(Bloomberg) – Exxon Mobil Corp. plans to pull out of Equatorial Guinea in the coming months, ending nearly three decades of oil drilling that turned the small West African nation into an OPEC member.
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Exxon said in an email that it will transfer its investments in the country to the government during the second quarter. “Our current focus is on safely handing over operations and caring for everyone affected by this change.”
Equatorial Guinea became one of the world’s hottest oil regions around the turn of the century, after discoveries by Mobil dating back to the mid-1990s produced large amounts of crude oil. Production soared after Exxon acquired Mobil in 1999, but output in coastal countries plummeted by more than 80% over the years as spring water dried up and foreign investment declined.
The company said the decision to exit is “consistent with ExxonMobil’s long-term strategy.” Chief Executive Officer Darren Woods has cut capital spending around the world to focus on the fastest-growing, lower-cost opportunities, such as Guyana and the US Permian Basin.
Ken Medlock, director of the Baker Institute Energy Research Center at Rice University in Houston, said oil companies consider on-the-ground risks, such as regulatory regimes and political stability, across their businesses when considering how to allocate capital. Ta.
“If these risks increase, companies may pack up and exit if there is another opportunity with a better risk-reward profile,” Medlock said.
Equatorial Guinea’s oil boom enriched the ruling elite, including President Teodoro Obiang Nguema Mbasogo, who seized power in 1979, established political ties with the United States, and led the country to the highest gross domestic product per capita in Africa. Brought to one of the production. But despite decades of oil production, the continent has some of the worst social indicators and a poor human rights record.
Exxon’s key asset is the Zafiro oil field, which has produced more than 1 billion barrels for more than 20 years. In 2022, Exxon announced plans to decommission platforms at sites that have been shut down due to safety incidents. Before the shutdown, Exxon was pumping about 45,000 barrels per day from its oil fields, a fraction of the 3.8 million barrels per day it produces worldwide.
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