ExxonMobil’s activities in the Arctic are set to dwindle as the oil major shifts its focus to more promising projects elsewhere on the globe.
Exxon said, “Our current investment plans do not include exploration activity within the Arctic Monitoring and Assessment Program (AMPA) region, and we plan relatively limited investment to sustain our existing interests in the region.”
The scaleback includes Exxon’s equity in the long-standing facilities in Norman Wells, Prudhoe Bay, Point Thompson, Kuparuk, and associated infrastructure in Alaska.
Exxon in its recent proxy statement to shareholders explained that pursuing drilling and related activities in the Arctic region could expose the company to “considerable material financial risk.” It includes regulatory and liability risks, not to mention the fact that access to capital would be a constraint.
“All major US banks are now unwilling to finance drilling in the Arctic Refuge, including Goldman Sachs, Morgan Stanley, JPMorgan Chase, Wells Fargo, CitiBank, and Bank of America,” the company said.
Price risk from oil spills is also an added deterrent.
But the company’s operations in regions like the United States and South America are moving full steam ahead. Its major focus in South America is Guyana – where in the Stabroek Block, it has racked up a resource count of over 11 billion oil-equivalent barrels. Soon, Exxon will have a total of three projects online; preparatory works for the third are currently underway. The other two projects – Liza 1 and Liza 2 – are operating above peak capacity.
Exxon plans to have six projects operating simultaneously by 2027, producing more than 1.2 million barrels per day (bpd) in the South American country.
