Exxon Mobil Corp (NYSE: XOM) would wind down oil production in Equatorial Guinea and leave the West African country after its license expired in 2026.
The exit reflected a broader move by major oil producers to reduce crude production in West Africa for lower-carbon natural gas development and more lucrative projects in the Americas, Reuters reports.
"It is a high-cost region where carbon emissions are a problem as well," said Gail Anderson at energy consultants Wood Mackenzie.
Exxon has cut its output in the country to less than 15,000 barrels of oil per day (bpd) through the existing production unit Serpentina.
This year, it evacuated staff from the offshore production platform Zafiro due to water entering the aging vessel.
Europe, which has been looking for alternative oil suppliers after sanctions on Russia this year, is the leading destination for Equatorial Guinea's oil exports.
Africa struggled to meet OPEC quotas due to the lack of investments in crude production.
As crude output in West Africa shrinks, production in the Americas will likely grow to 28 million bpd next year, up 2.3 million bpd from pre-pandemic levels, OPEC estimates show. Much of the increase comes from the U.S., Canada, Guyana, and Brazil, some places where Exxon has increased spending on oil output.
While crude oil production wanes in West Africa, the continent's liquefied natural gas (LNG) future is rising, and fossil fuel output could grow elsewhere in Africa.
Price Action: XOM shares traded higher by 1.55% at $111.51 in the premarket on the last check Tuesday.
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