Oil majors shift investment away from Middle East amid rising risks
Shafaq News- Middle East
Global oil companies are redirecting investments toward Africa and South America as repeated instability in the Middle East, most recently the war involving US, Israel, and Iran, raises risks to profitability, according to CNBC Arabia.
US firms ExxonMobil and Chevron, along with Britain’s BP and France’s TotalEnergies, are investing billions of dollars in new exploration projects outside the region to reduce exposure to conflict and capitalize on higher oil prices.
ExxonMobil is considering a $24 billion investment in deepwater oil fields in Nigeria, while Chevron has expanded its presence in Venezuela through asset swap deals. BP has acquired stakes in offshore fields in Namibia, and TotalEnergies has signed an exploration agreement with Turkiye. Consultancy Wood Mackenzie estimates these projects could generate up to $120 billion in value in the coming years.
Recent attacks on energy infrastructure and disruptions in the Strait of Hormuz have led to billions of dollars in losses for Western companies. ExxonMobil said its global production fell 6% in the first quarter, with potential annual losses of up to $5 billion linked to damage to gas facilities in Qatar.
Companies are increasingly targeting Africa, South America, and the eastern Mediterranean to offset risks, as the industry seeks to add around 300 billion barrels to global reserves by 2050 to meet demand.
Chevron is also preparing exploration projects in Egypt, Greece, and Libya, while strengthening its position in the Gulf of Mexico and securing additional stakes in heavy oil projects in Venezuela.
