Nearshore Americas
High Oil Demand Pushed T&T To Record Export Revenues

Tensions Grow Between Venezuela and Guyana Over Oil-Rich Territory

Tensions are mounting in the Caribbean as Venezuela and Guyana vie for control of the Essequibo region, rich in oil reserves.

This week, Venezuelan President Nicolás Maduro exacerbated the dispute by ordering State-owned oil companies to explore the contested territory.

Guyana’s President Irfaan Ali responded by seeking support from European nations as well as the US Southern Command. The Venezuelan government criticized the invitation to the US military, calling it a violation of regional sovereignty.

The Essequibo region remained largely uncontested until 2015, when Exxon Mobil discovered significant oil reserves there. Venezuela argues that Essequibo historically belonged to them, even during Spanish colonial rule.

The dispute over Essequibo dates back to the colonial period. Tensions between British Guiana and Venezuela escalated significantly in 1876, following the discovery of gold mines in the region. This led to Venezuela severing diplomatic relations with the United Kingdom ten years later.

The United Kingdom and Venezuela had to enter into arbitration, with the US acting as mediator. This culminated in the Paris Arbitral Award of 1899, which awarded the Essequibo region to British Guiana. However, Venezuela has consistently contested the legitimacy of this ruling.

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Earlier this week, Venezuela held a local referendum, which approved for Maduro to seek control of Essequibo.

Currently, Guyana’s GDP is experiencing an astounding 38% growth fueled by its burgeoning oil exports. Venezuela, which has its own vast oil reserves, has been unable to exploit them due to US sanctions. Those sanctions were recently lifted following President Maduro’s agreement to hold free and fair elections with the participation of opposition parties.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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