September 22, 2021

Exxon Mobil suffers $1.4 billion shortfall, as shareholders punishes oil giant

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By Dennis Adonis From Guyana Guardian

New York – (Guyana Guardian) – ExxonMobil, the American oil giant that has promised good fortunes on its oil exploration investments in Guyana, saw its global investment projections plunged by as much as 4.1 per cent at trading in New York, while registering a massive US$1.4 billion shortfall that has shattered early figures that were put forward by analysts.

In a recent Bloomberg news report, the publication hinted at investors wariness at Exxon’s spending in Latin America, inclusive of Guyana, which is considered an investment with delayed returns.

The respected financial news publication went on to explain that shareholders at Exxon want their money back, since they are not really interested in grand investment projects for the future.

And now that the company has reported inferior results with no plans for a payout, shareholders decided to reject Exxon’s request to pump any more monies into several big exploration projects.

It remains uncertain as to how much impact this will have on the company’s current exploration in Guyana.

But Adrian Frost, an oil and gas analyst that curate data for CNN Money pointed out to the Guyana Guardian that Exxon’s recent revelation that the wells in Guyana have more oil than was previously projected, is not just news that simply happens.

He was adamant that the announcement was really targeted at shareholders who are holding on to their pockets with regard to the investment offshore Guyana.

“The company is trying to tell sceptical shareholders that there is a lot of profit to gain from the investment in Guyana, only if they can approve increase spending on the company’s exploration there”, he surmised.

Exxon had indicated that it will begin commercial extraction of oil in 2020, which would, of course, mean that shareholders must continue to approve spending in Guyana if many of the company’s plans are to materialize here.

Many analysts like Frost have pointed out that several onshore plans that Exxon has for Guyana, such as the building of a large office complex among things can be delayed in cases where shareholders are holding back.

Guyana is slowly shifting itself into becoming an oil-driven economy. But many observers are warning that without shareholders support, there is no guarantee that Exxon would pump the volume of oil it has promised come 2020 and beyond.

In essence, since the Guyana government has no say on how many barrels of oil Exxon must pump daily, the country cannot effectively determine what volume of returns there will be from 2020.

Others pinpointed that the New York Stock Exchange and the shareholders in Texas are the power-brokers who will have to make that call on whether the Exxon pumps big or small; – not the Guyana government.

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