Venezuela increases stakes in dispute over oil with Guyana

Venezuelan President Nicolas Maduro raised the stakes dramatically in his country’s dispute over its border with Guyana. He ordered state companies to exploit contested mineral and oil deposits, and redrawn official maps following a “overwhelming mandate” in a Sunday referendum.

Guyana is concerned about Maduro’s aggressive speech and worries that Venezuela might invade Essequibo, which accounts for two-thirds of Guyana’s territory. There are also concerns about an offshore oilfield operated by US oil giant ExxonMobil.
Irfaan Ali, the President of Guyana, said late Tuesday that his country’s defense force was on “high alert”. He also promised to take the matter before the UN Security Council. He added that Venezuela had “clearly declared itself as an outlaw nation”.

A conflict between two oil-rich countriesin the Americaswould be a nightmare to the Joe Biden Administration, which eased the economic sanctions against Venezuela in hopes that Maduro would be convinced to hold fair and free elections next year in order to improve the global oil supply.

As tensions rose on Thursday, US officials announced that they would be conducting flight operations across Guyana with the Guyanese Military.

John Kirby, White House spokesperson for national security, told reporters that the White House would never waver in its support of Guyana’s sovereign rights. The British Foreign Office said Venezuela’s recent action was “unjustified” and “should cease”.

Most experts do not believe that a military conflict will occur in the near future. Maduro ran a patriotic campaign for a referendum to distract voters from his lack of popularity and Maria Corina Machado’s apparent support for his main opponent in next year’s presidential elections.
Evan Ellis, professor at the US Army War College and Latin American Studies expert, said: “My gut feeling is that this is probably a bluff.” “It is probably an attempt by Maduro, to divert attention away from the presidential elections and US pressure on democratic reform.”

Officials in Caracas claimed majorities of more than 95 per cent in favour of five referendum questions Essequibo and the creation of a Venezuelan state that encompasses the remote territory.
Independent observers, however, questioned the official figure of 10.5mn – which if accurate would surpass the number of voters who supported Hugo Chavez’s popular presidential election in 2012 – noting that there were few people at many polling stations.

Venezuela is disputing the 1899 decision of an international arbitral tribunal to award Essequibo to British Guiana, which was colonial at the time. Caracas was re-invigorated by Exxon’s 2015 discovery and subsequent exploitation off the coast of Essequibo of one of the largest recent oil discoveries in the world.

Exxon has now increased production at the Stabroek block offshore, which Venezuela’s government used to portray Guyana a US puppet.

The US State Department responded cautiously to the voting on Sunday. They encouraged Venezuela and Guyana to keep looking for a peaceful solution to their dispute.It added that “this is not a matter which will be resolved by a referendum”.
Brazil, which borders Venezuela, Guyana and the Caribbean, has sent more troops to the border zone. President Luiz inacio Lula da So said that he hopes “common sense will prevail on both sides”.

Venezuela announced in this year that it would be building a military airstrip near Essequibo, as well as a school and training grounds. After the election, a top government official shared a video of indigenous people in Essequibo lowering the Guyanese and raising the Venezuelan flag in its place.

Guyanese fear that their 800,000-strong nation would not be able to withstand an invasion from a much larger neighbor. Mike Singh, an investor in telecoms who runs a Georgetown consultancy, said that people are “very” scared and worried.

“Guyana is unable to defend itself except with bluster, like the bluster we hear from Vice-President [Bharrat] Jagdeo. The people know that it’s just balderdash. He is in no position to act.”

Nicholas Watson, Latin America’s managing director of consultancy Teneo believes that the Venezuelan regime’s hawkish stance on Essequibo is more a reflection of domestic concerns than a signal for imminent or likely military action.

He said, “We don’t know what the real meaning is or what they will actually do.” “Maduro has mastered the art of sleight-of-hand, and making big gestures that mean nothing.”

Venezuela would be the clear winner in any military conflict, as its Russian-equipped forces outnumber Guyana’s small defence force and are far more powerful. Ellis stated that Venezuela has Sukhoi fighters and MiG helicopters. It also has decent naval assets, including Iranian equipment, as well as Russian tanks.

Ellis said that Maduro’s armed forces are not in the best condition to take on the Essequibo jungle, which is a difficult terrain. Maduro would face serious risks if he sent Venezuela’s military to fight. He has heavily relied on the military to maintain power and has rewarded senior officers with lucrative drug smuggling franchises and illegal gold mining.

Phil Gunson, Andes Senior Analyst at International Crisis Group, Caracas said: “Maduro only has power because of the military high command. If they think he is losing it, it could be serious for him.”

Gunson continued: “Maduro claims a massive mandate for recovering the Essequibo, and there is no clear way to do that.”

Some see similarities with the 1980s invasion of Argentina by an unpopular military government to settle a long-standing territorial dispute. The junta was brought down by the failed war over the Falkland Island, or Malvinas, as Latin America refers to them. Gunson thinks Venezuela will not go to war over Essequibo.

He said that it was more likely that Maduro would find it convenient to incite tensions on the border at some point and possibly provoke skirmishes between the Guyanese army. “I don’t think this will lead to full-scale conflict, but it is a problem once you have armed conflict. . . It’s easy for this to escalate.”