Guyana’s oil resources have gained international attention as the discovery of oil in a disputed region has caused tensions with Venezuela, which also lays claim to the same region, to skyrocket in recent weeks.  The discovery of oil in the disputed Stabroek exploration area by ExxonMobil, with the potential of producing 1.5-2 billion barrels of oil, has also drawn the company into conflict with Venezuela. The Stabroek area is located 120 miles offshore in deep water.  Venezuela has laid claim to these waters, as well as two-thirds of present-day Guyana, as part of the Essequibo region. Venezuela has asked that ExxonMobil, who started drilling in the disputed waters in 2015, to stop drilling until the dispute, dating back decades, can be resolved by the United Nations.

U.S. foreign policy may be impacted by this conflict as the United States in the number one export destination for Guyanese goods– petroleum and mineral resources. If further conflict occurs with Venezuela, these exports may be reduced of fully stopped, impacting U.S. businesses that use Guyanese products. Additionally, the United States risks further economic strain if ExxonMobil is forced to stop drilling in the disputed Stabroek block. Much of this oil is then shipped to oil refineries in the United States for processing. If oil to these refineries is curtailed because of the conflict, there may be impacts on U.S. jobs.  This situation also poses a problem to U.S. national security.  Venezuela is currently in the midst of an economic crisis and is at risk of further civil strife. If this conflict is allowed to escalate, it may throw the destabilized nation, which is attempting to get Exxon to compensate it for many oil projects within its borders, further into chaos. This conflict has the potential to lead to potential regional instability, as Guyana has a huge economic stake in the exploitation of the disputed oilfields.

The Trump administration should reaffirm their continued support for economic development in the region; the administration should also voice strong support for a UN-led resolution for the dispute. Any further action– such as voicing support for Guyana’s claims– may risk making the situation worse.

The analysis I read was strong in information relating to the dispute but it didn’t state just how important the oil is to these two neighboring economies as well as not providing additional historical context behind the dispute.

https://www.ft.com/content/013bfd26-0a8e-11e7-ac5a-903b21361b43

–Drew