Is Venezuela about to invade Guyana for its oilfields?
Venezuela is trying to claim roughly two-thirds of neighbouring country Guyana following a recent referendum vote on an oil-rich land dispute.
The area, known as Essequibo, is predominantly jungle but the oil off its coast is likely driving the action by Venezuelan president Nicolás Maduro, who said the proposal to set up a region there received a 95 per cent approval rate.
Guyana, which has a population of just 800,000, received a huge petrodollar injection after massive offshore oil reserves were discovered in 2015.
US giants Exxon and Chevron are currently developing operations there through a profit-sharing contract with the country’s government and the boost saw Guyana become the fastest growing economy last year when GDP rose 62.3 per cent.
By 2025, the country estimates it will be producing around 825,000 barrels per day.
On Tuesday, Maduro proposed a law that would bring Essequibo’s oil under the jurisdiction of Venezuelan state oil company, PVDSA, and give Exxon and other foreign operators six months to vacate the region.
Such a move would effectively count as an annexation – and require military force in an area bigger than that of Greece.
Reports suggest that he has instructed PVDSA to draw up a map of exploration and exploitation of the resources in Essequibo and ordered the National Assembly to draft a law nullifying Guyana’s oil licenses in the region.
As a result of Maduro’s election in 2018, the US imposed sanctions that have hamstrung Venezuela’s oil trade, despite it owning the largest proven reserves of the commodity in the world.
In a Facebook address this week, Guyana’s president Irfaan Ali assured investors and citizens that his country’s defence force was “on high alert” adding, “Venezuela has clearly declared itself an outlaw nation.”
Ali stated that he had already spoken to the UN secretary general and is asking the UN Security Council to consider intervening.
Brazil, which borders both Venezuela and Guyana, yesterday said it was bolstering military presence on its northern border in response.
President Maduro has a track record of surprising diplomatic endeavours.
In 2020, he failed in an attempt to sue the Bank of England over $1bn in gold reserves, which the UK has withheld since 2018 due to not recognising him as Venezuela’s official leader.