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Friday, December 30, 2005

Marathon to Return to Libya; Former Oasis Group to Resume Operations After 19-Year Absence

PRNewswire: Marathon Oil Corporation(NYSE: MRO), in conjunction with its partners in the former Oasis Group, today announced that it has reached agreement with the Libyan National Oil Corporation on the terms under which the companies will return to their former oil and gas exploration and production operations in the Waha concessions in

Marathon and ConocoPhillips each hold a 16.33 percent interest in the Waha
concessions, with Amerada Hess holding an 8.16 percent interest, and the
Libyan National Oil Corporation holding the remaining 59.16 percent interest.
The concessions, which currently produce approximately 350,000 barrels of oil
per day, encompass almost 13 million acres located in the Sirte Basin, which
is one of the most prolific oil and gas producing areas of Libya, and which
contains sizable undeveloped oil and gas resources. Marathon anticipates
adding in excess of 160 million barrels of oil equivalent (boe) to the
company's proved reserves as a result of the reentry into Libya. In addition,
the company expects to add approximately 40-45,000 net barrels per day of
production during 2006.

"This is a historic day for Marathon and our partners," said Clarence P.
Cazalot, Jr., Marathon president and CEO. "We are pleased to be rejoining our
longtime friends at the Libyan National Oil Corporation and the Waha operating
company. We look forward to assisting in the further exploration and
development of Waha's significant oil and gas resources, improving
productivity from the existing fields and to providing gas supplies for the
Libyan economy and for export."

The fiscal terms will be essentially the same as the terms in effect at
the time of the suspension of the partners' activities in 1986. The reentry
terms include a 25-year extension of the concessions through 2031-34, and a
payment of $1.3 billion to the Libyan National Oil Corporation ($520 million
net to Marathon) for reentry and the extension of the concessions. In
addition, the companies will make a contribution to unamortized investments
made since 1986 of $530 million ($212 million net to Marathon), that was
agreed to be paid as part of the 1986 standstill agreement to hold the assets
in escrow for the U.S. partners.
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