HOUSTON (AP) _ Oil producer and refiner Marathon Oil Corp. said Thursday it expects its worldwide production of crude oil and natural gas to increase at least 8 percent in 2008 and average roughly 7 percent growth over the next five years.
The Houston-based company also said it expects its proved reserves — a key asset of oil companies — to increase by about 15 percent through 2012.
At a meeting with Wall Street analysts in New York, Marathon President and Chief Executive Clarence P. Cazalot Jr. touted the company's track record of growing its resource base, noting it had more than tripled to 6.6 billion barrels of oil equivalent since 2002.
But Cazalot, echoing many of his counterparts, also discussed several of the obstacles facing large oil companies.
In particular, he cited the higher costs of producing and refining oil, the prospect of greater government involvement in the form of taxes and environmental regulations and, perhaps most important, the challenging task of gaining access to new sources of hydrocarbons.
National, state-run oil companies, like those in Saudi Arabia and Venezuela, control almost 90 percent of global oil reserves.
Still, Cazalot said, "within the context of this industry background, we see Marathon as being very well positioned to deal with these challenges and be successful."
Marathon shares dipped 66 cents, or 1.4 percent, to $47.02 in morning trading. They've traded in a range of $43.24 to $67.04 in the past year.
Marathon is the fourth-largest U.S. integrated oil company, meaning it's involved in exploration and production as well as refining and marketing. The nation's top three are Exxon Mobil Corp., Chevron Corp. and ConocoPhillips.
During the presentation, Marathon predicted global upstream production of between 380,000 barrels and 420,000 barrels of oil equivalent this year, up from 351,000 barrels in 2007. The 2008 forecast excludes sales and acquisitions.
The company said it expects three major development projects to begin production this year — one in the Gulf of Mexico and two in Norway.
It also said the $3.2 billion expansion of its Garyville, La., refinery was proceeding on time and on budget. The company said the project is 38 percent complete. Marathon also is upgrading its Detroit refinery, which will enable it to better capitalize on the Athabasca Oil Sands Project in Alberta, Canada.
Marathon's capital and exploration spending is expected to be about $18.5 billion through 2012.
In January, Marathon reported 2007 earnings of $3.96 billion, down from $5.23 billion in the prior year. Full-year revenue dipped to $65.21 billion from $65.45 billion in fiscal year 2006.
The company had a difficult end to the year, as lower refining margins, project delays and higher costs sharply curtailed earnings.
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Copyright 2008 The Associated Press.