Guyana has reached out to the International Court of Justice and asked it to cancel a referendum planned in Venezuela calling for voters to decide whether Caracas should annex the Essequibo region, which contains considerable oil resources.
The dispute between Venezuela and Guyana regarding Essequibo is a long-running one, stemming from an arbitration decision from 1899, which gave control over Essequibo to the then-British colony Guyana.
Venezuela has not accepted the arbitration and recently moved to reinforce its claim over the territory with the referendum, announced in September. The International Court of Justice said earlier this year it has jurisdiction over the issue after Guyana approached it in 2018 to rule on the ownership of the disputed territory. A final decision on the matter, however, may be still years away.
Exploration for oil in Essequibo, however, is not years away. Earlier this month, Guyana announced an oil discovery in the disputed area and awarded exploration licenses to eight companies in the area.
Venezuela has refused to recognize the authority of the International Court of Justice in the matter of Essequibo. In response to Guyana’s approach to the ICJ to stop the referendum in Venezuela, President Nicolas Maduro slammed Guyana for “escalating war”. Maduro also told Exxon and other companies active in the region that they were acting illegally.
The Essequibo region, spanning 160,00 sq km, comprises two-thirds of the territory of Guyana and it might hold a significant portion of its oil reserves.
The dispute flared up as the U.S. lifted oil sanctions on Caracas temporarily in a bid to increase the supply of heavy crude for Gulf Coast refineries. Venezuela’s referendum, scheduled for early December, coupled with the recent cancelation of opposition primaries, might cause a change of rhetoric in Washington and possibly even a reimposition of the sanctions.
Source: Oil Price
