Venezuela relations

The week before last Takuba Lodge issued a press release stating that Foreign Minister Delcy Rodríguez of Venezuela had raised an objection with the Country Manager of Esso Exploration and Production Guyana Ltd about the dispatch of an oil rig from Louisiana to an exploratory concession granted by the Government of Guyana. The site identified for the drilling is called Liza, which is located off the coast of Demerara within the Stabroek Block. Needless to say, it is situated well within Guyana’s waters, and while Venezuela’s spurious claim to this country’s land space has never encompassed territory east of the Essequibo River, the Stabroek Block does extend into offshore Essequibo. The implications of this, one supposes, is the primary reason for Venezuela’s objection.

The latest protest from our western neighbour follows an ingrained pattern whereby it has attempted to thwart any major development on land or sea in Essequibo over the past few decades, be it a hydroelectric project, a spaceport, or an exploratory concession for oil. While beginning his first term of office with a very hard line on Guyana, the late President Hugo Chávez modified this when visiting Guyana in 2004, indicating that his government would not object to projects which were for the real development of the people of Essequibo, although with the caveat that these must not involve multinationals.

He was eventually followed to this country by President Nicolás Maduro in August 2013, who breezed in to the Conference Centre at Liliendaal to make soothing noises about the Cold War origins of the boundary controversy. As it transpired his words didn’t mean anything, since barely six weeks later the Venezuelan navy seized the oil exploration vessel the Teknik Perdana indirectly under contract to the Anadarko Petroleum Corporation of the US, that was surveying in Guyana waters offshore Essequibo.

Esso Exploration is the Guyana affiliate of Exxon Mobil, a company with whom Venezuela has testy relations. During President Chávez’s early days of inflexibility, it was one of a number of companies granted exploratory concessions off Essequibo which were warned by Miraflores that developing these could affect any investments they had or sought to have in Venezuela. This effectively stymied the search for oil there until the advent of the Teknik Perdana, which, as said above, was simply seized by our neighbour’s navy.

Nevertheless, in due course, the late Venezuelan head of state began nationalizing various foreign assets in any case, mostly after 2007, and the Cerro Negro heavy crude project and a smaller one known as La Ceiba which were operated by Exxon were taken over by the Chávez government without compensation being paid.

According to Caracas daily El Universal, there are more than 20 cases before the World Bank’s International Centre for Settlement of Investment Disputes over Venezuela’s nationalizations. In Exxon Mobil’s case, the company was last month awarded US$1.6 billion by the court, an award which Caracas is not surprisingly seeking to have annulled.

That aside, the latest contretemps with Venezuela comes against a background where firstly, Guyana had applied for an extension to her continental shelf in 2011; secondly, where there has been no movement on negotiating a maritime boundary between the two states; and thirdly, where Foreign Minister Carolyn Rodrigues-Birkett has said this country would like to move away from the Good Officer process as a means to finding a solution to the border controversy with Venezuela, and choose some other mechanism under the Geneva Agreement.

It has to be understood that the land boundary was finally settled by the arbitral award handed down by an international tribunal which sat in Paris in 1899. Venezuela accepted that award for over sixty years, and demarcated the boundary with this country in accordance with it. Our neighbour’s first official rejection of it came in 1962, while Guyana’s position is, and always has been, that the award constitutes a full, final and perfect settlement. In those days, of course, there was no notion of the continental shelf or maritime boundaries, bar the three-mile (as it then was) territorial sea, so the award does not speak to those subjects.

The terminus of the land border on the coast is at Punta Playa, and any maritime boundary would have to take that as its starting point if our western frontier is not to be undermined. Venezuela understands very well that if a maritime line is drawn from Punta Playa, that would be an act of acquiescence where the territorial boundary is concerned; in other words, it would constitute a recognition of the validity of the 1899 award. It is for this reason that the Venezuelan opposition have been very vocal in insisting that there can be no negotiation of a maritime boundary without negotiating the land boundary as well.

It is not as if either, Guyana has the option of going the route that she did in the case of Suriname by referring the maritime dispute to the arbitral court in Hamburg under the UN Convention on the Law of the Sea (UNCLOS), because Venezuela is not a signatory to the latter. It should come as no surprise either, that Caracas has also raised formal objection to Guyana’s application for an extension of her continental shelf under UNCLOS, despite the fact that it includes a statement that this would be without prejudice to any future maritime settlement.

Exactly why Minister Rodrigues-Birkett chose her end of year press conference in 2014 to tell the public that the government was looking at other options under the Geneva Agreement to seek a means of settlement to the controversy over the land boundary is not altogether clear. This was repeated in an interview with the Guyana Times last week, despite the fact that at the end of December the Venezuelan government had issued a communiqué in which it expressed its belief “that this mechanism continues to be the right political and legal path to settle the border dispute [sic]. This explains why it is so critical for the sake of the process that the government of the Co-operative Republic of Guyana responds to the requests made by the Bolivarian Republic of Venezuela for the prompt designation of the Good Officer.” (Translation from El Universal)

 

She was echoed, it seems, by the Head of the Presidential Secretariat, Dr Roger Luncheon, who also let it be known that Guyana was considering a judicial settlement for finality. Well, in the first place, even if for the sake of argument Caracas were to agree to a judicial settlement, it would still have to be agreed precisely what is to be settled. Is the government talking about maritime issues as well as the controversy? If the controversy, the question would undoubtedly be the validity of the award, and Venezuela has always been opposed to a judicial decision where that is concerned. In fact, El Universal reported an opposition ‘expert’ yesterday as listing among his country’s options going to the Hague or arbitration “only to solve the core problem of interpreting the subject matter of the Geneva Agreement.”

Since the government seems to have acknowledged that Venezuela likes the fact that the Good Officer process was not getting anywhere, one would have imagined it would have occurred to it that the time was not propitious for any deals. Just look at the situation. Guyana is going to an election in two months, so which foreign government worthy of its name is going to come to an agreement at such a time?

Then there is President Maduro’s very fragile circumstances. His country is in a crisis; his popularity ratings have sunk to an all-time low; he faces parliamentary elections later this year which the opposition might win; while the opposition itself has a very uncompromising stance on boundary issues with Guyana, both territorial and maritime. In other words, President Maduro is so weakened, he could not possibly agree to anything at this point which would appear in Venezuelan eyes to favour Guyana – even to abandon the Good Offices process; it would undercut him politically.

Did our government not absorb the full import of Venezuelan Foreign Minister Rodríguez communicating with Esso? Does it not understand that Mr Maduro cannot afford to appear to yield at this stage, and is unlikely to accede to a judicial route for any settlement now? In addition, an opposition dominated Congress should that materialize this year, would be bad news for Guyana. (Needless to say a military or opposition government in whatever form would be worse.)

Prior to May 11, the government should not be pushing anything, aside from dispatching note verbales and the like (which it has done) and vociferously defending its right to exploit its own resources (which it has also done in this instance). In other words, excepting in the case of some unanticipated development, it should be marking time until the election.

Around the Web

Comments