HOW EXXONMOBIL USES DIVIDE AND RULE TO GET ITS WAY
By Vijay Prashad, Peoples Dispatch.
February 4, 2021 | EDUCATE!
Above photo: ExxonMobils Liza Destiny vessel off the coast of Guyana.
ExxonMobil.
What Is Behind The Fueling The Border Dispute Between Guyana And Venezuela:
Oil And Imperialism.
Tensions rise between neighboring Guyana and Venezuela over a piece of land
that has been disputed since at least 1835. Both Guyanas President Irfaan
Ali and Venezuelas President Nicolás Maduro have exchanged sharp words
about the status of the Essequibo region, which both countries claim. Since
1990, the two countries have pursued their claims through a United Nations
good offices process; as recently as 2013, President Maduro and Guyanas
then-President Donald Ramotar said that the discussions over Essequibo were
going well under this UN framework.
Everything changed in 2015, and since then the tensions between the two
countries have flared up. Matters became so grave that the UN transferred
the dispute mechanism from its good offices to the International Court of
Justice, which ruled in December 2020 that it has jurisdiction over the
case.
Its All About Oil
Things changed in 2015 because of oil.
ExxonMobil, one of the worlds largest oil companies (newly merged in 1998),
signed an agreement with the government of Guyana in 1999 to develop the
Stabroek block, which is off the coast of the disputed Essequibo region.
Over the course of the following decade, despite the dispute, ExxonMobil
began to prospect in the area. It is important to recall that in 2007, the
Venezuelan government ejected ExxonMobil from Venezuelas Orinoco Basin oil
fields because the US multinational corporation refused to comply with the
new Venezuelan laws. ExxonMobil turned its attention toward Guyana andin
particularto the disputed Essequibo region. As a consequence of the
aggressive prospecting of oil companies (ExxonMobil, but also the Canadian
firm CGX), Guyana faced renewed border disputes not only with Venezuela but
also with Suriname, Guyanas neighbor to the east.
In 2015, ExxonMobil announced that it had found 295 feet of high-quality
oil-bearing sandstone reservoirs; this is one of the largest oil finds in
recent years. A close reading of the Production Sharing Agreement (PSA)
between Guyanas government led by then-President David Granger and
ExxonMobil should shock any sensitive person. ExxonMobil was given 75
percent of the oil revenue toward cost recovery, with the rest shared 50-50
with Guyana; the oil company, in turn, is exempt from any taxes. Article 32
(Stability of Agreement) says that the government shall not amend,
modify, rescind, terminate, declare invalid or unenforceable, require
renegotiation of, compel replacement or substitution, or otherwise seek to
avoid, alter, or limit this Agreement without the consent of ExxonMobil.
This agreement traps all future Guyanese governments in an inexcusable deal
that has been made on disputed waters.
Having studied the contract, Dr. Jan Mangala former presidential adviser to
President Granger and a consultant for the Danish company NTD Offshoresaid
that this deal was one of the worst that he had ever seen. Guyana, Mangal
argued, is being re-colonized, by which he meant that the deal would make
a few local business people and politicians rich from oil so they will work
for the exploiters and so they will not work for their country folk. Even
the International Monetary Fund weighed in with a report that said Guyana
signed a very bad deal with ExxonMobil; the terms of the contract, the IMF
wrote in a report for the Guyanese government, are relatively favorable to
investors by international standards with royalty rates for Guyana well
below of what is observed internationally.
Divide And Rule
When the Romans went out to conquer the Mediterranean world, they did so by
the policy of divide et impera, divide the adversaries and then rule over
them. The operations of ExxonMobil, with the help of the US government,
clearly show them egging on the conflict between Guyana and Venezuela over
the Essequibo region so that ExxonMobil benefits in the chaos.
There is mischief in this conflict. After Venezuela declared its
independence in 1811, the British colonizers in what they called British
Guiana wanted to ensure that their stronghold would not be weakened. In
1835, Robert Hermann Schomburgk surveyed the edges of the British territory
and drew a line that claimed the Essequibo and Orinoco river basins for his
imperial masters; Venezuela disputed the so-called Schomburgk Line in
1840. When gold was discovered in the Cuyuni basin, plainly in Venezuelan
territory, the line was shifted to claim that entire region. An arbitration
treaty signed in the United States was bathed in controversy, with Venezuela
rejecting it (according to Betty Jane Kissler in her 1972 study on the
Venezuela-Guyana boundary dispute: 1899-1966). US President Grover Cleveland
watched these developments and then noted that the Schomburgk Line had been
largely extended in some mysterious way and is treated as so infallible,
and so sacred that they will not accept anything other than full
annexation; The trader, wrote President Cleveland of the British
motivation, is again in evidence.
The trader returned to the story with ExxonMobil.
Guyanas government money from ExxonMobil to meet the estimated cost in
2018 of presenting Guyana/Venezuela controversy at the International Court
of Justice including payment of legal fees. In mid-2020, the Guyanese paper
Kaieteur News senior reporter Kiana Wilburg broke the story that the World
Bank had paid $1.2 million to Hunton Andrews Kurth, a law firm long
associated with ExxonMobil, to revise Guyanas petroleum laws. Wilburgs
report quoted the former presidential adviser Dr. Jan Mangal, who said that
the government was letting the very companies we need to regulate dictate
the countrys business. This is a recipe for failure. And as you can see, we
are failing.
Before attention could be brought to the sweetheart deal given to
ExxonMobil, and the opportunity for ExxonMobils lawyers to write Guyanas
laws, then-US Secretary of State Mike Pompeo arrived in Guyana in September
2020. He was on a three-day tour of Venezuelas neighborsGuyana, Brazil,
and Colombiato accelerate the US hybrid war against Venezuela. It was an
odd situation. The CIA had overthrown Guyanas democratically elected
government of President Cheddi Jagan in 1964. More than half a century
later, the US was trying to use Guyana as an instrument of regime change
against Venezuela. That is why the Guyana Human Rights Association
President Ali to avoid any recklessness. Pompeos quid pro quo on the
table was that if Guyana joined the crusade against Venezuela and tightened
its embrace of ExxonMobil, then the US would support its claims to
Essequibo.
A columnist for Kaieteur News wrote a sharp commentary after Pompeo left the
country. Here we are, caught in the middle, between Exxon and Venezuela and
we have nothing to show for it. We Guyanese dont even know the full details
regarding oil deals conducted on our behalf, by our political leaders with
Exxon
We talk about oil and the man comes and talks about terrorism and
drugs and the seathe things that matter to America. He protects his own,
delivers to his own, the columnist wrote. Once again, Guyanese got
nothing.
The conflict on the Guyanese-Venezuelan border heats up. ExxonMobil sits on
the sidelines, smiling. The distraction suits the oil giants. They make
their money whether there is peace or war.
Vijay Prashad is an Indian historian, editor and journalist. He is a writing
fellow and chief correspondent at Globetrotter. He is the chief editor of
LeftWord Books and the director of Tricontinental: Institute for Social
Research. He is a senior non-resident fellow at Chongyang Institute for
Financial Studies, Renmin University of China. He has written more than 20
books, including The Darker Nations and The Poorer Nations. His latest book
is Washington Bullets, with an introduction by Evo Morales Ayma.