The Texas, United States-based Exxon Mobil (NYSE:XOM) has made a huge oil discovery just off the coast of Nigeria. The well could help the business produce about a billion barrels of oil. It couldn’t have come for Exxon at a more appropriate time as their profits have slumped significantly in the last couple of years. It is more significant because the business is going to come out with their third-quarter results soon.
Stephen M. Greenlee, who is the President of the ExxonMobil Exploration Company, issued a statement saying, “We are encouraged by the results and will work with our partners and the government on future development plans.”
Good Timing for Exxon
Their stock prices have been coming down too in the last couple of years. Since the peak of 2014, the stock has slumped by 17 percent. Meanwhile, the profits of Exxon have also been at a 17-year low, and likewise, their credit rating has also been reduced, which has been a serious cause for concern for the business.
Further, on Wednesday, a court in New York ruled that Exxon’s auditing firm, Price Waterhouse Cooper, will have to hand over documents relating to the carbon footprints of the business and reveal how their work has affected climate change.
Exxon, though, has only 27 percent stake in this oil well. Chevron Nigeria Deepwater owns 27 percent too. The Chinese-Canadian Nexen and Total of France also have some stake in this well. Local companies in Nigeria own the rest.
Good News for Nigeria Too
The discovery is good news for this African country too. Petroleum Ministry of Nigeria said recently that the country is producing 1.9 million barrels every day. However, this did not pacify the oil producers, as their oil infrastructure is under threat from the Niger Delta Avengers group, a militant group. The latest attack was carried out last Tuesday.
Many businesses have slashed production, driving Nigeria into recession.
According to estimates of SBM Intelligence from Lagos, Chevron (NYSE:CVX), the Dutch-British Shell, and Exxon Mobil have together lost $7.1 billion in the first six months of this year, which comes to about 70 percent of their earnings because of low oil prices, weak margins at refineries and militant attacks.
Amid all this, Angola has emerged as the largest oil producer in Africa, beating Nigeria.
Exxon Mobil (NYSE:XOM), in fact, sold off its stake in one of their Nigeria arms recently to a local business, Nipco Investments.