Home' Trinidad and Tobago Guardian : August 9th 2015 Contents SBG6 VERBATIM
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt AUGUST 9 • 2015
FAZAL HOSEIN, Trinidad-based
consultant geologist at International
Geological Services Ltd:
For more than 100 years, Guyana waited
patiently while neighbouring Venezuela,
Trinidad, Brazil and Suriname enjoyed the
commercial success of oil exploration.
Success finally came in May when the
ExxonMobil Liza-1 well drilled in the offshore
deepwaters of the Stabroek license 120 miles
offshore Guyana found 295 feet of high-quality
hydrocarbon bearing reservoirs. Guyana was
happy, but Venezuela, wanting most of
Guyana s offshore acreage, issued a decree on
May 26 challenging the 1899 treaty decision
setting the countries borders.
The oil discovery can be considered well
within Guyana s exclusive economic zone, and
field development plans should not be affected.
This discovery is huge for Guyana and may
definitely impact a change from an agriculture
and mining economy to one of oil and gas
production. Development will be determined
by an oil price above US$60 per barrel, but
the estimated 500 million barrels of oil reserves
could make it happen early with first oil pro-
duction occurring within 5 years.
This is the first discovery in Guyana, but
the excellent source rock and petroleum system
in the basin and the association with slope
and deepwater fan depositional systems in the
area suggest several more discoveries are forth-
coming in the adjacent blocks of Anadarko,
Mid Atlantic Oil & Gas /JHI Associates Canje,
CGX and Repsol, which are now suddenly
more prospective following ExxonMobil s suc-
SADIO GARAVINI DI TURNO,
former Venezuelan ambassador to
Sweden, Guatemala and Guyana:
The discovery of 400 million to possibly
700 million barrels of oil, which equates to
approximately 12 times Guyana s GDP at cur-
rent oil prices, is obviously potentially trans-
formational news for Guyana. The problem is
that the concessions given by Guyana to
ExxonMobil and other companies include areas
which are clearly Guyanese, areas that are in
the disputed zone with Venezuela and also
areas that are evidently in the Venezuelan
The Venezuelan government, after forgetting
the dispute for nearly 16 years, is now trying
to use it for electoral reasons to distract public
attention from the socioeconomic disaster it
has created. The dispute has to be resolved
"in a manner that is acceptable to both parties"
as disposed in the Geneva Agreement of 1966.
The first article of the treaty compels the
parties to negotiate a "satisfactory solution
for the practical settlement of the controversy.
Both parties should try to reduce tensions and
sit down at the negotiating table, with the
support of the United Nations secretary general,
as set out in the Geneva Agreement.
ANTHONY T BRYAN, senior fellow
at the Institute of International
Relations at The University of the
West Indies in St Augustine, T&T:
It seems obvious that President Maduro is
manipulating the border dispute. It is partly
a troubled leader s response to domestic pres-
sures. His actions stand in stark contrast to
those of his predecessor, Hugo Chavez, who,
while wooing his smaller Caribbean neighbours
for international support for his global ambi-
tions, simply put the dispute on ice.
The May 27 Venezuelan decree claiming
sovereignty over Guyana s continental shelf,
waters in some parts of the eastern Caribbean,
almost all of Guyana s Exclusive Economic
Zone (EEZ) off the Essequibo region of Guyana
and a good deal of Suriname s maritime space,
goes well beyond the original maritime bound-
ary dispute that was arbitrated under the UN
Law of the Sea Convention in 2007, largely in
Guyana s favour.
Although Venezuela is one of seven coastal
states that have failed to sign the convention,
Guyana will not concede to Venezuelan pres-
sure. It has called Maduro s bluff. Guyana
also reasserts that its lawful boundaries that
were established 116 years ago are not nego-
In its pushback, it has taken Venezuela s
latest move to the United Nations, the Com-
monwealth, the OAS, Caricom and UNASUR.
The ExxonMobil oil find was an added blow
to Venezuela after the US$1.6 billion com-
pensation awarded to ExxonMobil for nation-
alisation of its Venezuelan assets.
But there will not be any war over the Esse-
quibo. Venezuelan pressure might take other
economic avenues (such as curtailing the
Petrocaribe agreement with Guyana), but fur-
ther escalation will make socialist Venezuela
look like a regional bully. Maduro would be
well advised to sit this one out.
The oil find is transformational for Guyana,
and for energy security in the Caribbean as
a whole. The dispute will not deter Exxon-
Mobil, though it may put a temporary damper
on exploration in other parts of its current
With the help of the multinationals, the
international organisations, and the countries
in the Caribbean and those South America
(Colombia and Brazil) offended by Maduro s
actions, Guyana will become a significant oil
producer within the decade.
But perhaps the oil discovery has made dis-
pute settlement more difficult since the
resource factor is now obvious.
RONALD SANDERS, consultant,
former Caribbean ambassador and
senior fellow at the Institute of
ExxonMobil s oil discovery is extremely
important to Guyana. It is established that
there are considerable oil and gas resources
in Guyana s waters.
Production would vastly improve Guyana s
economic situation for the benefit of itself
and its partner countries in the Caribbean
An 1897 treaty obliged Venezuela and Guyana
(then British Guiana) to accept the result of
an 1899 arbitration, setting their present
boundaries, as a full, perfect and final settle-
The boundaries were accepted by Venezuela
for 63 years until 1962 as British Guiana moved
toward independence when Venezuela claimed
it was "robbed" by the arbitral award.
A 1966 agreement, signed by the govern-
ments of Britain, British Guiana and Venezuela
in Geneva and filed with the United States,
acknowledged not a border dispute but rather
a "controversy" based on the new Venezuelan
assertion of nullity. The agreement provides
for the resolution of the controversy by actions
of the UN secretary general under Article 33
of the UN Charter.
After 49 years, including 25 years of the
secretary general s efforts at mediation and
conciliation through a good offices process,
no resolution has been found.
The exhaustion of other options now leaves
a judicial settlement open to the secretary
general. Such a judicial settlement by the Inter-
national Court of Justice would settle the issue
peacefully, binding both Guyana and Venezuela.
In 2013, the Venezuelan navy evicted from
Guyanese waters the RV Teknik Perdana, a
survey boat being used by Texas-based
Anadarko Petroleum Corp to carry out seismic
surveys. ExxonMobil was well aware of that
Unless Venezuela intervenes militarily,
ExxonMobil s work on the oil find should legit-
This article was published in the Latin
American Economic Adviser, week ending
July 31, 2015.
Will Guyana's oil find
transform its energy sector?
Venezuelan and Guyanese leaders have been trading barbs in
recent weeks, with the government of Venezuelan President
Nicolas Maduro going so far as to recall its ambassador to
Guyana amid mounting tensions over a border dispute between
the two nations. Venezuela has long claimed a significant part
of Guyana, including areas of the Atlantic Ocean where Exxon-
Mobil recently announced a major oil find that the government
has said could be worth up to 12 times the value of Guyana's
entire economy. How will the border dispute play out, and will it
interfere with plans to develop the oil find? How important was
the discovery for Guyana, which currently produces no oil?
The deepwater oil rig began exploration operations off
Guyana's coast in March, and in May, ExxonMobil reported
that the first well had made a "significant oil discovery."
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