Bloomberg Línea — Venezuela and Guyana are currently embroiled in dispute in the International Court of Justice (ICJ) in a bid to resolve a historical conflict over the territory known as Esequiba Guyana, a strip of land between the two countries that is rich in oil and forestry reserves.
This disputed area is delimited by the Cuyuní and Esequibo rivers, marking a portion of the Guiana massif, which extends for about 159,500 square kilometers, with unique and strategic natural resources.
The discovery of significant oil deposits in the territorial waters of Esequiba, by Exxon Mobil Corp. (XOM) in 2015 has fueled the dispute that dates back almost two centuries. The company found an equivalent of 11 billion barrels of oil and gas offshore, some 190 kilometers off the coast.
In the last week, the ICJ, which took on the case in 2018, rejected Venezuela’s objections to Guyana’s claim to the Esequiba, with a vote of 14 judges to one, and the the court will proceed to tribunal hearings regarding the territorial dispute.
The ICJ “rejects the preliminary objection raised by the Bolivarian Republic of Venezuela” by a vote of 14 judges to one, declared the president of the court, Judge Joan Donoghue.
“Guyana is confident that the court will uphold its long-standing international boundary with Venezuela,” Guyanese President Irfaan Ali said in a statement. “Guyana has always been fully committed to the peaceful resolution of the dispute with its neighboring and sister republic, in accordance with international law,” he added.
Guyana defends a territorial boundary established in 1899 in an arbitration court in Paris, while Venezuela alleges that it is the Geneva Agreement, signed in 1966 with the United Kingdom, which establishes the basis for a negotiated solution and which disregards the previous treaty.
Guayana was a British colony until 1966, formerly known as British Guyana.
How would Esequiba benefit Venezuela economically?
Oil is at the heart of the dispute, and since the discovery of the potential reserves, Guyana has focused on exploiting them and, thanks to its extraction activity, the small country’s GDP has grown exponentially and could even double by the end of 2023.
Projections by the World Bank (WB) and the International Monetary Fund (IMF) last year stated that Guyana, which has just 800,000 inhabitants, could have see GDP growth of 100% compared to 2021 figures.
In 2020, Guyana’s GDP grew by 43.5% and in 2021, by 19.9%. The IMF also said at the end of 2022 that the country’s economy would expand by 25.2% in 2023.
The IMF estimated last year that the GDP per capita of Guyana could be $9,000.
Consulting firm Rystad Energy has stated that the country’s reserves represent one third of the crude found in the world since Exxon made the first find in 2015 and a second discovery in 2022, and that the government would collect at least $1 billion in revenues from the oil. Exxon and Hess Corporation (HES) extract around 400,000 barrels of crude oil per day, offshore.
Not only oil
Vitalis, a civil and non-profit association, states in a report that Esequiba also has extraordinary forestry resources, mainly in the highlands, occupying more than eight million hectares, and that there is the possibility for mining minerals such as bauxite, gold, diamonds and manganese; as well as uranium reserves and the already existing exploitation of oil and natural gas.
“The agricultural potential existing in the north of the region stands out, which supplies the country’s population, mainly concentrated in this axis which does not exceed 15% of the territory, as well as its aquaculture potential”, the association pointed out.
Meanwhile, Venezuelan President Nicolás Maduro posted on Twitter on April 6 to express Venezuela’s call to defend the Geneva Agreement, and that “Esequiba is Venezuela!”
Following the latest decision by the ICJ, Maduro welcomed the judgment, insofar as it “makes clear the existence and validity of the Geneva Agreement of 1966, the only valid instrument to settle this territorial dispute”.
He also claimed that there has been “illicit and fraudulent” conduct on the part of the United Kingdom in the dispute over the territory.