Hess 2008 Annual Report Download - page 5

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In exploration, we executed a successful program
that resulted in offshore discoveries in Australia,
Libya and Egypt. We conducted appraisal drilling
in our Pony Field in the deepwater Gulf of Mexico,
where we drilled to a total depth of more than
32,000 feet. We also made significant additions to
our exploration acreage, including the acquisition of
47 blocks in the deepwater Gulf of Mexico and the
Semai V block in Indonesia.
MARKETING AND REFINING
While we continued our strategy of running our
refineries for cash flow, high crude oil prices and weak
refined product demand pressured margins for most
of 2008, resulting in lower profitability for the year.
The growth for Hess Energy Marketing, which
provides energy to 17,000 commercial and
industrial customers in the eastern United States,
occurred largely in sales of natural gas and
electricity. Energy Marketing also introduced a slate
of green products and services, such as Demand
Response and Carbon Neutral programs.
In Retail Marketing, which has 1,366 gasoline and
convenience stores along the East Coast of the U.S.,
higher average margins more than offset weaker
gasoline sales. The rollout of Dunkin’ Donuts self-
service offerings in our retail network has been
enthusiastically received by our customers.
SAFETY AND SOCIAL RESPONSIBILITY
In 2008 we achieved our best-ever performance
in employee safety. While we are proud of the
progress we are making, we remain focused on
building a culture of continuous improvement in
safety performance.
Our company is committed to making a long-lasting
positive impact on the communities in which we
operate. Last year, our contributions to support
health, education and community development grew
to $21 million from $16 million in 2007 and included
$3 million to the Greater Houston Community
Foundation for Hurricane Ike relief efforts. Our
partnership with the government in Equatorial
Guinea to improve primary education made
substantial progress in 2008 by training 1,165
teachers and renovating 40 model schools.
We are extremely pleased that Greg Hill has joined
us as President, Worldwide Exploration and
Production. Greg had a distinguished 25-year
career at Shell, where he most recently was
Executive Vice-President, Asia Pacific E&P.
He also served in leadership roles in the United
States and Europe. He brings global experience
in operations excellence, technology, development
projects and building world-class organizations
through investment in people.
Greg succeeds John O’Connor, who is retiring after
more than seven years of outstanding leadership.
We want to express our deep appreciation to John
for the extraordinary job he has done in developing
a global franchise in Exploration and Production.
His vision to grow reserves and production on a
sustainable and financially disciplined basis has
provided us a strong foundation for the future.
We appreciate our employees’ hard work and
dedication to build a company that has the
capability to meet the world’s energy challenges
with the entrepreneurial spirit of an independent.
We are grateful for the outstanding advice and
guidance of our Board of Directors. We especially
thank you, our stockholders, for your support
and interest.
John B. Hess
Chairman of the Board and Chief Executive Officer
March 4, 2009