Exxon Mobil Corp. is set to depart Equatorial Guinea in the coming months, marking the end of nearly thirty years of oil exploration and drilling that propelled the small West African nation into becoming an OPEC member.
The decision to exit was announced by the company in an email, stating that it plans to transfer its investments in the country to the government during the second quarter.
The focus now, according to Exxon Mobil, is on ensuring a safe handover of operations and providing support for all those affected by the transition.
This move aligns with ExxonMobil’s long-term strategy, which has seen a shift in focus towards the most promising and cost-effective prospects globally, such as those in Guyana and the US Permian Basin.
The decision comes amid a period of declining production and dwindling foreign investment in Equatorial Guinea, where Exxon Mobil’s presence had played a significant role in the nation’s oil industry since the mid-1990s.
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According to CEO Darren Woods, the company has been trimming its global capital spending, directing resources to areas with higher growth potential.
The decision to leave Equatorial Guinea reflects Exxon Mobil’s assessment of operational risks and opportunities elsewhere with better risk-reward profiles, as explained by Ken Medlock, director of Rice University’s Center for Energy Studies.
Equatorial Guinea experienced an oil boom in the early 21st century, which greatly benefited the ruling elite but failed to significantly improve the country’s social indicators or human rights record.
Exxon Mobil’s primary asset in the country, the Zafiro field, has been a significant contributor to the nation’s oil production, yielding over 1 billion barrels over two decades.
However, a safety incident in 2022 led to the shutdown of the field’s platform, prompting plans for decommissioning.
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Before the shutdown, Exxon Mobil was extracting approximately 45,000 barrels per day from the Zafiro field, a fraction of its global daily production.
The company’s departure raises questions about the future of foreign investment in Equatorial Guinea’s energy sector and the potential for increased state control over oil production in the country.