MARATHON OIL CORPORATION
                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 2002
                        --------------------------------

                                   INDEX                                   Page
                                   -----                                   ----

PART I - FINANCIAL INFORMATION


   Item 1.   Financial Statements:

             Consolidated Statement of Income...........................      3

             Consolidated Balance Sheet.................................      5

             Consolidated Statement of Cash Flows.......................      7

             Selected Notes to Consolidated
               Financial Statements......................................     9


   Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations................................................    22


   Item 3.   Quantitative and Qualitative Disclosures about
               Market Risk...............................................    38


   Item 4.   Controls and Procedures.....................................    44

             Supplemental Statistics.....................................    45



PART II - OTHER INFORMATION



   Item 1.   Legal Proceedings...........................................    48


   Item 6.   Exhibits and Reports on Form 8-K............................    49




<PAGE>





Part I - Financial Information

<TABLE>

                            MARATHON OIL CORPORATION
                  CONSOLIDATED STATEMENT OF INCOME (Unaudited)
                ------------------------------------------------

<CAPTION>
                                                                                Third Quarter              Nine Months
                                                                                    Ended                     Ended
                                                                                September 30              September 30
(Dollars in millions)                                                         2002         2001         2002         2001
-------------------------------------------------------------------------------------------------------------------------
REVENUES AND OTHER INCOME:
<S>                                                                           <C>          <C>         <C>         <C>    
  Revenues................................................................    $8,435       $8,514      $22,931     $26,260
  Dividend and investee income............................................        39           34          104         106
  Net gains (losses) on disposal of assets................................        33         (208)          44        (180)
  Gain (loss) on ownership change in Marathon
    Ashland Petroleum LLC.................................................         5            1            9          (5)
  Other income............................................................         6            7           15          83
                                                                              ------       ------       ------       ------
     Total revenues and other income......................................     8,518        8,348       23,103      26,264
                                                                              ------       ------       ------       ------
COSTS AND EXPENSES:
  Cost of revenues (excludes items shown below)...........................     6,444        6,058       17,192      18,499
  Selling, general and administrative expenses............................       218          175          588         506
  Depreciation, depletion and amortization................................       292          302          894         911
  Taxes other than income taxes...........................................     1,176        1,216        3,387       3,541
  Exploration expenses....................................................        29           20          130          69
  Inventory market valuation credit.......................................         -            -          (72)         -
                                                                              ------       ------       ------      ------
     Total costs and expenses.............................................     8,159        7,771       22,119      23,526
                                                                              ------       ------       ------      ------
INCOME FROM OPERATIONS....................................................       359          577          984       2,738
Net interest and other financial costs....................................        75           50          215         134
Minority interest in income of Marathon Ashland
 Petroleum LLC............................................................        45          223          138         650
                                                                              ------       ------       ------      ------
INCOME FROM CONTINUING OPERATIONS BEFORE
 INCOME TAXES.............................................................       239          304          631       1,954
Provision for income taxes................................................       145          120          289         689
                                                                              ------       ------       ------      ------
INCOME FROM CONTINUING OPERATIONS                                                 94          184          342       1,265

DISCONTINUED OPERATIONS:
  Loss from discontinued operations.......................................         -          (13)           -         (13)
  Costs associated with disposition of United
    States Steel..........................................................         -           (1)           -         (13)
                                                                              ------       ------       ------      ------
INCOME BEFORE EXTRAORDINARY LOSS AND
 CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING
 PRINCIPLES ..............................................................        94          170          342       1,239
Extraordinary loss from early extinguishment of
 debt, net of tax.........................................................        (7)           -          (33)          -
Cumulative effect of changes in accounting
 principles, net of tax...................................................         -            -           13          (8)
                                                                              ------       ------       ------      ------
NET INCOME................................................................       $87         $170         $322      $1,231
                                                                              ======       ======       ======      ======
</TABLE>


Included in revenues and costs and expenses for the third quarter of 2002 and
2001 were $1,114 million and $1,152 million, respectively, representing consumer
excise taxes on petroleum products and merchandise. Similar amounts for the nine
months of 2002 and 2001 were $3,193 million and $3,322 million, respectively.

The accompanying notes are an integral part of these consolidated financial
statements.



<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
            CONSOLIDATED STATEMENT OF INCOME (Continued) (Unaudited)
                             INCOME PER COMMON SHARE
          ------------------------------------------------------------

<CAPTION>
                                                                                Third Quarter              Nine Months
                                                                                    Ended                     Ended
                                                                                September 30              September 30
(Dollars in millions, except per share amounts)                               2002         2001         2002         2001
--------------------------------------------------------------------------------------------------------------------------
MARATHON COMMON STOCK:
 <S>                                                                         <C>         <C>           <C>         <C>    
 Income from continuing operations applicable
  to Common Stock     ....................................................       $94        $184          $342      $1,265
 Net income applicable to Common Stock....................................        87         193           322       1,275

 Per Share Data:
      - Income from continuing operations - basic.........................       .30         .59          1.10        4.09
      - Income from continuing operations - diluted.......................       .30         .59          1.10        4.09
      - Net income - basic................................................       .28         .63          1.04        4.13
      - Net income - diluted..............................................       .28         .62          1.04        4.12

 Weighted average shares, in thousands
      - Basic   ..........................................................   309,874     309,309       309,751     309,056
      - Diluted ..........................................................   309,970     309,923       309,952     309,452


 STEEL STOCK:
 Net loss applicable to Steel Stock......................................        $-        $(25)           $-        $(50)

 Per Share Data:
      - Net loss - basic..................................................         -       (0.28)            -       (0.56)
      - Net loss - diluted................................................         -       (0.28)            -       (0.57)

 Weighted average shares, in thousands
      - Basic and diluted.................................................         -      89,193             -      89,003
</TABLE>



See Note 4, for a description and computation of income per common share.





















The accompanying notes are an integral part of these consolidated financial
statements.




<PAGE>


<TABLE>



                            MARATHON OIL CORPORATION
                     CONSOLIDATED BALANCE SHEET (Unaudited)
                    ----------------------------------------

                                     ASSETS

<CAPTION>
                                                                          September 30        December 31
(Dollars in millions)                                                           2002               2001
---------------------------------------------------------------------------------------------------------
ASSETS
<S>                                                                             <C>                <C>    
Current assets:
   Cash and cash equivalents.............................................        $  375             $  657
   Receivables, less allowance for doubtful
    accounts of $5 and $4................................................         1,829              1,708
   Receivables from United States Steel..................................            14                 64
   Inventories...........................................................         2,075              1,851
   Other current assets..................................................           164                131
                                                                                 ------             ------
         Total current assets............................................         4,457              4,411

Investments and long-term receivables, less
   allowance for doubtful accounts of $10 and $4.........................         1,591              1,076
Receivables from United States Steel.....................................           546                551
Property, plant and equipment, less accumulated
   depreciation, depletion and amortization of
   $10,816 and $10,384...................................................        10,192              9,552
Prepaid pensions.........................................................           213                207
Goodwill.................................................................           275                 88
Intangibles..............................................................            97                 61
Other noncurrent assets..................................................           170                183
                                                                                 ------             ------
         Total assets....................................................       $17,541            $16,129
                                                                                 ======             ======

</TABLE>






















The accompanying notes are an integral part of these consolidated financial
statements.



<PAGE>


<TABLE>



                            MARATHON OIL CORPORATION
                CONSOLIDATED BALANCE SHEET (Continued)(Unaudited)
                -------------------------------------------------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<CAPTION>
                                                                                    September 30        December 31
(Dollars in millions)                                                                     2002               2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                <C>    
LIABILITIES

Current liabilities:
   Accounts payable..............................................................    $2,587             $2,431
   Payable to United States Steel................................................        28                 28
   Payroll and benefits payable..................................................       164                243
   Accrued taxes.................................................................       375                171
   Accrued interest..............................................................        60                 85
   Obligations to repay preferred securities.....................................         -                295
   Long-term debt due within one year............................................       161                215
                                                                                     ------             ------
         Total current liabilities...............................................     3,375              3,468

Long-term debt...................................................................     4,579              3,432
Deferred income taxes............................................................     1,429              1,297
Employee benefits................................................................       743                677
Payable to United States Steel...................................................         5                  8
Deferred credits and other liabilities...........................................       369                344

Minority interest in Marathon Ashland Petroleum LLC..............................     2,028              1,963

STOCKHOLDERS' EQUITY

Common stock:
   Common Stock issued - 312,165,978 shares at
    September 30, 2002 and December 31, 2001 (par value
    $1 per share, authorized 550,000,000 shares).................................       312                312
   Common Stock held in treasury - 2,298,289 shares
    at September 30, 2002 and 2,770,929 shares at
    December 31, 2001............................................................       (61)               (74)
Additional paid-in capital.......................................................     3,033              3,035
Retained earnings................................................................     1,751              1,643
Accumulated other comprehensive income (loss)....................................       (13)                34
Deferred compensation............................................................        (9)               (10)
                                                                                     ------             ------
         Total stockholders' equity..............................................     5,013              4,940
                                                                                     ------             ------
         Total liabilities and stockholders' equity..............................   $17,541            $16,129
                                                                                     ======             ======

</TABLE>








The accompanying notes are an integral part of these consolidated financial
statements.



<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
                CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
                ------------------------------------------------

<CAPTION>

                                                                                      Nine Months Ended
                                                                                        September 30
 (Dollars in millions)                                                            2002               2001
----------------------------------------------------------------------------------------------------------
<S>                                                                                <C>               <C>    
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
Net income....................................................................       $322            $1,231
Adjustments to reconcile to net cash provided
 from operating activities:
   Cumulative effect of changes in accounting principles......................        (13)                8
   Extraordinary loss from early extinguishment of debt.......................         33                 -
   Discontinued operations....................................................         -                 26
   Minority interest in income of Marathon Ashland
    Petroleum LLC.............................................................        138               650
   Depreciation, depletion and amortization...................................        894               911
   Inventory market valuation credits.........................................        (72)               -
   Exploratory dry well costs.................................................         70                12
   Deferred income taxes......................................................         28              (220)
   Net (gains) losses on disposal of assets...................................        (44)              180
   Changes in:
         Current receivables..................................................        (87)              132
         Receivable from/payable to United States Steel.......................         (2)               -
         Inventories..........................................................       (142)             (101)
         Current accounts payable and accrued expenses........................        339              (296)
   All other - net............................................................          6               162
                                                                                   ------            ------
         Net cash provided from continuing operations.........................      1,470             2,695
         Net cash provided from discontinued operations.......................         -                197
                                                                                   ------            ------
         Net cash provided from operating activities..........................      1,470             2,892
                                                                                   ------            ------

INVESTING ACTIVITIES:
Capital expenditures..........................................................     (1,023)           (1,020)
Acquisition of Equatorial Guinea interests....................................     (1,160)               -
Acquisition of Pennaco Energy, Inc............................................         -               (506)
Disposal of assets............................................................         94               181
Receivable from United States Steel...........................................         54                 -
Restricted cash -  withdrawals................................................         39                66
                -  deposits...................................................        (82)              (52)
Investees.....................................................................        (98)               (1)
All other - net...............................................................         (8)                4
                                                                                   ------            ------
         Net cash used in continuing operations...............................     (2,184)           (1,328)
         Net cash used in discontinued operations.............................         -               (170)
                                                                                   ------            ------
         Net cash used in investing activities................................     (2,184)           (1,498)
                                                                                    ------           ------


</TABLE>












The accompanying notes are an integral part of these consolidated financial
statements.



<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
           CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)(Unaudited)
           -----------------------------------------------------------

<CAPTION>

                                                                                Nine Months Ended
                                                                                   September 30
 (Dollars in millions)                                                       2002             2001
-----------------------------------------------------------------------------------------------------
<S>                                                                         <C>                <C>
FINANCING ACTIVITIES:
Commercial paper and revolving credit arrangements - net..................   (200)            (526)
Other debt    -  borrowings...............................................  2,095              661
              -  repayments...............................................   (868)            (397)
Repayment of preferred securities.........................................   (295)               -
Common Stock - repurchased ...............................................      -               (1)
Treasury Stock - reissued.................................................      2               11
Dividends paid   -   Marathon Common Stock................................   (217)            (214)
                 -   Steel Stock..........................................      -              (40)
                 -   Preferred stock......................................      -               (6)
Distributions to minority shareholder of
 Marathon Ashland Petroleum LLC...........................................    (87)            (450)
                                                                           ------           ------
         Net cash provided from (used in) financing activities............    430             (962)
                                                                           ------           ------
EFFECT OF EXCHANGE RATE CHANGES ON CASH...................................      2               (4)
                                                                           ------           ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS......................   (282)             428
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR............................    657              559
                                                                           ------           ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................................   $375             $987
                                                                           ======           ======

</TABLE>

















The accompanying notes are an integral part of these consolidated financial
statements.



<PAGE>




                            MARATHON OIL CORPORATION
               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


    1.  These consolidated financial statements are unaudited but, in the
        opinion of management, reflect all adjustments necessary for a fair
        presentation of the results for the periods reported. All such
        adjustments are of a normal recurring nature unless disclosed otherwise.
        These financial statements, including selected notes, have been prepared
        in accordance with the applicable rules of the Securities and Exchange
        Commission and do not include all of the information and disclosures
        required by accounting principles generally accepted in the United
        States of America for complete financial statements. Certain
        reclassifications of prior year data have been made to conform to 2002
        classifications. These interim financial statements should be read in
        conjunction with the consolidated financial statements and notes thereto
        included in the 2001 Annual Report on Form 10-K of Marathon Oil
        Corporation (Marathon).

    2.  Prior to December 31, 2001, Marathon, formerly named USX Corporation,
        had two outstanding classes of common stock: USX-Marathon Group common
        stock (Marathon Stock), which was intended to reflect the performance of
        Marathon's energy business, and USX-U. S. Steel Group common stock
        (Steel Stock), which was intended to reflect the performance of
        Marathon's steel business. On December 31, 2001, Marathon disposed of
        its steel business through a tax-free distribution of the common stock
        of its wholly owned subsidiary United States Steel Corporation (United
        States Steel) to holders of Steel Stock in exchange for all outstanding
        shares of Steel Stock on a one-for-one basis (the Separation). At
        December 31, 2001, the net debt and other financings of United States
        Steel was $54 million less than the net debt and other financings
        attributable to the Steel Stock, adjusted for a $900 million value
        transfer and certain one-time items related to the Separation. On
        February 6, 2002, United States Steel made a payment to Marathon of $54
        million, plus applicable interest, to settle this difference.

        Marathon has accounted for the business of United States Steel as a
        discontinued operation. The income from discontinued operations for the
        periods ended September 30, 2001, represents the net income attributable
        to the Steel Stock, except for certain limitations on the amounts of
        corporate administrative expenses and interest expense (net of income
        tax effects) allocated to discontinued operations as required by
        accounting principles generally accepted in the United States. Because
        operating and investing activities are separately identifiable to each
        of Marathon and United States Steel, such amounts have been separately
        disclosed in the statement of cash flows. Financing activities were
        managed on a centralized, consolidated basis. Therefore they have been
        reflected on a consolidated basis in the statement of cash flows.

    3.  Effective January 1, 2001, Marathon adopted Statement of Financial
        Accounting Standards No. 133 "Accounting for Derivative Instruments and
        Hedging Activities" (SFAS No. 133), as amended by SFAS Nos. 137 and 138.
        This statement requires recognition of all derivatives as either assets
        or liabilities at fair value. The transition adjustment related to
        adopting SFAS No. 133 on January 1, 2001, was recognized as a cumulative
        effect of a change in accounting principle. The unfavorable cumulative
        effect on net income, net of a tax benefit of $5 million, was $8
        million. The unfavorable cumulative effect on other comprehensive income
        (loss) (OCI), net of a tax benefit of $4 million, was $8 million.





<PAGE>




                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


3. (Continued)

        Since the issuance of SFAS No. 133, the Financial Accounting Standards
        Board (FASB) has issued several interpretations. As a result, Marathon
        has recognized in income beginning on January 1, 2002, the effect of
        changes in the fair value of two long-term natural gas sales contracts
        in the United Kingdom. As of January 1, 2002, Marathon recognized a
        favorable cumulative effect of a change in accounting principle of $13
        million, net of tax of $7 million. The unfavorable pretax change in the
        fair value of the gas contracts during the first nine months of 2002 was
        $9 million. The recorded derivative assets will continue to be
        marked-to-market.

        In June 2001, the FASB issued Statement of Financial Accounting
        Standards No. 143 "Accounting for Asset Retirement Obligations" (SFAS
        No. 143). This statement requires the fair value of a liability for an
        asset retirement obligation be recognized in the period in which it is
        incurred if a reasonable estimate of fair value can be made. The
        associated asset retirement costs are capitalized as part of the
        carrying amount of the long-lived asset. Marathon will adopt this
        statement effective January 1, 2003, as required. The adoption of this
        statement will result in a cumulative effect and be reported as a change
        in accounting principle relating primarily to the abandonment of oil and
        gas producing facilities. At this time, Marathon cannot reasonably
        estimate the effect of adoption on either its financial position or
        results of operations.

        In April 2002, the FASB issued Statement of Financial Accounting
        Standards No. 145 "Rescission of FASB Statements No. 4, 44, and 64,
        Amendment of FASB Statement No. 13, and Technical Corrections" (SFAS No.
        145). Extinguishment of debt will be accounted for in accordance with
        Accounting Principles Board Opinion No. 30 "Reporting the Results of
        Operations Reporting the Effects of Disposal of a Segment of a Business,
        and Extraordinary, Unusual and Infrequently Occurring Events and
        Transactions". SFAS No. 145 has a dual effective date. The provisions
        relating to accounting for leases were applicable to transactions
        occurring after May 15, 2002. The provisions relating to the early
        extinguishment of debt will be adopted by Marathon on January 1, 2003.
        As a result, losses from the early extinguishment of debt in 2002, which
        are currently reported as extraordinary items, will be reported in
        income from continuing operations in comparative financial statements
        subsequent to the adoption of SFAS No. 145.

        In June 2002, the FASB issued Statement of Financial Accounting
        Standards No. 146 "Accounting for Exit or Disposal Activities" (SFAS No.
        146). SFAS No. 146 will be effective for exit or disposal activities
        that are initiated after December 31, 2002.


    4.  Basic net income per share is calculated by adjusting net income for
        dividend requirements of preferred stock when applicable and is based on
        the weighted average number of common shares outstanding.

        Diluted net income per share assumes exercise of stock options, provided
        the effect is not antidilutive.






<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

<CAPTION>

4. (Continued)- COMPUTATION OF INCOME PER COMMON SHARE
                                                                                           Third Quarter Ended
                                                                                              September 30
                                                                                    2002                      2001
(Dollars in millions, except per share data)                                  Basic       Diluted       Basic       Diluted
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>          <C>          <C>          <C>    
Common Stock
-------------
  Income from continuing operations applicable
     to Common Stock......................................................       $94          $94         $184        $184
  Expenses included in income from continuing
   operations applicable to Steel Stock...................................         -            -           10          10
  Costs associated with disposition of
    United States Steel...................................................         -            -           (1)         (1)
  Extraordinary loss......................................................        (7)          (7)           -           -
                                                                             -------      -------      -------      -------
  Net income applicable to Common Stock...................................       $87          $87         $193        $193
                                                                             =======      =======      =======      =======
Shares of common stock outstanding (thousands):
  Average number of common shares outstanding.............................   309,874      309,874      309,309     309,309
  Effect of dilutive securities - stock options...........................         -           96            -         614
                                                                             -------      -------      -------      -------
    Average common shares including dilutive effect.......................   309,874      309,970      309,309      309,923
                                                                             =======      =======      =======      =======
Per share:
  Income from continuing operations.......................................      $.30         $.30         $.59        $.59
                                                                             =======      =======      =======      =======
  Extraordinary loss......................................................     $(.02)       $(.02)           -            -
                                                                             =======      =======      =======      =======
  Net income..............................................................      $.28         $.28         $.63        $.62
                                                                             =======      =======      =======      =======
Steel Stock
-----------------
Loss from discontinued operations.........................................         -            -         $(13)       $(13)
Expenses included in loss from continuing
 operations applicable to Steel Stock.....................................         -            -          (10)        (10)
Preferred stock dividends.................................................         -            -           (2)         (2)
                                                                              ------       ------       ------       ------
Net loss applicable to Steel Stock........................................         -            -         $(25)       $(25)
                                                                              ======       ======       ======       ======
Average common shares including dilutive
    effect (thousands)....................................................         -            -       89,193      89,193
                                                                              ======       ======       ======       ======
Per share:
    Loss from discontinued operations.....................................         -            -        $(.15)      $(.15)
                                                                              ======       ======       ======       ======
    Net loss..............................................................         -            -        $(.28)      $(.28)
                                                                              ======       ======       ======       ======
</TABLE>




<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
<CAPTION>

4. (Continued)- COMPUTATION OF INCOME PER COMMON SHARE
                                                                                            Nine Month Ended
                                                                                              September 30
                                                                                    2002                      2001
(Dollars in millions, except per share data)                                  Basic       Diluted       Basic       Diluted
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>          <C>          <C>         <C>    
Common Stock
-------------
  Income from continuing operations applicable
     to Common Stock......................................................      $342         $342       $1,265      $1,265
  Expenses included in income from continuing
   operations applicable to Steel Stock...................................         -            -           31          31
  Costs associated with disposition of
    United States Steel...................................................         -            -          (13)        (13)
  Extraordinary loss......................................................       (33)         (33)           -           -
  Cumulative effect of changes in
   accounting principles..................................................        13           13           (8)         (8)
                                                                             -------      -------      -------      -------
  Net income applicable to Common Stock...................................      $322         $322       $1,275      $1,275
                                                                             =======      =======      =======     =======
Shares of common stock outstanding (thousands):
  Average number of common shares outstanding.............................   309,751      309,751      309,056     309,056
  Effect of dilutive securities - stock options...........................         -          201            -         396
                                                                             -------      -------      -------     -------
    Average common shares including dilutive effect.......................   309,751      309,952      309,056     309,452
                                                                             =======      =======      =======     =======
Per share:
  Income from continuing operations.......................................     $1.10        $1.10        $4.09       $4.09
                                                                             =======      =======      =======     =======
  Extraordinary loss......................................................     $(.10)       $(.10)           -           -
                                                                             =======      =======      =======     =======
  Cumulative effect of changes in
   accounting principles..................................................      $.04         $.04        $(.03)      $(.03)
                                                                             =======      =======      =======     =======
  Net income..............................................................     $1.04        $1.04        $4.13       $4.12
                                                                             =======      =======      =======     =======
Steel Stock
-----------------
Loss from discontinued operations.........................................         -            -         $(13)       $(13)
Expenses included in loss from continuing
 operations applicable to Steel Stock.....................................         -            -          (31)        (31)
Preferred stock dividends.................................................         -            -           (6)         (6)
                                                                              ------       ------       ------      ------
Net loss applicable to Steel Stock........................................         -            -         $(50)       $(50)
                                                                              ======       ======       ======      ======
Average common shares including dilutive
    effect (thousands)....................................................         -            -       89,003      89,003
                                                                              ======       ======       ======      ======
Per share:
    Loss from discontinued operations.....................................         -            -        $(.15)      $(.15)
                                                                              ======       ======       ======      ======
    Net loss..............................................................         -            -        $(.56)      $(.57)
                                                                              ======       ======       ======      ======
</TABLE>




<PAGE>




<TABLE>

                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

<CAPTION>

   5.  Marathon's operations consist of three operating segments: 1)
       Exploration and Production (E&P) - explores for and produces crude oil
       and natural gas on a worldwide basis; 2) Refining, Marketing and
       Transportation (RM&T) - refines, markets and transports crude oil and
       petroleum products, primarily in the Midwest, upper Great Plains and
       southeastern United States through Marathon Ashland Petroleum LLC (MAP);
       and 3) Other Energy Related Businesses (OERB) - markets and transports,
       primarily in the United States and Europe, its own and third-party
       natural gas, crude oil and related products such as liquefied natural
       gas and methanol.

       The results of segment operations are as follows:

                                                                                                                   Total
(In millions)                                                                   E&P        RM&T         OERB     Segments
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>          <C>          <C>         <C>   
THIRD QUARTER 2002
-------------------
Revenues and other income:
  Customer................................................................      $713       $7,199         $523      $8,435
  Intersegment (a)........................................................       210           41           18         269
  Equity in earnings of unconsolidated investees..........................        10           12           15          37
  Other...................................................................         2           15            -          17
                                                                              ------       ------       ------      ------
  Total revenues and other income.........................................      $935       $7,267         $556      $8,758
                                                                              ======       ======       ======      ======
Segment income............................................................      $250         $108          $29        $387
                                                                              ======       ======       ======      ======

THIRD QUARTER 2001
------------------
Revenues and other income:
  Customer................................................................      $867       $7,213         $434      $8,514
  Intersegment (a)........................................................       150            1           17         168
  United States Steel (a).................................................         3            -            1           4
  Equity in earnings of unconsolidated investees..........................        15           14            1          30
  Other...................................................................         -           19            5          24
                                                                              ------       ------       ------       ------
  Total revenues and other income.........................................    $1,035       $7,247         $458      $8,740
                                                                              ======       ======       ======      ======
Segment income............................................................      $256         $575           $6        $837
                                                                              ======       ======       ======      ======
</TABLE>



(a)    Management believes intersegment transactions and transactions with
       United States Steel were conducted under terms comparable to those with
       unrelated parties.



<PAGE>


<TABLE>



                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

<CAPTION>

5.  (Continued)

                                                                                                        Total
(In millions)                                                        E&P        RM&T         OERB     Segments
----------------------------------------------------------------------------------------------------------------
<S>                                                                <C>         <C>           <C>         <C>    
Nine Months 2002
-------------------
Revenues and other income:
  Customer.....................................................    $2,253      $19,221       $1,457      $22,931
  Intersegment (a).............................................       526          100           55          681
  Equity in earnings of unconsolidated investees...............        34           35           32          101
  Other........................................................         1           38           (1)          38
                                                                   ------       ------       ------       ------
  Total revenues and other income..............................    $2,814      $19,394       $1,543      $23,751
                                                                   ======       ======       ======       ======
Segment income.................................................      $677         $268          $74       $1,019
                                                                   ======       ======       ======       ======

Nine Months 2001
------------------
Revenues and other income:
  Customer.....................................................    $3,136      $21,490       $1,634      $26,260
  Intersegment (a).............................................       509           14           62          585
  United States Steel (a)......................................        18            -            6           24
  Equity in earnings of unconsolidated investees...............        52           29           11           92
Other..........................................................        16           52           11           79
                                                                   ------       ------       ------       ------
  Total revenues and other income..............................    $3,731      $21,585       $1,724      $27,040
                                                                   ======       ======       ======       ======
Segment income.................................................    $1,299       $1,693          $40       $3,032
                                                                   ======       ======       ======       ======
</TABLE>



(a)    Management believes intersegment transactions and transactions with
       United States Steel were conducted under terms comparable to those with
       unrelated parties.



<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

<CAPTION>

5. (Continued) - The following schedule reconciles segment revenues and income
   to amounts reported in the financial statements:

                                                                                    Third Quarter
                                                                                         Ended
                                                                                      September 30
 (In millions)                                                                     2002         2001
------------------------------------------------------------------------------------------------------
<S>                                                                                <C>          <C>   
Revenues and other income:
  Segment revenues and other income...........................................     $8,758       $8,740
  Items not allocated to segments:
    Gain on ownership change in MAP...........................................          5            1
    Gain on asset disposition ................................................         24            -
    Loss related to sale of certain Canadian assets...........................          -         (221)
  Elimination of intersegment revenues........................................       (269)        (168)
  Elimination of sales to United States Steel.................................          -           (4)
                                                                                   ------       ------
     Total revenues and other income..........................................     $8,518       $8,348
                                                                                   ======       ======

Income:
  Segment income..............................................................       $387         $837
  Items not allocated to segments:
    Administrative expenses...................................................        (42)         (40)
    Gain on ownership change in MAP...........................................          5            1
    Gain on asset disposition ................................................         24            -
    Contract settlement.......................................................        (15)           -
    Loss related to sale of certain Canadian assets...........................          -         (221)
                                                                                   ------       ------
     Total income from operations.............................................       $359         $577
                                                                                   ======       ======
<CAPTION>

                                                                                   Nine Months Ended
                                                                                     September 30
 (In millions)                                                                     2002         2001
------------------------------------------------------------------------------------------------------
<S>                                                                               <C>          <C>    
Revenues and other income:
  Segment revenues and other income...........................................    $23,751      $27,040
  Items not allocated to segments:
    Gain (loss) on ownership change in MAP....................................          9           (5)
    Gain on lease resolution with U.S. Government.............................          -           59
    Gain on asset disposition ................................................         24            -
    Loss related to sale of certain Canadian assets...........................          -         (221)
  Elimination of intersegment revenues........................................       (681)        (585)
  Elimination of sales to United States Steel.................................          -          (24)
                                                                                    -----        -----
     Total revenues and other income..........................................    $23,103      $26,264
                                                                                   ======       ======
</TABLE>





<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

<CAPTION>

5.  (Continued)

                                                                                   Nine Months Ended
                                                                                     September 30
 (In millions)                                                                     2002         2001
------------------------------------------------------------------------------------------------------
<S>                                                                                <C>          <C>   
Income:
  Segment income.................................................................  $1,019       $3,032
  Items not allocated to segments:
    Administrative expenses......................................................    (125)        (127)
    Gain (loss) on ownership change in MAP.......................................       9           (5)
    Gain on lease resolution with U.S. Government................................       -           59
    Gain on asset disposition ...................................................      24            -
    Contract settlement..........................................................     (15)           -
    Inventory market valuation credit............................................      72            -
    Loss related to sale of certain Canadian assets..............................       -         (221)
                                                                                   ------       ------
     Total income from operations................................................    $984       $2,738
                                                                                   ======       ======
</TABLE>


6.   During 2002, in two separate transactions, Marathon acquired interests in
     the Alba Field offshore Equatorial Guinea, West Africa, and certain other
     related assets.

     On January 3, 2002, Marathon acquired certain interests from CMS Energy
     Corporation for $1,005 million. Marathon acquired three entities that own a
     combined 52.4% working interest in the Alba Production Sharing Contract and
     a net 43.2% interest in an onshore liquefied petroleum gas processing plant
     through an equity method investee. Additionally, Marathon acquired a 45%
     net interest in an onshore methanol production plant through an equity
     method investee. Results of operations for the nine months of 2002 include
     the results of the interests acquired from CMS Energy from January 3, 2002.

     On June 20, 2002, Marathon acquired 100% of the outstanding stock of
     Globex Energy, Inc. (Globex) for $155 million. Globex owned an additional
     10.9% working interest in the Alba Production Sharing Contract and an
     additional net 9.0% interest in the onshore liquefied petroleum gas
     processing plant. Globex also held oil and gas interests offshore
     Australia.

     The allocations of purchase price are preliminary. The allocations to
     intangible assets are not expected to be significant. The goodwill arising
     from the preliminary allocations was $179 million, which was assigned to
     the E&P segment. Significant factors that resulted in the recognition of
     goodwill include: the ability to acquire an established business with an
     assembled workforce and a proven track record and a strategic acquisition
     in a core geographic area.

     Additionally, the purchase price allocated to the equity method investments
     is $224 million higher than the underlying net assets of the investees.
     This excess will be amortized over the expected useful life of the
     underlying assets except for $35 million of goodwill relating to the equity
     investments.



<PAGE>



                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

6.  (Continued)
     The following table summarizes the preliminary allocation of the
     purchase price to the assets acquired and liabilities assumed at the
     date of acquisitions:
     (In millions)
     --------------------------------------------------------------------------
     Receivables.....................................................   $   22
     Inventories.....................................................       10
     Investments and long-term receivables...........................      463
     Property, plant and equipment...................................      661
     Goodwill (none deductible for income tax purposes)..............      179
     Other assets....................................................        3
                                                                        ------
        Total assets acquired........................................   $1,338
                                                                        ------

     Current liabilities.............................................  $   (31)
     Deferred income taxes...........................................     (147)
                                                                        ------
        Total liabilities assumed...................................    $ (178)
                                                                        ------
        Net assets acquired.........................................    $1,160
                                                                        ======

     In the first quarter 2001, Marathon acquired Pennaco Energy, Inc.(Pennaco),
     a natural gas producer. Marathon acquired 87% of the outstanding stock of
     Pennaco through a tender offer completed on February 7, 2001 at $19 a 
     share. On March 26, 2001, Pennaco was merged with a wholly owned 
     subsidiary of Marathon. Under the terms of the merger, each share not held 
     by Marathon was converted into the right to receive $19 in cash. The total 
     cash purchase price of Pennaco was $506 million. The acquisition was 
     accounted for under the purchase method of accounting. The goodwill 
     totaled $70 million. Goodwill amortization ceased upon adoption of SFAS 
     No. 142 on January 1, 2002. Results of operations for the nine months of 
     2001 include the results of Pennaco from February 7, 2001.

     The following unaudited pro forma data for Marathon includes the results
     of operations of the above acquisitions giving effect to them as if they
     had been consummated at the beginning of the periods presented. The pro
     forma data is based on historical information and does not necessarily
     reflect the actual results that would have occurred nor is it
     necessarily indicative of future results of operations. Included in the
     amounts for the nine months ended September 30, 2002 are approximately
     $3 million (net of tax of $2 million) or $0.01 per share of nonrecurring
     legal and employee benefit costs incurred by Globex related to the
     acquisition.
   
                                                              Nine Months Ended
                                                                 September 30
     (In millions, except per share amounts)                    2002       2001
     ---------------------------------------------------------------------------
     Revenues and other income............................... $23,114   $26,345
     Income from continuing operations.......................     338     1,259
     Net income..............................................     318     1,225
     Per share amounts applicable to Common Stock
      - Income from continuing operations - basic............    1.09      4.08
      - Income from continuing operations - diluted..........    1.09      4.07
      - Net income - basic...................................    1.03      4.11
      - Net income - diluted.................................    1.03      4.10



<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
<CAPTION>


7.   During the second quarter of 2002, Marathon acquired additional interests
     in coalbed methane assets in the Powder River Basin of northern Wyoming
     and southern Montana from XTO Energy, Inc. (XTO) in exchange for certain 
     oil and gas properties in eastern Texas and northern Louisiana. 
     Additionally, 100 million cubic feet per day (MMCFD) of long term gas 
     transportation capacity was released to Marathon by the original owner of 
     the Powder River Basin interests.

     On July 1, 2002, Marathon completed this transaction by selling its 
     production interests in the San Juan Basin of New Mexico to XTO for $42
     million. Marathon recognized a pretax gain of $24 million in the third
     quarter related to this transaction.

8.   Inventories are carried at lower of cost or market. Cost of inventories of 
     crude oil and refined products is determined primarily under the last-in, 
     first-out (LIFO) method.

                                                                 (In millions)
                                                         ---------------------------
                                                         September 30    December 31
                                                             2002           2001
                                                         ------------    -----------
     <S>                                                     <C>          <C>   
     Crude oil and natural gas liquids....................     $634         $693
     Refined products and merchandise.....................    1,331        1,143
     Supplies and sundry items............................      110           87
                                                             ------       ------
       Total (at cost)...................................     2,075        1,923
       Less inventory market valuation reserve...........        -            72
                                                             ------       ------
     Net inventory carrying value.........................   $2,075       $1,851
                                                             ======       ======
</TABLE>


     When the cost basis of its inventory exceeds market value, Marathon
     establishes an inventory market valuation (IMV) reserve to adjust the
     cost basis of its inventories to current market value. Quarterly
     adjustments to the IMV reserve result in noncash charges or credits to
     income from operations. Decreases in market prices below the cost basis
     result in charges to income from operations. Once a reserve has been
     established, subsequent inventory turnover and increases in prices (up
     to the cost basis) result in credits to income from operations. Nine
     months ended September 30, 2002, results of operations include a credit
     to income from operations of $72 million.





<PAGE>


<TABLE>



                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

<CAPTION>

9. The following sets forth Marathon's comprehensive income for the periods
   shown:

                                                                   Third Quarter         Nine Months
                                                                       Ended                Ended
                                                                   September 30         September 30
     (In millions)                                               2002       2001      2002       2001
     -------------                                              ------     ------    ------     ------
     <S>                                                          <C>       <C>       <C>      <C>   
     Net income..............................................     $87       $170      $322     $1,231
     Other comprehensive income (loss), net of tax
        Foreign currency translation
          adjustments........................................       3          -         -         (2)
        Deferred gains (losses)
          on derivative instruments..........................      (8)        15       (47)        57
        Minimum pension liability adjustments................       -          -         -          2
                                                               ------     ------    ------     ------
     Total comprehensive income..............................     $82       $185      $275     $1,288
                                                               ======     ======    ======     ======
</TABLE>


       During the first nine months of 2002, $14 million of gains, net of tax,
       were reclassified into earnings as a result of the discontinuance of
       cash flow hedges. As a result of a revised production forecast, it is
       no longer probable the original forecasted transactions will occur.

10.    The provision for income taxes for the periods reported is based on tax
       rates and amounts which recognize management's best estimate of current
       and deferred tax assets and liabilities.

       In July 2002, the United Kingdom enacted a supplementary 10 percent tax
       on profits from North Sea oil and gas production retroactively
       effective to April 17, 2002. In the third quarter 2002, Marathon
       recognized a one-time noncash deferred tax adjustment of $61 million
       related to prior periods.

       The provision for income taxes for the first nine months of 2002
       decreased by $400 million compared to the prior period primarily due to
       a $1,323 million decrease in income before income taxes in 2002
       compared to 2001. The effective tax rate for the first nine months of
       2002 was 46% compared to 35% for the comparable period in 2001. Without
       the one-time non cash deferred tax adjustment of $61 million, the
       effective tax rate for the first nine months of 2002 would have been
       36%.

       Interest and other financial costs in the nine months of 2001 included
       a favorable adjustment of $9 million related to certain prior years'
       taxes.

11.    At September 30, 2002, Marathon had no borrowings against its $1,354
       million long-term revolving credit facility and no borrowings against
       its $451 million short-term revolving credit facility. In April 2002,
       Marathon initiated a $1,350 million U.S. commercial paper program which
       is backed by the long-term revolving credit facility. $275 million of
       commercial paper was outstanding at September 30, 2002.

       Certain banks provide Marathon with uncommitted short-term lines of 
       credit totaling $200 million. At September 30, 2002, there were no 
       borrowings against these facilities.



<PAGE>




                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


11.  (Continued)

       At September 30, 2002, MAP had no borrowings against its $350 million
       short-term revolving credit agreements with banks and had no borrowings
       outstanding against its $190 million revolving credit agreement with
       Ashland, Inc., which was amended and extended for one year to March 15,
       2003. MAP had an additional committed $100 million 364-day revolving
       credit facility which expired in July 2002.

       At September 30, 2002, in the event of a change in control of Marathon,
       debt obligations totaling $2,378 million and operating lease obligations
       of $100 million may be declared immediately due and payable. In such 
       event, Marathon may also be required to either repurchase the leased 
       Fairfield slab caster for $96 million or provide a letter of credit to
       secure the remaining obligation.

12.    In the first nine months of 2002, Marathon issued notes of $1.45
       billion as follows: $450 million due 2012, $550 million due 2032 and
       $450 million due 2007, bearing interest at 6.125%, 6.8% and 5.375%,
       respectively. Additionally, Marathon Global Funding Corporation, a
       100%-owned consolidated finance subsidiary of Marathon, issued notes of
       $400 million due 2012, bearing interest at 6.0%. Marathon has fully and
       unconditionally guaranteed the securities of Marathon Global Funding.

       Marathon used the net proceeds to fund the purchase price and
       associated costs of the CMS Energy and Globex acquisitions, to
       refinance existing debt, to reduce outstanding commercial paper and for
       other general corporate purposes. The debt repurchased and retired
       early had average terms to maturity of between two and 21 years bearing
       interest at rates ranging from 8.125% to 9.375% per year, or a weighted
       average of 9.04% per year. The retirement of $144 million in the third
       quarter resulted in an extraordinary loss of $7 million (net of tax of
       $5 million) or $0.02 per share. During the nine months ended September
       30, 2002, Marathon retired $337 million of long-term debt resulting in
       an extraordinary loss of $33 million (net of tax of $20 million) or
       $0.10 per share.

13.    Marathon is the subject of, or party to, a number of pending or
       threatened legal actions, contingencies and commitments involving a
       variety of matters, including laws and regulations relating to the
       environment. Certain of these matters are discussed below. The ultimate
       resolution of these contingencies could, individually or in the
       aggregate, be material to the consolidated financial statements.
       However, management believes that Marathon will remain a viable and
       competitive enterprise even though it is possible that these
       contingencies could be resolved unfavorably.

       Marathon is subject to federal, state, local and foreign laws and
       regulations relating to the environment. These laws generally provide
       for control of pollutants released into the environment and require
       responsible parties to undertake remediation of hazardous waste disposal
       sites. Penalties may be imposed for noncompliance. At September 30, 2002
       and December 31, 2001, accrued liabilities for remediation totaled $72
       million and $77 million, respectively. It is not presently possible to
       estimate the ultimate amount of all remediation costs that might be
       incurred or the penalties that may be imposed. Receivables for
       recoverable costs from certain states, under programs to assist
       companies in cleanup efforts related to underground storage tanks at
       retail marketing outlets, were $58 million at September 30, 2002, and
       $60 million at December 31, 2001.




<PAGE>




                            MARATHON OIL CORPORATION
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


13.  (Continued)

       For a number of years, Marathon has made substantial capital expenditures
       to ensure its existing facilities comply with various laws relating to
       the environment. In the nine months of 2002 and for the years 2001 and
       2000, such capital expenditures totaled $69 million, $85 million and $73
       million, respectively.

       At September 30, 2002 and December 31, 2001, accrued liabilities for
       platform abandonment and dismantlement totaled $217 million and $193
       million, respectively.

       Marathon guaranteed certain obligations related to the business of
       United States Steel. As of September 30, 2002 and December 31, 2001, the
       exposure for all of these matters totaled $19 million and $28 million,
       respectively.

       United States Steel is the sole general partner of Clairton 1314B
       Partnership, L.P., which owns certain cokemaking facilities formerly
       owned by United States Steel. Marathon has guaranteed to the limited
       partners all obligations of United States Steel under the partnership
       documents. United States Steel may dissolve the partnership under
       certain circumstances, including if it is required to fund accumulated
       cash shortfalls of the partnership in excess of $150 million. In
       addition to the normal commitments of a general partner, United States
       Steel has indemnified the limited partners for certain income tax
       exposures. United States Steel has reported that it currently has no
       unpaid outstanding obligations to the limited partners.

       At September 30, 2002, and December 31, 2001, Marathon's pro rata share
       of obligations of LOOP LLC and various pipeline investees secured by
       throughput and deficiency agreements totaled $168 million. Under the
       agreements, Marathon is required to advance funds if the investees are
       unable to service debt. Any such advances are prepayments of future
       transportation charges.

       At September 30, 2002, and December 31, 2001, MAP had guaranteed the
       repayment of $75 million and $38 million, respectively of the outstanding
       balance of Centennial Pipeline LLC's Master Shelf and Revolving Note 
       Agreements.

       At September 30, 2002, and December 31, 2001, Marathon's contract
       commitments to acquire property, plant and equipment and long-term
       investments totaled $664 million and $297 million, respectively.



<PAGE>




                MARATHON OIL CORPORATION AND SUBSIDIARY COMPANIES

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         Marathon Oil Corporation (Marathon), formerly USX Corporation, is
engaged in worldwide exploration and production of crude oil and natural gas;
domestic refining, marketing and transportation of crude oil and petroleum
products primarily through its 62 percent owned subsidiary, Marathon Ashland
Petroleum LLC (MAP); and other energy related businesses. Management's
Discussion and Analysis should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements. The
discussion of the Consolidated Statement of Income should be read in conjunction
with the Supplemental Statistics provided on page 45.

         Prior to December 31, 2001, Marathon had two outstanding classes of
common stock: USX-Marathon Group common stock (Marathon Stock), which was
intended to reflect the performance of Marathon's energy business, and USX-U. S.
Steel Group common stock (Steel Stock), which was intended to reflect the
performance of Marathon's steel business. On December 31, 2001, Marathon
disposed of its steel business by distributing the common stock of its wholly
owned subsidiary United States Steel Corporation (United States Steel) to
holders of Steel Stock in exchange for all outstanding shares of Steel Stock on
a one-for-one basis (the Separation).

         Certain sections of Management's Discussion and Analysis include
forward-looking statements concerning trends or events potentially affecting
Marathon. These statements typically contain words such as "anticipates",
"believes", "estimates", "expects" or similar words indicating that future
outcomes are uncertain. In accordance with "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, these statements are
accompanied by cautionary language identifying important factors, though not
necessarily all such factors, that could cause future outcomes to differ
materially from those set forth in the forward-looking statements. For
additional risk factors affecting the businesses of Marathon, see the
information preceding Part I in the Marathon 2001 Form 10-K and subsequent
filings.

New Accounting Standards
------------------------
         Since the issuance of Statement of Financial Accounting Standards No.
133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No.
133), the FASB has issued several interpretations. As a result, Marathon has
recognized in income beginning on January 1, 2002, the effect of changes in the
fair value of two long-term natural gas sales contracts in the United Kingdom
(U.K.). As of January 1, 2002, Marathon recognized a favorable cumulative effect
of a change in accounting principle of $13 million, net of tax of $7 million.
The unfavorable pretax change in the fair value of the gas contracts during the
first nine months of 2002 was $9 million. The recorded derivative assets will
continue to be marked-to-market. Marathon expects to experience some volatility
in earnings as a result of these interpretations.

         In June 2001, the FASB issued Statement of Financial Accounting
Standards No. 143 "Accounting for Asset Retirement Obligations" (SFAS No. 143).
This statement requires the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset. Marathon
will adopt this statement effective January 1, 2003, as required. The adoption
of this statement will result in a cumulative effect and be reported as a change
in accounting principle relating primarily to the abandonment of oil and gas
producing facilities. Marathon expects that the cumulative effect adjustment
will be favorable and that the effect on future earnings will be unfavorable.
However, Marathon cannot reasonably quantify the effect of adoption on either
its financial position or results of operations at this time.



<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         In April 2002, the FASB issued Statement of Financial Accounting
Standards No. 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB Statement No. 13, and Technical Corrections" (SFAS No. 145). Extinguishment
of debt will be accounted for in accordance with Accounting Principles Board
Opinion No. 30 "Reporting the Results of Operations Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions". SFAS No. 145 has a dual effective date. The
provisions relating to accounting for leases were applicable to transactions
occurring after May 15, 2002. The provisions relating to the early
extinguishment of debt will be adopted by Marathon on January 1, 2003. As a
result, losses from the early extinguishment of debt in 2002, which are
currently reported as extraordinary items, will be reported in income from
continuing operations in comparative financial statements subsequent to the
adoption of SFAS No. 145.

         In June 2002, the FASB issued Statement of Financial Accounting
Standards No. 146 "Accounting for Exit or Disposal Activities" (SFAS No. 146).
SFAS No. 146 will be effective for exit or disposal activities that are
initiated after December 31, 2002.





<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
<CAPTION>

Results of Operations
---------------------
         Revenues and other income for the third quarter and first nine months 
of 2002 and 2001 are summarized in the following table:

                                                                        Third Quarter        Nine Months
                                                                           Ended                Ended
                                                                        September 30         September 30
(Dollars in millions)                                                2002       2001        2002       2001
------------------------------------------------------------------------------------------------------------
<S>                                                                <C>        <C>         <C>        <C>    
Exploration & production                                             $935     $1,035       $2,814     $3,731
Refining, marketing & transportation                                7,267      7,247       19,394     21,585
Other energy related businesses                                       556        458        1,543      1,724
                                                                   ------     ------       ------     ------
         Segment revenues and other income                          8,758      8,740       23,751     27,040

Revenues and other income not allocated to segments:
    Gain (loss) on ownership change in MAP                              5          1            9         (5)
    Gain on lease resolution with the
    U.S. Government                                                     -          -            -         59
    Gain on asset disposition                                          24          -           24          -
    Loss related to sale of certain Canadian assets                     -       (221)           -       (221)
Elimination of intersegment revenues                                 (269)      (168)        (681)      (585)
Elimination of sales to United States Steel                             -         (4)           -        (24)
                                                                    -----      -----       ------     ------
         Total revenues and other income                           $8,518     $8,348      $23,103    $26,264
                                                                   ======     ======       ======     ======

Items included in both revenues and costs and expenses, resulting in no effect 
on income:
Consumer excise taxes on petroleum
    products and merchandise                                       $1,114     $1,152       $3,193     $3,322
Matching crude oil, gas and refined product
    buy/sell transactions settled in cash:
       E&P                                                             78        126          227        359
       RM&T                                                         1,189      1,024        3,078      2,921
                                                                   ------     ------       ------     ------
         Total buy/sell transactions                               $1,267     $1,150       $3,305     $3,280
                                                                   ======     ======       ======     ======

</TABLE>


         E&P segment revenues decreased by $100 million in the third quarter of
2002 from the comparable prior-year period. This decrease primarily reflected
lower worldwide liquid hydrocarbon and natural gas volumes and losses from
derivative activities, partially offset by higher liquid hydrocarbon prices. For
the first nine months of 2002, revenues decreased by $917 million from the
prior-year period. This decrease primarily reflected lower worldwide natural gas
and liquid hydrocarbon prices and lower domestic liquid hydrocarbon volumes,
partially offset by higher international liquid hydrocarbon volumes.

         RM&T segment revenues in the third quarter of 2002 were flat with the
comparable prior-year period. For the first nine months of 2002, revenues
decreased by $2,191 million from the prior-year period. The decrease in the
first nine months primarily reflected lower refined product prices.



<PAGE>



<TABLE>


                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
<CAPTION>

         OERB revenues increased by $98 million in the third quarter of 2002
from the comparable prior-year period. This increase in the third quarter
primarily reflected increased natural gas and crude oil sales volumes. For the
first nine months of 2002, revenues decreased by $181 million from the
prior-year period. The decrease in the first nine months primarily reflected
lower natural gas prices partially offset by higher natural gas and crude oil
sales volumes.

         Income from operations for the third quarter and first nine months of
2002 and 2001 is summarized in the following table:
                                                            Third Quarter              Nine Months
                                                                Ended                    Ended
                                                            September 30              September 30
(Dollars in millions)                                     2002       2001          2002       2001
---------------------------------------------------------------------------------------------------
<S>                                                        <C>        <C>          <C>        <C>  
E&P
     Domestic                                             $187       $207           $458     $1,007
     International                                          63         49            219        292
                                                          ----       ----           ----       ----
        E&P segment income                                 250        256            677      1,299
RM&T                                                       108        575            268      1,693
OERB                                                        29          6             74         40
                                                          ----       ----           ----      -----
           Segment income                                  387        837          1,019      3,032

Items not allocated to segments:
      Administrative expenses                              (42)       (40)          (125)      (127)
      Inventory market valuation                             -          -             72          -
      Gain (loss) on ownership change - MAP                  5          1              9         (5)
      Contract settlement                                  (15)         -            (15)         -
      Gain on asset disposition                             24          -             24          -
      Gain on lease resolution with U.S. Government          -          -              -         59
      Loss related to sale of Certain Canadian Assets        -       (221)             -       (221)
                                                          ----       ----           ----      -----

           Total income from operations                   $359       $577           $984     $2,738
                                                          ====     ======           ====     ======
</TABLE>


         In the third quarter of 2002 segment income decreased by $450 million
from last year's third quarter. Segment income in the first nine months of 2002
decreased by $2,013 million from the first nine months of 2001. The decrease in
the third quarter was due primarily to lower refined product margins and lower
liquid hydrocarbon and natural gas volumes. The decrease in the first nine
months was due to lower refined product margins, lower liquid hydrocarbon and
natural gas prices and volumes.

         Worldwide E&P segment income decreased $6 million and $622 million in
the third quarter and first nine months of 2002, respectively, compared with the
same periods in 2001, primarily due to the factors discussed below.

         Domestic E&P income in the third quarter of 2002 decreased by $20
million from last year's third quarter. Results in the first nine months of 2002
decreased by $549 million from the same period in 2001. The decrease in the
third quarter was primarily due to lower liquid hydrocarbon and natural gas
volumes. The decrease in the first nine months was due primarily to lower liquid
hydrocarbon and natural gas prices and volumes, higher exploratory dry well
expense and decreased derivative gains.



<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         International E&P income in the third quarter of 2002 increased by $14
million from last year's third quarter. Results in the first nine months of 2002
decreased by $73 million from the same period in 2001. The increase in the third
quarter is a result of the addition of production interests in Equatorial
Guinea, higher liquid hydrocarbon prices and lower transportation costs. This
increase was partially offset by a mark-to-market valuation loss of $21 million
associated with long-term natural gas contracts in the U.K. The decrease in the
first nine months was due primarily to lower natural gas and liquid hydrocarbon
prices, higher dry well expense and higher derivative losses partially offset by
the addition of production interests in Equatorial Guinea and lower
transportation costs. The first nine months of 2002 income includes a $9 million
loss related to changes in the fair value of natural gas sales contracts in the
U.K. (See Note 3 to the Consolidated Financial Statements.)

         RM&T segment income in the third quarter of 2002 decreased by $467
million from last year's third quarter. Results in the first nine months of 2002
decreased by $1,425 million from the same period in 2001. The decrease in
downstream segment income was primarily due to a significantly lower refining
and wholesale marketing margin. The refining and wholesale marketing margin was
lower in the third quarter 2002 compared to the prior year period as crude oil
costs increased more than refined product prices. Continuing narrow price
differentials between sweet and sour crude oil in the third quarter 2002 also
negatively impacted the refining and wholesale marketing margin. The refining
and wholesale marketing margin was severely compressed in the first nine months
of 2002 as refined product prices decreased more than crude oil costs compared
to the prior year period.

         OERB segment income in the third quarter of 2002 increased by $23
million from last year's third quarter. Results in the first nine months of 2002
increased by $34 million from the same period in 2001. The increase in the third
quarter reflected a favorable effect of $14 million from increased margins in
our gas marketing activities and mark-to-market valuation changes in derivatives
used to support those activities, earnings of $5 million from Marathon's equity
investment in the Equatorial Guinea methanol plant acquired in 2002, and the
recognition of a $5 million property damage loss in the third quarter 2001 for
an equity investment in an offshore pipeline. The increase for the nine months
was primarily the net result of increased margins in our gas marketing
activities and mark-to-market valuation changes in derivatives used to support
those activities and the aforementioned property damage loss in 2001.

         Net interest and other financial costs for the third quarter and the
first nine months of 2002 increased $25 million and $81 million, respectively,
from the comparable 2001 period. These increases were due to higher average
debt levels resulting from acquisitions and the Separation. Also, in the first
nine months of 2001, interest and other financial costs included a favorable
adjustment of $9 million related to prior year taxes.

         The minority interest in income of MAP, which represents Ashland's 38
percent ownership interest, decreased $178 million and $512 million in the third
quarter and the first nine months of 2002, respectively, from the comparable
2001 periods, due to lower MAP income as discussed above for the RM&T segment.

         The provision for income taxes in the third quarter of 2002 increased
by $25 million from the comparable 2001 period primarily due to the United
Kingdom's enactment of a supplementary 10 percent tax on profits from North Sea
oil and gas production retroactively effective to April 17, 2002 resulting in a
one-time non cash deferred tax



<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

adjustment of $61 million.  This increase was partially offset by a $65 million
decrease in 2002 quarterly income before income taxes compared to the same
period in 2001. The effective tax rate for the third quarter of 2002 was 61%
compared to 39% for the third quarter of 2001. Without the one-time non cash
deferred tax adjustment of $61 million, the effective tax rate for the third
quarter of 2002 would have been 35%.

         Discontinued operations in the third quarter and first nine months of 
2001 related to the businesses of United States Steel.

         Extraordinary loss from early extinguishment of debt in the third
quarter of 2002 was attributable to the $144 million of long-term debt retired,
resulting in a pre-tax extraordinary loss of $12 million ($7 million net of
taxes or $.02 per share). During the first nine months of 2002, Marathon retired
$337 million of long-term debt resulting in a pretax extraordinary loss of $53
million ($33 million net of taxes or $.10 per share.)

         The cumulative effect of changes in accounting principles of $13
million, net of a tax provision of $7 million in the first nine months of 2002
represents the adoption of recently issued interpretations by the FASB of SFAS
No. 133 in which Marathon must recognize in income the effect of changes in the
fair value of two long term natural gas contracts in the United Kingdom. The $8
million loss, net of a tax benefit of $5 million, in the first nine months of
2001 was an unfavorable transition adjustment related to the adoption of SFAS
No. 133. For further discussion, see Note 3 to the Consolidated Financial
Statements.

         Net income for the third quarter and first nine months decreased by $83
million and $909 million, respectively, in 2002 from 2001, primarily reflecting
the factors discussed above.

Dividends to Stockholders
-------------------------
         On October 30, 2002, the Marathon Board of Directors (the Board)
declared dividends of 23 cents per share, payable December 10, 2002, to
stockholders of record at the close of business on November 20, 2002.

Cash Flows
----------
         Net cash provided from operating activities was $1,470 million in the
first nine months of 2002, compared with $2,695 million (from continuing
operations) in the first nine months of 2001. The $1,225 million decrease mainly
reflects the effects of lower refined product margins and lower prices for
liquid hydrocarbons and natural gas.

         Capital expenditures in the first nine months of 2002 totaled $1,023
million excluding the acquisitions of Equatorial Guinea interests, compared with
$1,020 million in the first nine months of 2001. The $3 million increase mainly
reflected increased spending in the first nine months of 2002 in the OERB
segment offset by decreased spending in the RM&T segment. The increase in the
OERB segment was attributable to the $32 million paid to acquire the right to
deliver and sell liquefied natural gas at terminal facilities located at Elba
Island, near Savannah, Georgia. Marathon can supply up to 58 billion cubic feet
of natural gas per year, for a minimum of 17 years, at the Elba Island LNG
regasification terminal. For information regarding capital expenditures by
segment, refer to the Supplemental Statistics on page 45.


<PAGE>


                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         Acquisitions included cash payments of $1,160 million in the first nine
months of 2002 for the two acquisitions of Equatorial Guinea interests and $506
million in the first nine months of 2001 for Pennaco Energy, Inc. (Pennaco). For
further discussion of acquisitions, see Note 6 to the Consolidated Financial
Statements.

         Cash from disposal of assets was $94 million in the first nine months
of 2002, compared with $181 million in the first nine months of 2001. In 2002,
proceeds totaling $42 million were from the disposition of certain oil and gas
properties in the San Juan Basin of New Mexico to complete the exchange
transaction described below. Other proceeds in 2002 were primarily the result of
the disposition of certain Speedway SuperAmerica LLC (SSA) stores. Proceeds in
2001 were mainly from the sale of various Canadian oil fields, SSA stores, and
various domestic producing properties.

         Net cash provided from financing activities was $430 million in the
first nine months of 2002, compared with net cash used of $962 million in the
first nine months 2001. The increase was due to the financing primarily
associated with the two acquisitions of Equatorial Guinea interests of
approximately $1.2 billion. This was partially offset by the early
extinguishment of debt of $337 million and the $295 million repayment of
preferred securities which became redeemable or were converted to a right to
receive cash upon the Separation. In early January 2002, Marathon paid $185
million to retire the 6.75% Convertible Quarterly Income Preferred Securities
and $110 million to retire the 6.50% Cumulative Convertible Preferred Stock.
Additionally, distributions to minority shareholder of MAP were $87 million in
the first nine months of 2002, compared to $450 million in the comparable 2001
period.

         Significant noncash activities in the first nine months of 2002
included an asset exchange whereby Marathon acquired additional interests in
coalbed methane assets in the Powder River Basin of northern Wyoming and
southern Montana in exchange for certain oil and gas properties in eastern Texas
and northern Louisiana. Additionally, 100 million cubic feet per day (MMCFD) of
long term gas transportation capacity was released to Marathon as part of this
transaction.

Derivative Instruments
----------------------
         See Quantitative and Qualitative Disclosure About Market Risk for
discussion of derivative instruments and associated market risk.

Debt Ratings
--------------------------------
         Marathon's senior unsecured debt is currently rated investment grade by
Standard and Poor's Corporation, Moody's Investor Services, Inc. and Fitch
Ratings with ratings of BBB+, Baa1, and BBB+, respectively.




<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Liquidity
---------
         Marathon's main sources of liquidity and capital resources are
internally generated cash flow from operations, committed and uncommitted credit
facilities, and access to both the debt and equity capital markets. Marathon's
ability to access the debt capital market is supported by its investment grade
credit ratings. Because of the liquidity and capital resource alternatives
available to Marathon, including internally generated cash flow, Marathon's
management believes that its short-term and long-term liquidity is adequate to
fund operations, including its capital spending program, repayment of debt
maturities for the years 2002, 2003, and 2004, and any amounts that may
ultimately be paid in connection with contingencies.

         Marathon has a committed $1,354 million long-term revolving credit
facility that terminates in November 2005 and a committed $451 million 364-day
revolving credit facility that terminates in November 2002. At September 30,
2002, there were no borrowings against these facilities. Marathon expects to
renew the 364-day facility at approximately the same size. In April 2002,
Marathon initiated a $1,350 million U.S. commercial paper program which is
backed by the long-term revolving credit facility. $275 million of commercial
paper was outstanding at September 30, 2002. Additionally, at September 30,
2002, Marathon had other uncommitted short-term lines of credit totaling $200
million, of which no amounts were drawn. MAP currently has a committed $350
million short-term revolving credit facility which expires in July 2003.
Additionally, MAP has a $190 million revolving credit agreement with Ashland
which expires in March 2003. As of September 30, 2002, MAP did not have any
borrowings against these facilities.

         In early September 2002, Marathon filed a new universal shelf
registration statement with the Securities and Exchange Commission registering
$2.7 billion aggregate amount of common stock, preferred stock and other equity
securities, debt securities, trust preferred securities and/or other securities,
including securities convertible into or exchangeable for other equity or debt
securities.

         In the first nine months of 2002, Marathon issued notes of $1.45
billion as follows: $450 million due 2012, $550 million due 2032 and $450
million due 2007, bearing interest at 6.125%, 6.8% and 5.375%, respectively.
Additionally, Marathon Global Funding Corporation, a 100%-owned consolidated
finance subsidiary of Marathon, issued notes of $400 million due 2012, bearing
interest at 6.0%. Marathon has fully and unconditionally guaranteed the
securities of Marathon Global Funding.

         Marathon used the net proceeds to fund the purchase price and
associated costs of the CMS Energy and Globex acquisitions, to refinance
existing debt, to reduce outstanding commercial paper and for other general
corporate purposes. The debt repurchased and retired early had average terms to
maturity of between two and 21 years bearing interest at rates ranging from
8.125% to 9.375% per year, or a weighted average of 9.04% per year. The
retirement of $144 million in the third quarter resulted in an extraordinary
loss of $7 million (net of tax of $5 million) or $0.02 per share. During the
nine months ended September 30, 2002, Marathon retired $337 million of long-term
debt resulting in an extraordinary loss of $33 million (net of tax of $20
million) or $0.10 per share.




<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         Marathon is not dependent on off-balance sheet arrangements to meet its
liquidity and capital resource needs. Marathon has used and may use in the
future off-balance sheet arrangements to fund specific projects. For additional
details of off-balance sheet arrangements, see Liquidity and Capital Resources
on page 38 of the Annual Report on Form 10-K.

         Contract commitments for property, plant and equipment acquisitions and
long-term investments at September 30, 2002, totaled $664 million compared with
$297 million at December 31, 2001.

         Marathon management's opinion concerning liquidity and Marathon's
ability to avail itself in the future of the financing options mentioned in the
above forward-looking statements are based on currently available information.
To the extent that this information changes, future availability of financing
may be adversely affected. Factors that affect the availability of financing
include the performance of Marathon (as measured by various factors including
cash provided from operating activities), the state of worldwide debt and equity
markets, investor perceptions and expectations of past and future performance,
the global financial climate, and, in particular, with respect to borrowings,
the levels of Marathon's outstanding debt and credit ratings by rating agencies.

Obligations Associated with the Separation of United States Steel
-----------------------------------------------------------------
         Marathon remains obligated (primarily or contingently) for certain debt
and other financial arrangements for which United States Steel has assumed
responsibility for repayment under the terms of the Separation. In the event of
United States Steel's failure to satisfy these obligations, Marathon would
become responsible for repayment. As of September 30, 2002, Marathon has
identified the following obligations totaling $676 million which have been
assumed by United States Steel:

o    $470 million of industrial revenue bonds related to environmental
     improvement projects for current and former United States Steel
     facilities, with maturities ranging from 2009 through 2033. Accrued
     interest payable on these bonds was $7 million at September 30, 2002.
o    $80 million of sale-leaseback financing under a lease for equipment at
     United States Steel's Fairfield Works, with a term extending to 2012,
     subject to extensions. Accrued interest payable on this financing was
     $2 million at September 30, 2002.
o    $97 million of operating lease obligations, of which $83 million was in
     turn assumed by purchasers of major equipment used in plants and
     operations divested by United States Steel.
o    A guarantee of United States Steel's $19 million contingent obligation
     to repay certain distributions from its 50%-owned joint venture PRO-TEC
     Coating Company.
o    A guarantee of all obligations of United States Steel as general
     partner of Clairton 1314B Partnership, L.P. to the limited partners.
     United States Steel has reported that it currently has no unpaid
     outstanding obligations to the limited partners. For further discussion
     of the Clairton 1314B guarantee, see Note 13 to the Consolidated
     Financial Statements.
o    $1 million under the tax sharing agreement as described below.





<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         Of the total $676 million, obligations of $560 million and
corresponding receivables from United States Steel were recorded on Marathon's
consolidated balance sheet (current portion - $14 million; long-term portion -
$546 million). The remaining $116 million was related to off-balance sheet
arrangements and contingent liabilities of United States Steel.

         Each of Marathon and United States Steel, as members of the same
consolidated tax reporting group during taxable periods ended on or prior to
December 31, 2001, is jointly and severally liable for the federal income tax
liability of the entire consolidated tax reporting group for those periods.
Marathon and United States Steel have entered into a tax sharing agreement which
allocates tax liabilities relating to taxable periods ended on or prior to
December 31, 2001. To address the possibility that the taxing authorities may
seek to collect a tax liability from one party where the tax sharing agreement
allocates that liability to the other party, the agreement includes
indemnification provisions.

         United States Steel reported in its Form 10-Q for the quarterly period
ended September 30, 2002, that it has significant restrictive covenants related
to its indebtedness including cross-default and cross-acceleration clauses on
selected debt which could have an adverse effect on its financial position and
liquidity. However, United States Steel management believes that its liquidity
will be adequate to satisfy its obligations for the foreseeable future. If there
is a prolonged delay in the recovery of the manufacturing sector of the U.S.
economy, United States Steel believes that it can maintain adequate liquidity
through a combination of deferral of nonessential capital spending, sale of
non-strategic assets and other cash conservation measures.

Environmental Matters
---------------------
         Marathon has incurred and will continue to incur substantial capital,
operating and maintenance, and remediation expenditures as a result of
environmental laws and regulations. To the extent these expenditures, as with
all costs, are not ultimately reflected in the prices of Marathon's products and
services, operating results will be adversely affected. Marathon believes that
substantially all of its competitors are subject to similar environmental laws
and regulations. However, the specific impact on each competitor may vary
depending on a number of factors, including the age and location of its
operating facilities, marketing areas, production processes and whether or not
it is engaged in the petrochemical business or the marine transportation of
crude oil and refined products.

         Marathon has been notified that it is a potentially responsible party
(PRP) at 11 waste sites under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) as of September 30, 2002. In addition,
there are three sites where Marathon has received information requests or other
indications that Marathon may be a PRP under CERCLA but where sufficient
information is not presently available to confirm the existence of liability. At
many of these sites, Marathon is one of a number of parties involved and the
total cost of remediation, as well as Marathon's share thereof, is frequently
dependent upon the outcome of investigations and remedial studies. There are
also 103 additional sites, excluding retail marketing outlets, related to
Marathon where remediation is being sought under other environmental statutes,
both federal and state, or where private parties are seeking remediation


<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

through discussions or litigation. Of these sites, 16 were associated with
properties conveyed to MAP by Ashland for which Ashland has retained liability
for all costs associated with remediation. Marathon accrues for environmental
remediation activities when the responsibility to remediate is probable and the
amount of associated costs is reasonably determinable. As environmental
remediation matters proceed toward ultimate resolution or as additional
remediation obligations arise, charges in excess of those previously accrued may
be required. (See Note 13 to the Consolidated Financial Statements.)

         New or expanded environmental requirements, which could increase
Marathon's environmental costs, may arise in the future. Marathon intends to
comply with all legal requirements regarding the environment, but since many of
them are not fixed or presently determinable (even under existing legislation)
and may be affected by future legislation, it is not possible to predict
accurately the ultimate cost of compliance, including remediation costs which
may be incurred and penalties which may be imposed. However, based on presently
available information, and existing laws and regulations as currently
implemented, Marathon does not anticipate that environmental compliance
expenditures (including operating and maintenance and remediation) will
materially increase in 2002.

         Marathon's environmental capital expenditures are expected to be
approximately $122 million in 2002. Based upon currently identified projects,
Marathon anticipates that environmental capital expenditures will be
approximately $157 million in 2003; however, actual expenditures may vary as the
number and scope of environmental projects are revised as a result of improved
technology or changes in regulatory requirements and could increase if
additional projects are identified or additional requirements are imposed.

         New Tier II gasoline rules, which were finalized by the EPA in February
2000, and the diesel fuel rules, which were finalized in January 2001, require
substantially reduced sulfur levels for gasoline and diesel. The combined
capital costs to achieve compliance with the gasoline and diesel regulations
could amount to approximately $850 million, which includes costs that could be
incurred as part of other refinery upgrade projects, between 2002 and 2006. This
is a forward-looking statement. Some factors (among others) that could
potentially affect gasoline and diesel fuel compliance costs include obtaining
the necessary construction and environmental permits, operating and logistical
considerations, further refinement of preliminary engineering studies and
project scopes, and unforeseen hazards.

         During 2001 MAP entered into a New Source Review consent decree and
settlement of alleged Clean Air Act and other violations with the EPA covering
all of MAP's refineries. The settlement committed MAP to specific control
technologies and implementation schedules for environmental expenditures and
improvements to MAP's refineries over approximately an eight year period. The
current estimated cost to complete these programs is approximately $300 million
in expenditures over the next six years.



<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         MAP has used MTBE as an octane enhancer and oxygenate in reformulated
gasoline to comply with applicable laws for many years. The maximum amount of
MTBE in gasoline is limited to 15% by volume. Approximately 7% of MAP's 2001
gasoline production contained MTBE. MAP had three MTBE units at its refineries
in Detroit, Robinson and Catlettsburg with a relatively immaterial combined book
value. Because several states in MAP's marketing area have passed laws banning
MTBE as a gasoline component in the future, MAP decided in the first quarter of
2002 to begin to phase out production of MTBE and to reduce the remaining
estimated useful life of the MTBE units. MTBE production was discontinued in
October 2002, by which time the MTBE units were fully depreciated.

Other Contingencies
-------------------
         Marathon is the subject of, or a party to, a number of pending or
threatened legal actions, contingencies and commitments involving a variety of
matters, including laws and regulations relating to the environment. The
ultimate resolution of these contingencies could, individually or in the
aggregate, be material to Marathon. However, management believes that Marathon
will remain a viable and competitive enterprise even though it is possible that
these contingencies could be resolved unfavorably to Marathon. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity".

         MAP has instituted a number of process and facility modifications at
its Catlettsburg refinery to correct the operating conditions that led to a
product quality issue earlier this year. MAP has been working with some regional
gasoline jobbers and dealers since August to remedy certain product quality
issues in gasoline produced at this refinery. As a part of its response to the
situation, MAP has inspected a large number of retail, terminal and
transportation facilities, and is systematically cleaning facilities that may
have been impacted.

Credit Risk
-----------
         Marathon is exposed to credit risk in the form of possible nonpayment
by customers and trading partners. A significant portion of this risk is
concentrated in energy related businesses. The creditworthiness of customers and
trading partners is subject to continuing review. When deemed appropriate,
Marathon requires prepayment or letters of credit to secure credit exposure.
Additionally, netting agreements are utilized to reduce exposures to firms with
both receivables and payables. Marathon has in the past and continues to conduct
business with the so-called "energy merchant" firms. Many of these firms have
seen their credit ratings deteriorate during 2002. As a result, Marathon has
reduced its exposure to these entities. In some cases security has been
requested and, in other cases, all business activity has been stopped. Marathon
estimates its aggregate net exposure to energy merchant companies to be less
than $20 million with no individual company exposure greater than $10 million.

         Marathon has significant exposures to United States Steel arising from
the separation. Those exposures are discussed in "Obligations Associated with
the Separation of United States Steel".




<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Outlook
-------
         The outlook regarding Marathon's E&P segment revenues and income is
largely dependent upon future prices and volumes of liquid hydrocarbons and
natural gas. Prices have historically been volatile and have frequently been
affected by unpredictable changes in supply and demand resulting from
fluctuations in worldwide economic activity and political developments in the
world's major oil and gas producing and consuming regions. Any significant
decline in prices could have a material adverse effect on Marathon's results of
operations. A prolonged decline in such prices could also adversely affect the
quantity of crude oil and natural gas reserves that can be economically produced
and the amount of capital available for exploration and development.


         Marathon estimates its 2003 and 2004 production will average
approximately 390,000 to 395,000 barrels of oil equivalent per day (BOEPD). This
compares to estimated 2002 production of approximately 413,000 BOEPD. The 2003
production forecast is less than expected due to project delays in Norway, as
well as slower response time for new production in the Powder River Basin.
Production for 2004 is less than the previous forecast of 430,000 to 435,000
boepd, due primarily to delayed production response in the Powder River Basin,
permitting delays for the onshore facility associated with the Corrib field off
the west coast of Ireland, and uncertainty regarding the development of the
Ozona deepwater discovery in the Gulf of Mexico. This production revision is
expected to negatively impact 2003 and 2004 earnings by approximately $.03 and 
$.10 per share, respectively, based on Marathon's forecast assumptions.
Marathon continues to project an increase in its proven reserve base to 
approximately 1.4 billion barrels of oil equivalent by the end of 2004.


         On October 23, 2002, Marathon announced the Camden Hills field in the
ultra-deepwater of the Gulf of Mexico began producing natural gas in 7,209 feet
of water. The development, located in Mississippi Canyon Block 348 approximately
150 miles southeast of New Orleans, is the deepest field in the recently
completed Canyon Express gas gathering system that links the Camden Hills,
Aconcagua and Kings Peak fields. Marathon holds a 50 percent interest in Camden
Hills and serves as operator.

         In the fourth quarter of 2002, Marathon plans to commence drilling
operations on three deepwater wells in the Gulf of Mexico. Marathon plans to
drill or participate in four additional wells in the Gulf of Mexico in 2003 and
2004.

         Other major upstream activities, which are currently underway or under
evaluation, include:

  o    Norway, where Marathon has interests in nine licenses in the Norwegian 
       sector of the North Sea;
  o    Alaska, where Marathon had a natural gas discovery on the Ninilchik
       Unit on the Kenai Peninsula with additional drilling planned in 2002;
  o    Angola, where Marathon participated in the drilling of the successful
       Plutao exploration well on Block 31 and is currently participating in
       the drilling of the Gindungo well on Block 32. Marathon plans to
       participate in three or four additional exploration wells in this area
       during 2003;
  o    Eastern Canada, where Marathon recently completed drilling the
       Annapolis G-24 well and expects to drill one or two additional
       exploration wells and gather extensive 3D seismic over two additional
       blocks in the area during 2003; and



<PAGE>



                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

  o     Equatorial Guinea, where a government approved expansion plan is
        underway to boost gas production from 250 to approximately 800 MMCFD in
        order to increase condensate production from 17,000 to approximately
        46,000 gross barrels per day (BPD) by the fourth quarter of 2003. The
        additional gas production will be reinjected into the reservoir.
        Marathon is also finalizing plans to increase liquid petroleum gas
        (LPG) production by late 2004 through the expansion of existing LPG
        facilities from approximately 2,700 to 16,000 BPD.

         Marathon has proposed plans for a major liquefied natural gas (LNG)
re-gasification and power generation complex near Tijuana in the Mexican State
of Baja California. The proposed complex would consist of a LNG marine terminal,
an off-loading terminal, onshore LNG re-gasification facilities, water
desalinization plant, wastewater treatment facilities and pipeline
infrastructure necessary to transport the natural gas. Additionally, a 1,000
megawatt natural gas-fired power generation plant would be constructed on the
site. Potential completion and start-up is projected for 2005.

         In the North Sea, the Symphony natural gas pipeline project, another
key component of Marathon's integrated gas strategy, recently conducted an open
season for prospective shippers on this pipeline that is designed to transport
gas from the UK and Norwegian North Sea to southern England. Based upon input
from prospective shippers, Marathon will continue discussions with interested
parties in evaluating the best transportation alternatives to bring Norwegian
gas to the U.K. utilizing Marathon's Brae infrastructure.

         On October 1, 2002, Marathon announced the signing of a letter of
intent with Rosneft Oil Company to participate in Urals North American
Marketing, a venture that would transport and market Urals crude to the North
American market. The venture is subject to the signing of definitive agreements
and obtaining necessary U.S. and Russian government approvals. Expected start-up
would be in the third quarter of 2003.


         The above discussion includes forward-looking statements with respect
to the timing and levels of Marathon's worldwide liquid hydrocarbon and natural
gas production, the exploration drilling program, additional resources, and the
planned construction of LNG and pipeline facilities. Some factors that could
potentially affect worldwide liquid hydrocarbon and natural gas production and
the exploration drilling program include acts of war or terrorist acts and the
governmental or military response, pricing, supply and demand for petroleum
products, amount of capital available for exploration and development,
occurrence of acquisitions/dispositions of oil and gas properties, regulatory
constraints, timing of commencing production from new wells, drilling rig
availability and other geological, operating and economic considerations. The
forward-looking information related to reserve additions is based on certain
assumptions, including, among others, presently known physical data concerning
size and character of reservoirs, economic recoverability, technology
development, future drilling success, production experience, industry economic
conditions, levels of cash flow from operations and operating conditions.
Factors that could impact the transporting and marketing of Urals crude to the
North American market include the inability or delay in obtaining necessary
government and third-party approvals, unforeseen difficulty in the negotiation
of definitive agreements among project participants, arranging sufficient
project financing, unanticipated changes in market demand or supply, competition
with similar projects and environmental and permitting issues. Some factors that
could affect the planned construction of the LNG re-gasification, power
generation and related facilities, as well as the North Sea pipeline
transportation and related facilities, include, but are not limited to,



<PAGE>



                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


unforeseen difficulty in the negotiation of definitive agreements among project
participants, identification of additional participants to reach optimum levels
of participation, inability or delay in obtaining necessary government and
third-party approvals, arranging sufficient project financing, unanticipated
changes in market demand or supply, competition with similar projects and
environmental and permitting issues. Additionally, the LNG project could be
impacted by the availability or construction of sufficient LNG vessels. The
foregoing factors (among others) could cause actual results to differ materially
from those set forth in the forward-looking statements.


         Marathon's RM&T segment income is largely dependent upon the refining
and wholesale marketing margin for refined products, the retail gross margin for
gasoline and distillates, and the gross margin on retail merchandise sales. The
refining and wholesale marketing margin reflects the difference between the
wholesale selling prices of refined products and the cost of raw materials
refined, purchased product costs and manufacturing expenses. Refining and
wholesale marketing margins have been historically volatile and vary with the
level of economic activity in the various marketing areas, the regulatory
climate, the seasonal pattern of certain product sales, crude oil costs,
manufacturing costs, the available supply of crude oil and refined products, and
logistical constraints. The retail gross margin for gasoline and distillates
reflects the difference between the retail selling prices of these products and
their wholesale cost, including secondary transportation. Retail gasoline and
distillate margins have also been historically volatile, but tend to be
countercyclical to the refining and wholesale marketing margin. Factors
affecting the retail gasoline and distillate margin include seasonal demand
fluctuations, the available wholesale supply, the level of economic activity in
the marketing areas and weather situations that impact driving conditions. The
gross margin on retail merchandise sales tends to be less volatile than the
retail gasoline and distillate margin. Factors affecting the gross margin on
retail merchandise sales include consumer demand for merchandise items and the
level of economic activity in the marketing area.

         At its Catlettsburg, Kentucky refinery, MAP has initiated a multi-year
integrated investment program to upgrade product yield realizations and reduce
fixed and variable manufacturing expenses. This program involves the expansion,
conversion and retirement of certain refinery processing units which, in
addition to improving profitability, will reduce the refinery's total gasoline
pool sulfur below 30 ppm, thereby eliminating the need for low sulfur gasoline
compliance investments at the refinery. The project is expected to be completed
in late 2003.

         A MAP subsidiary, Ohio River Pipe Line LLC (ORPL), is building a
pipeline from Kenova, West Virginia to Columbus, Ohio. ORPL is a common carrier
pipeline company and the pipeline will be an interstate common carrier pipeline.
The pipeline is currently known as Cardinal Products Pipe Line and is expected
to initially move about 50,000 barrels per day of refined petroleum into the
central Ohio region. As of June 2002, ORPL had secured all of the rights-of-way
required to build the pipeline, and on August 2, 2002, the final permits
required to build the pipeline were approved. Construction began in August 2002
and start-up of the pipeline is expected to follow in the first half of 2003.

         On October 30, 2002, MAP announced its 50 percent-owned Pilot Travel
Centers LLC (PTC) has signed a definitive agreement to purchase 60 retail travel
centers including fuel inventory, merchandise and supplies. The 60 locations are
in 15 states, primarily in the Midwest, Southeast and the Southwest regions of
the country. Subject to governmental approval, the transaction is expected to
close in approximately 60 days.



<PAGE>




                            MARATHON OIL CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         The above discussion includes forward-looking statements with respect
to the Catlettsburg refinery, the Cardinal Products Pipe Line system and the PTC
definitive agreement. Some factors that could potentially cause the actual
results from the Catlettsburg investment program to differ materially from
current expectations include the price of petroleum products, levels of cash
flows from operations, unforeseen hazards such as weather conditions, the
completion of construction and regulatory approval constraints. Factors that
could impact the Cardinal Products Pipe Line include completion of construction
and resolution of pending litigation. Some factors that could affect the PTC
acquisition include inability or delay in obtaining necessary government and
third-party approvals, and satisfaction of customary closing conditions. These
factors (among others) could cause actual results to differ materially from
those set forth in the forward-looking statements.

         On August 6, 2002, Marathon announced it will begin expensing the fair
value of employee stock options on January 1, 2003. Marathon will adopt
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" (SFAS No. 123). Under this methodology, stock options will be
valued by using an option-pricing model, which expenses stock option grants over
the vesting period. Currently, Marathon accounts for stock options using the
principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB No. 25). Based upon this change, and assuming the
number of stock options granted in 2003 approximates the number of those granted
in 2002, the estimated impact on Marathon's 2003 earnings would not be
materially different than under APB No. 25.







<PAGE>




                            MARATHON OIL CORPORATION

 
                     ITEM 3. QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                      ------------------------------------

Management Opinion Concerning Derivative Instruments
----------------------------------------------------
         Management has authorized the use of futures, forwards, swaps and
options to manage exposure to market fluctuations related to commodities,
interest rates, and foreign currency.

         Marathon uses commodity-based derivatives to manage price risk related
to the purchase, production or sale of crude oil, natural gas, and refined
products. To a lesser extent, Marathon is exposed to the risk of price
fluctuations on natural gas liquids and on petroleum feedstocks used as raw
materials.

         The approach of Marathon`s E&P segment to the use of commodity
derivative instruments is selective and opportunistic. When it is deemed to be
advantageous, Marathon may lock-in market prices on portions of its future
production.

         Marathon's RM&T segment uses commodity derivative instruments to
mitigate the price risk associated with crude oil and other feedstocks, to
protect carrying values of inventories and to protect margins on fixed-price
sales of refined products.

         Marathon's other energy related businesses are exposed to market risk
associated with the purchase and subsequent resale of natural gas. Marathon uses
commodity derivative instruments to mitigate the price risk on purchased volumes
and anticipated sales volumes.

         As market conditions change, Marathon evaluates its risk management
program and could enter into strategies that assume market risk whereby cash
settlement of commodity-based derivatives will be based on market prices.

         From time to time, Marathon uses financial derivative instruments to
manage interest rate and foreign currency exposures. As Marathon enters into
derivatives, assessments are made as to the qualification of each transaction
for hedge accounting.

         Management believes that use of derivative instruments along with risk
assessment procedures and internal controls does not expose Marathon to material
risk. However, the use of derivative instruments could materially affect
Marathon's results of operations in particular quarterly or annual periods.
Management believes that use of these instruments will not have a material
adverse effect on financial position or liquidity.


Commodity Price Risk and Related Risks
--------------------------------------
         Marathon's strategy has generally been to obtain competitive prices for
its products and allow operating results to reflect market price movements
dictated by supply and demand. As part of achieving Marathon's strategy, certain
fixed-priced physical contracts are hedged using derivative instruments that
assume market risk. Marathon will use a variety of derivative instruments,
including option combinations, as part of the overall risk management program to
manage commodity price risk within its different businesses.





<PAGE>




                            MARATHON OIL CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                          -----------------------------

         Sensitivity analysis of the incremental effects on pretax income of
hypothetical 10 percent and 25 percent changes in commodity prices for open
derivative commodity instruments are provided in the following table(a):

                                                       Incremental Decrease in
                                                      Income Before Income Taxes
                                                        Assuming a Hypothetical
                                                          Price Change of:(a)
 (Dollars in millions)                                      10%          25%
--------------------------------------------------------------------------------
Derivative Commodity Instruments(b)(c)
        Crude oil(d)................................     $47.0(e)     $146.8(e)
        Natural gas(d)..............................      28.3(e)       96.2(e)
        Refined products(d).........................       3.7(e)       12.4(e)

    (a) Amounts adjusted to reflect Marathon's 62 percent ownership of MAP.
        Marathon remains at risk for possible changes in the market value of
        derivative instruments; however, such risk should be mitigated by price
        changes in the underlying hedged item. Effects of these offsets are not
        reflected in the sensitivity analysis. Amounts reflect hypothetical 10%
        and 25% changes in closing commodity prices for each open contract
        position at September 30, 2002. Marathon management evaluates its
        portfolio of derivative commodity instruments on an ongoing basis and
        adds or revises strategies to reflect anticipated market conditions and
        changes in risk profiles. Marathon is also exposed to credit risk in the
        event of nonperformance by counterparties. The creditworthiness of
        counterparties is subject to continuing review, including the use of
        master netting agreements to the extent practical. Changes to the
        portfolio subsequent to September 30, 2002, would cause future pretax
        income effects to differ from those presented in the table.
    (b) Net open contracts for the combined E&P and OERB segments varied
        throughout third quarter 2002, from a low of 30,201 contracts at August
        16, to a high of 38,164 contracts at September 19, and averaged 34,684
        for the quarter. The number of net open contracts for the RM&T segment
        varied throughout third quarter 2002, from a low of 12 contracts at
        August 2, to a high of 11,916 contracts at September 24, and averaged
        4,313 for the quarter. The net open contracts represent 100% of MAP's
        positions. The derivative commodity instruments used and hedging
        positions taken will vary and, because of these variations in the
        composition of the portfolio over time, the number of open contracts by
        itself cannot be used to predict future income effects.
    (c) Gains and losses on options are based on changes in intrinsic value
        only.
    (d) The direction of the price change used in calculating the sensitivity
        amount for each commodity reflects that which would result in the
        largest incremental decrease in pretax income when applied to the
        derivative commodity instruments used to hedge that commodity.
    (e) Price increase.




<PAGE>




                            MARATHON OIL CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                          -----------------------------

     E&P Segment
         Marathon uses derivative instruments in its E&P segment to mitigate the
price risk associated with equity production of crude oil and natural gas. As of
September 30, 2002, Marathon has entered into zero-cost collar options on
approximately 30% of its remaining forecasted 2002 worldwide equity liquids
production. These collars have been structured so that on average Marathon will
receive the following:

  o When prices are below $19.34, market price plus $4 per barrel; 
  o $23.34 when prices are between $19.34 and $23.34;
  o Market price when prices are between $23.34 and $29.35; and 
  o No participation in market price movements above $29.35.

The above-mentioned strategy is being marked-to-market and is reflected in
income for the period.

         As of September 30, 2002, Marathon has entered into zero-cost collar
options and other derivative instruments on approximately 30% of its remaining
forecasted 2002 worldwide equity natural gas production. In one of the more
significant strategies, Marathon has placed derivatives on 177 MMCFD at an
average of $4.33 per MCF for the balance of 2002 relating to the Powder River
Basin area. A portion of the above-mentioned strategy is being marked-to-market
and is reflected in income for the period due to loss of hedge effectiveness.
The balance qualifies for hedge accounting. Marathon has also entered into a
zero-cost collar on 200 MMCFD through December 2002, whereby Marathon will
receive up to $4.48 per MCF but no less than $3.19 per MCF. This strategy is
being marked-to-market and is reflected in income for the period.

         As of September 30, 2002, Marathon has entered into zero-cost collars
on 145 MMCFD of natural gas for January through December 2003, whereby Marathon
will receive up to an average $4.64 per MCF but no less than an average $3.64
per MCF. Of the 145 MMCFD, 133 MMCFD currently qualify for hedge accounting.
Additionally, Marathon has also entered into zero-cost collars on 25,000 BPD of
oil for January through December 2003, whereby Marathon will receive up to an
average $28.54 per BBL but no less than an average $23.01 per BBL. 19,000 BPD
qualify for hedge accounting. The remaining oil and gas volumes are being
marked-to-market and included in income.

         Total net pretax derivative gains for the E&P segment were $9 million
and $51 million for the first nine months of 2002 and 2001, respectively. Gains
of $23 million from discontinued cash flow hedges for the first nine months of
2002 are included in the aforementioned amounts. These gains were reclassified
from accumulated other comprehensive income (loss) as it is no longer probable
that the original forecasted transactions will occur.

     RM&T Segment
         Marathon's RM&T operations generally use derivative commodity
instruments to lock-in costs of certain crude oil and other feedstocks, to
protect carrying values of inventories and to protect margins on fixed-price
sales of refined products. Total net pretax derivative losses, net of the 38
percent minority interest in MAP, were $54 million for the first nine months
2002 compared with gains of $57 million for the first nine months 2001. RM&T's
trading activity gains and losses were not significant for the first nine months
2002 and 2001.



<PAGE>




                            MARATHON OIL CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                          -----------------------------

     OERB Segment
         Marathon has sold forward a specified volume of natural gas. Marathon
has used derivatives to convert the fixed price in this contract to market
prices. The underlying physical contract matures in 2008. Marathon generally
will use derivative instruments to assume market risk on these contracts. In
addition, Marathon uses fixed-price physical contracts for portions of its
purchase for resale volumes to manage exposure to fluctuations in natural gas
prices. Total net pretax derivative losses were $1 million and $29 million for
the first nine months of 2002 and 2001, respectively.

Other Commodity Related Risks
-----------------------------
         Marathon is subject to basis risk, caused by factors that affect the
relationship between commodity futures prices reflected in derivative commodity
instruments and the cash market price of the underlying commodity. Natural gas
transaction prices are frequently based on industry reference prices that may
vary from prices experienced in local markets. For example, New York Mercantile
Exchange (NYMEX) contracts for natural gas are priced at Louisiana's Henry Hub,
while the underlying quantities of natural gas may be produced and sold in the
Western United States at prices that do not move in strict correlation with
NYMEX prices. To the extent that commodity price changes in one region are not
reflected in other regions, derivative commodity instruments may no longer
provide the expected hedge, resulting in increased exposure to basis risk. These
regional price differences could yield favorable or unfavorable results. OTC
transactions are being used to manage exposure to a portion of basis risk.

         Marathon is subject to liquidity risk, caused by timing delays in
liquidating contract positions due to a potential inability to identify a
counterparty willing to accept an offsetting position. Due to the large number
of active participants, liquidity risk exposure is relatively low for
exchange-traded transactions.

Interest Rate Risk
------------------
         Sensitivity analysis of the incremental effects on the change in fair
value assuming a hypothetical 10 percent change in interest rates is provided in
the following table:
                                                                    Incremental
                                                          Fair      Increase in
(Dollars in millions)                                   Value(d)   Fair Value(a)
--------------------------------------------------------------------------------
Financial assets:
  Interest Rate Swap Agreements(b)................        $3             $3
Financial liabilities:
  Long-term debt(c)...............................    $5,206           $194

(a)  For long-term debt, this assumes a 10% decrease in the weighted average
     yield to maturity of Marathon's long-term debt at September 30, 2002. For
     interest rate swap agreements, this assumes a 10% decrease in the effective
     swap rate at September 30, 2002.
(b)  See below.
(c)  Includes amounts due within one year.
(d)  Fair value was based on market prices where available, or current borrowing
     rates for financings with similar terms and maturities.



<PAGE>




                            MARATHON OIL CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                          -----------------------------

         At September 30, 2002, Marathon's portfolio of long-term debt was
substantially comprised of fixed-rate instruments. Therefore, the fair value of
the portfolio is relatively sensitive to effects of interest rate fluctuations.
This sensitivity is illustrated by the $194 million increase in the fair value
of long-term debt assuming a hypothetical 10 percent decrease in interest rates.
However, Marathon's sensitivity to interest rate declines and corresponding
increases in the fair value of its debt portfolio would unfavorably affect
Marathon's results and cash flows only to the extent that Marathon would elect
to repurchase or otherwise retire all or a portion of its fixed-rate debt
portfolio at prices above carrying value.

         Marathon has initiated a program to manage its exposure to interest
rate movements by utilizing financial derivative instruments. The primary
objective of this program is to reduce the Company's overall cost of borrowing
by managing the fixed and floating interest rate mix of the debt portfolio. 
Beginning in the third quarter 2002, Marathon entered into several interest
rate swap agreements, designated as fair value hedges, which effectively
resulted in an exchange of existing obligations to pay fixed interest rates for 
obligations to pay floating rates.  The following table summarizes our interest 
rate swap activity as of September 30 and November 14, 2002:

As of September 30, 2002
------------------------
                                                           
                           Fixed Rate    Notional               09/30/02
                             to be        Amount       Swap    Fair Value
Floating Rate to be Paid    Received   ($Millions)   Maturity ($Millions)
-------------------------------------------------------------------------
Six Month LIBOR +1.915%      5.375%        $200        2007        $2.5


Cumulative as of November 14, 2002
----------------------------------
                                    
                                 Fixed Rate       Notional
                                    to be          Amount
Floating Rate to be Paid          Received      ($Millions)     Swap Maturity
-----------------------------------------------------------------------------
Six Month LIBOR +1.935%            5.375%           $450            2007


         During the first nine months of 2002, Marathon entered into U.S.
Treasury Rate lock agreements to hedge pending issuances of new debt. The U.S.
Treasury Rate lock agreements, which were designated and effective as cash flow
hedges, were settled for a net of $14 million concurrent with the issuance of
the new debt. The $9 million, net of tax, unrecognized loss is being
reclassified from accumulated other comprehensive income (loss) to net interest
and other financial cost over the life of the new debt.

Foreign Currency Exchange Rate Risk
-----------------------------------
         As of September 30, 2002, the discussion of foreign currency exchange
rate risk has not changed materially from that presented in Quantitative and
Qualitative Disclosures About Market Risk included in Marathon's 2001 Form 10-K.




<PAGE>




                            MARATHON OIL CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                          -----------------------------

Safe Harbor
-----------
         Marathon's quantitative and qualitative disclosures about market risk
include forward-looking statements with respect to management's opinion about
risks associated with the use of derivative instruments. These statements are
based on certain assumptions with respect to market prices and industry supply
and demand for crude oil, natural gas, and refined products. To the extent that
these assumptions prove to be inaccurate, future outcomes with respect to
Marathon's hedging programs may differ materially from those discussed in the
forward-looking statements.




<PAGE>





                            MARATHON OIL CORPORATION

                         ITEM 4. CONTROLS AND PROCEDURES
                          -----------------------------


Item 4. Controls and Procedures
-------------------------------
         Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the participation of
Marathon's management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-14 and 15d-14 under the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the design and
operation of these disclosure controls and procedures were effective. No
significant changes were made in our internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation.







<PAGE>


<TABLE>



                            MARATHON OIL CORPORATION
                       SUPPLEMENTAL STATISTICS (Unaudited)
                       -----------------------------------
<CAPTION>

                                                                    Third Quarter              Nine Months
                                                                        Ended                     Ended
                                                                    September 30              September 30
(Dollars in millions)                                              2002        2001         2002         2001
---------------------------------------------------------------------------------------------------------------
<S>                                                              <C>          <C>          <C>          <C>    
INCOME (LOSS) FROM OPERATIONS
  Exploration & Production
   United States..............................................      $187         $207         $458       $1,007
   International..............................................        63           49          219          292
                                                                   -----        -----        -----        -----
       E&P Segment Income.....................................       250          256          677        1,299
  Refining, Marketing & Transportation(a).....................       108          575          268        1,693
  Other Energy Related Businesses(b)..........................        29            6           74           40
                                                                   -----        -----        -----        -----
       Segment Income.........................................      $387         $837       $1,019       $3,032

Items Not Allocated To Segments:
  Administrative Expenses.....................................       (42)         (40)        (125)        (127)
  Inventory Market Valuation Credit...........................         -            -           72            -
  Gain on lease resolution with U.S. Government...............         -            -            -           59
  Gain (Loss) on Ownership Change - MAP.......................         5            1            9           (5)
  Contract settlement.........................................       (15)           -          (15)           -
  Gain on asset disposition...................................        24            -           24            -
  Loss related to sale of certain Canadian assets.............                   (221)                     (221)
                                                                  ------       ------       ------       ------
      Income From Operations..................................      $359         $577         $984       $2,738

CAPITAL EXPENDITURES
  Exploration & Production....................................      $222         $219         $660         $593
  Refining, Marketing & Transportation........................       121          153          303          365
  Other(c)....................................................        40           20           60           62
                                                                   -----        -----        -----        -----
      Total...................................................      $383         $392       $1,023       $1,020

EXPLORATION EXPENSE
  United States...............................................        $4           $9          $85          $34
  International...............................................        25           11           45           35
                                                                   -----        -----        -----        -----
      Total...................................................       $29          $20         $130          $69

OPERATING STATISTICS
Net Liquid Hydrocarbon Production(d)(f)
    United States.............................................     113.8        124.1        118.3        124.9
    U.S. Equity Investee (MKM)................................       8.2          9.0          8.5          9.5

                                                                  ------       ------       ------       ------
       Total United States....................................     122.0        133.1        126.8        134.4

     Europe...................................................      38.6         52.3         50.7         47.0
     Other International......................................       6.3         10.4          5.0         12.7
     West Africa..............................................      22.5         13.5         23.5         17.3
     International Equity Investee (CLAM).....................         -            -            -           .1

       Total International....................................      67.4         76.2         79.2         77.1
                                                                  ------       ------       ------       ------
       Worldwide..............................................     189.4        209.3        206.0        211.5

 Net Natural Gas Production(e)(f)(g)
     United States............................................     709.6        751.8        743.3        771.3
     Europe...................................................     270.4        301.4        308.8        322.1
     Other International......................................      99.0        119.1        104.0        125.4
     West Africa..............................................      72.5            -         48.3            -
     International Equity Investee (CLAM).....................      16.1         26.4         23.3         31.6

        Total International...................................     458.0        446.9        484.4        479.1
                                                                  ------      -------      -------       ------
        Worldwide.............................................   1,167.6      1,198.7      1,227.7      1,250.4


Total production (MBOEPD).....................................     384.0        409.1        410.6        419.9
</TABLE>



<PAGE>

<TABLE>

                            MARATHON OIL CORPORATION
                       SUPPLEMENTAL STATISTICS (Unaudited)
<CAPTION>

                                                                       Third Quarter              Nine Months
                                                                           Ended                     Ended
                                                                       September 30              September 30
(Dollars in millions)                                                 2002        2001         2002         2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>          <C>          <C>          <C>    
OPERATING STATISTICS
Average Sales Prices (excluding derivative gains and losses)
  Liquid Hydrocarbons
    United States................................................    $23.77       $21.97       $21.31       $22.54
    U.S. Equity Investee (MKM)...................................     27.35        25.01        23.98        25.07
      Total United States .......................................     24.01        22.18        21.49        22.72


   Europe........................................................     26.52        24.67        23.54        25.60
   Other International...........................................     25.21        22.55        23.05        21.99
   West Africa...................................................     25.89        24.20        23.39        25.95
   International Equity Investees (CLAM).........................     36.36        42.36        15.51        28.86

     Total International.........................................     26.20        24.31        23.46        25.09

     Worldwide...................................................    $24.79       $22.95       $22.25       $23.58


 Natural Gas(g)
   United States.................................................     $2.75        $2.69        $2.69        $4.20



   Europe........................................................      2.56         2.38         2.61         2.69
   Other International...........................................      3.05         2.82         3.01         4.72
   West Africa...................................................       .24            -          .24            -
   International Equity Investees (CLAM).........................      2.69         3.29         2.95         3.46
     Total International.........................................      2.30         2.55         2.48         3.27

     Worldwide...................................................     $2.57        $2.64        $2.60        $3.85

Average Sales Prices (including derivative gains and losses)
  Liquid Hydrocarbons
    United States................................................    $23.54       $22.09       $20.71       $22.58
    U.S. Equity Investee (MKM)...................................     27.35        25.01        23.98        25.07
      Total United States .......................................     23.80        22.29        20.93        22.75


   Europe........................................................     26.45        24.67        23.52        25.60
   Other International...........................................     25.21        22.55        23.05        21.99
   West Africa...................................................     25.89        24.20        23.39        25.95
   International Equity Investees (CLAM).........................     36.36        42.36        15.51        28.86

     Total International.........................................     26.15        24.31        23.45        25.09

     Worldwide...................................................    $24.64       $23.03       $21.90       $23.60


  Natural Gas(g)
    United States................................................     $2.83        $2.76        $2.87        $4.44



   Europe........................................................      1.72         2.38         2.51         2.69
   Other International...........................................      3.05         2.82         3.01         4.72
   West Africa...................................................       .24            -          .24            -
   International Equity Investees (CLAM).........................      2.69         3.29         2.95         3.46

     Total International.........................................      1.81         2.55         2.41         3.27


     Worldwide...................................................     $2.41        $2.68        $2.68        $3.99

MAP:
Crude Oil Refined(d).............................................     931.3        961.1        931.9        930.0
Consolidated Refined Products Sold(d)............................   1,387.4      1,343.8      1,322.7      1,300.3
     Matching buy/sell volumes included in refined
     products sold(d)............................................      94.4         43.0         76.4         43.8
Refining and Wholesale Marketing Margin(h)(i)....................    $.0389       $.1314       $.0364       $.1347
Number of SSA retail outlets(k)..................................     2,063        2,145            -            -
SSA Gasoline and Distillate Sales(j)(k)..........................       943          916        2,706        2,657
SSA Gasoline and Distillate Gross Margin(h)(k)...................    $.1063       $.1331       $.1007       $.1230
SSA Merchandise Sales(k).........................................      $645         $607       $1,797       $1,669
SSA Merchandise Gross Margin(k)..................................      $150         $137         $436         $387


</TABLE>




<PAGE>





                            MARATHON OIL CORPORATION
                       SUPPLEMENTAL STATISTICS (Unaudited)
                       -----------------------------------


 (a) Includes MAP at 100%. RM&T segment income includes Ashland's 38%
     interest in MAP of $45 million, $223 million, $110 million and $650 
     million in the third quarter and nine months of 2002 and 2001, 
     respectively.
 (b) Includes domestic natural gas and crude oil marketing and transportation. 
 (c) Includes other energy related businesses and corporate capital 
     expenditures. 
 (d) Thousands of barrels per day (e) Millions of cubic feet per day
 (f) Amounts reflect sales before royalties, if any, excluding Canada,
     Equatorial Guinea, Gabon and the United States where amounts are shown
     after royalties.
 (g) Includes gas acquired for injection and subsequent resale of 4.0, 6.8,
     4.4, and 8.3 MMCFD in the third quarter and nine months of 2002 and 2001,
     respectively.
 (h) Per gallon
 (i) Sales revenue less cost of refinery inputs, purchased products and
     manufacturing expenses, including depreciation.
 (j) Millions of gallons 
 (k) Excludes travel centers contributed to Pilot Travel Centers LLC. 
     Periods prior to September 1, 2001 have been restated.







<PAGE>






Part II - Other Information:
----------------------------

Item 1. LEGAL PROCEEDINGS

Cajun Express Arbitration

In September, 2002, Marathon settled its pending arbitration with Transocean
Sedco Forex Inc. arising from Marathon's cancellation of the Cajun Express rig
contract on July 5, 2001. Transocean's July 19, 2001 demand for arbitration
sought net lost revenue of an unspecified amount. The contract may have
generated $90 million in gross revenues over the remainder of the 18 month
period. The settlement terms included payment of a portion of the disputed claim
resulting in a $9 million after-tax loss.

Environmental Proceedings

On December 3, 2001, Illinois EPA (IEPA) issued a Notice of Violation to MAP
arising out of the sinking of a floating roof on a storage tank at a
Martinsville, Illinois facility. A heavy rainfall caused the floating roof to
sink. MAP believes it may have an Act of God/emergency defense. Based upon
discussions with IEPA, MAP expects the matter to be referred to the Illinois
Attorney General's office for enforcement proceedings.

In March, 2002, MAP attended a meeting with the Illinois EPA concerning MAP's
self reporting of possible emission exceedences and permitting issues related to
some storage tanks at MAP's Robinson, Illinois facility. In late April, MAP
submitted to IEPA a comprehensive settlement proposal which was rejected by
IEPA. We have had subsequent discussions with IEPA and the Illinois Attorney
General's office and anticipate additional meetings and discussions in the
coming months.







<PAGE>





Part II - Other Information (Continued):
----------------------------------------


  Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (a) EXHIBITS

           10.1   Marathon Oil Corporation Deferred Compensation Plan for 
                  Non-Employee Directors, Amended and Restated as of 
                  January 1, 2002.

           10.2   Second Amended and Restated Marathon Oil Corporation 
                  Non-Officer Restricted Stock Plan, effective as of
                  January 2, 2002.

           12.1   Computation of Ratio of Earnings to Combined Fixed Charges 
                  and Preferred Stock Dividends

           12.2   Computation of Ratio of Earnings to Fixed Charges.

           99.1   Certification of President and Chief Executive Officer 
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 
                  Section 906 of the Sarbanes-Oxley Act of 2002.

           99.2   Certification of Chief Financial Officer pursuant to 
                  18 U.S.C. Section 1350, as adopted pursuant to Section 906
                  of the Sarbanes-Oxley Act of 2002.


  (b) REPORTS ON FORM 8-K

               Form 8-K dated August 13, 2002 (filed August 13, 2002), 
           reporting under Item 9. Regulation FD Disclosure, that Marathon Oil 
           Corporation's President and Chief Executive Officer and Chief 
           Financial Officer submitted to the SEC statements under oath 
           regarding facts and circumstances relating to Exchange Act filings.

               Form 8-K dated November 14, 2002 (filed November 14, 2002), 
               reporting under Item 9. Regulation FD Disclosure, that Marathon
               Oil Corporation updated its production forecast.




<PAGE>





Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned chief accounting officer thereunto duly authorized.

           MARATHON OIL CORPORATION


           By /s/ A. G. Adkins
                    A. G. Adkins
                   Vice President -
              Accounting and Controller

November 14, 2002






<PAGE>




                            MARATHON OIL CORPORATION




     CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Clarence P. Cazalot, Jr., President & Chief Executive Officer, certify that:

(1)  I have reviewed this quarterly report on Form 10-Q of Marathon Oil
     Corporation;

(2)  Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

(4)  The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c)  presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and

(6)  The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  November 14, 2002



                                               /s/  Clarence P. Cazalot, Jr.

                                                    Clarence P. Cazalot, Jr.
                                             President & Chief Executive Officer





<PAGE>




                            MARATHON OIL CORPORATION




     CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, John T. Mills, Chief Financial Officer, certify that:


(1)  I have reviewed this quarterly report on Form 10-Q of Marathon Oil
     Corporation;

(2)  Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

(4)  The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c)  presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and

(6)  The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:  November 14, 2002


                                                          /s/  John T. Mills

                                                               John T. Mills
                                                        Chief Financial Officer








                                                                    EXHIBIT 10.1


                            MARATHON OIL CORPORATION
                           DEFERRED COMPENSATION PLAN
                           FOR NON-EMPLOYEE DIRECTORS
                  (Amended and Restated as of January 1, 2002)

1.  Purpose

         The Marathon Oil Corporation Deferred Compensation Plan for
Non-Employee Directors is intended to enable the Corporation to attract and
retain non-employee Directors and to enhance the long-term mutuality of interest
between such Directors and shareholders of the Corporation.

2.  Definitions

         The following definitions apply to this Plan and to the Deferral
         Election Forms:

         (a)      Beneficiary or Beneficiaries means a person or persons or 
                  other entity designated on a Beneficiary Designation Form by a
                  Participant as allowed in subsection 8(c) of this Plan to 
                  receive Deferred Benefit payments. If there is no valid 
                  designation by the Participant, or if the designated
                  Beneficiary or Beneficiaries fail to survive the Participant
                  or otherwise fail to take the Benefit, the Participant's 
                  Beneficiary is the Participant's surviving spouse or, if there
                  is no surviving spouse, the Participant's estate.

         (b)      Beneficiary Designation Form means a form acceptable to the
                  Committee or its designee and used by a Participant according
                  to this Plan to name his/her Beneficiary
 or Beneficiaries.

         (c)      Board means the board of directors of Marathon Oil
                  Corporation.

         (d)      Committee means the Compensation and Organization Committee of
                  the Board or such other committee of the Board as the Board
                  may designate to administer the Plan.

         (e)      Common Stock means the common stock of the Corporation.

         (f)      Common Stock Unit means a book-entry unit equal in value to a
                  share of Common Stock.

         (g)      Corporation means Marathon Oil Corporation, or any successor
                  thereto.

         (h)      Deferral Election Form means a document designated by the
                  Committee for the purpose of allowing a Participant to elect
                  to make a deferral under section 4 of this Plan, including the
                  portion that is the Distribution Election Form.

         (i)      Deferral Year means a calendar year for which a Participant
                  has a Deferred Benefit.

<PAGE>

         (j)      Deferred Benefit means either a Deferred Cash Benefit or a 
                  Deferred Stock Benefit under the Plan.

         (k)      Deferred Cash Account means that bookkeeping record
                  established for
                  each Participant who elects a Deferred Cash Benefit under this
                  Plan. A Deferred Cash Account is established only for purposes
                  of measuring a Deferred Cash Benefit and not to segregate
                  assets or to identify assets that may or must be used to
                  satisfy a Deferred Cash Benefit. A Deferred Cash Account will
                  be credited with that portion of the Participant's Retainer
                  Fee deferred as a Deferred Cash Benefit according to a
                  Deferral Election Form and according to section 6 of this
                  Plan. A Deferred Cash Account will be credited periodically
                  with amounts as provided under section 6(b) of this Plan.

         (l)      Deferred Cash Benefit means the Deferred Benefit elected by a
                  Participant under section 4 that results in payments governed
                  by sections 6 and 8.

         (m)      Deferred Stock Account means that bookkeeping record 
                  established for each Participant to reflect the status of 
                  his/her Deferred Stock Benefits under this Plan. A Deferred
                  Stock Account is established only for purposes of measuring a 
                  Deferred Stock Benefit and not to segregate assets or to 
                  identify assets that may or must be used to satisfy a Deferred
                  Stock Benefit. A Deferred Stock Account will be credited with 
                  that portion of the Participant's Retainer Fee deferred as a 
                  Deferred Stock Benefit according to section 3 of this Plan and
                  any dividend equivalent payments according to section 7 of 
                  this Plan. A Deferred Stock Account will be credited 
                  periodically with amounts determined by the Committee under
                  subsection 7(b) of this Plan.

         (n)      Deferred Stock Benefit means the Deferred Benefit that is
                  established in accordance with section 3 of this Plan and that
                  results in distributions governed by sections 7 and 8.

         (o)      Directors means those duly named members of the Board.

         (p)      Distribution Election Form means that part of a Deferral
                  Election
                  Form used by a Participant according to this Plan to establish
                  the post-Termination duration of deferral of a Deferred
                  Benefit and the frequency of payments of any Deferred Cash
                  Benefit. If a Deferred Benefit has no Distribution Election
                  Form that is operative according to section 4, distribution of
                  that Deferred Benefit is governed by section 8.

         (q)      Election Date means the date established by this Plan as the 
                  date before which a Participant must submit a valid Deferral
                  Election Form to the Committee. For each Deferral Year, the 
                  Election Date is December 31 of the preceding calendar year 
                  or, in the case of an individual who becomes a Participant
                  during a Deferral Year, the date that he/she becomes a 
                  Participant. Despite the two preceding sentences, the
                  Committee may set an earlier date as the Election Date for 
                  any Deferral Year.


<PAGE>

         (r)      Participant means a Director who is not simultaneously an
                  employee of the Corporation.

         (s)      Plan means the Marathon Oil Corporation Deferred Compensation
                  Plan for Non-Employee Directors.

         (t)      Retainer Fee means that portion of a Participant's
                  compensation that is fixed and paid without regard to his/her
                  attendance at meetings.

         (u)      Terminate, Terminating, or Termination, with respect to a
                  Participant,
                  means cessation of his/her relationship with the Corporation
                  as a Director whether by retirement, death, disability or
                  severance for any other reason.

3.  Minimum Stock-Based Compensation

         Each Person who becomes a Participant after October 29, 1996 shall
receive at least 50 percent of his/her annual Retainer Fee in the form of Common
Stock Units which are maintained as a Deferred Stock Benefit until termination
within each Participant's Deferred Stock Account.

4.  Deferral Election

         A deferral election is valid when a Deferral Election Form is
completed, signed by the Participant, and received by the Committee or its
designee. Deferral elections are governed by the provisions of this section.

         (a)      A Participant may elect a Deferred Benefit for any Deferral
                  Year if he/she is a Participant at the beginning of that 
                  Deferral Year or becomes a Participant during the Deferral
                  Year.

         (b)      Before each Deferral Year's Election Date, each Participant
                  will be provided with a Deferral Election Form. Subject to 
                  Section 3, a Participant may elect on or before the Election 
                  Date to defer until after Termination the receipt of the 
                  remaining portion of his/her Retainer Fee for the Deferral
                  Year in the form of a Deferred Cash Benefit.

         (c)      A  Participant  may not  elect to  convert a  Deferred  Cash  
                  Benefit to a Deferred Stock Benefit or to convert a Deferred 
                  Stock Benefit to a Deferred Cash Benefit.

         (d)      Each Distribution Election Form is part of the Deferral 
                  Election Form on which it appears or to which it states that 
                  it is related. The Committee may allow a Participant to file 
                  one Distribution Election Form for all of his/her Deferred
                  Cash Benefits and one for all of his/her Deferred Stock 
                  Benefits.

         (e)      If it does so before the last business day of the Deferral 
                  Year, the Committee may reject any Deferral Election Form or 
                  any Distribution Election Form or both, and the Committee is 
                  not required to state a reason for any rejection. The 
                  Committee may modify any Distribution Election Form at any 
                  time to the extent necessary to comply with any laws or 
                  regulations.  However, the Committee's rejection of any 
                  Deferral Election Form or any Distribution Election Form or 
                  the Committee's modification of any Distribution Election 
                  Form must be based upon action taken without regard to any 
                  vote of the Participant whose Deferral Election Form or 
                  Distribution Election Form is under consideration, and the 
                  Committee's rejections must be made on a uniform basis with 
                  respect to similarly situated Participants. If the Committee 
                  rejects a Deferral Election Form, the Participant must be
                  paid the amounts he/she would then have been entitled to 
                  receive if he/she had not submitted the rejected Deferral
                  Election Form.

<PAGE>

         (f)      A Participant may not revoke a Deferral Election Form or a
                  Distribution Election Form after the Deferral Year begins. 
                  Any revocation before the beginning of the Deferral Year is 
                  the same as a failure to submit a Deferral Election Form or a 
                  Distribution Election Form. Any writing signed by a 
                  Participant expressing an intention to revoke his/her Deferral
                  Election Form or a related Distribution Election Form and
                  delivered to the Committee or its designee before the close 
                  of business on the relevant Election Date is a revocation.

5.  Effect of No Election

         A Participant who has not submitted a valid Deferral Election Form to
the Committee or its designee on or before the relevant Election Date may not
defer any part of the cash portion of his/her Retainer Fee for the Deferral Year
under this Plan. In the case of a person who becomes a Participant after October
29, 1996 and who does not submit a valid Deferral Election Form on or before the
relevant Election Date, fifty percent of such Participant's Retainer Fee will
become a Deferred Stock Benefit pursuant to section 4 of this Plan. The Deferred
Benefit of a Participant who submits a valid Deferral Election Form but fails to
submit a valid Distribution Election Form for that Deferred Benefit before the
relevant Election Date or who otherwise has no valid Distribution Election Form
for that Deferred Benefit is governed by section 8.

6.  Deferred Cash Benefits

         (a)      Deferred Cash Benefits will be set up in a Deferred Cash
                  Account for each Participant and credited with deemed
                  investment returns as provided in section 6(b). Deferred Cash
                  Benefits are credited to the applicable Participant's Deferred
                  Cash Account as of the day they would have been paid but for
                  the deferral.

         (b)      A Participant may select one or more investment options
                  approved by the Committee for his/her Deferred Cash Benefits.
                  Amounts will be credited to Deferred Cash Accounts to reflect
                  the deemed returns on such investment options at periods
                  determined by the Committee. A participant may change the
                  investment allocation of his/her Deferred Cash Account at
                  anytime.

7.  Deferred Stock Benefits

         (a)      Deferred Stock Benefits will consist of Common Stock Units 
                  and will be set up in a Deferred Stock Account for each 
                  Participant.  Each Common Stock Unit will increase or 
                  decrease in value by the same amount and with the same 
                  frequency as the fair market value of a share of Common 
                  Stock.  Each Deferred Stock Account will be credited as of 
                  the date the annual retainer fee would otherwise have been 
                  payable with a quantity of Common Stock Units determined in 
                  accordance with this section based on the closing price of a 
                  share of Common Stock on the NYSE on the date of such credit 
                  to the Deferred Stock Account.

<PAGE>

         (b)      Each Deferred Stock Account will be credited on or about each
                  Common Stock dividend payment date with additional Common
                  Stock Units, including fractional units, in a quantity equal
                  to the quotient of the dividends payable on the quantity of
                  shares in such account divided by the closing price of a share
                  of Common Stock on the NYSE on the date of that payment.

         (c)      In the event of a reorganization, recapitalization, stock
                  split, stock dividend, combination of shares, merger,
                  consolidation, rights offering or any other change in the
                  corporate structure, the number and kind of common stock units
                  credited to each Participant's account shall be adjusted
                  accordingly.

8.  Distributions

         (a)      According to a Participant's Distribution Election Form, but
                  subject to section 4(d), a Deferred Cash Benefit must be 
                  distributed in cash. Subject to section 4(d), a Deferred 
                  Stock Benefit will be distributed in shares of Common Stock 
                  corresponding to, and equal to the number of, the Common 
                  Stock Units credited to the Participant's Deferred Stock 
                  Account.  However, cash must be paid in lieu of fractional 
                  shares of the Common Stock otherwise distributable.

         (b)      Deferred Cash Benefits will be paid in a lump sum unless the
                  Participant's Distribution Election Form specifies payment of 
                  a Deferred Cash Benefit in installment payments over ten 
                  years. For a Deferred Cash Benefit payable in installments,
                  investment returns under section 6(b) will continue to accrue 
                  on the unpaid balance of a Deferred Cash Account. Any 
                  lump-sum cash payment will be paid or installment payments 
                  will begin to be paid or delivery of Common Stock will be 
                  made in the month following the Participant's Termination, 
                  unless a later post-Termination distribution date is 
                  specified in a Participant's Distribution Election Form.

         (c)      Deferred Benefits may not be assigned by a Participant or
                  Beneficiary.  A Participant may use a Beneficiary Designation
                  Form to designate one or more Beneficiaries for all of his/her
                  Deferred Benefits; such designations are revocable. Each
                  Beneficiary will receive his/her portion of the Participant's
                  Deferred Cash Account and Deferred Stock Account on February
                  15 of the year following the Participant's death unless the
                  Beneficiary's request for a different distribution schedule is
                  received before distributions begin and is approved at the
                  Committee's sole discretion. The Committee may require that
                  multiple Beneficiaries agree upon a single distribution
                  method.

<PAGE>

         (d)      Upon the occurrence of a Change in Control resulting in a 
                  Participant's Termination,  the Corporation shall pay such 
                  Participant, in the month following such Termination, cash in 
                  an aggregate amount equal to the value of such Participant's
                  Deferred Cash Account and Deferred Stock Account on the date 
                  of the Change in Control, as determined using the closing 
                  price of the Common Stock on the New York Stock Exchange on 
                  such date or the highest per-share price actually paid in 
                  connection with such Change in Control.  For purposes of this 
                  Plan, "Change in Control" shall mean a change in control of a 
                  nature that would be required to be reported in response to 
                  Item 6(e) of Schedule 14A of Regulation 14A promulgated under 
                  the Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), whether or not the Corporation is then subject to such 
                  reporting requirement; provided, that, without limitation,
                  such a change in control shall be deemed to have occurred if

                        (i)   any person (as defined in Sections 13(d) and 14(d)
                              of the Exchange Act) (a "Person") is or becomes 
                              the "beneficial owner" (as defined in Rule 13d-3 
                              under the Exchange Act), directly or indirectly,
                              of securities of the Corporation (not including in
                              the amount of the securities beneficially owned 
                              by such person any such securities acquired
                              directly from the Corporation or its affiliate 
                              representing twenty percent (20%) or more of the 
                              combined voting power of the Corporation's then 
                              outstanding voting securities; provided, however,
                              that for purposes of this Agreement the term 
                              "Person" shall not include (A) the Corporation or 
                              any of its subsidiaries, (B) a trustee or other 
                              fiduciary holding securities under an employee 
                              benefit plan of the Corporation or any of its 
                              subsidiaries, (C) an underwriter temporarily
                              holding securities pursuant to an offering of 
                              such securities, or (D) a corporation owned, 
                              directly or indirectly, by the stockholders of 
                              the Corporation in substantially the same 
                              proportions as their ownership of stock of the 
                              Corporation; and provided, further, however, that 
                              for purposes of this paragraph (i), there shall 
                              be excluded any Person who becomes such a 
                              beneficial owner in connection with an Excluded 
                              Transaction (as defined in paragraph (iii) below)
                              : or

                        (ii)  the following individuals cease for any reason
                              to constitute a majority of the number of 
                              Directors then serving: individuals who, on the 
                              date hereof, constitute the Board and any new
                              Director (other than a Director whose initial
                              assumption of office is in connection with an 
                              actual or threatened election contest including
                              but not limited to a consent solicitation,
                              relating to the election of Directors of the 
                              Corporation) whose appointment or election by the 
                              Board or nomination for election by the
                              Corporation's stockholders was approved or
                              recommended by a vote of at least two-thirds
                              (2/3) of the directors then still in office who 
                              either were Directors on the date hereof or whose 
                              appointment, election or nomination for election 
                              was previously so approved; or

<PAGE>

                        (iii) there is consummated a merger or consolidation
                              of the Corporation or any direct or indirect
                              subsidiary thereof with any other corporation, 
                              other than a merger or consolidation (an 
                              "Excluded Transaction")which would result in the 
                              holders of the voting securities of the 
                              Corporation outstanding immediately prior thereto 
                              continuing to represent (either by remaining 
                              outstanding or by being converted into voting 
                              securities of the surviving corporation or any 
                              parent thereof) at least 50% of the combined 
                              voting power of the voting securities of the 
                              entity surviving the merger or consolidation (or 
                              the parent of such surviving entity) immediately
                              after such merger or consolidation, or the 
                              shareholders of the Corporation approve a plan of 
                              complete liquidation of the Corporation, or there 
                              is consummated the sale or other disposition of 
                              all or substantially all of the Corporation's 
                              assets.

                              Notwithstanding any other provision to the
                              contrary, in no event shall the transfer of
                              ownership interests in the Corporation in
                              and of itself constitute a Change in Control
                              under this Plan.

9.  Corporation's Obligation

         (a)      The Plan is unfunded. A Deferred Benefit is at all times 
                  solely a contractual obligation of the Corporation. A 
                  Participant and his/her Beneficiaries have no right, title or 
                  interest in the Deferred Benefits or any claim against them. 
                  Except according to section 9(b), the Corporation will not 
                  segregate any funds or assets for Deferred Benefits nor issue 
                  any notes or security for the payment of any Deferred Benefit.

         (b)      The Corporation may establish a grantor trust and transfer to 
                  that trust shares of the Corporation's common stock or other 
                  assets. The governing trust agreement must require a separate
                  account to be established for each electing Participant. The 
                  governing trust agreement must also require that all 
                  Corporation assets held in trust remain at all times subject 
                  to the Corporation's judgment creditors.

10.  Control by Participant

         A Participant has no control over Deferred Benefits except according to
his/her Deferral Election Form, Distribution Election Form, and Beneficiary
Designation Form, and deemed investment allocation in section 6(b).

11.  Claims Against Participant's Deferred Benefits

         A Deferred Cash Account and Deferred Stock Account relating to a
Participant under this Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to do so is void. A Deferred Benefit is not subject to attachment or
legal process for a Participant's debts or other obligations. Nothing contained
in this Plan gives any Participant any interest, lien or claim against any
specific asset of the Company. A Participant or his/her beneficiary has no
rights other than as a general creditor.

<PAGE>

12.  Amendment or Termination

         This Plan may be altered, amended, suspended, or terminated at any time
by the Committee.

13. Administration

         The Committee shall have the full and exclusive power and authority to
administer this Plan and to take all actions that are specifically contemplated
hereby or are necessary or appropriate in connection with the administration
hereof. The Committee shall also have full and exclusive power to interpret this
Plan and to adopt such rules, regulations and guidelines for carrying out this
Plan as it may deem necessary or proper. The Committee may correct any defect or
supply an omission or reconcile any inconsistency in this Plan in the manner and
to the extent the Committee deems necessary or desirable to further the Plan
purposes. Any decision of the Committee in the interpretation and administration
of this Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.

14.  Notices

         Notices and elections under this Plan must be in writing. A notice or
election is deemed delivered if it is delivered personally or if it is mailed by
registered or certified mail to the person at his/her last known business
address.

15.  Waiver

         The waiver of a breach of any provision in this Plan does not operate
as and may not be construed as a waiver of any later breach.

16.  Construction

         This Plan is created, adopted, maintained and governed according to the
laws of the state of Delaware. Headings and captions are only for convenience;
they do not have substantive meaning. If a provision of this Plan is not valid
or not enforceable, the validity or enforceability of any other provision is not
affected. Use of one gender includes all, and the singular and plural include
each other.

17.  Effective Date

         The effective date of the Plan is January 1, 2002.




                                                              
                                                                    EXHIBIT 10.2

       THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
           THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

 Second Amended and Restated Marathon Oil Corporation Non-Officer Restricted
                                   Stock Plan
       (As Approved October 30, 2002, but Effective as of January 2, 2002)

1.        Purpose

          The objective of the Marathon Oil Corporation Non-Officer Restricted
          Stock Plan (the "Plan") is, through the issuance of restricted stock
          ("Shares"), to advance the interests of Marathon Oil Corporation, its
          subsidiaries, affiliates and joint ventures (the "Corporation") (a) by
          promoting the retention of outstanding employees, (b) by rewarding
          specific noteworthy achievements on the part of an employee or a group
          of employees, (c) by motivating employees through growth-related
          incentives to achieve long-term goals and (d) by aligning the
          interests of employees with those of the stockholders.

2.        Administration

          The Compensation and Organization Committee of the Marathon Oil
          Corporation Board of Directors (the "Board") or such other committee
          of the Board as the Board may designate to oversee the Plan (the
          "Authorizing Committee") shall create and authorize pools of specific
          numbers of Shares to be granted under the
 Plan by the Granting
          Committee. Authorizations shall be made every two years, and no
          authorization shall exceed 1 percent of the total shares of common
          stock outstanding on December 31 of the preceding year. In addition,
          Shares related to grants that are forfeited or cancelled before
          vesting shall immediately become available for grants, and these
          Shares, as well as any unused portion of the percentage limit of
          Shares available from previous authorizations, shall be carried
          forward and available for grants in succeeding calendar years.

          Except as otherwise set forth herein, the Plan shall be administered
          by the Salary and Benefits Committee of the Corporation (the
          "Administering Committee"). The Administering Committee shall
          establish its own guidelines for general administration of the Plan.
          Such guidelines shall be subject to review by the Law, Tax and
          Accounting departments. The Administering Committee shall have the
          power to cancel a grant made under the Plan when such cancellation is
          deemed appropriate. The Administering Committee may delegate to the
          Stock Plan Officer (as designated under the Marathon Oil Corporation
          1990 Stock Plan) its duties under this Plan pursuant to such
          conditions or limitations as the Administering Committee may
          establish.

          From and after May 28, 2002, the Authorizing Committee shall authorize
          a committee (the "Director Committee") consisting of the employee
          Director(s) of the Marathon Oil Corporation Board of Directors to
          grant awards of specific numbers of Shares to eligible employees. The
          term "Granting Committee" shall refer to the Administrative Committee
          prior to May 28, 2002, and shall refer to the Director Committee from
          and after May 28, 2002.



<PAGE>

3.        Eligibility for Participation

          Individuals who are employed by one of the following entities and are
          below Salary Grade 19 shall be eligible to receive grants under the
          Plan:

              Marathon Oil Corporation and its wholly-owned direct and indirect
              subsidiaries, Marathon Oil Company and its wholly-owned direct and
              indirect subsidiaries, Marathon Ashland Petroleum LLC and its
              wholly-owned direct and indirect subsidiaries, Speedway
              SuperAmerica LLC and its wholly-owned direct and indirect
              subsidiaries, or any foreign entity that is wholly-owned, directly
              or indirectly, by Marathon Oil Corporation.

          The Granting Committee shall select from among such eligible employees
          those to whom Shares shall be granted and shall determine the number
          of Shares to be granted to each such grantee.

4.        Grants

          All grants shall be subject to such forfeiture and transfer
          restriction provisions as may be established by the Administering
          Committee. As a condition of acceptance of a grant, each employee must
          agree to forgo the opportunity to make an election under Section 83(b)
          of the Internal Revenue Code of 1986 to be taxed on the fair market
          value of the shares as of the date of the grant. Grantees receiving an
          award shall have all the rights of a stockholder of the Corporation,
          including the right to vote the Shares and the right to receive any
          cash dividends paid thereon.

5.        Source of Shares

          Shares granted under the Plan may be granted out of authorized and
          unissued shares, treasury shares or open-market purchases.


6.        Vesting

          Shares granted to an employee shall vest as follows: 50 percent of the
          Shares received pursuant to a specific grant shall vest on the second
          anniversary of the grant, the remaining 50 percent shall vest on the
          fourth anniversary of the grant. Each grant shall be subject to the
          condition that the employee's continuous service with the Corporation
          continues through the relevant anniversary date, unless terminated by
          reason of death. Notwithstanding anything herein to the contrary, if
          the grantee is eligible to participate in a change of control plan
          adopted by his or her employer, any provisions of such plan that
          relate to the vesting of restricted stock shall apply to the Shares.



7.        Adjustments

          In the event of any change in the outstanding common stock of the
          Corporation by reason of a stock split, stock dividend, stock
          combination or reclassification, recapitalization or merger, or
          similar event, the Authorizing Committee may appropriately adjust the
          number of Shares covered by a grant and make such other revisions to
          outstanding grants as it deems are equitably required.




<PAGE>



8.        Tax Withholding

            At the time of delivery or vesting of cash or Shares under this
          Plan, the Corporation, its subsidiaries, affiliates, and joint
          ventures shall have the right to withhold from any payment of cash or
          Shares under this Plan or any other available source an appropriate
          amount of cash or number of Shares or a combination thereof for
          payment of taxes or other amounts required by law or to take such
          other action as may be necessary in the opinion of the Corporation to
          satisfy all obligations for withholding of such taxes. If Shares are
          used to satisfy withholding, such Shares shall be valued based on the
          fair market value when the tax withholding is required to be made from
          the eligible employee.


9.        Amendments

          The Administering Committee shall have the authority to make such
          amendments to any terms and conditions applicable to outstanding
          grants as are consistent with the Plan, provided that, except for
          adjustments under Paragraph 7 hereof, no such action shall modify a
          grant in a manner adverse to the grantee without the grantee's prior
          consent, except as such modification is provided for or contemplated
          in the terms of the grant. Except for the authorization or issuance of
          additional shares of the Corporation's common stock, the Authorizing
          Committee shall approve all amendments to the Plan.


10.       Awards to Employees on Non-U.S. Payrolls

          The Granting Committee shall have the power to grant awards under the
          Plan in the form of restricted stock units ("Units"), with each Unit
          representing the right to receive, at the discretion of the
          Authorizing Committee, either one share of the Corporation's common
          stock ("Common Stock"), or a cash payment equal to the fair market
          value of a share of Common Stock subject to certain conditions.
          Grantees receiving Units shall have the right to receive cash dividend
          equivalents equal in value to any cash dividends paid on the shares of
          Common Stock represented by the Units but shall have no voting rights
          with respect to such Units. Upon the vesting of Units under Paragraph
          6 hereof, the vested Units shall be cancelled and each grantee shall
          be entitled to receive payment in one of the following forms at the
          discretion of the Granting Committee: (i) a number of shares of Common
          Stock equal to the number of vested Units, or (ii) a cash payment
          equal to the fair market value of the number of shares of Common Stock
          equal to the number of vested Units as determined on the date of
          vesting. Thereafter each grantee who receives payment in the form of
          shares of Common Stock shall have all the rights of a stockholder of
          the Corporation, including the right to vote such shares of Common
          Stock. Except as otherwise noted in this Paragraph 10, Units granted
          hereunder shall be subject to the provisions of Paragraphs 1 through 9
          of the Plan; provided however, that the terms and conditions of such
          Units shall be subject to the rules and regulations of applicable U.S.
          and foreign laws (including, but not limited to tax withholding,
          resale restrictions, and transferability), and shall be administered
          at all times in accordance with such applicable laws.


<PAGE>

11.       Effective Date

          This amended and restated Plan is approved this 30th day of October,
          2002, but is effective as of January 2, 2002, and supercedes the prior
          Plan document effective on that date.




                                                                    Exhibit 12.1



<TABLE>

                            Marathon Oil Corporation
           Computation of Ratio of Earnings to Combined Fixed Charges
                          and Preferred Stock Dividends
                        TOTAL ENTERPRISE BASIS--Unaudited
                        Including Discontinued Operations
                              (Dollars in Millions)



<CAPTION>

                               Nine Months
                                  Ended
                               September 30            Year Ended December 31
                              --------------  --------------------------------------
                               2002    2001    2001    2000    1999    1998    1997
                              ------  ------  ------  ------  ------  ------  ------
<S>                           <C>     <C>     <C>     <C>     <C>     <C>     <C>   
Portion of rentals
representing interest......    $  47   $  39 $    54  $   52  $   49  $   53  $   35
Capitalized interest,
 including discontinued
 operations................       11      20      27      19      26      46      31
Other interest and
 fixed charges, including
 discontinued operations...      235     213     349     375     365     318     352
Pretax earnings which
 would be required to
 cover preferred stock
 dividend requirements
 of parent.................        -       9      12      12      14      15      20
                              ------  ------  ------  ------  ------  ------  ------

Combined fixed charges and
 preferred stock
 dividends (A).............   $  293  $  281  $  442  $  458  $  454  $  432  $  438
                              ======  ======  ======  ======  ======  ======  ======

Earnings-pretax income with
 applicable adjustments (B).  $1,061  $2,868  $3,213  $1,809  $1,866  $1,087  $1,067
                              ======  ======  ======  ======  ======  ======  ======

Ratio of (B) to (A).........    3.62   10.19    7.26    3.95    4.11    2.51    2.43
                              ======  ======  ======  ======  ======  ======  ======

</TABLE>










                                                                    Exhibit 12.2



<TABLE>

                            Marathon Oil Corporation
                Computation of Ratio of Earnings to Fixed Charges
                       TOTAL ENTERPRISE BASIS - Unaudited
                              Continuing Operations
                              (Dollars in Millions)




<CAPTION>
                               Nine Months
                                   Ended
                               September 30            Year Ended December 31
                              --------------  --------------------------------------
                               2002    2001    2001    2000    1999    1998    1997
                              ------  ------  ------  ------  ------  ------  ------

<S>                           <C>     <C>     <C>     <C>     <C>     <C>     <C>
Portion of rentals
representing interest.......  $   47  $   39  $   54  $   52  $   49  $   53  $   35
Capitalized interest,
 including discontinued
 operations.................      11      20      27      19      26      46      31
Other interest and fixed
 charges, including
 discontinued operations....     235     213     349     375     365     318     352
                              ------  ------  ------  ------  ------  ------  ------
Total fixed charges (A).....  $  293  $  272  $  430  $  446  $  440  $  417  $  418
                              ======  ======  ======  ======  ======  ======  ======

Earnings-pretax income with 
 applicable adjustments (B).  $1,061  $2,868  $3,213  $1,809  $1,866  $1,087  $1,067
                              ======  ======  ======  ======  ======  ======  ======

Ratio of (B) to (A).........    3.62   10.53    7.47    4.06    4.24    2.60    2.55
                              ======  ======  ======  ======  ======  ======  ======
</TABLE>













                                                                    Exhibit 99.1






                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Marathon Oil Corporation (the
"Company") on Form 10-Q for the period ending September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Clarence P. Cazalot, Jr., President and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

          (1)    The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.




/s/  Clarence P. Cazalot, Jr.

Clarence P. Cazalot, Jr.
President & Chief Executive Officer
November 14, 2002













[135372]





                                                                    Exhibit 99.2






                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Marathon Oil Corporation (the
"Company") on Form 10-Q for the period ending September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
John T. Mills, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge:

         (1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.




/s/  John T. Mills

John T. Mills
Chief Financial Officer
November 14, 2002


















[135372]