After three decades of operation in Equatorial Guinea, Exxon is preparing to withdraw from the OPEC member state in Central Africa. The supermajor announced its decision to transfer its holdings in the country to the government, citing a shift in its long-term strategy.
According to Bloomberg, Exxon stated that the exit from Equatorial Guinea aligns with its strategic focus on investing in the lowest-cost and fastest-growth locations. This strategy emphasizes regions such as Guyana and the Permian basin.
The news of Exxon’s departure comes amidst reports of another major player, French TotalEnergies, planning to exit onshore oil operations in Nigeria. TotalEnergies’ decision follows Shell’s recent announcement of selling its onshore business in Nigeria for $1.3 billion.
TotalEnergies’ CEO, Patrick Pouyanne, attributed the decision to withdraw from Nigeria’s onshore oil sector to challenges related to health, security, and environmental policies, particularly in the Niger Delta region. Onshore oil production in Nigeria has long been plagued by issues such as pipeline vandalism and infrastructure sabotage.
Although both Exxon and TotalEnergies will maintain their presence in Nigeria’s offshore oil sector, Reuters reports that the offshore sector offers more profitability with fewer challenges.
Commenting on Exxon’s exit from Equatorial Guinea, Ken Medlock, director of Rice University’s Center for Energy Studies, highlighted the influence of uncertain regulatory regimes and political stability. He suggested that mounting risks may have prompted Exxon to pursue opportunities with a better risk-reward profile elsewhere.
Exxon emphasized its commitment to ensuring a safe handover of operations in Equatorial Guinea and expressed concern for all those impacted by the transition.
