill volume increased by 68 percent, mainly due to flowline failuresin the Eagle Ford and Wyoming.

Incident investigations in the Eagle Ford identified microbial-induced corrosion (MIC) as the primary cause ofan increasing trend of flowline failures. We have risk-assessed the pipeline distribution system and prioritizedcorrective actions including increased pigging of flowlines and intensified corrosion treatment. We alsoperform flyovers of flowlines to improve early detection of spills.

Discontinued assets were removed from the previous year's data for

comparing year-on-year performance

Discontinued assets were removed from the previous year's data for

comparing year-on-year performance


Percent of Spill Events Uncontained

2013 2014 20150

20

40

60

80

10

15

20

25

30

Spill Events to the Environment ≥ 1bblNumber

Number Percent of Spill Events Uncontained

Num

ber of Spill Events

4,033

1,151

3,605

2013 2014 20150k

2k

4k

6k

8k

40

50

60

70

80

Spill Volumes to the Environment ≥1 bblVolume

Non‑Oil Volume (bbls) Oil Volume (bbls)

Number of Spill Events

WASTE MANAGEMENT

We strive to minimize the environmental impact of generating, storing,

transporting and disposing of waste from our operations.

Our operations generate a variety of waste streams, including spent batteries and filters; scrap metal; tankcleaning residue; contaminated soil; office and domestic waste such as paper and light bulbs; and items specificto drilling and production operations.

In 2015, we disposed of approximately 743 thousand tons of waste off-site, nearly all (< 99.99 percent) ofwhich was deemed non-hazardous according to applicable regulations. The volume of waste decreased by 2percent, relatively flat compared to 2014. Produced water and process wastewater are not included in thewaste inventory in accordance with IPIECA’s Oil and Gas Industry Guidance on Voluntary Sustainability Reporting.



Company assets develop waste management programs targeting their specific operations. For example, in2015 Oklahoma implemented a program to reduce the volume of drilling cuttings going to landfills. Theprogram includes separating and recycling oil from oil-based drill cuttings and using the dry cuttings as landfillcover.

Additionally, under our Waste Management Vendor Approval Program, Marathon Oil reviews vendors’ HES&Sprograms and past regulatory compliance performance. Vendors with the highest identified risk undergo anonsite audit, usually conducted by a third party, and are approved or rejected for use based on the audit results.Common reasons for rejecting vendors are significant prior fines and poor safety and environmentalperformance.


19%

38%

41%

1%

2015 Solid Waste SourcesPercentage

Production Drilling Completions

Workover

Total Solid Waste (thousand tons)0

250

500

750

1000

Solid Waste to Offsite DisposalThousand tons

2014 2015

LIVING OUR VALUES IN THE WORKPLACE

Marathon Oil conducts our business with a high regard for the health and safety of

our employees, contractors and the communities where we work.

MANAGEMENT APPROACH

Our health, environment, safety and security (HES&S) vision is to achieve an accident- and injury-freeworkplac

2015 corporate sustainability report -...

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