Exxon Mobil Withdraws from Equatorial Guinea after Three Decades

Exxon Mobil, the oil company, intends to cease its operations in Equatorial Guinea in the second quarter of this year, after approximately three decades of oil exploration and extraction in the West African country.

Reuters reported in 2022 that Exxon decided to leave the country once its licenses expire, amidst a gradual divestment of old crude oil assets in Africa.

Exxon Mobil stated in an email message that it will transfer its investments in Equatorial Guinea to the government during the second quarter of the year.

They added that their focus is now on securely handing over the operations and addressing all parties that will be affected by this change.

Thanks to the oil discoveries made by Exxon Mobil in the mid-1990s, Equatorial Guinea has produced large quantities of oil and has become a member of the Organization of the Petroleum Exporting Countries (OPEC).

The monthly report released by “OPEC” indicates that oil production in Equatorial Guinea reached 55,000 barrels per day in December, with an increase of approximately 4,000 barrels per day.

Exxon Mobil stated that the decision to leave Equatorial Guinea aligns with the company’s long-term strategy.

The oil production of Exxon in Equatorial Guinea has decreased over the years, and the giant oil company is trying to sell its main assets in the Zafiro oil field since 2020.

The CEO of the company, Darren Woods, had reduced Exxon Mobil’s capital expenditure worldwide.

This was done in order to focus on faster-growing and lower-cost opportunities in regions like Guyana and the Permian Basin in North America.

Ken Medlock, the director of the Energy Studies Center at the Baker Institute, affiliated with Rice University in Houston, United States, stated that “When oil companies think about directing their capital, they take into consideration the risks on the ground, including the systems and political stability.”

Bloomberg quoted Midlock as saying, “If these risks increase, companies pack up and leave if they find other opportunities with higher chances of profit in exchange for the risks.”

It is mentioned that Teodoro Obiang Nguema, the President of Equatorial Guinea, who seized power in 1979, established political relations with the United States and succeeded in achieving one of the highest per capita GDP rates in Africa. However, after decades of oil production, the country witnessed some of the lowest social indicators in Africa.