Oil Price
As tensions with Venezuela continue to simmer over President Nicolas Maduro’s attempt to annex oil-rich Essequibo from Guyana, the U.S. is sending a top defense official to Guyana to discuss the situation.
U.S. Deputy Assistant Secretary of Defense for the Western Hemisphere Daniel P. Erikson is visiting Guyana on Monday and Tuesday in what the U.S. Embassy in Guyana referred to as a push for a “bilateral defense and security partnership in support of regional stability”. Erikson will be meeting with the Guyanese government and military leaders, as well as with the regional bloc, the Caribbean Community (CARICOM).
In December, Guyana and Venezuela vowed to avoid the use of force in the dispute, which escalated earlier last month after Maduro held a referendum to annex Essequibo, then vowing to force the exit of foreign oil producers who refused to comply.
The Venezuelan parliament has yet to pass a law establishing Venezuela’s jurisdiction over the Essequibo region, which represents two-thirds of the territory of Guyana and is where its oil riches are concentrated.
Maduro is facing elections this year, and there has been significant speculation that the subject of the rightful ownership of Essequibo–a popular topic among Venezuelans–is being used to create a state-of-emergency situation that could justify the postponing of the elections.
In the meantime, an easing of U.S. sanctions on Venezuela, which remains in place despite Maduro’s moves on Essequibo, where Exxon has made massive discoveries offshore, Venezuela’s oil exports rose 12% last year, reaching nearly 700,000 barrels per day.
However, this pace of increase of crude oil exports remains slower than last year, with gains limited in part by a lack of investment necessary to boost production, Reuters reports.
By Charles Kennedy for Oilprice.com
