Venezuela and Guyana are fighting over oil and things are getting hot!

We all know that oil and gas is big business globally. The industry is estimated to be worth US$4.3 trillion this year.

So when two oil producing countries have a border dispute, it’s gonna be a fight!

Cue this latest dispute between Venezuela and Guyana. For you to really understand this story, we need a quick history lesson.

Venezuela and Guyana have been disputing their maritime borders for decades. Venezuela argues that the region of Essequibo, which is currently governed by Guyana, actually should be part of Venezuela. 

An international ruling way back in 1899 gave Guyana the rights over this area, but Venezuela doesn’t acknowledge that ruling, so the disagreement continues.

Then Guyana hit oil in 2015 and Venezuela started laying their claim again.

More than 11 billion barrels of oil and gas have been discovered off Guyana’s coast so far, and oil companies are still exploring.  Guyana has already earned millions of dollars from this new resource, and its economic growth has skyrocketed.

Now of course, Venezuela, which is already a major global oil producer, wants a piece of the new oil in Guyana, which they claim is actually in their territory. 

The battle got so intense that Guyana had to ask the International Court of Justice to step in and make a ruling that should be accepted once and for all. 

While that decision is pending, Guyana is internationally recognised as having sovereignty over the region and by extension, any oil or gas deposits discovered there.

So, the country periodically has bidding rounds where the Government auctions off sections or blocks to different oil companies, who will come in and explore for oil. 

Now, a few weeks ago the Guyanese Government started its latest round of bidding for eight new oil blocks. If oil is discovered in just two of these blocks, that’s billions of dollars in revenue for Guyana. 

So the Venezuelan Government basically said… alright, alright, alright, that’s enough.

They called the auction illegal, arguing that Guyana doesn’t have sovereign rights to the area, so any oil activity there should be done in agreement with Venezuela.

They also want the bidding and exploration to be put on hold until the International Court hands down the final judgment.

But obviously, Guyana isn’t on the same page as Venezuela. For one, the region was internationally recognised as theirs decades ago and they’re on a hot streak right now. 

The United States and the Organization of American States have condemned Venezuela’s remarks, but Venezuela basically told them to mind their own business.

So things are heating up, we’ll have to wait and see for the ICJ’s ruling and Venezuela’s next move.

And that’s the bottom line.