Value Creation Strategy
In May 2020, CEO Mike Hennigan laid out MPC's new value creation strategy. He explained that the company's focus will be on three key areas initially:
- Strengthen the competitive position of MPC's portfolio. This entails positioning its assets to be a leader in cost, operating and financial performance metrics. "MPC has always been focused on safety and operational excellence — and that will not change," the chief executive explained. "However, we need to focus further on the contribution of each of our individual assets and ensure the financial performance in all cycles meets our expectations and contributes to shareholder returns."
- Improve commercial performance. "We are fortunate to have an extensive integrated footprint, but we have an opportunity to become more dynamic to capture higher margins across the value chain," he said.
- Lower its cost structure and be "extremely" disciplined in capital allocation. "This means lowering our costs in all aspects of our business and challenging ourselves to be incredibly disciplined in every expense dollar we spend across our organization," said Hennigan. "It also means having a strict protocol on capital investment for the long term to focus on the highest-return projects, risk adjusting them, and assuring that we position the company to achieve these returns irrespective of the market environment."
Three months later, Marathon reached an agreement to sell its convenience store arm, Enon-based Speedway LLC, to 7-Eleven Inc. The $21-billion deal added approximately 3,800 c-stores to Irving, Texas-based 7-Eleven's network.
The transaction also included a 15-year fuel supply agreement for approximately 7.7 billion gallons per year associated with the Speedway business. At the time they two companies reached a deal in August 2020, MPC said it expected incremental opportunities over time to supply 7-Eleven's remaining business as existing arrangements mature and as 7-Eleven adds new locations in connection with its announced U.S. and Canada growth strategy.
The transaction closed in May 2021.
MPC is an integrated, downstream energy company. It operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.
MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.