Ramnarine hoping for bilateral solution

Venezuela’s President Nicolas Maduro claims ExxonMobil Corporation, the world's largest oil and gas company based on financial performance, is to blame for the recent flare-up in tensions with its smaller South American neighbour to the east, Guyana.

Maduro, speaking in a national television broadcast on June 10, said that in the past 10 years, Venezuela has been the country that has provided the most help with Guyana's development, and then blamed ExxonMobil for the recent spike in tensions.

“Who is behind this and with a lot of responsibility? It’s the American transnational ExxonMobil. ExxonMobil is responsible, with its lobbying, influences over key officials and power of provocation against Venezuela,” said Maduro.

Maduro did not mention the Chinese company CNOOC, or the other American company, Hess Corporation, which are also ExxonMobil’s partners offshore Guyana.

Under the leadership of late Venezuelan President Chavez, China grew into one of the largest investors in Venezuela, lending the socialist leaning country over $50 billion to develop primarily energy initiatives under oil-for-loan deals.

Maduro said Guyana’s President David Granger needs to open a path for dialogue and stop listening to false advice from ExxonMobil and officials paid off by ExxonMobil.

Tensions between Venezuela and Guyana have been on the rise recently. On Nov. 13, 2014, Irving, Texas-based ExxonMobil announced plans to invest more than $200 million to drill an exploration well offshore Guyana.

Six days after ExxonMobil announced the discovery of more than 295 feet oil pay offshore Guyana in the Stabroek block on May 26, Maduro issued Decree No. 1,787 declaring an area that Venezuela now regards as its maritime space, including the Stabroek block.

ExxonMobil, which was awarded a $1.6 billion judgment by an international arbitration panel for assets seized by Venezuela’s government in 2007, should not be surprised by the recent accusations made by Maduro as late Venezuelan President Chavez and former Venezuelan oil minister Rafael Ramirez always referred to the company as working for the U.S. empire that was after the South American country’s massive crude oil reserves, the largest in the world.

“Baseless and shameless” decree

Guyana’s Finance Minister Carl Greenidge said in a speech on June 10 that the Venezuelan '”decree in its baseless and shameless attempt at usurping Guyana’s territory is also intended to deny Guyana its legitimate right to continue the pursuit of existing developmental initiatives.

It is also intended to impact negatively on other pending and future developmental initiatives in that portion of Guyana’s legitimate maritime space that falls within the area circumscribed by the Decree.''

Contrary to the public statements from Venezuela’s government, the Decree cannot be considered an act of sovereignty where it applies to territory that does not belong to Venezuela, Greenidge said. “Guyana condemns this Decree in the strongest possible terms.”

Guyana, a democracy since 1966 and the only English-speaking country in South America, has vast natural resources – forestry, mining and oil and gas exploration.

Its legal system is based on English common law and its corporate system is based on the Canada Business Corporations Act.

Maduro said that the person from Guyana’s government who wrote the statement committed a serious diplomatic and political error which is causing the new president of Guyana to make errors.

“I have ordered the Venezuelan Foreign Ministry to coordinate a meeting that was already planned with Guyana's Foreign Ministry,” said Maduro.

“From here on with dialogue and diplomacy, we can navigate these historic differences.”

During a press conference in Caracas on June 9, Venezuelan Foreign Minister Delcy Rodriguez addressed her country’s current stance regarding the territorial dispute and recent statements from Guyana’s government regarding the same.

“Venezuela maintains its position to consider null and void the Treaty of Washington of 1899 and calls on the government of Guyana to stay in the regulatory framework of the Treaty of Geneva (1966),” she said.

“The unique and surprising aggression is that the government of Guyana has allowed a powerful transnational as Exxon Mobil to venture into disputed territory between two countries.”

Stabroek block offshore Guyana

Release of the Venezuelan Decree came within a week of Exxon’s May 20 announcement that a well drilled by its affiliate, Esso Exploration and Production Guyana Ltd., had encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs offshore Guyana at the Liza-1 well located in the Stabroek block.

Esso spud the Liza-1 exploration well on March 5 and drilled it to 17,825 feet (5,433 meters) in 5,719 feet (1,743 meters) of water.

The Stabroek Block, located approximately 120 miles offshore Guyana, encompasses 6.6 million acres (26,800 square kilometers).

The Stabroek block is part of the emerging underexplored Guyana‐Suriname Basin, which has a proven active hydrocarbon system similar to proven and producing basins of the West African Equatorial Margin, according to data compiled from a May 2015 presentation made by CGX Energy Inc.

Over the next five years, more than three times the number of exploration wells will be drilled than in the past five years across the South American Equatorial Margin.

Six to eight wells are expected to be drilled in the Guyana‐Suriname Basin between now and the end of 2016, of which two were completed as of May 2015, while another is currently being drilled, according to CGX.

“I am encouraged by the results of the first well on the Stabroek Block,” said Stephen M. Greenlee, president of ExxonMobil Exploration Company, on May 20.

“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.”

Data from the well will be analysed over the coming months to better determine the full resource potential, according to Greenlee.

Esso Exploration and Production Guyana Ltd. holds a 45 percent interest in the Liza-1 well. Hess Guyana Exploration Limited holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds the remaining 25 percent interest.

Other major players in the Guyana‐Suriname Basin include Anadarko, Repsol, Chevron, Petronas, Tullow, Kosmos, Apache, Murphy, INPEX, CEPSA and RWE, according to CGX.

If deemed commercial, it is not clear how long it would be before first oil would flow from the project. ExxonMobil officials declined to comment about potential future developments.

Officials from Guyana’s Presidency didn’t respond to e-mailed questions regarding bilateral trade with oil field services companies in Trinidad that have traditionally provided services to Guyana’s oil sector in the past, and whether or not the recently raised tensions between Guyana and Venezuela would complicate matters.

The Geneva Agreement of 1966 remains the best hope for keeping the issue between Guyana and Venezuela from going totally out of control, Greenidge said.

The mandate of the secretary-general of the United Nations under this agreement is quite clear.

“To that eventuality, we must now direct our full attention. Guyana, of course, stands ready to continue discussions with Venezuela with respect to our bilateral relations while we pursue a peaceful settlement within the framework of the Geneva Agreement where the U.N. secretary-general has a defined role,” concluded Greenidge.

In a June 13 interview with EnergyNow Energy Minister Kevin Ramnarine said he hoped to see the two countries find a bilateral level solution to the dispute.

"We simply [want to] facilitate them by providing the physical neutral space for them to meet here in Trinidad and Tobago," said Ramnarine, but, as a neighbour and a friend to both countries we would like to see them resolve the issue bilaterally."