Maduro or Guyana? Caricom’s choice – By Mark Wilson – commentary

Maduro or Guyana? Caricom’s choice

By Mark Wilson  – Trinidad Guardian – Published: – Sunday, October 25, 2015

“Could be a second Angola,” an ExxonMobil source last week told Upstream magazine. That’s Guyana’s offshore oil discovery. Angola produces close to two million barrels a day, around the same as Nigeria. 

In August, T&T was producing 75,000 barrels.

ExxonMobil announced its Liza-1 oil find in May. Then they moved fast.

They’re talking a 2018 start-up with 60,000 barrels, ramping up quickly to three times that amount. They will use a floating production storage and offloading vessel, with no time-consuming onshore infrastructure.

ExxonMobil plans four wells offshore Guyana next year. That will cost perhaps US$800 million.  

Half a dozen rigs are moored in Trinidad waters. Once contracts and equipment are sorted, they could be up and drilling within days. There’s talk of a January start.

For Guyana, the next two years will be difficult. Beyond that, it looks like an oil boom.

For 40 years, Guyana has been Caricom’s laughed-at loser. Desperate Guyanese take low-end jobs—if they get past surly immigration officials.

That could quickly reverse. Guyana could be the long-spurned cousin, suddenly successful and sought-after.

T&T’s energy service industry has already won Guyanese offshore business. We’ll see more of that.

Companies like ANSA McAL and Republic Bank have invested in Guyana. If Guyana booms, those investments will bring dividends. If T&T’s own economy is set for trouble, Guyanese business will matter.

The problem lies with Caracas, and its spurious claim to two-thirds of Guyana.

Liza-1 and Ranger lie offshore from land which is indisputably Guyanese, even if the Venezuelan claim made sense. But right after ExxonMobil’s May announcement, Venezuela’s president Nicolás Maduro claimed those waters.

Since then, he has trekked around Caricom, offering sweeties. Quite what he expects in return has not been spelt out—at least not in public.

Just over a week ago, he went to Suriname. He agreed to give them 150 prefabricated houses and a rice export deal.

He went to Antigua, where he finalised a 25 per cent stake in the troubled West Indies Oil Company. He agreed to set up a regional bank, and build a jointly-owned Simon Bolivar resort. Antigua will become an “entrepreneurial socialist” state.

He went to Grenada where he offered to negotiate a maritime boundary, to help start oil and gas exploration, and establish a regional economic zone. He went to St Lucia. His government meanwhile sent a threatening letter to the Canadian owners of a new Guyanese gold mine.

Last month, he went to Jamaica, St Kitts-Nevis and Dominica. In August, his vice president was in Belize.

Also last month, Venezuela signed yet another agreement with Trinidad & Tobago on Loran Manatee, taking proposals for cross-border gas a step forward.

Back home, Maduro faces a National Assembly election on December 6. His opponents have a massive opinion poll lead—but the electoral system is loaded to favour his party.

Whatever the outcome, Maduro remains president. But if he loses control of the National Assembly, he would be fighting for his political life, exposed to the threat of a recall referendum.

Nobody with a cash-strapped economy breaks off a close-fought election campaign to do a Caribbean cheque-writing tour unless there’s something to gain. Just what, though?

Let’s take the January scenario. ExxonMobil is drilling. Maduro is still president. The Opposition narrowly controls Congress. It has already accused Maduro of being soft on Guyana.

Does Maduro make a grand-charge speech? Almost certainly, yes. But after that, what’s next?

Does he back off and do nothing, to taunts from the Opposition? Or does he send in his navy?

On the navy option, there is form. Two years ago, in October 2013, the Venezuelan navy “arrested” a survey ship working for US oil company Anadarko inside Guyana’s Exclusive Economic Zone. They forced it to set course for the Venezuelan island of Margarita.

It’s not just Venezuela and Guyana. US-owned ExxonMobil holds a 45 per cent stake in Liza-1; another US company, Hess, has 30 per cent. The remaining 25 per cent is held by a subsidiary of China National Offshore Oil Corporation. They won’t want to lose their cash.

Venezuela’s oil industry is deeply in debt to China. In a face-off, China will have to decide where to jump. And so will Caricom.

Post a comment or leave a trackback: Trackback URL.

Comments

  • De castro  On October 27, 2015 at 4:31 am

    Interesting but very speculative article.
    December 6th is weeks away don’t let us Stoke the fire.
    Agree MADuro is clutching at straws…..but dangerous.
    Let’s see if he survives after elections.
    Most Venezuelans are fed up with things political and are more concerned with their everyday survival………doubt if MADuro will survive.
    More concerned about his replacement.
    Politricks !

  • Albert  On October 27, 2015 at 11:07 am

    A game changer might be a US warship visiting the area to show support for US interest. Then again US may have its own plan to get its man in Venezuela.

  • Gigi  On October 31, 2015 at 12:18 pm

    Madurai just needs to work his magic on the Guyanese people. We already love Venezuela more than we do Guyana. This is what the PNC did to the Guyanese people. Venezuela’s economy is a result of low oil prices worldwide and internal US destabilization and interference that supports oligarchs gaining power who are in favor of western neoliberal policies. If Guyanese think they will become rich from Exxon oil drilling they need to look at the dismal living standards of the majority of the people living in Nigeria and Angola to see the harsh reality. The Venezuelan people enjoy a far better quality of life that was even better before the oil price carnage. That govt believes in sharing the wealth. We can already see from the present salary debacle playing out that the PNC govt is only interested in hoarding the wealth for itself. Maduro or Guyana? Maduro all the way!!!!

  • Ron Persaud  On October 31, 2015 at 8:52 pm

    “According to the First Law of Petropolitics, the higher the average global crude oil price rises, the more free speech, free press, free and fair elections, an independent judiciary, the rule of law, and independent political parties are eroded.”
    Source; http://foreignpolicy.com/2009/10/16/the-first-law-of-petropolitics/
    The events in Venezuela, from the time of Chavez to present, appear to support this postulate

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: