Exxon Mobil Faces Potential Sanctions as U.S. Investigates Business Dealings

Despite the warnings, Exxon proceeded to sign a $300 million contract with a consortium that included the Mohameds to construct an onshore logistics base in Guyana.

Exxon Mobil, the Texas-based oil giant, has been warned by U.S. government officials multiple times to avoid engaging in business with two Guyanese mining magnates, Nazar Mohamed and his son Azruddin, who are currently under investigation by U.S. authorities for alleged money laundering, drug trafficking, and gold smuggling.

Despite the warnings, Exxon proceeded to sign a $300 million contract with a consortium that included the Mohameds to construct an onshore logistics base in Guyana.

The Mohameds have strong connections to Guyana’s president and certain cabinet members, according to intelligence reports and sources familiar with their relationships.

Given the government’s control over the country’s vast offshore oil reserves, the Mohameds’ influence could pose a significant challenge to international companies operating in Guyana.

The father, Nazar Mohamed, has been a longtime associate of President Irfaan Ali’s family and reportedly made significant donations to Ali’s 2020 presidential campaign.

U.S. officials are now contemplating imposing sanctions on the Mohameds, which would require Exxon to sever its business ties with any sanctioned individuals or entities.

The investigations by U.S. agencies, including the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigation (FBI), allege that the Mohameds were involved in smuggling Colombian cocaine and illegally mined Venezuelan gold to various locations worldwide.

They are also suspected of money laundering on behalf of drug traffickers and sanctioned Russian nationals operating in the region.

Exxon, when approached for comments, stated that it complies with all applicable laws in its operations.

The Mohameds, on the other hand, deny any wrongdoing and claim to be unaware of any U.S. investigation or discussions about potential sanctions against them.

U.S. officials had advised Exxon against partnering with the Mohameds, citing concerns and “red flags” regarding their background.

Although the officials did not disclose the specific details of the ongoing criminal investigations due to legal constraints, they made it clear that the Mohameds could not obtain U.S. visas.

Exxon’s deal with the consortium including the Mohameds involves the construction of a shore base to support the expansion of oil production off Guyana’s coast.

This expansion aims to increase production to 1.2 million barrels per day by 2027, surpassing the output of many OPEC nations.

Guyana is considered a key growth opportunity for Exxon globally.

The company currently owns a 45% stake in the project, with Hess and China National Offshore Oil Corporation (CNOOC) holding 30% and 25% stakes, respectively.

While Exxon’s partnership has obtained most of the necessary approvals to reach its production target, the potential imposition of sanctions on the Mohameds could disrupt the project and its operations in Guyana.

As Guyana emerges as a major player in the oil industry, Exxon’s association with individuals under investigation for serious criminal activities raises concerns about the company’s risk assessment and due diligence processes.

The case highlights the challenges faced by multinational corporations when operating in countries with complex political and economic landscapes.

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