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Breaking News:

OPEC Lifts Production in February

Exxon Set to Exit Equatorial Guinea

Exxon is leaving Equatorial Guinea after a three-decade presence in the OPEC member from Central Africa.

The supermajor told Bloomberg that it will transfer its holdings in the country to the government and that “Our focus now is on a safe handover of operations and caring for all impacted by this change.”

Exxon also added that the exit was part of the company’s long-term strategy. That strategy focuses on investments in the lowest-cost and fastest-growth locations, Bloomberg noted in its report. These locations include Guyana and the Permian.

The news coincided with reports that French TotalEnergies was planning to exit onshore oil in Nigeria, following in the footsteps of fellow supermajor Shell, which last month said it would sell its onshore business in the country for $1.3 billion.

Speaking at the release of TotalEnergies’ financial results for 2023, CEO Patrick Pouyanne said that "Fundamentally it's because producing this oil in the Niger Delta is not in line with our [Health, Security and Environmental] policies, it's a real difficulty."

Onshore oil production in Nigeria has been problematic for decades, with pipeline vandalism and infrastructure sabotage rampant despite government efforts to rein these in.

Both supermajors, however, will remain in Nigeria’s offshore oil sector, which is more lucrative while less problematic, Reuters noted in a report.

Speaking of problems, these could have been a big reason for Exxon’s decision to leave Equatorial Guinea, according to one analyst interviewed by Bloomberg.

Uncertain regulatory regimes and political stability must have been among the factors Exxon considered before deciding what to do with its Guinea business, the director of Rice University’s Center for Energy Studies at the Baker Institute in Houston, Ken Medlock, told the news outlet.

“If those risks mount, companies could pack up and leave if they have other opportunities with a better risk-reward profile,” he explained.

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By Charles Kennedy for Oilprice.com

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