Exxon Mobil Corp. is planning to exit Equatorial Guinea, marking the close of an era that lasted nearly three decades.
This move will see the end of the company’s oil extraction efforts, which have significantly contributed to making the nation a member of OPEC.
The company has announced it will hand over its investments to the government in the upcoming second quarter.
This decision highlights Exxon Mobil‘s shift in focus towards ensuring a smooth transition and looking after affected individuals.
Discovered by Mobil Corp. in the mid-90s, Equatorial Guinea rose to prominence in the oil sector in the early 2000s.
After Exxon’s acquisition of Mobil in 1999, oil production increased dramatically.
Yet, over time, the nation’s oil output has significantly decreased due to depleting reserves and falling foreign investment.
This withdrawal is part of Exxon’s broader strategy, as explained by CEO Darren Woods.
The company is reducing spending globally to prioritize projects with higher growth potential and lower costs, such as those in Guyana and the U.S. Permian Basin.
The decision to leave reflects considerations of regulatory and political risks.
Ken Medlock from Rice University’s Baker Institute points out that rising risks can lead companies to seek better opportunities elsewhere.
Oil wealth enriched leaders like President Obiang but failed to enhance social indicators or human rights in Equatorial Guinea.
The Zafiro field, Exxon’s main asset, has produced over 1 billion barrels in two decades.
Following a safety incident in 2022, Exxon announced its intention to decommission the field’s platform.
At its closure, Exxon’s production from Zafiro was a mere fraction of its global output.