ExxonMobil’s drilling plans off Guyana have angered Venezuela and risk deepening a dispute between the two South American neighbors over Venezuela’s claims to much of the oil-rich region of Essequibo, Guyana.
The US supermajor announced this week that it plans to drill two exploration wells north and west of its Stabroek block off Guyana, where three already operational Exxon projects currently produce more than 550,000 barrels per day (bpd) of crude oil and are expected to reach more than 550,000 barrels per day (bpd) of crude oil. more than 600,000 b/d of production later this year.
Exxon’s pursuit of exploratory drilling in the disputed region has drawn strong reactions from Venezuela, which has promised a “forceful and law-abiding response.”
The simmering conflict between Guyana and Venezuela intensified late last year, when Nicolas Maduro called a non-binding referendum on whether Venezuela should annex the Essequibo region, off the coast of which Guyana’s enormous oil discoveries have been made in recent years.
Essequibo was part of Venezuela during its colonial period, but in the late 19th century, international arbitration ceded the land to Guyana, then a British colony. Venezuela has never accepted the arbitration award, but for most of the time since it was issued it has not acted on its grievances. Related: U.S. Oil Drilling Activity Stagnates
Analysts see little chance that the conflict between Venezuela and Guyana will worsen further and view Maduro’s referendum and threats to annex much of Guyana’s territory as a move aimed at rallying a nationalist vote in a context of declining popularity as this year’s presidential election approaches.
In December, Venezuela and Guyana agreed not to use force or escalate tensions in the conflict. At a meeting in Brazil last month, Maduro and Guyanese President Irfaan Ali reiterated their commitment not to use force.
Brazil, however, reinforced its troops near its border with Venezuela earlier this month.
As tensions continued to simmer, ExxonMobil Guyana Chairman Alistair Routledge said this week that the US supermajor was determined to continue its operations in Guyana despite the dispute with Venezuela.
“We’re not going anywhere,” Routledge told reporters, adding that Exxon considers its exploration and production contracts with Guyana to be valid under local and international laws.
Guyana’s Foreign Secretary Robert Persaud told The Associated Press on Wednesday that Exxon has every right to drill for oil and gas in the Essequibo region “because it is in established waters of Guyana, in a fully demarcated area.
But the announcement of new oil drilling in the area claimed by Venezuela risks worsening tensions in the region, analysts say.
“The truth is this announcement couldn’t come at a worse time,” Geoff Ramsey, a senior fellow at the Atlantic Council, told the Guardian.
“This is going to be a massive test for regional diplomacy. »
The United States earlier this week pledged urgent military assistance to Guyana to help it defend itself against threats.
Routledge of ExxonMobil Guyana welcomed the enhanced cooperation between Guyana and the United States and said: “We remain committed to Guyana, continuing our operations here and fulfilling the commitments we have made.”
Venezuela was not happy, not at all.
Vice President Delcy Rodríguez criticized Exxon’s drilling plans offshore Guyana in a post onaffirming that the American supermajor “seeks to protect its illicit operations, in a sea which has not yet been delimited, under the hawkish cover of the United States in complicity with Guyana”.
Defense Minister Vladimir Padrino López said “If ExxonMobil has a private security company represented by the Southern Command and a unit of the Government of Guyana in the maritime zone, which rightfully belongs to Venezuela, they will receive a proportional, forceful and legal response. »
ExxonMobil is not only pursuing more oil exploration drilling off the coast of Guyana, but also wants to exploit the country’s natural gas reserves. The Guyanese government and the major American major are seeking to set a timetable for developing some of the gas resources in the eastern part of the Stabroek block, operated by Exxon.
By Tsvetana Paraskova for Oilprice.com
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