Raphael John-Lall
Economic and commercial interests are driving the animosity between Guyana and Venezuela over the disputed oil-rich Essequibo region.
This is the view of experts who spoke during webinar last Thursday night entitled “The Guyana-Venezuela Controversy: The Argyle Declaration and Implications for International Law and the Caribbean.”
It was hosted by the Institute of International Relations, University of the West Indies (UWI), St. Augustine.
Dean of the Faculty of Law at the St. Augustine campus of The University of the West Indies, Dr Alicia Elias-Roberts, who said while the legal aspects of international law are important, economic aspects like the discovery of oil in Guyana in 2015 also helped fuelled the tension between Venezuela and Guyana.
“The question is what influence does ExxonMobil have in this issue. The influence of ExxonMobil, I agree with the panellists, is based on its economic interests and the company is interested in its bottomline dollars. But in terms of international law, there are many dynamics to the issue between Guyana and Venezuela.
“After there was the pronouncement that there was the finding of oil in 2015, and the Guyana government said it has this company operating offshore that found oil in commercial quantities, it escalated to the extent that Venezuela then issued a presidential decree saying that that is in their area. So, Venezuela reacted to oil being in Guyana’s waters in commercial quantities. Even Caricom had to say this presidential decree by Venezuela was violating other Caricom states maritime areas,” said Elias-Roberts.
Last December, the presidents of Venezuela and Guyana met in St. Vincent and the Grenadines where the leaders signed the Argyle agreement not to use force to solve the dispute over the oil-rich Essequibo region which Guyana currently administers.
Both countries met again last month and in March the presidents are due to meet again.
Caribbean economic zone
Co-founder and co-chair, Caribbean Policy Consortium, Professor Emeritus University of Miami, Anthony Bryan, who also spoke, gave reasons why he thinks Venezuela wants to “grab a piece of Guyana.”
He said Venezuela wants to create an economic zone on the northern-eastern coast of Venezuela.
“Let me blunt about it. Essequibo is the prize at the end of the rainbow for Venezuela. The northern coast of the Essequibo would give Venezuela an additional exit to the Atlantic Ocean. It would gain 280 kilometres of coastline, resulting not only in an expansion of its continental platform, but also of its sea limits, its adjoining areas, and exclusive economic zone.
“If the coastal band towards the Essequibo is expanded and combined with its occupation of the Isla de Aves and the Los Monjes archipelago, which is off Maracaibo in western Venezuela, the nation will have the ability to control the southern Caribbean and expand its fishing and oil and gas resource zones. This would generate total maritime sovereignty over the Atlantic for 22.2 kilometres, and customs jurisdiction for 44.4 kilometres. By any measurement this also speaks of a huge advantage for Venezuela in terms of national security and defence.”
He also spoke about the implications for the Dragon gas agreement T&T signed with Venezuela in December.
“With respect to the implications of the current controversy for the Caribbean in relation to gas deals. The current deal that would face some obstacles is the cross-border Dragon project between T&T and Venezuela. T&T needs access to more natural gas, and Venezuela would be able to monetise a resource that they have not exploited in the past. Of course, it’s not all clear sailing. The US, which has put sanctions on Venezuela, on December 22, 2023, gave T&T an exception with a licence that enables Shell and the National Gas Company of T&T (NGC) to produce natural gas in the Dragon field for 30 years,” Bryan said.
He added that the United States Government has indicated that it will pull back on some of its sanction’s relief for Venezuela if further progress towards implementing the Barbados agreement, which includes free elections, is not apparent.
“If so, the Biden administration will not renew general license 44, which has provided relief to the Venezuelan oil and gas sector. This license will expire on April 18, 2024. On January 29, 2024, the US revoked general license 43 which allowed transactions with the Venezuelan state-owned gold mining company Minerven. But there are signals out of Washington that it could refrain from imposing the harshest penalties on the oil and gas sector.”
He said in this context, it is premature to speculate as to whether the Dragon gas agreement would be affected by the reimposition of some sanctions.
“An outcome will depend on the recommendations of the department of the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, which administers and enforces economic and trade sanctions based on US foreign policy and national security.”
He also cast doubt over the theory that ExxonMobil is behind the recent flare up between Venezuela and Guyana, as he noted it is difficult to argue that the international energy companies have a hand in the recent tensions over the Essequibo region, as they are businesses and they are simply looking to increase their commercial operations.
“I do not think that the international oil companies have any role in stirring up problems between Guyana and Venezuela. We should look at ExxonMobil and the others; the Stabroek field is one of the most profitable fields ever discovered in petroleum engineering and certainly Guyana has many friends that support its position.
“The other thing to remember is that the interest of the companies is in oil production regardless of what nation it belongs to. These companies, like nation states, do not have friends, they have interests. The interests of ExxonMobil at the moment is in Guyana. In fact, it has decided to commence with drilling off the Essequibo region. I think that the spectacular success of ExxonMobil and TotalEnergies does provide some animosity on the part of President Maduro.”
Caribbean energy plan
Bryan warned energy-dependent Caribbean countries about Venezuela’s role in the region and added that Venezuela’s Petrocaribe plan was not designed to assist the region.
“That is a forceful lesson for the region. The Petrocaribe model of regional energy cooperation was not sustainable. It was based on the primacy of Venezuelan oil, and the use of ideology as a strategy for regional cooperation. In short, Petrocaribe was not a model for the region’s energy future!”
He noted that Venezuela is once again trying to revive the Petrocaribe energy plan for the region, but urged the region to be cautious.
“There is at the present time a Venezuelan effort to revive Petrocaribe, and there appears to be eager anticipation by energy-importing Caribbean countries that this might be the equivalent of the second coming of Christ and a signal to begin another mendicant pilgrimage to Caracas. But we should be cautious.”
He called on the Caribbean region to devise a sustainable energy plan for the future.
“Petrocaribe’s legacy in the Caribbean demonstrates that what we really need is a clear holistic vision of regional energy cooperation which would integrate our regional energy policy with trade, economic, environmental, security and foreign policies while broadening dialogue with producing and consuming countries alike. So, as we look beyond the present to the future, ironically the current controversy between Guyana and Venezuela may be a harbinger of better things to come.”