By Kejal Vyas
When it comes to Exxon Mobil Corp.'s recent oil discovery off
the coast of Guyana, one that Venezuela claims as its own, Guyanese
President David Granger has a clear message for the U.S. company:
Full speed ahead.
Mr. Granger, who took office days before Exxon announced the
significant find last month, said that he met with officials from
the company--which was contracted by Guyana--and offered assurances
that exploration work won't be interrupted, despite Venezuela's
recent revival of a century-old claim on two-thirds of Guyana's
territory.
Guyana, a former British colony of 750,000 people and South
America's only English-speaking nation, is counting on diplomacy
and the help of regional allies to resolve the matter.
A Paris arbitration tribunal in 1899 had set the internationally
recognized boundaries, but Venezuela sixty years later rejected the
findings saying it was cheated.
"We're not going to send the navy out there and battle it out,"
Mr. Granger said in an interview Friday, ahead of efforts to garner
international support for the country. His campaign is set to begin
at an annual Caribbean summit in Barbados next week and will
continue at the United Nations General Assembly in September, he
said.
"We're a small nation, we have no interest in any sort of
military confrontation," said Mr. Granger, a retired army
brigadier.
Venezuela, which has periodically laid claim on the land,
briefly detained a Malaysian-owned seafloor survey ship hired by
Guyana and the U.S. oil company Anadarko along with its crew in
2013.
Tensions between the nations have risen since Exxon's discovery,
with Venezuela President Nicolás Maduro issuing a May 26 decree
reasserting his country's sovereignty over the Louisiana-sized
Essequibo region's land and its Atlantic waters, where Exxon has
the exploration concession from Guyana.
Mr. Maduro, who on his weekly television program Tuesday accused
Exxon of "provocation," was expected to address congress on ways to
confront Guyana this week, but his speech was postponed twice and
is now scheduled for this coming Tuesday.
"I ask for the help of the whole country, all social and
political sectors, civil and military, to defend our territory,
defend our fatherland," Mr. Maduro said as he faces pressure from
allies as well as political opponents to take action against
Guyana.
The controversy comes at a time when Venezuela's economy is
crumbling, prompting some analysts to believe he is looking to
divert attention from internal problems outward.
Polls indicate that Mr. Maduro's ruling United Socialist Party
is likely to suffer a major setback in National Assembly elections
set for Dec. 6, with Venezuelans punishing the country's leadership
for an economic crisis marked by triple-digit inflation and chronic
shortages of basic goods such as milk and detergent.
"It's primarily a distraction," said Risa Grais-Targow, an
analyst at the risk consultancy Eurasia Group. She added that Mr.
Maduro could be using the issue as leverage to pressure the new
government in Guyana.
"I hope he will be conciliatory," Mr. Granger said in
anticipation of his counterpart's address. "This issue was settled
116 years ago."
Mr. Granger said he personally told Exxon officials in Guyana in
a meeting in recent days that they have nothing to worry about.
"The difference is that Exxon is U.S. property and any attempt to
physically interfere with U.S. property might be faced with a
different response," Mr. Granger said.
Exxon declined to comment.
Exxon has had strained relations with Caracas after the country
nationalized the company's heavy-oil projects in 2007, for which
Venezuela has to pay the U.S. oil major $1.6 billion, an
arbitration court ruled earlier this year. Exxon and Venezuela's
state energy company ended their decadeslong relationship last week
after selling their joint ownership of a refinery.
Guyana, which the World Bank ranks as the Western Hemisphere's
third-poorest country in terms of per capita gross national
product, is trying to boost its coffers and find a share of oil off
of northeastern South America after other neighbors, such as
Suriname and Brazil, in recent years made significant
discoveries.
Mr. Granger said oil would be a boon for the country, which
relies on limited lumber, gold and diamond mining and is grappling
with high levels of youth unemployment. A World Health Organization
study in 2012 found Guyana to have the highest suicide rate in the
world, four times the global average.
Mr. Granger, who is Afro-Guyanese, led a multiethnic coalition
of political parties to victory after 23 years of a government
controlled by Guyanese of East Indian descent. He says his
administration can offer stability and is looking for new
investors.
The prospect for oil has also attracted Spanish energy company
Repsol SA, which according to Guyana's government requested a
six-month extension this week on its offshore exploration
license.
Venezuela's objections have grown louder with Exxon's presence,
Mr. Granger said. "I can't think of any other reason for the
tensions. There was no other precedent except for the presence of
Exxon."
Despite the territory controversy, Guyana and Venezuela have
strengthened economic ties since signing an oil-for-rice deal in
2009. Thanks to the agreement, Guyana has become the largest
supplier of the grain to 29 million Venezuelans, who take in nearly
half of Guyana's rice exports in exchange for refined oil.
That deal is set to expire later this year and Mr. Granger says
his foreign minister is scheduled to be in Venezuela on Monday with
the hopes of renewing the supply contract and securing a crucial
market for Guyanese farmers.
"I don't think there will be any danger that the border matter
will jeopardize the agreement," Mr. Granger said.
Write to Kejal Vyas at kejal.vyas@wsj.com
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