Venezuela’s Move to Annex Oil-rich Region in Guyana Raises International Tensions

Venezuelan President Nicolas Maduro has sparked controversy by issuing a decree to annex the oil-rich Essequibo region in neighbouring Guyana. The decision follows a referendum in which voters expressed support for the annexation of land from Guyana, prompting Maduro to announce the establishment of a new state, “Guayana Essequiba.”

The Essequibo region is renowned for its abundant oil reserves and vast forests, encompassing approximately two-thirds of Guyana’s territory. Madur has instructed the Venezuelan state oil company PDVSA to create a dedicated department, PDVSA Essequibo, to oversee operations in Guayana, effective immediately.

Moreover, Maduro has enacted a presidential decree to establish the “High Commission for Defence of Guayana Esequiba” to oversee oil, gas, and mining licenses in the region. The president has also unveiled a new map of Venezuela, now including disputed territories, and has ordered a census of the residents in the annexed territory, granting them Venezuelan nationality.

To further assert control, legislation is being formulated to prohibit the engagement of companies with prior operations in Guyana’s disputed waters. Companies currently operating in the area will be required to vacate within three months.

In response to these actions, Guyanese President Irfaan Ali has expressed concern, appealing to the United Nations and other world leaders for support. He has also underscored the nation’s efforts to engage in “defence cooperation” with allies such as the US.

Brazilian President Luiz Inacio Lula da Silva has assured Ali of Brazil’s support, affirming their solidarity with Guyana and condemning any aggressive behaviour from Venezuela.

This territorial dispute dates back to the 1899 ruling by international arbitrators that delineated the current borders. The US State Department has urged both Venezuela and Guyana to seek a peaceful resolution, emphasizing the need to respect the 1899 award until a new agreement or legal decision is reached.

The stakes are high, particularly with the discovery of oil off the coast of Essequibo in 2015, which has led to significant investment in infrastructure projects in Guyana. Oil revenue has been contributing approximately $1 billion annually to the government, with ExxonMobil playing a pivotal role in the country’s oil production.

ExxonMobil, among other companies, has been mandated to exit Guyana within three months under Venezuela’s new directive. This directive follows a prolonged strained relationship between Venezuela and ExxonMobil, stemming from the nationalization of the company’s oil projects by Venezuela in 2007. This led to an arbitration case, culminating in a $1.6 billion compensation award in favor of ExxonMobil in 2014.

While Maduro’s actions have heightened tensions, Guyana has dismissed them as an attempt to divert attention from the domestic challenges faced by Venezuela.

Venezuela’s annexation move has raised international concerns and has the potential to escalate into a full-fledged diplomatic and territorial dispute in the region.