The Drums of War Are Growing Louder in South America

As tensions rise in the Essequibo territorial dispute, Brazil sends reinforcements to its northern border, Venezuela holds a referendum on whether to annex the region and Guyana mulls hosting US military bases.    

Just over two weeks ago, I posted a piece flagging the possibility that the next geopolitical flash point in this year of living dangerously could be a centuries-old border dispute in an oil-rich corner of South America. That oil-rich corner is Essequibo, a sparsely populated 160,000 square-kilometre chunk of disputed land, comprising mainly rain forest, that makes up roughly two-thirds of Guyana, a former British colony. But the land has also been claimed by Venezuela since it won its independence from Spain just over 200 years ago. With a little encouragement from the US, the dispute now threatens to escalate into a full-blown war.

A map of the region:

Guyana: “Essequibo Is We Own” | Three Worlds One Vision

Troop Movements

On Wednesday (Nov 29), the Ministry of Defence of neighbouring Brazil announced it was sending military reinforcements to its northern border as a precautionary measure. The northern Brazilian state of Roraima, in the middle of the Amazon jungle, shares a border with both Venezuela and Essequibo and Brasilia is concerned that the ratcheting tensions between its two neighbours could descend into violence.

Last week, Brazil’s President Luiz Inácio Lula da Silva (aka Lula) sent his senior adviser, Celso Amorim, a former minister of defence and foreign secretary, to Caracas to meet with the President of Venezuela, Nicolás Maduro, to express the Brazilian government’s concerns about the risk of war breaking out between the two countries. That meeting does not appear to have had the desired effect. On Wednesday, Lula posted a message on X reminding that (machine translated):

When a country decides to go to war, it is declaring the bankruptcy of dialogue. And I came into politics through dialogue, and I believe that it is much more sensible and effective to waste a few hours at negotiating tables than to go around shooting at random, killing innocent women, children and men.

The Brazilian government is particularly concerned about the possible fallout from a popular consultative referendum the Maduro government is holding this Sunday on the country’s territorial claims over Essequibo. The referendum includes five questions, the fifth of which is whether citizens agree that incorporating Essequibo as part of Venezuela’s own territory and granting its “current and future population” Venezuelan citizenship is a good idea.

The move is largely seen by Maduro’s critics as an attempt to shore up domestic support at home and is also a response to Guyana’s increasingly close military ties with the US. Caracas insists that the referendum is purely consultative and non-binding, and that it has no intention of annexing the territory. But at the same time it is increasing its military activity close to the border with Essequibo, ostensibly to combat illegal mining activities.

Ominously, Venezuela’s Minister of Defence Vladimir Padrino López recently said the dispute with Guyana “is not an armed war, for now.”

“Go out and vote (in the referendum). This is not an armed war, for now, it is not an armed war,” he said, adding that the members of the Bolivarian National Armed Forces (FANB) will be “permanently on guard” for “any action that threatens” the country’s “territorial integrity.”

The government of Guyana is also raising the stakes. Up until last week it had repeatedly denied allegations from Caracas that it was planning to invite US Southern Command to set up a forward operating base in Essequibo. But then last Friday the country’s Vice President Bharrat Jagdeo said in a press conference:

“We have never been interested in military bases, but we have to protect our national interest… We’re going to be working with a number of countries on greater defence cooperation. We will have from the US Department of Defence next week two visits to Guyana, by two teams. And then several other visits in the month of December and then high level representation from the Department of Defence here.”

In other words, it appears that US Southern Command is about to set up a new forward operating base, or bases, in a territory that is still very much in dispute. That territory is not only rich in oil and gas but also boasts other mineral deposits, including Gold and Bauxite, as well as huge fish stocks and fresh water supplies. Also of note is Jagdeo’s mention of “a number of countries” with which it is seeking “greater defence countries.” Those countries include Canada, which has mining interests across Latin America, and Brazil.

The US and Guyana already signed an agreement in 2020 to undertake joint military patrols in the Essequibo region, ostensibly for “drug interdiction” and to provide “greater security” to the South American country. Southcom has signed similar agreements with the governments of Ecuador and Peru in recent months (as we have covered herehere and here) and is looking to do the same with Uruguay.

A Centuries-Old Dispute

The current diplomatic tussle over Essequibo may have been ignited by the discovery in 2015 of huge deposits of oil off the coast of the disputed region but its roots date back over two centuries. Readers will not be surprised to learn that the initial antagonist in the dispute was the British Empire, which in 1814 acquired the regions of Demerara and Berbicea from the Netherlands (the cream coloured territory in the map above) after the Anglo-Dutch Treaty of 1814. In that treaty the Netherlands did not demarcate the territory’s western border with Venezuela.

That was an open invitation for the British Empire. In the chaos that resulted from the overthrow of Spanish rule in South America, the British began to exploit weaknesses in post-independence Venezuela, then part of “Gran Colombia“, to make incursions west of the Essequibo river, where gold deposits were soon discovered. The Essequibo territory had de jure belonged to the Spanish crown but it had exercised little effective control over it. Wherever British troops found a power vacuum, they left British settlers behind. It is also during this time that the British occupied the Malvinas (Falkland Islands).

In 1822, Simon Bolivar ordered his Minister in London, José Rafael Revenga, to present an official complaint to the British authorities, in the following terms:

“The settlers of Demerara and Berbice have usurped a large portion of land that according to the latest treaties between Spain and Holland belongs to us on this side of the Essequibo River. (…) said settlers must place themselves under the jurisdiction and obedience of our laws or withdraw to their former possessions.”

Needless to say, that did not happen. Over the next few decades the British progressively expanded their control over Essequibo. As the century progressed, it settled in more and more of the territories it claimed as its own, although there were periods of relative coexistence with Venezuela that put a temporary break on the British expansion. Following the British claim of 1887, which included populations under historical Spanish and Venezuelan control, the government of Venezuela decided to sever diplomatic relations.

Matters eventually came to a head at the Paris Tribunal of Arbitration, convened in 1899 to settle the dispute, at which Venezuela’s claims were, ironically, supported by Washington. Sitting on the five-member court were two Americans, representing Caracas, two Britons, representing, of course, the interests of Her Majesty’s Empire, and a Russian who was supposed to be an impartial judge. The latter, Friedrich Martens, was instrumental in tilting the ruling in the British colony’s favour.

The arbitration court agreed to grant the United Kingdom 159,000 square of territory west of the Essequibo River. Some jurists and political authorities, including the Netherlands and Brazil, warned that the ruling had been excessively generous to the British. Venezuela lodged a formal complaint, though it finally grudgingly accepted the outcome and collaborated in the demarcation of the new border. The conflict remained dormant for decades.

But all that changed in 1949, when one of the four North American lawyers who represented Venezuela in the Paris arbitration award, Severo Mallet-Prevost, had a memorandum published posthumously that documented a litany of irregularities in the process, from external pressure to the partial attitude of the Russian judge, to parallel negotiations. In other words, the trial had been rigged in the UK’s favour from day one and in Mallet-Prevost’s opinion, that was enough to nullify the ruling.

After these revelations, Venezuela resumed its territorial claim. Then, in 1966, the year the UK granted independence to Guyana, it also signed the Geneva Agreement with Venezuela, under which the parties agreed to reach a mediated solution to the Essequibo dispute, recognising Venezuela’s nullification of the 1899 decision.

But the newly independent Guyana refused to engage in direct negotiations with Venezuela, preferring instead to pursue UN-based mechanisms including through the General Assembly and the Security Council. In 1987, both countries agreed to thrash out their differences through a UN-mediated “Good Offices” process. During the Hugo Chávez era, integration with the neighbour was prioritised over territorial differences.

To begin with, Maduro continued along the same path. In September, 2013, months after Chávez’s death, he made an official visit to Georgetown and declared that the dispute was a legacy of colonialism. Then, in 2015, a consortium of oil companies led by Exxon Mobile discovered huge deposits of oil and gas in the disputed waters of Essequibo. And just like that, the conflict was reignited, but this time it is the US, not the British, that is stirring the pot.

All About the Oil

For the moment, it is Guyana’s vast untapped energy supplies that are of most interest to the US government and corporations. As a 2018 report by US Southern Command conceded, the US will have increasing difficulties securing enough energy to meet domestic demand in the decades to come. Though the report does not mention Guyana directly by name, it leaves little doubt that the US economy’s main source of energy supplies in the years to come will be its direct neighbourhood.

Then, in January this year, Southcom Commander Laura Richardson explained, with disarming frankness, US’ strategic interest in Guyanese oil in a speech to the Atlantic Council:

This region, why this region matters, with all of its rich resources and rare earth minerals: you’ve got the Lithium Triangle which is needed for technology today; 60% of the world’s lithium is in the Lithium Triangle, Argentina, Bolivia, Chile. You just had the largest oil reserves, light sweet crude discovered off of Guyana over a year ago. You have Venezuela’s resources as well with oil, copper, gold. China gets 36% of its food source from this region. We have the Amazon, lungs of the world. We have 31% of the world’s fresh water in this region too.

Below is a clip of the speech in all its glory. It is, I believe, a perfect illustration of late Major General Smedley Darlington Butler’s thesis that war is a “racket” — “possibly the oldest, easily the most profitable, surely the most vicious.” Like Butler in his day, General Richardson is nothing more than a “high-class muscle-man” — or in her case, woman — “for Big Business, for Wall Street and for the Bankers”; “a racketeer, a gangster for capitalism.” Unlike Butler (at least in his later years), Richardson seems to bask in the role.


If anything, war is even more of a racket today than it was back in Butler’s time (early 20th century), mainly because the business of war is so much larger. In Guyana, the US stands to benefit not only from gaining access to valuable mineral resources at dirt cheap prices — the production sharing agreement the Guyanese government signed with the Exxon Mobil consortium was so egregious that a former presidential adviser cautioned that the country was being “recolonised” — and without having to pay any of the externalities; it will also get to sell Guyana shiploads of US-made weapons and other military equipment.

And Guyana right now is rolling in money, despite the miserly conditions the Guyanese government agreed to in the contracts it has signed with Exxon. But how much of that money will be funnelled into the US military industrial complex, just as happens with all US wars? For example, Guyana’s coast guard just took delivery of a patrol boat built by Metal Shark, a US military contractor that has sold well over a dozen maritime combat vessels to Ukraine since the war began there.

As Julian Assange once said about the Afghan war, the goal is “to wash money out of the tax bases of the United States, out of the tax bases of Europe,” through the target country, “and back into the hands of a transnational security elite.”

As NC regular Joe Well notes in the thread below, the reputation and image of the US (and its imperial forebear, the UK) among the Venezuelan public are already in tatters:

Venezuelans have grown up seeing a map of their country that includes this territory, and being told how the evil British and the feckless Americans took it from them. And now the Yankee oil barons are stealing the oil, throwing only a small percentage to the current inhabitants.

Whatever the legal or diplomatic niceties, the image of the US is being permanently destroyed in Venezuela, a vastly more important country than Guyana (and if the terms of the deal are so lopsided, the image of the US may be badly damaged in Guyana as well).

Until the 2000s, it was widely joked that Venezuela was the most pro-US country in Latin America after Puerto Rico. Our leaders have not only reversed that, they are on the verge of creating an enemy for generations. Make no mistake, this is the kind of thing that breeds generational animosity, like the theft of Texas and Upper California has with Mexico, or the US intervention in 1898 has with Cuba.

Exxon’s Revenge

The US began taking an interest in Guyana, which boasts one of the lowest population densities on the planet, in 2015 — the same year that a consortium of firms led by Exxon Mobil discovered huge deposits of oil in waters off the coast of Essequibo. For decades Washington had more or less stood on the sidelines of the territorial dispute over Essequibo, calling for a “timely resolution” through bilateral negotiations. But that all changed in 2018, when it began calling for the hugely controversial 1899 arbitration decision to be upheld.

In the same year, Guyana filed an application before the International Court of Justice (ICJ) asking the Court to reaffirm the 1899 arbitration award that established the boundary between Guyana and Venezuela. In 2020, the ICJ ruled against Venezuela, whose government refuses to acknowledge ICJ jurisdiction on the matter.

As the Washington Post reported in 2017, the discovery of oil in Essequibo was the perfect revenge for Exxon’s then-CEO Rex Tillerson, whom Donald Trump would later go on to appoint as his secretary of state:

Rex Tillerson hadn’t been CEO of ExxonMobil very long when the late president Hugo Chavez made foreign oil companies in Venezuela an offer they couldn’t refuse. Give the government a bigger cut, or else.

Most of the companies took the deal. Tillerson refused.

Chavez responded in 2007 by nationalizing ExxonMobil’s considerable assets in the country, which the company valued at $10 billion. The losses were a big blow to Tillerson, who reportedly took the seizure as a personal affront.

Only Tillerson didn’t get mad, at least in public. He got even.

Flash forward to May 2015. Just five days after former military general David Granger was elected president of the South American nation of Guyana, unseating the country’s long-ruling leftist party, ExxonMobil made a big announcement.

In the deep blue waters120 miles off Guyana’s coast, the company scored a major oil discovery: as much as 1.4 billion barrels of high-quality crude. Tillerson told company shareholders the well, Liza-1, was the largest oil find anywhere in the world that year.

For tiny Guyana (population 800,000), the continent’s only English-speaking country and one of its poorest, it was a fortune-changing event, certain to mark a “before and after” in a country long isolated by language and geography.

There was just one problem with this undersea bonanza. Venezuela claimed the waters — and the hydrocarbons beneath them — as its own.

Clearly drilling in the disputed area was potentially a good business decision for ExxonMobil, not some sort of elaborate revenge scheme by its CEO

But revenge had been served. Venezuelan President Nicolas Maduro, Chavez’s successor, was livid.

“There is a brutal campaign against Venezuela of lies, funded by ExxonMobil … which has great influence at the Pentagon,” Maduro declared, calling the dispute an attempt to corner Venezuela and precipitate “a high-intensity conflict.”

Since then the US has waged a brutal economic war against Venezuela that has allegedly killed tens of thousands of people, according to a report by the Centre for Economic and Policy Research (CEPR). It has, with the help of the Bank of England, confiscated Venezula’s gold; and even tried to engineer a coup against the Maduro government by appointing Juan Guaidó “interim president”, with farcical consequences. Now holed up in Florida, Guaidó faces a raft of criminal charges back home including treason, usurpation of functions, profit or extraction of money, securities or public goods, money laundering and association to commit a crime.

Yet even as the US is on the verge of establishing another military foothold just across the border from Venezuela (Southcom already has seven or eight official military bases and many more unofficial ones in Colombia, whose Petro government has reestablished commercial and diplomatic ties with Caracas) in disputed territory, it is also in the process of lifting sanctions against Venezuelan oil, gas and gold. On Tuesday, Maduro asked Joe Biden to lift all the remaining sanctions and begin a new era of relations “at the highest level” — something the Biden administration is not ready to contemplate until at least after next year’s elections.

In the meantime, the distant drums of another US proxy war are growing louder in Latin America and the Caribbean, which has already seen its fair share of (largely US-sponsored) military conflicts and whose leaders in 2014 declared the region a “Zone of Peace.” But that peace could soon be shattered if the current cycle of ratcheting tensions between Venezuela and Guyana is not stopped.

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  1. JTMcPhee

    Wishing us hairy apes lots of luck getting to that “new just multipolar international order.” As long as greed-driven corporations get to use “national sovereign armies” and faux tribunals as instruments of corporate power, troubles like Essequibo will be the norm. Wishing it wasn’t so, but there it is.

  2. Argos

    Thank you for your accurate information. Just to clarify, Maduro’s plebiscite is a response to the expected American aggression, as you mentioned at the end of the text. It’s important to remember other areas of conflict in the subcontinent. Alongside the drug war in Peru and Ecuador, which you previously reported on, there may be an ongoing disagreement with China in the equatorial Pacific region. Alongside the drug war in Peru and Ecuador, which has been previously reported, there may be an ongoing disagreement with China in the equatorial Pacific region. This was highlighted in our blog: commenting on Pepe Ecobar’s text.
    All the US military and Coast Guard are involved in a significant fisheries initiative that appears to have grand aspirations. Both Peru and ecuador, with strong fishing industries, have complaints about China’s illegal fishing in their waters and the US Coast Guard has an action program on Illegal, Unreported, and Unregulated (IUU) Fishing aimed at the Asian country.

    Equally notable is the Atlantic Partnership’s desire to establish a NATO counterpart in the South Atlantic. As we previously observed: “the most ambitious initiative for the area, yet, is the Partnership for Atlantic Cooperation, with objectives that have yet indefined and which born at the United Nations General Assembly in New York”.

    It’s important to mention that Trump asked and Bolsonaro assigned a Brazilian admiral to head a department in Southcommand. Despite the election of Lula and Bolsonaro’s defeat, the coup attempt still demoralized the Brazilian Armed Forces. Nevertheless, the Brazilian admiral still stays in Florida and Lula could not or would not dismiss him. As you previously mentioned, the situation is very grave. Thank you for the information, which I will convey to X.

  3. The Rev Kev

    About 120 years ago when the US wanted to control the Panama Canal when it was built, they engineered a coup in that region of Colombia and used the US military to stop a Colombian force from taking back control. The US then recognized the rebels as the de facto government of the new Country of Panama which is why the US is still there to this day. Amusingly the Panamanian Declaration of Independence and Constitution plus the Panamanian flag were all written and designed in the Waldorf-Astoria Hotel in New York City-

    The reason that I mention this episode is that perhaps the US could do the same in Essequibo and make it a brand new country under it’s direct control. If they need a leader, then I am sure that Juan Guaidó could be persuaded to leave his Florida mansion and go there to become El Presidente. And General Richardson? I am sure that she could be appointed as the Consul for this new country and oversee the construction of one of the newest, biggest US bases overseas as well as a port to export all that oil and gas to the US from.

      1. ambrit

        From even earlier, the Dominican Republic’s Trujillo.
        Then, also, Nicaragua’s Somoza family.
        And, lest we forget, Chile’s Pinochet.
        America has ‘form’ when it comes to “influencing” Latin American politics.

  4. Mikel

    It seems like an issue that would make another BRICS + country put more money into military spending rather than other development.

  5. PlutoniumKun

    Thanks for bringing this to our attention, as so often, NC goes places the rest of the media ignores.

    Its an odd oversight that nobody seems terribly interested in the views of the 100,000 or so people who have lived in the disputed region for generations. They appear to be largely indigenous peoples with (like much of Guyana) a strong ethnic mix with South Asian immigrants from the 19th Century. The border areas with Venezuela is one of the strongholds of the ethnic tribes. The common language in Guyana is English or forms of English Creole.

    I’m no expert on international law, but it seems to be that Venezuela’s claims are not very strong. They have refused UN arbitration and in the past they did accept the existing boundary at tribunal, albeit subsequently having withdrawn their agreement. Its also worth pointing out that the 1899 Tribunal actually granted a significant chunk of the headwaters of the Essequibo to Venezuela – this is now a permanent part of Venezuela – presumably they don’t intend to offer all these lands back into the ‘pot’ if there is some sort of new agreement reached.

    It seems to me that the only satisfactory resolution to disputes like this is to ask the people who live in the disputed area. My guess is that they’ll vote with the oil money.

    On the issue of oil and other resources, there is not likely much to be won within the landmass – geologically, most of Guyana is old volcanic shield rocks which can be very rich in heavy minerals such as gold, but its generally hard and expensive to extract, and Guyana is noticeably deficient in much infrastructure. Any mining is likely to be very small scale, unless deposits are found on the narrow coastal strip. Even then, Guyana’s lack of a natural deepwater harbour would be a major impediment.

    The oil is what matters. It should be noted that the off-shore deposits off Guyana have been explored since the 1950’s but up to relatively recently nothing particularly valuable was found. The off-shore shelf is part of a very rich potential deposit of what are known as pre-salts that extend right along the continental shelf of South America, dating from when Pangaea broke apart. The oil reserves in Guyana are actually a direct match of similar oil deposits off Senegal in Africa. The oil deposits formed in the shallow sea that grew as the two continents came apart.

    The big discoveries are not in dispute – they are in the south-east of the geological area, which is closer to Surinam than Venezuela. On the assumption that you draw a straight line out from the Essequibo to delineate a hypothetical boundary between the two countries, nearly all the rich deposits would still belong to Guyana.

    While the early deals (which didn’t come to much, most exploration on the north-west hasn’t hit particularly rich deposits) were not very favourable to Guyana, the more recent ones, which feature enormous deposits of apparently high quality crude seem to be better, although of course inevitably Exxon are much more likely to be able to drive a good deal. Guyana is however developing a Sovereign Wealth Fund that, at least in theory, follows international best practice. Whether Guyanas institutions are up to this is anyones guess. But what is true is that even a bad deal is extremely important for the country – it is leaping from one of the poorest countries in South America to potentially its richest in a very short time. Its GNP grew by a staggering 38% last year alone.

    1. Eclair

      PK, thank you for pointing out that there are indigenous peoples in the disputed region, who undoubtedly have some opinions. But, since official US/Western policy seems to be, ‘what people?’ they probably don’t have a chance.

      And, thanks, Nick for a look at this little-known region of SA. I recognize ‘Demerrara’ because of the sugar. Maybe Ha Joon Chang can talk about it in a second round of “Edible Economics.” (I can’t remember if he includes it in the first edition.). But remember the Stately Homes of England, built on the sugar/slave trade.

  6. furnace

    “Those countries include Canada, which has mining interests across Latin America, Brazil and”

    Sentence got cut off. Otherwise excellent article, thanks for keeping this issue around, it’s extremely important and is getting overshadowed by everything else.

  7. Carolinian

    Readers will not be surprised to learn that the initial antagonist in the dispute was the British Empire

    Word. As for the current US meddling perhaps, per Mark Twain, reports of the death of the Monroe Doctrine have been greatly exaggerated.

    Thanks for the excellent summer upper.

  8. Joe Well

    What is missing here is that generations of Venezuelans have grown up seeing a map of their country that includes this territory, and being told how the evil British and the feckless Americans took it from them. And now the Yankee oil barons are stealing the oil, throwing only a small percentage to the current inhabitants.

    Whatever the legal or diplomatic niceties, the image of the US is being permanently destroyed in Venezuela, a vastly more important country than Guyana (and if the terms of the deal are so lopsided, the image of the US may be badly damaged in Guyana as well).

    Until the 2000s, it was widely joked that Venezuela was the most pro-US country in Latin America after Puerto Rico. Our leaders have not only reversed that, they are on the verge of creating an enemy for generations. Make no mistake, this is the kind of thing that breeds generational animosity, like the theft of Texas and Upper California has with Mexico, or the US intervention in 1898 has with Cuba.

    How many friendships can the US afford to squander?

    1. ambrit

      “How many friendships can the US afford to squander?”
      Not so much “friendships” as Client State to Hegemon relationships.
      The details concerning the fraught relationship between Venezuela and Exxon Mobil Oil show the basic dysfunction. An American based commercial concern ruthlessly exploits local populations in the extraction of finite resources. There, in a nutshell is the history of Latin America over the past two hundred years.
      China gets a passing mention, but, realistically, (Realpolitik?) the BRICs nations, especially have interests that steer them towards pitting a spanner (spammer?) in the works of the American State Department’s machinations in the region. As the American Hegemon declines, expect to see more ‘disputes’ in the region ‘encouraged’ by “outside actors.”

      1. Joe Well

        That kind of extremely broad brush misses a lot.

        In Venezuela, there was a certain amount of anger for US support for the Pérez-Jiménez dictatorship in the 1950s, leading up to the infamous scenes of Nixon being attacked by a mob on the streets of Caracas.

        But then Venezuela nationalized foreign (mostly US) oil assets in the 1960s-1970s on a mostly friendly basis, founded OPEC, and then reaped a windfall with the OPEC oil embargo. Through all that, Washington didn’t try to get up to any Guaidó-level shenanigans. And Venezuelans famously kept shopping in Miami, importing US beauty pageants, movies, clothes, cars, music, junk food, in short, leading the charge of US consumer culture into Latin America.

        Venezuelans from the 1960s to the 1990s could see themselves as having a relationship with the US similar to what Canada has, a relationship that was as equal as could be realistically expected given the obvious power differences, and in the case of Venezuela, the absolutely unbelievable-even-by-the-standards-of-the-Western-Hemisphere levels of corruption.

        The warm feelings kept going right through the early years of the Chavez administration, but the George W. Bush regime turned the tide and more and more the US became associated with the reactionary upper middle class.

        1. ambrit

          Would the growth of the population, tied to the unequal distribution of wealth contribute to a growing over time antipathy to both the local “reactionaries” and their perceived American backers?
          Didn’t Chavez use that “unrest” to drive his populist political machine into power? Maduro, despite his ‘backsliding,’ has continued many of the “populist” politics of his predecessor.
          So, the basic question is, (and it applies to North America as much as Latin America,) who does the majority of the population mentally associate themselves with? The Elites or the Populii?

  9. Rubicon

    From Francesco Sassi on Twitter:
    🚨🇻🇪Venezuela could launch an invasion of🇬🇾Guyana’s oil-rich Essequibo area after a referendum on annexation to be held on Sunday.
    🇬🇾is the rising star of the #Oil market
    🇻🇪a fading superstar
    🛢️Latin America is getting closer to a energy war with global implications

    In another map, Sassi notes that US oil tankers have off-shored themselves on a nearby island.

  10. Rubicon

    A very valid narration of the past and present situation in that area of the World. Thank you.
    But now it’s 2023/24 and the US Financial issues are now having to combat the growing dominance of China, Russia, some BRICs nations. As Michael Hudson has pointed out, repeatedly, more nations are turning away from the use of the US$. (Whether they will be successful, we don’t know.

    As this change continues, we see the US Financial Power beginning to lash out in Israel, with the ultimate gain of destroying Iran. If that’s accomplished, it will hurt Russia/China/others financially.
    Meantime, the US oil barons in/near Guyana are pressing against Venezuela – a country that is part of the BRICS. This is part of the war that’s being fought: between Western Financial Powers and those in the East and Southern hemispheres.

  11. Bernie Simon

    The policies of Chavez and Maduro have caused six million Venezuelans to flee the country as economic refugees. The controversy over Essequibo is only an attempt to divert attention from the corruption and failed policies of the Venezuelan government, just like Argentina’s invasion of the Falklands / Malvinas was that government’s attempt to divert attention from the failure of the dictatorship then in power.

    1. furnace

      Notably missing from your post is a criminal sanction regime imposed by the US, which frankly is far more damaging than anything the Maduro government could muster (not to mention the billions in gold stolen by the US/UK). Or are you going to say Cuba’s woes are likewise its own fault?

      1. GM

        The biggest villain in the Cuban story is the 1980s Kremlin.

        Sanctions are generally a good thing — they stimulate the internal economy and build up resilience and self-sufficiency.

        Cuba, Iran and North Korea would have mostly benefited from them, all else equal, and you see what is happening in Russia now.

        Inversely, Eastern Europe was sold by the Kremlin to the West in exchange for the vague promise of the late Soviet elites joining the club of the rulers of the world, and was mostly ruined by being in the EU and not being sanctioned.

        But all else is not equal — you need to also have the resources to be self sufficient, and you need to have a firm grip on the country and govern it properly.

        Cuba (and North Korea too) got screwed royally by the Kremlin’s betrayal of socialism, which resulted in them going cold turkey on oil and other commodity imports while losing their main export market. At least it’s a tropical island so you don’t freeze to death and total starvation could be avoided (with a serious weight loss though). North Korea got hit much worse. Could have been a much different picture now had the Kremlin not done that.

        Venezuela’s problem is that there was never a real serious revolution and physical extermination or expulsion of the existing elites. They are all still there, and the same corruption networks that ran the place previously are still in place. You do a thorough cleansing of that mess, and there might be a positive course of development in the future. It has the resources — lots of oil plus a relatively low population density in a fertile environment — to prosper.

    2. Joe Well

      Major differences:

      1. The Falklands were in the processing of falling into Argentina’s lap when the dictatorship launched the invasion, the opposite is happening here.
      2. The Falklands are economically almost worthless, the opposite of this scenario.
      3. The current Venezuelan government is not a military dictatorship that throws activists out of airplanes into the ocean.
      4. The Falklanders had been united in their independence from Argentina for a long time. Meanwhile, the loyalties of the residents of the disputed territory weren’t so clear before there was oil money to buy them. In the 1960s and 70s, a rebel group in the disputed territory actually tried to get Venezuelan recognition and citizenship.
      5. The Argentineans were the clear aggressors, while the US is looking pretty aggressive now. In the 1960s, the UK, Guyana and Venezuela agreed that the territory was in dispute and that the status was unsettled, the current oil exploration could be seen as undermining that status quo. With the Falklands, the dispute discussions were interrupted by the invasion, which clearly undermined the status quo.
      6. The Falklands are not in Argentina’s territorial waters. Venezuela and Argentina meanwhile have a classic border dispute, the kind that exists all over the world, except for the magnitude of the dispute from Guyana’s point of view.
      7. The Falklands were not being militarized, while it looks like that may soon happen in the disputed territory.
      8. Argentina was not subject to extreme foreign interference from the US the way Venezuela has been over the last 20 years–of course they need to keep the US and any proxies away from their borders.
      9. Venezuela has been pursuing this issue diplomatically, rather than launching a theatrical military invasion and changing the direction of street traffic.

      However, one huge lesson to be drawn from the Falklands War: the Argentinian government still milks the Falklands War for propaganda value, the “pibes del Belgrano” (sailors who survived the sinking of the Belgrano) are still trotted out and even sung about in football chants at the World Cup, and it is still cited as a reason not to trust the US (which played both sides of the conflict)–despite the fact that to any objective observer the invasion was insane. Now imagine how a US-backed war with Venezuela will be remembered?

      And not just in Venezuela. The Falklands War amazingly got Argentina a lot of sympathy, and the US a lot of ill will, in Latin America. Imagine how much more sympathy and ill will will come from a fully justified war of national self-defense following 20 years of economic attacks? And just as the US is losing its grip on the Old World.

      1. GM

        2. The Falklands are economically almost worthless, the opposite of this scenario.

        Not really true, it’s on the Atlantic shelf, and much of the oil discovered around the world in recent decades is associated with the structures that formed when Gondwana broke up. There was a nice shallow sea there when some of those Mesosoic anoxic events happened, then the geology turned out right to trap a lot of organic material and form oil.

        All those deposits along the African coast and along the Brazilian coast are the result of that.

        It extends to Argentina too, and I’ve seen estimates on the order of half a billion barrels specifically around the Falklands.

        A drop in the bucket in the grand scheme of things, but we are scraping the bottom of the barrel at this point, and given see how excited people are about relatively tiny finds like those off the coast of Guyana, this is not insignificant.

        1. Joe Well

          In the period in question, the British government seriously considered saving money by turning the islands over to Argentina over the opposition of the islanders, though in actual practice the islands were tightly linked to Argentina economically.

  12. GM

    In the deep blue waters120 miles off Guyana’s coast, the company scored a major oil discovery: as much as 1.4 billion barrels of high-quality crude. Tillerson told company shareholders the well, Liza-1, was the largest oil find anywhere in the world that year.

    Just so that people who don’t have these numbers always in their heads get a proper perspective on the significance of these deposits:

    The world consumes ~95M barrels of oil a day, of which the US uses ~20M.

    So those 1.4 Bbl are 70 days of US consumption and two weeks of world consumption.

    Pretty much a drop in the bucket.

    Likely the bigger reason Venezuela is ready to go to war is the prospect of establishment of US bases in Guyana, because Venezuela itself does in fact have massive oil reserves that the US can live off for about half a century (with all the caveats about heavy oil and Orinoco Belt tar sands) and the US has to control it for that reason. But right now Venezuela is an enemy country, so they might be looking to play the Ukraine scenario but on a smaller scale.

    P.S. 1.4Bbl being the largest discovery that year tells you where things are headed. Somehow oil production still increased after circa 2008 we were all convinced Peak Oil has truly arrived, for reasons having to do with how detached from how the real world conventional economics mantras actually are, but the end is indeed nigh. A few decades sooner or later doesn’t matter all that much in the grand scheme of things.

  13. GM

    One more thing to add — Guyana also has a territorial dispute with Suriname about a fairly sizable piece of rainforest along the Brazilian border, and Suriname in turn has a territorial dispute with French Guiana too,

    It’s a total colonial mess…

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