{"id":178653,"date":"2021-02-08T12:00:26","date_gmt":"2021-02-08T12:00:26","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=178653"},"modified":"2021-02-04T05:33:24","modified_gmt":"2021-02-04T05:33:24","slug":"how-exxonmobil-uses-divide-and-rule-to-get-its-way-in-south-america","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2021\/02\/how-exxonmobil-uses-divide-and-rule-to-get-its-way-in-south-america\/","title":{"rendered":"How ExxonMobil Uses Divide and Rule to Get Its Way in South America"},"content":{"rendered":"

3 Feb 2021 – <\/em>Tensions rise between neighboring Guyana and Venezuela over a piece of land that has been disputed since at least 1835. Both Guyana\u2019s President Irfaan <\/a>Ali<\/a> and Venezuela\u2019s President Nicol\u00e1s <\/a>Maduro<\/a> 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 \u201cgood offices<\/a>\u201d process<\/a>; as recently as 2013, President Maduro and Guyana\u2019s then-President Donald Ramotar said<\/a> that the discussions over Essequibo were \u201cgoing well\u201d under this UN framework.<\/p>\n

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 \u201cgood offices\u201d to the International Court of Justice, which ruled<\/a> in December 2020 that it has jurisdiction over the case.<\/p>\n

It\u2019s All about Oil<\/strong><\/p>\n

Things changed in 2015 because of oil.<\/p>\n

ExxonMobil, one of the world\u2019s 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<\/a> ExxonMobil from Venezuela\u2019s Orinoco Basin oil fields because the U.S. multinational corporation refused to comply with the new Venezuelan laws. ExxonMobil turned its attention toward Guyana and\u2014in particular\u2014to 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<\/a>, Guyana\u2019s neighbor to the east.<\/p>\n

In 2015, ExxonMobil announced<\/a> that it had found 295 feet of \u201chigh-quality oil-bearing sandstone reservoirs\u201d; this is one of the largest oil finds in recent years. A close reading of the Production Sharing <\/a>Agreement<\/a> (PSA) between Guyana\u2019s 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 (\u201cStability of Agreement\u201d) says that the government \u201cshall 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\u201d without the consent of ExxonMobil. This agreement traps all future Guyanese governments in an inexcusable deal that has been made on disputed waters.<\/p>\n

Having studied the contract, Dr. Jan Mangal\u2014a former presidential adviser<\/a> to President Granger and a consultant for the Danish company NTD Offshore\u2014said<\/a> that this deal was one of the worst that he had ever seen. Guyana, Mangal argued, is being \u201cre-colonized,\u201d by which he meant that the deal would \u201cmake 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.\u201d Even the International Monetary Fund weighed in with a report<\/a> 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, \u201care relatively favorable to investors by international standards\u201d with royalty rates for Guyana \u201cwell below of what is observed internationally.\u201d<\/p>\n

Divide and Rule<\/strong><\/p>\n

When the Romans went out to conquer the Mediterranean world, they did so by the policy of divide et impera<\/em>, divide the adversaries and then rule over them. The operations of ExxonMobil, with the help of the U.S. government, clearly show them egging on the conflict between Guyana and Venezuela over the Essequibo region so that ExxonMobil benefits in the chaos.<\/p>\n

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 \u201cSchomburgk Line\u201d 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<\/a> in her 1972 study on the Venezuela-Guyana boundary dispute: 1899-1966). U.S. President Grover Cleveland watched these developments and then noted<\/a> that the Schomburgk Line had been \u201clargely extended in some mysterious way\u201d and is treated as \u201cso infallible, and so sacred\u201d that they will not accept anything other than full annexation; \u201cThe trader,\u201d wrote President Cleveland of the British motivation, \u201cis again in evidence.\u201d<\/p>\n

The trader returned to the story with ExxonMobil.<\/p>\n

Guyana\u2019s government used<\/a> money from ExxonMobil \u201cto meet the estimated cost in 2018 of presenting Guyana\/Venezuela controversy at the International Court of Justice including payment of legal fees.\u201d In mid-2020, the Guyanese paper Kaieteur News\u2019 senior reporter Kiana Wilburg<\/a> broke the story<\/a> that the World Bank had paid $1.2 million to Hunton Andrews Kurth, a law firm long<\/a> associated with ExxonMobil, to revise Guyana\u2019s petroleum laws. Wilburg\u2019s report quoted the former presidential adviser Dr. Jan Mangal, who said that the government was \u201cletting the very companies we need to regulate dictate the country\u2019s business. This is a recipe for failure. And as you can see, we are failing.\u201d<\/p>\n

Before attention could be brought to the sweetheart deal given to ExxonMobil, and the opportunity for ExxonMobil\u2019s lawyers to write Guyana\u2019s laws, then-U.S. Secretary of State Mike Pompeo arrived in Guyana in September 2020. He was on a three-day tour of Venezuela\u2019s neighbors\u2014Guyana, Brazil, and Colombia\u2014to accelerate the U.S. hybrid war<\/a> against Venezuela. It was an odd situation. The CIA had overthrown<\/a> Guyana\u2019s democratically elected government of President Cheddi Jagan in 1964. More than half a century later, the U.S. was trying to use Guyana as an instrument of regime change against Venezuela. That is why the Guyana Human Rights Association asked<\/a> President Ali to \u201cavoid any recklessness.\u201d Pompeo\u2019s quid pro quo on the table was that if Guyana joined the crusade against Venezuela and tightened its embrace of ExxonMobil, then the U.S. would support its claims to Essequibo.<\/p>\n

A columnist for Kaieteur News wrote a sharp commentary<\/a> after Pompeo left the country. \u201cHere we are, caught in the middle, between Exxon and Venezuela and we have nothing to show for it. We Guyanese don\u2019t even know the full details regarding oil deals conducted on our behalf, by our political leaders with Exxon\u2026 We talk about oil and the man comes and talks about terrorism and drugs and the sea\u2014the things that matter to America. He protects his own, delivers to his own,\u201d the columnist wrote. \u201cOnce again, Guyanese got nothing.\u201d<\/p>\n

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.<\/p>\n

_______________________________________________<\/em><\/p>\n

\"\"<\/a><\/em>Vijay Prashad<\/em> 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<\/a> and the director of Tricontinental: Institute for Social Research<\/a>. He is a senior non-resident fellow at Chongyang Institute for Financial Studies<\/a>, Renmin University of China. He has written more than 20 books, including <\/em>The Darker Nations<\/a> and<\/em> The Poorer Nations<\/a>. His latest book is <\/em>Washington Bullets<\/a>, with an introduction by Evo Morales Ayma.<\/em><\/p>\n

This article was produced by Globetrotter<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

3 Feb 2021 – Tensions rise between neighboring Guyana and Venezuela over a piece of land that has been disputed since at least 1835. ExxonMobil sits on the sidelines, smiling. The distraction suits the oil giants. They make their money whether there is peace or war.<\/p>\n","protected":false},"author":4,"featured_media":104534,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[1441,2339,2340,1050,541,557],"class_list":["post-178653","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latin-america-and-the-caribbean","tag-big-oil","tag-exxonmobil","tag-guyana","tag-imperialism","tag-latin-america-caribbean","tag-venezuela"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/178653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=178653"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/178653\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/104534"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=178653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=178653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=178653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}