Venezuela, Guyana and Oil

Venezuela recently sent a naval vessel to disputed waters that are claimed by both Venezuela and Guyana. The naval ship approached an ExxonMobil ship that was doing a seismic survey.

In 2017, the New York Times has an article about the oil being found off the coast of Guyana:

With a population of fewer than one million people, Guyana — Venezuela’s eastern neighbor on the continent’s north coast — would be able to export nearly all of the oil that it will begin producing, probably starting around 2020.  Early rough estimates by experts of how much recoverable oil Guyana could have range to more than four billion barrels, which at today’s prices would be worth more than $200 billion.

As mentioned in the article, oil prices at the time were around $50. One should also note that the population of Guyana is less than one million. This country could end up being the equivalent of Norway. Of course, the problem is that Venezuela holds claims on this area (or at least parts of this area).

Associated Press (22 December 2018) had this to say after the Venezuelan naval vessel approached the ExxonMobil ship:



Exxon drilled its first successful well off the coast of Guyana in 2015 and since then has made nine more discoveries, including one this month that boosted to 5 billion oil-equivalent barrels the company's estimate of reserves in the deep-water area . . . But Venezuelan President Nicolas Maduro has called the oil drilling by the U.S. company illegal, and many fear that as his socialist-run country teeters on the edge of chaos he could seek to provoke his neighbor.

Venezuela has claimed the mineral-rich region west of the Essequibo river in Guyana as its own since the 19th Century, a view shared even by some of Maduro's fiercest opponents. 

In 2017, the estimate was that there would be 4 billion barrels of oil equivalent. Now we're looking at 5 billion. As we know, Venezuela is in economic chaos. What better way to unite Venezuelans, but to start a dispute with Guyana.

Reuters had this piece of info about the disputed territories:

Critics say socialist President Nicolas Maduro is using the dispute over the Essequibo, a sparsely populated jungle region making up two-thirds of Guyana's land which Venezuela also claims, to distract from hyperinflation and shortages of basic goods that have prompted millions of Venezuelans to emigrate.

We know that Venezuela's oil industry is in disrepair. How many Venezuelans leaving are from the oil industry and how many of them will head to Guyana, which no doubt could use their services? We could have a situation where the growing oil industry in Guyana just causes more problems for Venezuela as their oil industry could face a never ending downward cycle due to a lack of trained oil employees.

OilPrice.com had this little sentence about the situation:

The U.S. State Department said the Venezuelan navy had behaved “aggressively,” a statement that Venezuela’s foreign ministry criticized on Tuesday as being “interventionist and disrespectful.” Venezuela said Exxon’s contractors were in areas under “undoubtedly Venezuelan sovereignty.”

At what point will the US military be in Guyana, helping protect the country from invasion?