Feb 11, 2024 News
Kaieteur News – In a revelation of priorities, ExxonMobil, the American oil giant, has announced its intention to wind down operations in Equatorial Guinea, bringing a close to a chapter spanning nearly three decades. The company said the main pull factor is Guyana’s lucrative oil fields.
David Goldwyn, an international analyst, recently highlighted the oil discoveries in Guyana’s Stabroek Block as one of the “giants” of the decade, painting a picture of the country’s significance as a “hotspot” for the oil industry with its 11 billion barrels of oil-equivalent reserves.
This pivot away from Equatorial Guinea, once dubbed the fastest-growing economy on Earth just like Guyana, reveals key lessons about ExxonMobil’s relentless pursuit of maximizing value for its shareholders, even at the expense of the prosperity of its host countries.
A grim picture of Equatorial Guinea is left in ExxonMobil’s aftermath. The country, once buoyed by the discovery of oil in the 1990s that propelled it to become the third-largest oil producer in Sub-Saharan Africa, now grapples with the debilitating effects of the resource curse. This phenomenon, where countries rich in natural resources end up worse off, is starkly evident in Equatorial Guinea. Despite its oil wealth, the United Nations reports from 2019 to 2023 highlight a nation where less than half of the population has access to clean drinking water and 20% of children die before reaching the age of five, with the majority living on US$2 a day.
The only development that has been taking place is within the bank accounts of selected members of the Government which is led by President Teodoro Obiang. While the people suffer and swim in the slums of poverty, the members of the Government live lavish lifestyles.
An exclusive report by US award winning journalist, Rachael Maddow noted that one of the President’s sons, Teodoro Nguema Obiang Mangue, enjoyed a rather lavish lifestyle on the oil revenue that was supposed to go towards his country’s Treasury. With monies intended for the state, he bought himself a luxurious US$30M mansion in Malibu, California, some of the world’s finest and rarest sports vehicles such as Lamborghinis and Ferraris. He even bought some of the world’s most expensive Michael Jackson memorabilia such as statues of the pop icon. (See link to full video: https://www.msnbc.com/rachel-maddow/watch/exxonmobil-exploits-poor-nation-s-corruption-for-oil-in-africa-853945411885)
With the resource curse taking firm root in Equatorial Guinea President, Teodoro Obiang Nguema Mbasogo, and his family have been the focal point of scandals and investigations revealing the misappropriation of oil revenues, even at times facilitated by agents of Exxon.
This was examined in an American Senate Sub-Committee investigation in 2017, during Rex Tillerson’s tenure as ExxonMobil’s CEO, which uncovered payments diverted to private accounts controlled by President Obiang’s family, rather than the country’s National Treasury.
The International Monetary Fund’s (IMF) latest report from January 2024 paints a bleak future for Equatorial Guinea, forecasting a recession in 2023 and a continuous economic contraction. The report stresses the need for policy reforms to avoid the full unraveling of gains in per capita income over the last two decades.
ExxonMobil shifting attention to Guyana indeed signifies its unyielding drive to exploit new opportunities for shareholder value maximization. With plans to bring six projects online to elevate national output to 1.3 million barrels per day by 2027, ExxonMobil’s operations in Guyana are poised for expansion, with the full support of the Irfaan Ali administration.
However, this aggressive pursuit raises concerns about the potential for repeating patterns of exploitation and neglect experienced in Equatorial Guinea. Certainly, though the situations in Guyana and Equatorial Guinea are very different, the African country’s experiences can be instrumental. The starkest lesson may be that the experience of Equatorial Guinea does not agree with Exxon’s repeated claims that it cares for the prosperity of its host country.
ExxonMobil’s departure from Equatorial Guinea, leaving it in a state of economic and social disrepair, coupled with its fervent focus on Guyana, starkly illustrates the company’s most important purpose: maximizing value for its shareholders, often disregarding the long-term prosperity of its host countries.
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