The Oil and the Glory

Surprise: ExxonMobil will bid for Afghan oil play

ExxonMobil confirms that it has filed to bid on a group of Afghanistan oilfields containing an estimated 1 billion barrels of oil and gas, an instant validation of one of the riskiest resource plays on the planet. If the company’s application proceeds, it could set up a battle of colossals, since the state-owned China National ...

ExxonMobil confirms that it has filed to bid on a group of Afghanistan oilfields containing an estimated 1 billion barrels of oil and gas, an instant validation of one of the riskiest resource plays on the planet. If the company’s application proceeds, it could set up a battle of colossals, since the state-owned China National Petroleum Corp. and India’s ONGC have also filed to bid, I have been told.

The tender deadline was yesterday to file an expression of interest. Company spokesman Alan Jeffers told me that the filing is among Exxon’s global search for new hydrocarbon opportunities. The filings are to be made official after a government meeting Wednesday at which applications will be vetted.

The Exxon filing is surprising because until now the Afghan natural resource play, while rich, has been perceived as highly speculative, a place for the most daring wildcatters, in addition to regional state-owned companies such as CNPC, which won the first Afghan oil tender last year. The reason is both security — no one knows whether a 30- 40-year project would endure since Afghanistan has been at almost constant war for more than three decades — and the lack of infrastructure. Namely, how do you get the oil and gas to the market? Majors of the scale of Exxon rarely pursue such ventures, preferring for wildcatters to prove them out, then seek to buy in with their deep pockets.

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