In 2015 Guyana awarded an oil exploration contract to ExxonMobil, former company of former US Secretary of State Rex Tillerson. Exxon soon discovered an oil field estimated at five billion barrels, significant enough to change the economy of tiny Guyana once production begins next year.
Unlike the heavy and expensive oil of Orinoco/Chavez, the oil found offshore Guyana is high quality, light. Oil analysts cite an astonishing 82 per cent success rate for Exxon drilling in frontier areas compared with industry averages of 35 per cent.
Wood Mackenzie’s analysts say the offshore region “will easily become the fourth largest oil producing nation in Latin America by the next decade, with chances to outperform the countries preceding it. If Venezuela and Mexico fail to address production declines, Guyana could quickly surpass them to number two.”
Keep in mind until now this entire Esequiba region, offshore and on, had been off limits to oil exploration by mutual agreement of the countries. The Exxon Guyana discoveries confirmed the belief that the Esequiba region holds enormous oil resources.
Here enters the complication of Venezuela’s Maduro government and the bizarre declaration of opposition National Assembly President Juan Guaido to be deemed legitimate president. The entire tragic drama now unfolding can be better understood if we look beyond Orinoco Belt oil to the huge untapped potential reserves of Esequiba.
Since the 2015 Exxon finds, Venezuela has launched complaints with Guyana and on occasion interdicted Exxon oil exploration vessels. Complicating the situation for the Maduro regime is the fact that a partner of Exxon offshore Guyana in the disputed waters is the state oil company of Maduro’s largest creditor, China’s CNOOC.
Imagine a scenario where Maduro’s regime is replaced by a free-market Guaido who reopens Venezuela to foreign oil interests and reprivatizes the state PDVSA. Then Guaido, with help from his various international friends, aggressively asserts Venezuela’s claims to Esequiba.
Britain, France and Spain, all with major oil companies in the region, have joined the US in recognizing Guaido as interim president. So long as Venezuela was controlled by Maduro, it suited Exxon and their backers in Washington to recognize Guyana’s legitimacy to the offshore Esequiba fields.
Were Guaido to come in, that could easily change and a fragile Guyana could be arm-twisted to resolve the Esequiba issue to the benefit of Venezuela.
Right now we find Maduro with the open support of China and Russia, opposed by Guaido with the open backing of Washington, London, France, Brazil (also bordering on the Esequiba region) and others. Further adding to the explosive geopolitical cocktail of the region is the fact that China has formally incorporated Guyana into its Belt and Road Initiative and is building a highway link from Manaus in Northern Brazil through Guyana, giving Brazil far more efficient access to the Panama Canal, cutting thousands of miles off the shipping route.
Notable also are Chinese efforts in Panama, the central shipping crossing between Atlantic and Pacific Oceans. In 2016 China’s Landbridge Group bought Panama’s Margarita Island Port, the largest port, on the canal’s Atlantic side, giving the Chinese company intimate access to one of the most important goods distribution centers in the world.
It doesn’t take much imagination to realize that the geopolitical stakes in the Venezuela crisis go far beyond issues of legitimacy or democratic elections and far beyond the borders of Venezuela. And this is only the oil.
Mar 22, 2019After four days of pulsating action in the Commissioner of Police Birth Anniversary Inter-Division and Branches T20 cricket tournament, the afternoon game between defending Champions President Guards...
Should the Court of Appeal today turn down the decision of the Chief Justice (CJ) that the no-confidence vote (NCV) on December... more
Editor’s Note, If your sent letter was not published and you felt its contents were valid and devoid of libel or personal attacks, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]