President and chief executive officer, Marathon Oil Corporation
Born: 1951, in New Orleans, Louisiana.
Education: Louisiana State University, BS, 1972.
Career: Texaco, 1972–1974, geophysicist; offshore division, 1974–1976, various posts; 1976–1977, assistant district geologist; 1977–1979, district geologist; 1979–1981, assistant division geologist; 1981–1984, regional manager of exploration; 1984–1985, staff geologist for exploration and production executive committee; 1985–1987, assistant to vice chairman; frontier exploration department, 1987–1992, general manager; 1992–2000, corporate vice president; 1992, president of Latin America/West Africa Division; Texaco Exploration and Production, 1994–1997, president; Texaco International Marketing and Manufacturing, 1997–1998, president; Texaco Ltd., 1998–1999, president for international production and chairman; 1999–2000, corporate vice president and president for production operations; USX Corporation, 2000–2001, vice chairman; Marathon Oil Company (an operating unit of USX), 2000–2001, president; Marathon Oil Corporation, 2001–, president and CEO.
Address: Marathon Oil Corporation, 5555 San Felipe Road, Houston, Texas 77056–2723; http://www.marathon.com.
■ The oil-industry veteran Clarence Cazalot had already spent more than 25 years in the industry when he was tapped in 2000 to take over the leadership of Marathon Oil Company, which was then operating under the umbrella of the giant steel conglomerate USX. Just a little more than a year later Marathon broke from USX and, in the two ensuing years, reached new levels of profitability under Cazalot's direction. As one of the largest U.S. oil-and-gas companies, Marathon posted net income of more than $1.3 billion for 2003 on total revenue of just over $41.2 billion, a sharp increase from a profit of $516 million on sales of about $31.5 billion in the previous year.
As president and CEO of Marathon Oil Corporation, Cazalot focused much of his energy on expanding the company's asset base through ambitious investments in worldwide exploration and production. In late January 2004 Marathon unveiled a capital spending budget of nearly $2.3 billion for 2004. Roughly 60 percent of the budget was allocated for Marathon's exploration and production operations, while 25 percent was earmarked for refining, marketing, and transportation, with the final 15 percent going to integrated gas and corporate expenditures.
A native of New Orleans, Cazalot enrolled at Louisiana State University (LSU) in Baton Rouge after graduating from high school. As a geology major, he participated in LSU's Geology Field Camp during the summer of 1970. Established in the 1920s, the field camp, located near Colorado Springs, Colorado, was designed to provide LSU students with important field experience in geology, geophysics, and petroleum engineering. (In September 2001 Marathon, under Cazalot's leadership, announced a leadership gift of $100,000 to the LSU Foundation to be used for infrastructure improvements at the camp.) In 1972 Cazalot received his BS in geology.
Shortly after graduating from LSU, Cazalot joined Texaco in Bellaire, Texas, as a geophysicist. Two years later he transferred to the company's offshore division, headquartered in New Orleans. He held a number of posts in the offshore division over the next two years and in 1976 was named assistant district geologist. A year later he was promoted to district geologist, moving to assistant division geologist in 1979 and regional manager of exploration in 1981. Three years later, in 1984, Cazalot was transferred to corporate headquarters in Harrison, New York, and named staff geologist for Texaco's exploration and production executive committee. In 1985 he was named assistant to Texaco's vice chairman, a post he held until 1987, when he became general manager of Texaco's frontier exploration department in Bellaire.
Cazalot was elected a corporate vice president in 1992 and was named president of the company's Latin America/West Africa Division. Under Cazalot, the division, headquartered in Coral Gables, Florida, established three regional centers, all of which reported to Cazalot in Coral Gables. Texaco's center in Rio de Janeiro was responsible for the company's operations in Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay. Another center in Bogota, Colombia, was responsible for the company's activities in Colombia, Ecuador, Panama, Peru, and Venezuela. A separate operations center, also based in Coral Gables, was charged with overseeing Texaco's operations in Central America, the Caribbean, and Canada. In addition, the headquarters operation supervised exploration and drilling in the African countries of Angola, Nigeria, Cameroon, and Togo, the marketing responsibilities for which were transferred to Texaco Europe.
In 1994 Texaco appointed Cazalot, who retained his corporate vice presidency, president of Texaco Exploration and Production (TEPI), headquartered in Harrison, New York. In the fall of 1996 Texaco announced an organizational realignment, effective January 1, 1997, under which Cazalot became president of Texaco International Marketing and Manufacturing and was reposted to London. In 1998 Cazalot was named corporate president for international production and chairman of TEPI. On November 12, 1998, Texaco outlined its plans for a reorganization of its international upstream operations, effective January 1, 1999. The reorganization was designed to focus more sharply on upstream activities in three key areas: the location and acquisition of resources, swift commercial development of such resources, and the optimization of Texaco's global production operations. In this reorganization, Cazalot was named president of production operations and posted to Texaco's offices in White Plains, New York.
In early 2000 USX Corporation, a holding company formed in 1986 to manage operations formerly directed by U.S. Steel Corporation, announced that it had hired Cazalot to run Marathon Oil Company, one of USX's four independent operating units. In accepting his new post as president, Cazalot extolled Marathon, according to a corporate press release, as "a world-class oil company with great potential to grow and prosper." He also stated: "I look forward to working with Marathon's fine management team to take the company to the next level of success." At the same time, Cazalot was named a vice chairman of USX and elected to its board of directors.
Responding to growing pressure from both analysts and investors, USX in April 2001 announced plans to separate Marathon from USX's weaker steel business. In publicizing the spin-off of Marathon, Tom Usher, USX chairman and CEO, said that the move would give the oil company greater flexibility to expand its business through stock-based acquisitions. Under the terms of the breakup, Cazalot became Marathon's CEO as well as its president. Speaking to security analysts in early 2002, Cazalot outlined a business strategy that he said would create sustainable growth in Marathon's value through the pursuit of unique partnerships and innovative energy solutions. Discussing the ways in which Marathon could compete most effectively in a market that put a premium on size, he said that the key to the company's strategy would be to find a way to achieve profitable growth and create value rather than to focus on the company's size. Cazalot said that he hoped to set Marathon apart from its competitors by adopting a business model enabling the company to use its size as an advantage, "linking our technical strength, commercial skills, and international stature with a willingness to do things differently, and to do so with the speed and agility of a small enterprise."
Over the next two years Cazalot led Marathon to a number of strategic acquisitions and joint-venture operations, all selected for their fit into the company's overall strategy for the long term. During 2002 Marathon acquired and successfully integrated significant natural gas interests in Equatorial Guinea and laid the groundwork for additional expansion in that tiny West African country. Additional upstream interests were acquired in Norway, and Marathon signed an agreement with XTO Energy, under which the former swapped some of its oiland-gas properties in Texas and Louisiana for XTO's coal-bed methane assets in the Powder River Basin of northern Wyoming and southern Montana.
In 2003 Marathon reached agreement with the government of Equatorial Guinea and its state-owned oil company, GE-Petrol, to develop a liquefied natural gas (LNG) project on Bioko Island. The joint venture's Bioko LNG plant, scheduled to come onstream in 2007, was forecast to yield an annual output of roughly 3.4 million metric tons of LNG. Marathon also saw significant advances in its Norwegian exploration program, announcing in September 2003 its third Norwegian discovery of the year. After a long absence from the Russian market, where it had played an instrumental role in developing oiland-gas fields off Sakhalin Island, Marathon in May 2003 acquired Khanty Mansiysk Oil Corporation (KMOC) in a transaction valued at roughly $280 million. In announcing the KMOC purchase, according to a corporate press release, Cazalot said: "This acquisition forms the basis for a new core area with substantial near- and medium-term growth, and is consistent with our strategy of upgrading" the company's upstream portfolio.
In December 2003 Cazalot hinted that Marathon might be interested in buying out Ashland's minority interest in the two companies' joint venture, Marathon Ashland Petroleum (MAP), the fifth-largest oil refiner in the United States. At the time, Marathon owned 62 percent of MAP, which was headquartered in Findlay, Ohio, with Ashland holding a 38 percent stake. MAP operated seven refineries that together were capable of processing more than 900,000 barrels of oil daily. Its refined products were marketed at Marathon's 3,800 service stations and also through its Speedway SuperAmerica retail subsidiary, which operated roughly 1,700 outlets.
Meeting with security analysts in Houston in early November 2003, Cazalot expressed satisfaction with Marathon's progress in the implementation of the strategies and business plans he had first outlined in February 2002. He said that the company expected its average daily production in 2004 to total about 365,000 barrels of oil equivalent, reflecting the impact of recent acquisitions and joint ventures. Assessing the energy-industry climate for 2004 and beyond, Cazalot pointed to such key factors as an increasing emphasis on natural gas as a global market commodity, continued volatility in commodity prices, the emergence of heightened competition from state-owned oil companies, and declining output from traditional oil-andgas basins. Although all factors were sure to have a significant effect on the industry's competitive landscape, Cazalot said that finding "access to profitable new oil and gas resources is perhaps the most critical issue facing international energy companies," according to a corporate press release.
In addition to his responsibilities as Marathon's president and CEO, in the early 2000s Cazalot was deeply involved in both civic and industry-related affairs. He sat on the boards of Spindletop Charities, the Greater Houston Partnership, and the Sam Houston Area Council of the Boys Scouts of America. He also served on the boards of Baker Hughes, the American Petroleum Institute, the Maguire Energy Institute, and the U.S.–Saudi Arabian Business Council and was a member of the National Petroleum Council, National Association of Manufacturers, and the American Association of Petroleum Geologists.
See also entries on Texaco Inc., USX Corporation, and Marathon Oil Corp. in International Directory of Company Histories .
Antosh, Nelson, "Oil Prices Power Marathon's Profits; Other Majors Likely to Show Large Gains," Houston Chronicle , January 28, 2004.
Birger, Larry, "Texaco Planning to Remain in Coral Gables, Fla.," Miami Herald , January 16, 1994.
"Cazalot Elected USX Vice Chairman and Marathon President," March 2, 2000, http://www.marathon.com/News_Center/Press_Releases/2000_News_Releases/?releaseid=244652 .
Davis, Michael, "Houston-Based Oil Company Leaves Steel Conglomerate," Houston Chronicle , April 25, 2001.
Hassell, Greg, "Marathon Oil Names Executive as New President," Houston Chronicle , March 2, 2000.
"Marathon Completes Acquisition of Khanty Mansiysk Oil Corporation; Acquisition Establishes Russia as a New Core Area for Growth," May 13, 2003, http://www.marathon.com/News_Center/Press_Releases/2003_News_Releases/?releaseid=411778 .
"Marathon Reaffirms Company Strategy and Outlines Plans to Achieve Sustainable Value Growth," November 4, 2003, http://www.marathon.com/News_Center/Press_Releases/2003_News_Releases/?releaseid=466396 .
"Marathon Stays with Strategy, Outlines Plans for More Growth," Houston Business Journal , November 4, 2004.