Brawling for Black Gold: Guyana’s Border Dispute With Venezuela

By: Mason Krohn

After Rex Tillerson’s tweet-based firing in early March, Exxon Mobil’s command over international affairs seemed fleeting, especially for a company that once had its press releases copied verbatim in White House statements. Yet, the oil giant’s long-lasting sway over global conflict has proved itself unrelenting even in the face of Mr. Tillerson’s departure. Most notably, due to Exxon Mobil’s discovery of oil in the Caribbean sea, a century-long debacle over the true border between Venezuela and Guyana has reignited.

Dating back to 1831, Britain initiated the cartographic dispute by hiring Robert Schomburgk to survey their colonial territory in Guyana and set a westward border on their claim. Extending far into Venezuelan land, Britain approved the Schomburgk Line, gaining an additional 33,000 square miles for the colony. Rightfully upset with the expansion, Venezuela called on the United States to invoke the Monroe Doctrine and protect the independent Latin American nation from foreign influence. In 1895, US Secretary of State, Richard Olney demanded that Britain submit the dispute to international arbitration, receiving backing from President Grover Cleveland while rumors of war upon Britain circulated in US press coverage. To Venezuela’s dismay, even after Britain agreed to arbitration, the boundary committee ruled in favor of British Guyana, enforcing Schomburgk’s demarcation, despite Venezuela’s hopes that Britain colonial expansion would be curbed at the Essequibo River.

Unsurprisingly, the feud did not end at the turn of the 20th century. In 1941, one of the lawyers representing Venezuela in the late 1800s tribunal case, Severo Mallet-Prevost, published a memorandum that denounced the arbitrators’ decision as the result of a political deal between Great Britain and Russia. Citing Mallet-Prevost’s worries over corruption in the ruling, Venezuela declared the arbitral award “null and void”. To this day, Venezuela recognizes the termination of its eastern border at the Essequibo River, encapsulating two-thirds of Guyana’s territory in a disputed area.

Tensions subsided for the latter half of the century, but Exxon Mobil disrupted the order in South America by announcing the discovery of rich reserves directly off the coast of Guyana’s disputed land. Known as the Stabroek Block, an estimated 3.2 billion barrels of recoverable oil lie within the depths of Guyanese waters. Exxon has reported that its drilling will begin as early as 2020. Accordingly, after Exxon’s first discovery in 2015, officials in Caracas and Georgetown have been fighting for the profit from the reserves. Venezuelan President Nicolas Maduro labeled the Guyanese president a “hostage” to Exxon and cut off all rice purchases from Guyana. Meanwhile, Guyana’s Foreign Minister Carl Greenidge asked Google to remove all Spanish street names in Essequibo from its maps. Further provoking its neighbor, Venezuela has moved a significant troop presence eastward, garnering complaints from Guyanese business that are losing foreign investors because of Venezuela’s threats.

Seeking resolution, the United Nations proposed handing the decision to the International Court Of Justice. Guyana welcomed the plan, but Venezuelan officials rejected the ICJ, leaving them with few opportunities to assert their claim over Essequibo. Due to their limited approach diplomatically, Venezuela may turn to military force in order to retake their former territory. This February, Brazilian president Michel Temer approved a trip by his Defense Minister and Institutional Security Cabinet Chief to Guyana and Suriname for the stated purpose of approving border security. Brazilian paper O Antagonista challenged this profession, declaring in an unconfirmed report that the actual intention behind the trip was to share Brazilian intelligence about Venezuela’s consideration of an incursion into Guyana. The seizure would be unchallenging given Venezuela’s superior forces, and it offers two benefits to the struggling country. First, the incursion would delay a final decision by the ICJ, which would set the border in stone. Second, Maduro could use the occupation of Guyana as leverage with the United States while negotiating an amnesty plan for himself and members of his party. With tremendous food insecurity and hyperinflation, Venezuela also has a lot to lose if the international community has reason to employ heavier sanctions and take military action in defense of Guyana. As of now, invasion stands as a rumor, but the Venezuelan autocracy has repeatedly shocked the world with unpredictable measures, so there is no telling whether or not Guyana is safe in the near future.

Sadly, no matter the outcome of the Essequibo conflict, neither country has much to gain for its impoverished populace. A startling 35% of Guyanese citizens live below the poverty line, so receiving under $50 a barrel for the hundreds of thousands that could be extracted daily should paint a bright future for the nation of just 737,718 citizens. However, without a significant amount of engineers or developed industry, Guyana cannot capitalize on its own reserves. Likely, all of the refining will take place offshore while the oil is immediately sent to foreign markets. Consequently, the only way oil can improve Guyana is if its elected officials direct the tax revenue towards efforts that assist the people. Looking at past precedent, the Guyanese should not have faith in their government. After the discovery of diamonds and gold, Australian and Canadian firms boosted export earnings and contributed taxes to the nation, but small local-based firms smuggled the minerals abroad, evading taxation. Making matters worse, Guyanese politicians squandered the finite tax dollars on subsidies for state-owned sugar producers. Natural resources minister, Raphael Trotman, hopes to correct Guyana’s prior mistakes by signing on to the Extractive Industries Transparency Initiative and monitoring mineral revenues to prevent theft. However, his maneuver cannot account for a history of corruption nor the inefficiencies in Guyana’s polarized political atmosphere. The two major parties are divided along racial lines: the predominantly Afro-Guyanese People’s National Congress (PNCR) and the primarily Indo-Guyanese People’s Progressive Party. The PNCR, which has historically rigged elections, is in a standoff with the opposition over the appointment of a new head of the electoral commission. But, without resolution, the constitution enables presidential appointment, advancing even more corruption in favor of the PNCR. Coincidentally, the elections will coincide with Exxon’s planned initiation of extraction, so only ballots can tame the corruption of oil.

Venezuelans, the victims of repression and starvation, will not witness relief from seizure of the Essequibo. Venezuela already has the most proven crude oil reserves in the world (over 300 billion barrels), but as Chavez once did, Maduro has not invested in the necessary infrastructure to boost production. In fact, in 2016, Caracas imported 50,000 barrels of light crude oil just to prepare heavy crude oil for export. Moreover, Venezuela's aged tankers are prohibited from leaving ports by international maritime law, and because of a history of poor payments, the global marketplace is weary of selling modern tankers to the autocracy. The country will more than likely default on its $50 billion debt to China even with current reserves. Hence, the Essequibo venture has no payoff for everyday Venezuelan citizens who have been denied a voice and nutrition by their government.

​No matter where Guyana’s border stands, at the end of the day, Venezuela is on the verge of collapse and Guyana’s economy is spiraling downward. As Exxon fuels the ever-growing threat that climate change poses to the world, only corporate America succeeds, albeit the emptied reserves at the mouth of the Essequibo River. Little did Robert Schomburgk know in 1831 that his fabricated demarcation would pit two Caribbean nations against each other while an oil giant would scour the resources of Guyana.