Marathon delays decision on company split

HOUSTON — Marathon Oil Corp. said Thursday it has delayed a decision on whether to split into two separate companies, citing the recent volatility in global financial markets.

Marathon announced in July it was considering a move to create one publicly traded company focused primarily on exploration and production and another on refining and marketing.

Marathon owns the oil refinery in Catlettsburg, Ky., which it bought from the company previously known as Ashland Oil.

Marathon previously said it expected to make a decision by year's end. Marathon President and Chief Executive Clarence P. Cazalot Jr. said in a statement Thursday the review so far indicates that a separation may enhance shareholder value.

"However, the recent extreme volatility in the capital and commodity markets requires further evaluation before a decision can be reached," Cazalot said. "Concluding this evaluation remains a high priority, with timing of a decision largely dependent on external market factors."

Marathon is the fourth-largest U.S. integrated oil company, meaning it's involved in exploration and production as well as refining and selling gasoline. The Houston-based company gave no new timeframe for a decision.

If a split takes place, some analysts have speculated that Marathon, with extensive global oil and gas assets, could quickly become a takeover target for oil giants sitting atop massive piles of cash but struggling to find new sources of crude and natural gas.

From 2001 to 2007, Marathon's holdings more than tripled to 6.6 billion barrels of oil equivalent, and more growth is forecast. The company has said it expects to replace reserves at an annual rate of more than 150 percent through 2012.

Marathon, like other energy companies, has had to adjust its operations because of the sharp decline in commodity prices in the past five months.

In October, it said it has delayed the expansion of a gasoline refinery in Detroit because of market conditions. Marathon also has said it expects its 2009 capital spending budget to be about 15 percent lower than in 2008.