Exxonmobil Chad-Cameroon Pipeline Project

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Conclusion

We decided to continue carrying out the project and below are some reasons:

- Promising financial returns. In analysis of the financial part of the project. There will be $2 billion revenues for Chad, $500 million for Cameroon and $5.7 billion for EM and its project partners if the project ends well. Also, the project will get funded by the World Bank and private sponsors, which in turn reduces the cost to a very low level. Therefore, the large amount of profits can help EM expand its business, increase the value of its stocks and recruit top-notch talents, making the company more competitive.

- Support from local government. Chad and Cameroon are one of the most undeveloped countries in the world. The slow growth of its GDP is a main factor threatening the its regime. In order to keep its sovereign stable, they have to attract investment from other place. The bright future of the project makes the government proactive to provide all resources need to carry out the project. So even though it is policy sensitive, the project might go smoothly.

- Improve the living quality of resident. Chad and Cameroon can oversee a sour on its economy after the project is done. With revenues get from the project, government in the two countries can build infrastructure, increase the income, create job opportunities and decrease the crime. That is a good public relation for EM. If we can really make that happen, many other countries and organization would like to trust and cooperate with us in the future.

- Rebuild the brand. Since EM has a very terrible public image in terms of environment, it is a great chance for it to gain the reputation back. The project was used to be blamed because the company had a bad history of handling the environmental problem. So if the company can deal with problem well, it is likely that the public will forgive the mistake made by EM.

Strategy and Plan

The top risk faced by Exxon now is the withdrawal of Exxon’s partner Royal Dutch/Shell(Shell) and France’s Total FinaElf (Elf). There is no doubt that the quit of Shell and Elf put the Pipeline project into a dangerous situation. Not only the project might collapse, but also Exxon is taking all risks of this project by itself. To improve the situation and share the risks, as well as raise more fundings, it is recommended for Exxon to open the project up for bid to find appropriate corporations.

Another challenge faced by Exxon is the history of oil company exploration in less developed countries and environmental problems. The oil spill in the nigerian oil field results in the environmental degradation and dissatisfaction in local society.Exxon’s brand imagine is bad in local people, just as Shell. However, it is a great opportunity for Exxon to rebuild their brand influence even as an oil company, to show their faith on environmental protection by increasing the budget on environment problems and introduce higher techniques. Moreover, the involvement of world bank can provide Exxon with environmental advices since they have 250 environmental experts and 800 employees working on sustainable development issues.