Petroleum and Oil

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Ryerson University|
ExxonMobil and The Chad/Cameroon Pipeline: Case Analysis|
By: Nirpaal Saggu|
Professor: Jian GuanSection: GMS802-021|
Student ID: 500332344|


The case titled “ExxonMobil and the Chad/Cameroon Pipeline”, examines two large oil businesses merging together to finish an immense development project which spanned for approximately 25 to 30 years. In 1998, both Exxon and Mobil both respectively saw great success as major companies at the time with each company performing multi-billion dollar operations. In 1997 Exxon was achieving a large net income of $8.5 billion with revenues soaring as high as $137.2 billion, achieved a “AAA” debt rating, and also shelling out 5.4 million barrels of gasoline on a daily basis for huge profits. In contrast, Mobil thrived by building a strong reputation as well. The company saw revenues of $65 billion and achieved a net income of $3.3 billion; shelling out 3.3 million barrels of gasoline daily. In 1996, Shell, Elf and ExxonMobil signed a memorandum with the Chadian and Cameroonian governments which provided the sanctioning of a project which involved oil drilling for roughly 25-30 years. Their vision was to expand oil fields in the southern region of Chad by hauling out 300 wells of oil in the Doba Basin and as well building a 650-mile underground pipeline channel from Chad to Cameroon due to Chad being landlocked. The pipeline would move the oil to the coastline of Cameroon and be transported off to various parts of the world. The price of the development was $3.5 billion generating one billion barrels of oil. According to the World Bank, they approximated that the development would produce $2 billion for Chad, $500 million for Cameroon, and $5.7 billion for ExxonMobil and its associates. Ironically, the union of ExxonMobil was reminiscent of John Rockefeller’s Standard Oil Company which split apart in 1911 when the antitrust powers that be forced them to divide into two separate...
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