Guyana's Oil Reserves in Essequibo Are Amplifying Ongoing Political Strife With Venezuela: What to Know

The Gist:

• Venezuela and Guyana have disputed ownership of the coastal Essequibo region since the 1800s, and a 2015 oil discovery in the area worsened the situation.
• Venezuela conducted a referendum vote approving a takeover of Essequibo, aka Guayana Esequiba.
• It's unclear how far Venezuela's government will go to assert territorial claims in this region of Guyana.

A territorial dispute dating back to the 1840s between Venezuela and Guyana — who share a border — has escalated thanks to the oil industry. Ever since ExxonMobil discovered oil sitting off the coast of Guyana, Guyana has been "sitting on a jackpot of liquid gold," as the Harvard International Review put it.

However, Venezuela wants to take over the region. The country even conducted a vote in 2023 to see if its citizens approved of Venezuela taking over the oil-rich Essequibo from Guyana.

The potential for wealth and power growth in the small nation of Guyana, in northeastern South America, is huge. However, oil can also be somewhat of a "curse" to small nations, the HIR explains, as it has left other Latin American countries weaker both democratically and economically.

Here are all the basics you need to know about the situation.

In 2015, oil was discovered off the Essequibo coast of Guyana, as TIME reported. Since Guyana's economy relies heavily on the oil and gas industry, the oil discovery has impacted the country deeply. However, Venezuela has asserted that it holds claim over the 160,000-square-kilometer region in Guyana.

As Business Insider reported, major oil companies Chevron and ExxonMobil are increasing production in Guyana. Energy expert Dan Yergin told the news outlet that Guyana's offshore oil development is the fastest "in the history of the world." And all of this oil growth is escalating the border issues with Venezuela.

The clash over who controls Essequibo, aka Guayana Esequiba, dates back to the 1800s, but the oil discovery in 2015 added fuel to the fire. CNBC explained that Essequibo was actually given to Britain in 1899 (at the time, Guyana was a British colony), but Venezuela has long fought that ruling.

Venezuela's efforts ramped up considerably in 2023. For one thing, in November 2023, Venezuela's President Nicolás Maduro accused Guyana (along with the U.S. and the oil companies working in Essequibo) with attempting "legal colonialism" to keep Essequibo out of Venezuela's control, as per CNBC.

Tensions have escalated so much that Venezuela conducted a referendum vote on Dec. 3, 2023 to determine whether citizens supported taking over the Essequibo region of Guyana, per Reuters.

The referendum presented voters with five questions asking whether Venezuela should claim jurisdiction over the oil-rich region, and it passed with a 95 percent "yes" rate. It may seem like this implies that many Venezuelans support the measure to claim Essequibo from Guyana; however, reports suggest that voter turnout was actually very low, as reported by AP News.

Despite the referendum's results, the International Court of Justice stated that Venezuela is not permitted to alter the agreement asserting Guyana's right to the land.

Guyana's president Irfaan Ali said on television, “I want to assure Guyanese there is nothing to fear over the next number of hours, days, months ahead,” according to CNBC. However, he also spoke of increased security at the borders, implying that Venezuela's actions can't be ignored.

As CNN reported, the Venezuelan vote was "largely symbolic," but it's uncertain how far Venezuela could go to enforce the decisions made on that ballot. Even if Venezuela doesn't use force to take over Guyana, the successful vote could infuse support for Venezuela's president Maduro into his reelection campaign, per CNN.