The burgeoning Guyanese offshore sector has been added to Lloyd’s Joint War Committee’s list of places of elevated danger, alongside notable hot spots like the southern Red Sea and the Black Sea, amid heightened border tensions between Venezuela and the small nation of Guyana.
The JWC added Guyana to its Listed Areas on Monday, but only for calls to offshore installations within the Guyanese EEZ between the 12-mile and 200-mile lines (outside territorial waters). ExxonMobil is developing various offshore oilfields in its lucrative Stabroek Block lease area off Guyana, and is deploying multiple FPSOs to ramp up production on a tight timeline. OSVs and huge tankers calling at Exxon’s FPSOs to carry petroleum are among the vessels in use.
Venezuelan President Nicolas Maduro has heightened tensions along the border by reclaiming historic claims to the Guyana province of Essequibo. This underdeveloped jungle region covers two-thirds of Guyana’s land area but only a small portion of its inhabitants. It offers substantial oil and gold extraction prospects, and Maduro has directed Venezuelan state natural resource corporations to pursue chances in the region, which is on Guyanese territory.
The conflict extends back to colonial times, when Guyana was known as British Guiana. In 1840, British administrators chose a border delineation west of the Orinoco River, and in 1899, an American-mediated agreement with Venezuela formalised this border. Venezuela objected in 1966, and the UK promised to continue discussions or send the subject to the UN. In 2020, the International Court of Justice decided to hear a Guyanese case to finally settle the matter.
Maduro maintains that the ICJ lacks jurisdiction, and he has not waited for the court matter to be resolved. This year, he held a popular poll to determine if Essequibo should be included into Venezuela. According to Maduro’s dictatorial administration, the outcome demonstrated overwhelming popular support for the plan in Venezuela.
The referendum was accompanied by small-scale military activities around Venezuela’s border, raising fears that Maduro may launch a military incursion. Though Venezuela’s troops have been reduced by years of financial hardship, Guyana has little if any ability to repel a military attack, and it only has a few of marine patrol vessels to monitor its waterways.
Guyanese President Irfaan Ali has stated that his administration “reserves the right to work with all our partners to ensure the defence of our country.” To better assess the risk of a conflict, the Biden administration has ordered an assessment of Venezuela’s military movements.