Conversation: Analyzing the Venezuela-Guyana Maritime Boundary Dispute

June 12, 2015 | 20:43 GMT, Source

Video Transcript

Lynn Wise: Hi, I'm Lynn Wise, Editor here at Stratfor. With me today is Reggie Thompson, Latin America analyst. Today we're going to be talking about Venezuela's new military zone that it's established off the coast in waters disputed with Guyana. So Reggie, this dispute has been going on for decades now, and Venezuela periodically tries to assert control over the area, but never through the establishment of a military zone. We know that Venezuela is really under a lot of pressure these days economically, politically — why has it decided to make such a potentially inflammatory decision now?

Reggie Thompson: Well, the presidential decree on May 27th that established this zone was likely motivated by the announcement by Exxon in early May that it had discovered some quantities of oil in an offshore bloc known as the Stabroek bloc which is in waters that Venezuela has historically claimed as its own. Now this dispute began in the 19th century in 1899 the territorial dispute was settled. The present day borders, the present day land borders that is between Guyana and Venezuela was settled by an international arbitration panel. Now, in the 1960s, Venezuela renewed its claim to that part of Guyana, and the maritime border has never been drawn because Venezuela does not recognize the land border as belonging to Guyana. They would like to extend their land all the way to the Esecipo river, at least in theory. But Venezuela at this point really wants to challenge the fact that Exxon discovered this oil. They want to challenge the fact that Guyana is trying to exploit this oil in an area whose status, at least for Venezuela, is legally ambiguous. And so doing this, by doing this action, by creating a military zone, which essentially empowers Venezuela to sail military vessels into that area—not that they will, mind you, but just the threat of sailing military vessels there—is likely to dissuade future exploration and exploitation of resources in that area.

Lynn: So it sounds like it's really a scare tactic by Venezuela. Has it worked? Has it dissuaded any exploration so far?

Reggie: Well, these things take time, so we may not see a reaction immediately from any of the companies conducting offshore exploration in Guyana. Exxon would have to go back there and drill some further wells if it wanted to further explore what is in the Stabroek block, so if we were to see Exxon not go back and do that, or if we were to see other companies publicly come out and say that they didn't want to conduct any exploration in that area because of this, then Venezuela's tactic would have worked. But it may be some time before we see any effects of this.

Lynn: So if things were to escalate and Venezuela were to militarily intervene into this area, what would Guyana's options be. It's a pretty small country, one that's kind of not the focus of international affairs a lot.

Reggie: Yes, well, Guyana's options are really very limited. The Guyanese self-defense forces have a very small naval component, very limited coast guard vessels that they can potentially use to oppose any Venezuelan military action there. It's highly unlikely at this point that Venezuela is going to follow up with more than just words at this point. We haven't seen any indicators that the Venezuelans intend to actually sail vessels there or actually intend to disrupt any ongoing oil exploration activity. But really the Guyanese are very outmatched. The Venezuelans, I mean, they do have problems such as logistical problems with the military, their vessels, they do have a limited naval component, even though it's much, much greater than the Guyana's. But, at this point, really the Guyanese are very outmatched by the Venezuelans.

Lynn: But the Venezuelans are still under a lot of constraints domestically. Would they be able to sustain a military intervention?

Reggie: Well, that would be highly difficult. Maduro is very constrained at home with the ongoing economic crisis, with potential threats to—really to the economy from the deteriorating Venezuelan public finances. So Venezuela is internally focused right now. While the Guyanese military zone that Venezuela established, this could serve as a distraction to domestic public opinion before legislative polls, which are tentatively scheduled for late November or early December. It's really a gamble that Maduro would be taking, and it's not clear that the benefits would outweigh the costs.

Lynn: Politically, this is also a good move for Venezuela. It's a very popular move, I imagine.

Reggie: Yes, domestically, this is one of the few issues that really transcends the party boundaries in Venezuela. People from the ruling United Socialist Party of Venezuela and from the Venezuelan opposition both really support Venezuela staking a claim to this part of the world, to this part of the Guyanese territory, obviously because of the mineral resources that are there and just nationalistic pride, obviously. So really Venezuelan action, whether it's rhetorical or physical, against Guyana would likely count on significant support within Venezuela.

Lynn: Thank you Reggie, that was fascinating. For more on this and other topics please visit Stratfor.com.

"Conversation: Analyzing the Venezuela-Guyana Maritime Boundary Dispute is republished with permission of Stratfor."