Joint US-Guyana-Exxon Oil Scheme In The Essequibo Region Seeks To Circumvent Venezuela
The joint scheme could also diminish Venezuela's leverage as a significant oil exporter, especially within the context of its strained relations with the US.
The recent oil discoveries in 2015 at the Guyana-Venezuela frontier called Essequibo have added more complexity to an already difficult situation in that frontier as there is an ongoing and unresolved territorial conflict with Venezuela where some of the oil reserves were suspected of being located. This region called Essequibo which has Venezuela on the west, Guyana on the east, and Brazil on the south, has been the source of many diplomatic and legal disputes for more than 100 years, and today as the promise of oil became a reality, it is Guyana and US corporatocracy which want to drill in the disputed area without negotiation nor mutual understanding with its bolivarian neighbor. The article gives historical context to the Essequibo dispute while explaining the recent moves and interests of the players involved in this region.
Historical Context
The historical roots of the Essequibo conflict can be traced back to the 1800s, first when Venezuela was part of a state called the Republic of Great Colombia. Venezuela says it has historical proof, legal documents, and official maps that the Essequibo region was part of the Great Colombia state. Furthermore, the Bolivarian state also claims it has historical legal documentation and maps that show the Essequibo region was part of the Venezuela State after it broke off from Great Colombia in 1830. It is important to remember that back then Guyana was a colony, first established and controlled by the Dutch from 1667 to 1815 and then it became British Guiana, a United Kingdom colony from 1831 to 1966. It was not until 1966 that it got its independence from the UK as Guyana. Thus effectively both Great Colombia and Venezuela were dealing with imperial European states in their eastern frontier.
The Essequibo region has been a strategic area for Venezuela, Guyana and its former British rulers, as it contains vast natural resources and territorial expansion in South America. The historical maps of Gran Colombia and Venezuela from 1819 show the Essequibo River within it. It was not until the British colonial power intervened in the region and took over the territory of Guyana in 1840.
Years later Venezuela foolishly trusted the US’s arbitration of the issue and its Monroe Doctrine’s supposed protection against European powers as a forum which ultimately made it easy for the US to collude with the UK to maintain a joint Anglo-American control over the region. This came in the form of the Treaty of Washington (1897) which was an arbitration treaty that temporarily settled the territorial dispute between the UK and Venezuela in the 1890s until the 1960s. The US played a role in facilitating the treaty by urging both parties to accept arbitration as a solution. However, the treaty was not the end of the controversy, as Venezuela challenged its validity in 1962 at the UN General Assembly's Fourth Committee, claiming that it did not recognize the previous arrangements.
Venezuela’s Claim
From Caracas’ perspective, Guyama’s claim is based on a purposely unclear demarcation of the Essequibo border to steal the region away from Venezuela by the United Kingdom and now by Guyama and the US. As they see it they have historical claims to this region and demand some satisfactory resolution to their predicament via negotiation. But this negotiation was not possible due to Guyama's (and its US patrons) bellicose escalation of intending to hand over oil blocks in a sea that is not yet delimited and that is still in dispute and has been for more than 120 years. Guyama has even gone a step further and illegally handed over oil blocks in the strictly Venezuelan sea off the coast of the Delta Amacuro to Exxon Mobil and others. These transnationals intending to receive these licenses would effectively be entering into illegality as Venezuela has not recognized these oil block licenses.
The initiative could also diminish Venezuela's leverage as a significant oil exporter, especially within the context of its strained relations with the US. This could have broader implications for the country's economy and regional influence. As it stands Venezuela will not recognize these blocks or these licenses and will assert our sovereignty in a legalistic way. The border relations between the two countries have deteriorated since 2015 and the negotiation process has suffered a major setback in terms of institutionalization. Guyana's government is using the US-controlled International Court of Justice for its case, but this body has no real authority, nor jurisdiction of any sort to decide on a matter that is bilateral and political, and that requires dialogue, negotiation, and compromise.
Venezuelan Referendum Against US Lawfare
The Venezuelan referendum in defense of Essequibo, which will take place on December 3rd, is a democratic exercise that reflects the will of the people and their rejection of foreign interference. This referendum takes place to counteract Guyana's illegal moves to hand out the region to US companies without a mutual and authentic legal resolution of the dispute. Guyana has answered by attempting to stop this referendum with the help of US-controlled legal bodies.
United States-Venezuela relations have traditionally been characterized by hostility ever since the Bolivarian government took power in 1999 until the present time. Though there have been ongoing talks between the Venezuelan government and a faction of the opposition, which is pro-US, for US sanction relief but to no avail as the US merely seeks Venezuela to submit to its rule. There have been arbitration cases between Exxon and Venezuela at the International Chamber of Commerce (ICC) and the World Bank-affiliated International Centre for Settlement of Investment Disputes (ICSID) but these have served as Pro-US Pro-guyana legal proxies in a long game of international lawfare.
Venezuela has rejected the jurisdiction of the International Court of Justice (ICJ) over the dispute and has proceeded with a referendum to ask Venezuelans if they agree with Caracas' position. Guyana's government for its part sees the referendum as a case of annexation and has asked the ICJ to halt parts of the vote. Guyana applied to the ICJ in 2018, seeking a resolution to the border controversy but the ICJ nor any other body has the authority to rule on the matter unilaterally. All these judicial entities can do is be a mediator for the parties to speak but it cannot do a ruling since there is no global jurisdiction. One can understand this move by Guyana (and its US patron along with US Oil giants of Exxon and Chevron) for wanting to force an outcome, effectively canceling negotiations and dialogue all under the guise of the rule of law. The US has effectively taken the role the UK had so many years before and is using its political power to make sure Guyana gets full control of the Essequibo region without the two parties reaching a mutual accord.
Guyana: From UK Proxy To US Proxy
Exxon Mobil Corp. has been involved in the exploration and extraction of oil in Guyana, which has further complicated the situation as there is much distrust from both sides. Venezuela has accused Guyana's President Irfaan Ali of following mandates from Exxon Mobil Corp. and the U.S. in the territorial dispute. The timing of Guyana's concessions to Exxon following negotiations between Venezuela and the US has raised eyebrows and sparked speculation about the interconnected nature of these events. The Venezuelan Foreign Minister's address to the UN, highlighting the US's alleged appropriation of Venezuela's oil resources through its association with Exxon and the government of Guyana. The accusations of unilateral disposal of disputed territories and violations of international law have underscored the contentious nature of the geopolitical maneuvering in the region.
A brief history of ExxonMobil's involvement in Guyana reveals the company's strategic vision and persistence. The company first recognized the potential of Guyana's deepwater oil resources in the mid-1990s, after conducting several geological surveys. In 1999, it secured a large offshore concession through a subsidiary, but its exploration efforts were hampered by a territorial dispute between Guyana and Suriname that lasted from 2000 to 2007. Once the dispute was settled, ExxonMobil resumed its exploration activities in 2008 and made a significant discovery in 2015. Interestingly, this discovery coincided with ExxonMobil's losses in Venezuela, as the Bolivarian government nationalized its assets in early 2007.
Recently Chevron announced in October 2023 that it will acquire Hess, a smaller competitor, in a stock-for-stock transaction valued at $53 billion. The acquisition will enable Chevron to gain access to the oilfields in Guyana, where it will join forces with Exxon. Hess has been part of a group, along with Exxon Mobil Corp and CNOOC, that has been exploring and developing oil and gas resources in Guyana's offshore areas since 2015. The group has made over 30 discoveries and expects to produce 1.2 million barrels of oil per day by 2027.
Concluding Thoughts
Venezuela faces a historic challenge in the referendum on the Essequibo territory, which it claims as part of its national sovereignty. The South American country is seeking to defend its rights in the face of pressure from Guyana and its patrons, who are trying to prevent the referendum. Venezuela hopes that the people will express themselves freely and conscientiously on this issue of vital importance to their future and geoeconomic output.