In December, Guyana, a South American nation with a population of over 800,000, captured significant attention due to its neighbor, Venezuela. Nicolás Maduro, the autocratic leader of Venezuela, stirred controversy by calling for a referendum in early December 2023 to seek approval for the annexation of Essequibo, which constitutes two-thirds of Guyana’s territory. Surprisingly, Venezuelans voted in favor of this move, despite the matter having been settled by an international tribunal in 1899.
The catalyst for this heightened tension can be attributed to the discovery of oil in Guyana. Dr. Terrence Blackman, the founder and CEO of the Guyana Business Journal, pointed out, “What has happened is that it’s been exacerbated by the discovery of oil (in Guyana). This discovery has made pursuing this course of action seem more attractive to Venezuela.” Guyana’s oil discovery in 2015 catapulted it into becoming the world’s fastest-growing economy, achieving the highest real GDP growth rate in 2022 and 2023. Conversely, despite possessing the world’s largest oil reserves, Venezuela has experienced a dire economic downturn since Nicolás Maduro’s rise to power in 2013.
Valerie Marcel, director at New Producers Group, observed, “Venezuela doesn’t truly have sources of support in its ambitions to take over that territory of Guyana, whereas Guyana, it seems, has international public law on its side, as well as an alliance with the United States. So, at this stage, the fears that Guyana felt in the past are much less. It feels more confident against its larger neighbor.”
Guyana’s sudden economic growth has piqued the interest of oil experts. While the country’s remarkable GDP growth may seem impressive, critics raise concerns about its weak democratic institutions and the deep divisions in its politics along ethnic lines, which could potentially expose it to the so-called “resource curse.” Gregory Brew, an energy analyst at Eurasia Group, commented, “Guyana is at a crossroads in its history. It is about to become one of the world’s most exciting and important oil-producing countries.”
To gain a deeper understanding of Guyana’s oil economy, its ongoing conflict with Venezuela, and the implications of Guyana’s oil for the United States, please watch the video above.
