......... Ebola outbreak has led to XOM postponing drilling in Liberia and limiting employee travelling in Nigeria. Nigeria is expected to be declared Ebola free, so activities could resume soon.
................ ExxonMobil had purchased a stake worth 80% in an offshore Liberian oil block, Block 13, from Canadian Overseas Petroleum (NYSE:COPL), with COPL holding a 20% stake. The contract made it mandatory for XOM to start drilling within three years.
Following the contract's terms and conditions XOM had planned drilling of this oil well in Liberia for late 2014. The firm is now facing a steep challenge with the postponement of its drilling plans owing to the Ebola outbreak. The block is estimated to have almost 2.6 billion recoverable oil resources, according to an independent reserves evaluators hired by COPL, in their Gross Prospective Oil Resource Report.
XOM also conducts offshore drilling in Nigeria, a country where the company has around 1 million acres of land. Furthermore, XOM is also making petroleum products in Nigeria. The firm has limited non-essential travelling of its employees in the country. Even so, reports suggest that HAL's Nigerian operations have not hampered by a major degree and it is predicted that United States Centre for Disease Control and Prevention would soon declare Nigeria Ebola free.
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The drilling halt in Liberia, and the restriction of employee travelling, are major setbacks to XOM's expansion plans for new oil wells. Even so, the recent Ebola outbreak does not result in any cancellation of the plans.
Instead, these plans have been postponed until the virus is curtailed especially in Liberia. It is predicted that there won't be any immediate or major financial impact on XOM putting its drilling activities on hold in Liberia.
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