At a time when India is planning to resume its oil supplies from the Caribbean after three-year hiatus, a new front is brewing up in the region. Following the partial rollback of the Trump-era sanctions on Venezuela by the US administration, Indian suppliers are getting ready to begin oil exports. Towards the end of October, US Treasury issued a general licence to Venezuela lifting all the prohibited sanctions for six months in lieu of conduct of internationally monitored elections in the country towards the second half of 2024.
India used
to procure 10 million barrels per month before the sanctions constituting 5-7%
of imports. Owing to the 2019 US sanctions, India was forced to stall crude
imports from Venezuela. After the Ukraine war, the US began to soften its
stance towards Venezuela over the fears of rising oil prices. These moves were
soon followed by an exchange of hostages between both countries. While the
re-entry of Venezuelan oil back into global markets in the wake of OPEC’s oil
production cuts is truly welcoming, the call for a referendum by the Chavista
regime on December 3rd on the disputed Essequibo region has
potentially stirred up a longstanding conflict.
Venezuela
and Guyana are embroiled in a bitter territorial war over Essequibo on the
Western Border of Guyana. The densely forested Essequibo region rich in natural
resources and mineral deports makes up two-thirds of Guyana. Close to two
centuries old dispute which was resolved amicably is now raked up by the
Chavista regime for both political and economic brownie points.
Venezuela
obtained independence from Spain in 1821 as the Republic of Gran Colombia
comprising of Colombia, Panama and Ecuador. Venezuela separated from Gran
Colombia in 1830. In 1814 British seized Dutch colonies which included areas to
the West of the River Essequibo and unified them with British Guiana. Though
Spain had laid claims to some of these regions, preoccupied with independence
movements across Latin American countries, ignored the British occupation. In
1835 British deputed German explorer Robert Hermann Schomburgk to demarcate the
boundaries of British Guiana. Subsequently the British published a map in 1840.
Venezuela contested the map and claimed the entire area west of the Essequibo
River. With the discovery of gold in the
Essequibo region around the 1850s the dispute reignited.
In 1899
jurists from the US, UK and Russia at the international tribunal in Paris
awarded 94% of the region to the British Guiana and the area close to the mouth
of River Orinoco and a small stretch along the Atlantic Sea coast to Venezuela.
Though Venezuela was unhappy both sides accepted the judgement in 1905. In 1962
when the British initiated serious deliberations on granting independence to
British Guiana, Venezuela declared the 1899 ruling as “null and void”.
Following Guyana’s independence, Venezuela militarised the border in 1966 and
installed military infrastructure on disputed islands and instigated the
indigenous population into an uprising against Guyana. Under intense diplomatic
pressure, both countries signed a 12-year moratorium agreement on the dispute
at Port of Spain in 1970.
To prevent
the dispute from spiraling out of control, in 1990 the UN created the Good
Offices Process to mediate the dispute1. Even after three
decades, when countries failed to reach an agreement, in 2018, the UN referred
the dispute to the International Court of Justice (ICJ). In 2020, ICJ confirmed
its authority to hear the suit. With President Maduro facing an International
Criminal Court investigation over human rights violations, Venezuela rejected
ICJ’s jurisdiction.
The
discovery of new oil fields off the coast of Essequibo in 2015 by Exxon Mobil
has changed the dimensions of this dispute. Countries vied to invest in Guyana
and suddenly the economic prospects of one of the poorest countries in the
continent brimming with opportunities has intensified tensions over the
disputed region. Venezuela has hardened its position post-discovery of the largest
crude oil reserves off the coast of Essequibo. Maduro embarked on subversion
and intimidation tactics. Venezuelan Navy began to harass the Guyanese shipping
vessels and started interrupting the oil exploration by Exxon Mobil in the
Essequibo region. Maduro issued two decrees in 2015 and 2021 to establish
Venezuelan maritime boundaries over the Guyanese economic exclusive zone and
fortified the region with military deployments.
Amid dire
economic straits in 2021, Maduro used this dispute to achieve a rare solidarity
with the opposition turning it into a symbol of nationalism. He vowed to
reconquer the disputed region. Militarily Guyana is not a match for Venezuela
which has Russian weapons and military support. While Guyana has a security
cooperation agreement with the US it is not part of the Inter-American Treaty
of Reciprocal Assistance (where nations are obligated to defend others). Guyana
is militarily vulnerable and ill-equipped to take on Venezuela. The timing of
the escalation of the long-standing dispute between Venezuela and Guyana over
the natural resource-rich Essequibo region is rather dubious and cynical.
US sanctions
on the Venezuelan oil sector have crippled the economy and soon investments also
disappeared. The partial revocation of US sanctions came into force after Maduro
agreed to release political prisoners, lift a ban on opposition leaders and
conduct internationally monitored elections in 2024. But Maduro held back on
reinstating the opposition leaders in public offices. Capitalising on the
latest concessions, playing patriotism politics, mainstreamed the Essequibo
issue. In September Venezuelan national assembly passed a resolution calling
for a referendum comprising five questions on the Essequibo dispute on December
3.
The
apprehensive Guyanese government then approached the ICJ for provisional
measures to prevent Venezuela from changing the existing status quo of
Essequibo. ICJ’s verdict scheduled for December 1 has warned Venezuela to “refrain
from taking any action which would modify that situation that currently
prevails”. Though the court hasn’t specifically banned the referendum it
has asked Venezuela to stop taking any concrete action that would alter the
status quo.
Granting
Venezuelan citizenship to Essequibo residents, rejecting the UN jurisdiction in
the dispute, issuing identity cards, incorporating the region into the
Venezuelan map and establishing a state in the region were the five questions
in the referendum. In the lacklustre referendum with a poor turnout, Maduro
claimed to have received 95% support for annexation.
With
Presidential elections slated for next year, driven by political motives,
Maduro is using Essequibo as a trump card to woo the electorate. Maduro’s
political mentor Hugo Chavez in 2005, pushed this issue under the rug and
formed a political and economic alliance with Guyana and other Caribbean
countries. Through the alliance PetroCaribe, Venezuela traded refined petrol
products with rice from Guyana. But Maduro has dismantled this alliance.
The
referendum is an attempt to shift the focus from the real issues of poverty,
economic recession, and massive emigration of people. About 8 million or a
quarter of the population have moved out of the country. Two days after the
referendum, Maduro mobilised troops close to the Venezuelan borders along the
Atlantic coast, ordered the state oil company, PDVSA to draw plans for the exploitation
and exploration of reserves in the Essequibo region and draft a new law to nullify
the Guyanese contracts with foreign companies involved in oil exploration.
Following
Maduro’s escalatory measures to formalise the referendum and bellicose rhetoric,
Guyanese President, Irfaan Ali appealed for help from the US and UN and sought
the support of Caricom, the Caribbean Community. The US has backed Guyana and
assured support. With global attention focused on the referendum and its
potential ramifications, Maduro has arrested 10 opposition political leaders.
Characteristic of an authoritarian despot, enflaming nationalism, Maduro is now
steadily consolidating his political dominance as well.
Sitting on the
world’s largest oil reserves, caught by Dutch disease (rich resources inflating
the country’s currency making the non-oil exports uncompetitive) and plagued by
socialist economic policies Venezuelan economy has collapsed. But this hasn’t
deterred Maduro from stirring up another conflict for resources. Maduro’s
attempts to ratchet up tensions amid growing disregard for international law by
countries is unsettling the geopolitical scenario reeling under conflicts.
Indian
Connect
Colonised by
the British, indentured labour imported from India, constitute the single
largest ethnic group in Guyana. Home to the largest Hindu population in Latin
America, India and Guyana share a unique bond. Guyanese President Ali, guest of
honour for the Pravasi Bharatiya Diwas, mooted a long-term partnership with
India in areas like energy, health care and infrastructure. Since 2015, Guyana
has substantially increased oil production and made its first oil shipment to
India in 2021. With Guyana planning to auction 14 oil blocks, India should
actively explore investment opportunities to meet burgeoning energy demands.
Amid China’s rapidly expanding footprint, Latin American countries are enthusiastic
about Indian presence to counterbalance the Dragon. The commissioning of “MV Ma
Lisha” a passenger-ferry cum cargo ship built by India’s GRSE (Garden Reach
Ship Builders and Engineers) in George Town in April 2023 revived the 185 year
old ties with Guyana when two ships SS Whitby and SS Hesperus set sail from
Kolkata2. With Maduro ratcheting pressure, Guyana might
expand the scope of defence cooperation with India which is currently
restricted to providing military training to soldiers and coast guards.
Defying
ICJ’s verdict, Maduro is advancing annexation attempts. With tensions soaring,
the US has announced joint exercises with Guyanese Defence Forces. With its
sovereignty under threat, Guyana has called for an urgent UNSC meeting. Roiled
in geopolitical wars spanning various theatres, the international community is
now alarmed by the prospect of an oil war in South America.
@ Copyrights reserved.
No comments:
Post a Comment