Guyana-Venezuela situation worsens

Bert Wilkinson | 7/16/2015, 11:16 a.m.

Venezuelan authorities last week turned away and generally hassled a Guyanese fuel boat that had docked there for oil supplies. Later, Venezuela gave every indication that it is upping the ante on a claim to Guyana’s land and marine territory by halting shipments of rice to the contentious neighboring territory.

A week after Caribbean Community leaders took the side of Guyana and urged Venezuela to back off its ambitious claims to the regional block member nation, Venezuelan authorities did just the opposite.

In late May, the administration of President Nicolas Maduro surprisingly published a decree in the country’s official gazette, laying claim to a large part of the north and southeastern coast of Guyana, virtually rendering the country landlocked and vastly reduced in size from its current 83,000 square miles. The map also stretched into a part of northern Suriname.

As promised to regional leaders, Venezuela scrubbed the map from the gazette but republished it in the past week, this time without any numerical coordinates showing exactly where it is laying its offshore claim.

This action was apparently taken to calm the fears of several Caribbean island nations that had been affected by the decree, whose leaders had looked askance at the map at their summit in Barbados two weeks ago.

Over the weekend, Agriculture Minister Noel Holder and other top officials scrambled to confirm reports from a shipping agent in Venezuela that authorities there had decided to bring forward a November deadline to end Venezuelan rice imports from Guyana this month, well ahead of the schedule. Officials say the row is now reaching a stage of Venezuelan economic warfare against Guyana.

For the past three years or so, Guyana had been selling large shipments of white rice and paddy to Venezuela under lucrative terms and at prices at least $200 more per ton than obtained in European and other markets.

Officials there said that they had told the previous Indo-led government that shipments, amounting to approximately 40 percent of Guyana’s annual rice crop, would end in November, though they wisely did not announce it at the height of the May 11 general elections campaign. The result is that nearly 300 filled containers are sitting on a city pier, waiting to be shipped to Venezuelan ports. Holder said officials “are trying to clarify reports” that shipments have been stopped this month as the row over the land and marine border has escalated to an all-time low.

The simmering dispute has come in the midst of the euphoria of U.S. oil giant Exxon Mobil’s announcement that it had found significant traces of oil and gas at an offshore location granted by Guyana. The Venezuelan map has of course included the area where Exxon’s rig is located, as well as several neighboring blocks linked to CGX Energy of Canada, Repsol of Spain and Anadarko of Texas.

To rub salt in Venezuelan wounds, a team from Anadarko returned to Guyana in the past week to tell President David Granger that the company is interested in returning and restarting operations.

Anadarko had a very unfortunate experience with the Venezuelan navy back in 2013, when gunboats kicked out its seismic vessel, towed it to a local port and detained its crew for more than a week before the issue was settled diplomatically.

The company had packed up and left the area, unlike Exxon, which, embarrassingly for Venezuela, went ahead with drilling even as Venezuelan authorities urged it to stop its “illegal” activities offshore.

Exxon plans to drill two more wells in the area, and Anadarko wants to return. Repsol and CGX are also gearing up to drill in the next year or so, clearly energized by Exxon’s whopping success with its Liza1 well, which government officials say could produce up to 1.5 billion barrels of oil and an undisclosed amount of gas.