Marathon Oil to Spin Off Refining, Marketing Business
Marathon Oil to Spin Off Refining, Marketing Business
Jay LaPrete/Bloomberg
A tanker truck sits parked outside the Marathon Oil Company storage facility in Columbus, Ohio.
A tanker truck sits parked outside the Marathon Oil Company storage facility in Columbus, Ohio. Photographer: Jay LaPrete/Bloomberg
Marathon Oil Corp., the largest refiner in the U.S. Midwest, will spin off its fuel-making business, creating two independent energy companies.
Marathon Petroleum Corp. will be the fifth-largest independent refiner by capacity and will be based in Findlay, Ohio, the company said in a statement today. The spinoff is expected to be tax free and effective June 30.
The announcement was made before the start of regular trading on U.S. markets. Marathon, based in Houston, rose $4.22, or 10 percent, to $44.75 at 7:30 a.m. in New York.
Marathon said after the spinoff it will be focused on crude oil production and exploration. The company considered the split in 2008, but delayed it due to financial market turmoil and lower commodities prices.
“The substantial improvement in the global business and financial environments over the last two years has created the conditions under which we believe it is now appropriate to move forward with the formation of two strong independent energy companies,” Clarence P. Cazalot, Marathon’s chief executive officer, said in the statement.
The spinoff will include the company’s refining and marketing business, retail network and pipelines. Marathon’s exploration and production arm will include oil-sands mining and integrated gas.
(Marathon will hold a conference call for investors at 11 a.m. New York time, accessible on their website http://www.marathon.com)
To contact the reporter on this story: Jessica Resnick-Ault in New York at jresnickault@bloomberg.net.
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.
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