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“What Is Expected From Legal Counsel in Changing Times”

“What Is Expected From Legal Counsel in Changing Times”. Gary R. Heminger President Marathon Petroleum Company Corporate Law Leadership Forum April 22, 2009. Global Operations. The Reach and Scope of Marathon. 35 Attorneys. 26,000 Employees. The few, the proud, the in-house counsel.

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“What Is Expected From Legal Counsel in Changing Times”

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  1. “What Is Expected From Legal Counsel in Changing Times” Gary R. Heminger President Marathon Petroleum CompanyCorporate Law Leadership Forum April 22, 2009

  2. Global Operations

  3. The Reach and Scope of Marathon 35 Attorneys 26,000 Employees The few, the proud, the in-house counsel

  4. Challenges to Legal Counsel Product Liability Price Gouging Protection of Intellectual Property New Regulations Constraining Advocacy Efforts Ethics Leadership Sarbanes Oxley Compliance Guidance on Contracts and Legislative Initiatives Anti-trust Mergers and Acquisitions Environmental Law Personal Injury Medical Monitoring PMPA and Marketing 4

  5. The key expectation – “Understand the business!”

  6. Industry Jobs Direct Industry Total Job Chain Oil: Approximately 5.9 million Oil:1.84 million Auto: Approximately3 million Auto: 1.1 million

  7. New Projects, New Jobs, New Energy Garyville Major Expansion Detroit Heavy Oil Upgrade Project

  8. Without delay With delay Sales Time Cost of Delay Typical Cost of Project Delay Additional Adverse Results • Deferred benefits • Time value of investment dollar • Competitor advantage 8

  9. Our Industry is an Industry of Price Takers Iran tests missiles Hurricane Ike Open interest contracts soar Hurricane Katrina Threat of Iraq Embargo OPEC Cuts Iraq War Non-OPEC disruptions Events drive price Source: NYMEX (WTI crude oil) and AAA (gasoline a diesel)

  10. Annual Price and Margin Sensitivities$ Millions (After Tax) Refined products wholesale margin sensitivity(per penny a gallon change) $137 Speedway SuperAmerica light product margin(per penny a gallon change) $21 LLS 6-3-2-1 crack spread(per dollar a barrel change) ~$280 Sweet/Sour Oil Cost Differential(per dollar a barrel) ~$110

  11. Price Discovery

  12. The Popular View of Price Gouging Media Headlines “Florida fields hundreds of complaints” “Hot line established to report price gouging” “Attorney General to crack down on price gouging”

  13. True or False: Cost is Knowable 13

  14. USTs and $411 Million

  15. Who Pays for Cap-and Trade? 15

  16. Venezuelan Partial Upgrading Canadian Upgraded Bitumen Canadian Diluted Bitumen Canadian Light Arab Light North Sea Nigerian Mexican Emissions Comparison Transportation to Markets Production Refining Refining Byproducts End Use Consumption Kg CO2e/Barrel Source: T.J. McCann & Associates

  17. Structure of Success QUALITY EFFICIENCY PRODUCTIVITY Business Understanding and Business Focus 17

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