Exxon Set to Wind Down Africa Oil Production After 2026, Media Report

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Exxon Set to Wind Down Africa Oil Production After 2026, Media Report
Exxon Set to Wind Down Africa Oil Production After 2026, Media Report

Africa-Press – Rwanda. Exxon Mobil has been operating in Equatorial Guinea for decades. Equatorial Guinea is a small Central African state where most of the country’s revenues come from oil exported to Europe, which has been in search of alternatives to Russian oil due to the sanctions it imposed against Moscow this year.

Exxon Mobil plans to end its oil production in OPEC-member Equatorial Guinea when the company’s license expires in 2026, a media outlet reported, citing sources. Last year, the firm accounted for about 45,000 barrels per day (bpd) of the country’s total 93,000 bpd of oil pumped.

In 2014, Equatoguinean oil output by Exxon reached a peak of more than 300,000 bpd. Since, it has been declining along with an overall decrease in oil extraction in the country that is facing the aging of oil fields. Recently, the firm limited its oil production to less than 15,000 bpd through only one active platform. Another platform, which Exxon has been trying to sell since 2020, became unoperational due to technical reasons and is reportedly planned to be decommissioned.

One of the sources said that the oil production could be upped to about 25,000–30,000 bpd by putting a third offshore platform that is currently awaiting governmental approval into operation.

The company’s decision comes as part of a wider trend of winding down African oil extraction units by international corporations. In October, joint oil output by Angola and Nigeria, the continent’s two top oil producers and OPEC members, reached a low of 2.1 million bpd (compared to 3.2 million bpd in 2019).

Chevron, Shell, as well as Exxon, all exited Nigeria, claiming that it is facing widescale oil theft, named among main factors that led to worst production results in 32 years. In 2022, Nigeria’s position as Africa’s largest oil exporter was lost to Angola, which, however, was also abandoned by TotalEnergies this year.

The companies leaving Africa are reportedly switching to the Americas, with the United States, Canada, Guyana and Brazil contributing to recent growth in the region’s oil production. American output is expected to increase to 28 million bpd next year (2.3 million bpd higher than pre-pandemic levels).

In contrast, experts predict the development of the African liquefied natural gas (LNG) industry, as Europe seeks a replacement for sanctions-blocked Russian fuel, leading to a rise in investment in new gas projects. According to forecasts, this could result in a 30% increase in African gas production over the following eight years.

Last year, Chevron exported the first liquefied natural gas (LNG) cargo project from its project in Equatorial Guinea. In the autumn of 2022, Mozambique started gas exports for the first time in its history. Fuel produced by a consortium led by Eni and Exxon has been headed straight to Europe to mitigate the effects of the energy crisis. Furthermore, new oil and gas fields have recently been discovered in Namibia, with experts describing the reserves as promising.

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