HOUSTON — Marathon Oil Corp. said Thursday that it will spin off its its fuel-making business in Findlay, making it the fifth largest independent U.S. refiner.
Its northwest Ohio business will be called Marathon Petroleum Corp. and expects to trade stock under the ticker symbol MPC on the New York Stock Exchange. The spinoff plan was revived two years after the company considered and dismissed it because of the financial market turmoil and lower commodity prices.
The Findlay company will have the company's refining and marketing business, retail network and pipelines, with property in the Midwest, Gulf Coast, and Southeast. Its president and chief executive will be Gary Heminger, who now runs the Findlay operation, which is called Marathon Ashland Petroleum LLC.
In a conference call with industry analysts, Mr. Heminger said “Our strategy is we want to be able to capture (profit) margins across the entire value chain.”
Marathon Oil will continue to be based in Houston, trading stock on NYSE under the MRO symbol. It will maintain the company's exploration, oil-sands mining, and natural-gas businesses.
“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 spin-off, which needs regulatory approval, is expected to be completed on June 30.
Stockholders of Marathon Oil will receive one share of Marathon Petroleum for every two shares of Marathon Oil they own. Also, the Marathon Petroleum is expected to pay an initial dividend of 20 cents a share per quarter, or 80 cents a year.
The Findlay spinoff firm will have its own seven-member board of directors, chaired by Thomas J. Usher, who is not a Marathon executive. Marathon Oil also will have a seven member board.
Marathon's existing Findlay office has about 1,500 employees who oversee service stations, oil refineries, and miles of oil pipeline.
Marathon Oil was based in Findlay until 1982, when the firm was acquired by U.S. Steel Corp., of Pittsburgh. Its independence was restored in 2001 when U.S. Steel, then USX Corp., split its steel and oil business into separate companies. Houston was picked as the headquarters of the new corporation.
But Marathon continued to have a significant presence in its longtime home in a three-building complex along South Main Street in downtown Findlay. When the spin-off was considered in 2008, the company said employment in Findlay likely would be unaffected.
The Findlay business unit would include oversight of the Marathon, Speedway, and SuperAmerica gas stations, as well as wholesale fuel sales; oil refineries in Canton, Ohio, Detroit, Kentucky, Illinois, Louisiana, and Texas; oil terminals throughout the Southeast and Midwest; pipelines; and a transportation system that includes river barges and trucks.
First Published January 13, 2011, 11:24 p.m.