Essequibo River Dispute
Venezuela has long claimed 40% of the territory of Guyana and extended its maritime claims in 2015 after the discovery of oil in disputed waters. The Guyana Essequibo covers 53,000 square miles between the Essequibo River in Guyana, formerly British Guiana, and the present border with eastern Venezuela. The controversy centers on land to the west of Guyana's Essequibo River, encompassing around two-thirds of the English-speaking nation. The area has long been denoted on Venezuelan maps as a "reclamation zone," while in practice Guyanese have long lived and mined there.
The Cooperative Republic of Guyana administers the Essequibo region as its own but whose sovereignty is claimed by Venezuela based on the Geneva Agreement of February 17, 1966. Only the eastern part of the Anacoco river island in the Cuyuní River is under the sovereignty of Venezuela but has been protested by Guyana. Guyana maintained that it was an act of annexation of the Venezuelan army when in 1966 it occupied it militarily. Venezuela claims the territory as its own and, in its maps, the area usually appears oblique striped or with the legend Zone In Reclamation, subject to the Geneva Agreement of February 17, 1966.
Essequibo, an oil-rich area that borders both countries, is estimated to have between 800 million and 1.4 billion barrels of high-quality crude oil, worth at least US$44 billion. Located on the mainland, Essequibo is a point of contention between the two South American countries.
A Presidential Decree, dated July 10, 1968, created a straight baseline for eastern Venezuela. The straight baseline (SBL), in effect, closes the delta system of the Orinoco River. However, the SBL does extend beyond the limits of Venezuelan-administered territory into the neighboring state of Guyana. While Venezuela laid claim to territory as far as the Essequibo River, Guyana rejected this claim.
The long-standing territorial dispute between the two neighbors on the northern edge of South America, Venezuela and Guyana, entered a new and potentially volatile phase in June 1982 with the expiration of a 12-year moratorium on Venezuela's claim to a piece of land that makes up five-eighths of Guyana's national territory.
Exxon Mobil Corporation announced May 20, 2015 a significant oil discovery on the Stabroek Block, located approximately 120 miles offshore Guyana. The well was drilled by ExxonMobil affiliate, Esso Exploration and Production Guyana Ltd., and encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water. Stabroek Block is 6.6 million acres (26,800 square kilometers).
“I am encouraged by the results of the first well on the Stabroek Block,” said Stephen M. Greenlee, president of ExxonMobil Exploration Company. “Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block.”
The well was spud on March 5, 2015. The well data would be analyzed in the coming months to better determine the full resource potential. Esso Exploration and Production Guyana Ltd. holds 45 percent interest. Hess Guyana Exploration Limited holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
ExxonMobil thinks that its discovery could hold as much as 700 million barrels of crude. Although it may be too early to tell if ExxonMobil can ultimately recover that much oil, the discovery in the Stabroek Block could be worth as much as $40 billion at current prices.
Venezuelan Foreign Minister Delcy Rodriguez expressed her country’s commitment to peaceful settlement of the dispute with Guyana over Essequibo. She made the remarks on the 51st anniversary of the Geneva Agreement, which granted Guyana temporary political authority over the region until the situation is resolved. The agreement was signed by Venezuela and the United Kingdom, Guyana’s colonizer, in 1966. “Here we are showing the international community the true soul of the Venezuelan people, who are a people of peace, seeking a resolution in a peaceful, negotiated, political and acceptable way for both parties, a resolution on the controversy of the Essequibo territory,” Rodriguez said.
The dispute over Essequibo reemerged in January 2017 when U.S. multinational giants Exxon Mobil and Hess discovered a massive amount of oil in the territory. And now that Exxon Mobil is moving forward with plans to exploit the Stabroek Block, it may attempt to push diplomatic relations to a new low. Taking advantage of the territorial dispute, Exxon Mobil has sided with the Guyanese government against Venezuela, which nationalized US$10 billion of its assets ten years ago. The company is already preparing plans to excavate, process and sell crude oil from the area. The controversy was revived in May 2015 after an offshore oil discovery by Exxon Mobil Corp which could be a major boost to the poor nation which depends heavily on rice, gold, diamonds and bauxite.
Venezuela's president Nicolas Maduro signed a decree soon after the announcement that created a theoretical "defense" zone offshore that would, in Venezuela's eyes, leave the former British colony with no direct access to the Atlantic Ocean. Venezuela’s Official Gazette of May 27, 2015 essentially states that President Nicolas Maduro had authorized sovereignty over the coastal waters west of the Essequibo River to Delta Amacuro. If the calculations in the Gazette are accurate, it means that Venezuela is now laying claim to all the waters off Essequibo and that will include the area where the American oil company, Exxon-Mobil, recently discovered a significant oil find.
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