On the northeastern tip of South America, there are three little countries stacked in a row; anomalies of empire whose imperial histories still have resonance today. Guyana, Suriname and French Guiana. One formerly of the British Empire; one formerly of the Dutch Empire; one still an overseas department of France and all speaking the language that their colonial masters left them. Of these, Guyana, formerly British Guyana and the only English-speaking country in South America, has been in the news lately following a referendum in Venezuela where President Maduro invited Venezuelans to decide if a large chunk of Guyana should, in fact, be Venezuelan.
Given the vast oil riches off the coast of Guyana, the referendum unsurprisingly passed.Once the sabre-rattling verbal aggression died down, there was agreement that no one wanted to go to war and that the foreign ministers of each country would negotiate a solution over the next three months.Who knows what solution they might come up with? An unpopular Venezuelan President has forced his opponent to the negotiating table over the result of a referendum he can never enforce: if Maduro wanted to invade Guyana, he would have to do so via Brazil given the impenetrability of the Guyanese jungle so it’s hard to see how this helps Maduro either domestically or internationally.
It certainly hasn’t impressed the Americans who were quick to make common cause with Guyana through “joint manoeuvres” in Guyana’s airspace. Of course, that common cause is motivated – at least in part – by Exxon and Chevron’s ownership of large stakes in Guyana’s offshore oil fields and oil is at the heart of everything that is going on in Guyana right now.There had long been suspicions that there was oil off this little corner of South America but it was only in 2011 that these suspicions were confirmed when exploration specialists Tullow Oil made an extraordinary discovery in the Zaedyus well off French Guiana. Tullow was a FTSE 100 company at the time and their shares went up 19 per cent on a day when the wider FTSE 100 was off 2 per cent.
It was an amazing find and based on the idea that if there was oil offshore West Africa, there should be oil off the coast of South America because the two continents had once been stuck together.Despite this epochal success, Tullow and its partner Shell couldn’t follow up the Zaedyus discovery – and they spent a billion dollars trying to do so – but the idea that there should be oil on these shores had stuck. This is what led Exxon along the coast into Guyana and in 2015 they made the first of their mega-discoveries.
Since then, Exxon has followed up its initial success with a string of further discoveries and in 2020 they began production. The numbers are vast: 11 billion barrels of oil have been found and production will be 1.2 million barrels of oil a day by 2028 and that’s just the start. While there have long been suggestions in the Guyanese press that Exxon is somehow doing Guyana over, this isn’t the case.
The contracts are entirely in line with what you’d expect in licences in areas where there has been no history of oil discoveries or production. Exxon took all the risk and they get plenty of the rewards but so does Guyana: by 2030, the Government of Guyana will recoup $10 billion per year in oil revenues. No wonder President Maduro wants a slice of the action; no wonder the US wants to stop him.
It’s hard to underestimate just what a change oil is bringing to Guyana. This is a country of just 800,000 people and most people think that’s an overestimate because so many Guyanese have, until now, headed overseas and to the US, Canada and the UK in particular. And it’s a divided society too with the population evenly split between Afro-Guyanese (descended from the slave population) and Indo-Guyanese (descended from indentured labourers) with a small population of native Guyanese (around 10 per cent) providing something of a balance between the two.
This is a society in which never the twain shall meet: in the capital, Georgetown, there are very clear areas which are Indo-Guyanese and others which are very clearly Afro-Guyanese. The Guyana cricket team, part of the West Indies, is one of the few areas where both parts of the population come together providing such legends as Lance Gibbs, Sir Clive Lloyd, Rohan Kanhai, Shivnarine Chanderpaul and Alvin Kallicharan. As with many small countries, there’s always prejudice about the neighbours: the local media love nothing more than a gangland or mobster killing and you can be sure that those same mobsters will have connections to Guyana’s fellow West Indians in Trinidad who are regarded as the pinnacles of bad influence.
As for politics, currently the Indo-Guyanese are in the political ascendancy with 43-year-old President Irfaan Ali taking office following a controversial election in 2020 which saw Afro-Guyanese President David Grainger leave office after a protracted electoral dispute. Former President Bharrat Jagdeo (in office from 1999-2011) is one of Ali’s vice-presidents and, while many were concerned given his performance in office, that his influence would be corrupt, indications so far are that the Ali government is genuinely making an effort to build a better future for Guyana through a Norwegian-style National Resource Fund.
This has much to do with the microscope under which Guyana finds itself. The US, EU and UK all expanded their missions in Guyana after the discovery of oil and are taking a close interest in all matters Guyanese. In 2020, the UK High Commissioner at the time, Greg Quinn, played a leading part in persuading President Grainger that clinging to office was both unjustified and counter-productive: Quinn’s appointment as an OBE was the very least he deserved. This beefed-up presence will be an influence for the good.
Quinn and his fellow diplomats were right to intervene – Grainger was making a fool of himself and of Guyana and he knew it. But it’s an influence that Venezuela, with their agreement to work towards a compromise with Guyana, have clearly recognised. Whatever comes out of these talks between the foreign ministers, the geopolitical reality of Guyana’s position will be the only factor that counts. President Maduro of Venezuela may have hoped he can walk right in, but it looks as though he will face serious international opposition.
Source: https://reaction.life