• Nazar Mohamed and his son, Azruddin, are partners in a lucrative venture to build Exxon a shore base in Guyana for its massive offshore oil operation. They also face a criminal investigation and possible U.S. sanctions.

WASHINGTON (REUTERS): U.S. government officials repeatedly warned Exxon Mobil to avoid doing business with two mining magnates in Guyana, who face a U.S. investigation on suspicions of money laundering, drug trafficking and gold smuggling, according to five people with knowledge of the matter and two intelligence reports seen by Reuters.

The Texas-based oil giant ignored the advice, which was delivered during meetings in late 2021 and early 2022, and cut a deal to build a $300 million onshore logistics base with a consortium that included the two Guyanese businessmen, Nazar Mohamed and his son, Azruddin. Exxon announced the contract award in April 2022.

The Mohameds have close ties with Guyana’s president and some cabinet members, according to one of the U.S. intelligence reports and three sources with knowledge of their relationships. The government controls access to vast and newly discovered oil reserves off the South American nation’s coast. The Mohameds, owners of Mohamed’s Enterprise, had mostly focused on gold mining and foreign currency exchange before expanding into the oil business in recent years and securing the lucrative deal with Exxon.

Now, U.S. officials are considering imposing sanctions on the Mohameds, according to four of the sources and two additional people familiar with the matter. That could require Exxon to sever its business relationship with any sanctioned individuals or companies.

The construction of the shore base is part of Exxon’s efforts to expand oil production off Guyana’s coast. An Exxon-led partnership with two other oil firms currently produces about 380,000 barrels per day. The companies plan to expand output to 1.2 million bpd by 2027, a massive haul that would make Guyana’s production higher than what many OPEC nations, including neighboring Venezuela, produce today.

Exxon did not answer detailed questions from Reuters for this story but said in a statement: “We comply with all applicable laws where we operate and conduct our business.”

The Mohameds deny any wrongdoing. They are being investigated by the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the Department of Homeland Security and other U.S. agencies, on suspicions of smuggling Colombian cocaine and illegally mined Venezuelan gold to the United States, Europe and the Middle East, according to the five sources with knowledge of the probe. The Mohameds are also suspected of laundering money for drug traffickers and criminals, including sanctioned Russian nationals operating in the region, according to one of the intelligence reports.

The FBI, DEA and Homeland Security all declined to comment.

The U.S. officials advised Exxon against doing any business with the Mohameds, warning that Washington had identified concerns and “red flags” with the pair and saying they could not get visas to enter the United States, according to two of the sources familiar with the matter. The officials did not, however, tell the Exxon executives the full details of the criminal probes into the Mohameds because of legal constraints on disclosing information about ongoing investigations, the two sources said.

Reuters told Exxon in a request for comment in July 2022 that Nazar Mohamed faced a criminal investigation by U.S. authorities.

The news organization interviewed the elder Mohamed twice last spring and summer, once at his company’s Georgetown headquarters, where armed men guarded the front door and framed photographs of Guyanese President Irfaan Ali and government ministers hung in the entrance hall. He said at the time that he had heard he was under a U.S. investigation for “quite some time.”

“I have been unfairly targeted,” Nazar Mohamed told Reuters.

In February 2023, Azruddin Mohamed publicly disclosed criminal allegations, posting an angry message on Facebook to tens of thousands of followers saying the company was being falsely accused of drug trafficking and other crimes by someone talking to “foreign law enforcement.”

Nazar Mohamed said this week in a statement to Reuters, speaking for himself, his son and their businesses, that they had committed no crimes and were not aware of any U.S. investigation into their activities or any discussion of U.S. sanctions against them.

“The accusations you mention,” the statement said, “are false and defamatory.”

U.S. government representatives met in person at least three times with Exxon executives in Guyana’s capital of Georgetown to warn them about the Mohameds in late 2021 and early 2022, before the oil giant signed the construction contract with the joint venture that included the Mohameds, according to two sources familiar with the meetings. The executives included Alistair Routledge, head of Exxon’s Guyana operation, the sources said.

Exxon declined a Reuters request for an interview with Routledge.

The U.S. officials advised Exxon executives to choose any of the other five groups that were competing for the deal, all of which also involved Guyanese companies, according to one of the people familiar with the discussions.

Guyana is Exxon’s top bet for global oil production growth outside of the United States. At the time it contracted with the group including the Mohameds, the company still needed Guyana government approval for more than half of the 1.2 million barrels per day in production capacity it projects by 2027. Exxon owns 45% of the project and its two partners, Hess and China National Offshore Oil Corporation, own 30% and 25% stakes, respectively.

The partnership has since secured almost all of the approvals required to hit the 2027 output target.

Neither Hess nor CNOOC responded to requests for comment on the investigations into the Mohameds or the government’s meetings with Exxon.

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »