Exxon Corp., the world's largest petroleum company, yesterday pulled out of a consortium that has planned a $700 million deep water port in the Gulf of Mexico. The port would handle huge supertankers carrying imported oil to this country in the 1980s.
A pipeline subsidiary of Exxon withdrew from Seadock, Inc., which proposed a crude oil unloading terminal 26 miles off the coast of Freeport, Tex. Exxon was the largest investor in the project and its decision could kill the proposed port, oil industry sources said last night.
An Exxon statement blamed "continuing uncertainties" relating to the rights of owners to manage and operate the port and future financial obligations as major factors in the decision.
In Houston, Seadock president Hugh L. Scott said last night "it is highly unlikely" that the project can proceed now that Exxon has removed itself. Mobil Corp. withdrew earlier and seven remaining companies in the project are expected to send spokesmen to a meeting on the future of Seadock later this week.
"It will be a tragic shame if excess government intervention and over-regulation deny to the people of Texas and the nation the economic and environmental benefits which Seadock could make possible but this now looms as a very real possibility," Scott declared.
Although former Secretary of Transportation William T. Coleman Jr. approved licenses for two of the controversial deep water ports before leaving office last January, he included requirements demanded by the Justice Department that would open the facilities to all shippers and would permit the government to order an expansion of the ports.
The owners of both proposed superports - the second, called Loop, Inc., is planned for 13 miles off Grand Isle, La. - must decide by Aug. 1 whether they will operate under the restrictions required by Coleman. When Mobil pulled out its 15 per cent investment, from Seadock, it complained that the federal government's final rules did not recognize what the petroleum company called the "high risk" nature of superport investments."
Exxon , which was to be the largest single stockholder of Seadock (a 22 per cent share), said its decision was made with "reluctance" because of "significant national benefits" that could be realized if Seadock is constructed - employment opportunities, reduced environmental risks compared with other forms of transporting oil in smaller ships and reduced transport costs.
Remaining owners of Seadock are Cities Services Co., Gulf Oil Corp., Continental Oil, Crown, Shell Oil, Phillips Petroleum and the Dow Chemical Co. Although the original nine partners in Seadock have invested nearly $20 million to date for design work, environmental studies and license applications.
Although the Seadock port may have been dealt a fatal by Exxon yesterday, there were some indications that owners of Loop may move ahead with their plans.
A spokesman for Loop, in New Orleans, said yesterday that his consortium expects "to be able to reach agreement with the Department of Transportation on modifications" to the original license. A decision by Loop's six owners - Ashland, Marathon, Murphy, Shell, Texaco and Union oil companies - will be made by Aug. 1, the spokesman added.
Proponents of the superports have said their construction could lead to a 30 per cent cut in crude oil transport costs. From the offshore port sites, oil shipped from the Middle East and other producing nations would be sent by pipeline to shore, where it would be fed into separate interstate pipelines owned by some of the same firms.
The Seadock's proposal is controversial in Texas, where city and port officials from Galveston had proposed buildings a publicly owned onshore superport large enough to handle the supertankers. The Galveston officials said their project would be cheaper to construct.
Without ports capable of handling a new generation of large oil tankers, oil must be unloaded from the ocean vessels to smaller ships that can dock at current ports - a process that could cause more accidents, spills and higher transport costs for a nation depending on oil imports througout the 1980s.