Dona Ferentes
A little bit OC⚡DC
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Today, we touch on Guyana because the conflict speaks to a bigger issue for investors: the end of the unipolar world.
Guyana, to refresh all our memories, is a tiny country with fewer than a million people on the northeast coast of South America. It shares a border with Venezuela. For over a century Venezuela has maintained that Guyana’s Esequibo region belongs to Venezuela.
At this point, though, the conflict is about oil and gas. In 2015, ExxonMobil made a major oil discovery off Guyana’s coast. Together with Hess and China's CNOOC, it’s been producing oil in Guyana since 2019. (The Esequibo region currently produces around 400,000 bpd, and that figure could top 1 million bpd by 2027.)
This has transformed Guyana into the fastest growing economy in the world. Last year, real GDP shot up 62.4%. It’s no wonder Venezuela wants to grab a slice.
On Sunday, Venezuelans voted to claim Guyana’s Esequibo region for itself. The vote wasn’t binding in any way. It was designed to give a translucent veneer of legitimacy to Venezuelan President Nicolás Maduro’s next steps.
Here’s Maduro holding up his new map of Venezuela on Tuesday, with what he’s calling Venezuela’s “new state.”
The Guyana Defense Force is “on high alert.” But it doesn’t have much weight to throw around. So of course, it’s turned to the US for help.
US Secretary of State Antony Blinken has reaffirmed US support of Guyana’s sovereignty. And the US military planned to conduct flights alongside the Guyana Defense Force yesterday.
The US has good reason to protect the interests of US oil companies like ExxonMobil (and its investors). It doesn’t want Venezuela’s state oil company taking the 11 million barrels of recoverable oil and gas sitting off Guyana’s coast.
Guyana, to refresh all our memories, is a tiny country with fewer than a million people on the northeast coast of South America. It shares a border with Venezuela. For over a century Venezuela has maintained that Guyana’s Esequibo region belongs to Venezuela.
At this point, though, the conflict is about oil and gas. In 2015, ExxonMobil made a major oil discovery off Guyana’s coast. Together with Hess and China's CNOOC, it’s been producing oil in Guyana since 2019. (The Esequibo region currently produces around 400,000 bpd, and that figure could top 1 million bpd by 2027.)
This has transformed Guyana into the fastest growing economy in the world. Last year, real GDP shot up 62.4%. It’s no wonder Venezuela wants to grab a slice.
On Sunday, Venezuelans voted to claim Guyana’s Esequibo region for itself. The vote wasn’t binding in any way. It was designed to give a translucent veneer of legitimacy to Venezuelan President Nicolás Maduro’s next steps.
Here’s Maduro holding up his new map of Venezuela on Tuesday, with what he’s calling Venezuela’s “new state.”
The Guyana Defense Force is “on high alert.” But it doesn’t have much weight to throw around. So of course, it’s turned to the US for help.
US Secretary of State Antony Blinken has reaffirmed US support of Guyana’s sovereignty. And the US military planned to conduct flights alongside the Guyana Defense Force yesterday.
The US has good reason to protect the interests of US oil companies like ExxonMobil (and its investors). It doesn’t want Venezuela’s state oil company taking the 11 million barrels of recoverable oil and gas sitting off Guyana’s coast.
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