Written by Anton Khimiak, UCMC/HWAG analyst
A referendum was held on December 3, 2023, at the request of Venezuelan President Nicolas Maduro, with, according to the results, 95% supported the decision to annex a third of Guyana’s territory to Venezuela. Moreover, as reported by the head of Venezuela’s National Electoral Council (out of 20.7 million Venezuelans eligible to vote) more than 10.5 million people voted in the referendum. The referendum reignited a century-old territorial dispute concerning the 160,000 square kilometres of the Essequibo region in western Guyana, inhabited by roughly 200,000 Guyanese who primarily communicate in English and indigenous languages.
Venezuela’s escalation has drawn international attention due to the potential impact on regional stability and natural resource exploitation. Even though the dispute is primarily between Venezuela and Guyana, there are forces at work in the international arena who wish to heighten tensions.
One of these players is the Russian Federation, which is closely linked to Venezuela and its leader Maduro.
Background to the conflict
The origins of Venezuela and Guyana’s territorial dispute are lost in the colonial era. Guyana was a Dutch colony before becoming a British one in 1814, however, in 1966, the country declared independence.
Venezuela gained its independence as a sovereign state in the early 1830s and since then, Caracas has argued that the former Dutch colony of Essequibo, which became part of British Guiana (now Guyana) as a result of the Napoleonic Wars, should be returned to Venezuela. The discovery of gold in the disputed territory complicated matters even further. An international arbitration panel ruled in British Guiana’s favour in 1899, but Venezuela has consistently rejected the decision, claiming that its government was not properly represented during the arbitration process.
The discovery of significant oil reserves off the coast of the Essequibo region has added a new dimension to the territorial dispute. Major oil companies, including ExxonMobil of the United States, have made significant investments in exploring and producing oil from offshore fields.
Today, Venezuela, which has been mired in an economic crisis for years, sees the annexation of Essequibo as a way to gain access to valuable resources while also improving its own financial situation. Guyana’s proven oil reserves are currently estimated to be 5.5 billion barrels (investigations are still ongoing, and additional reserves may exist). According to ExxonMobil, Guyana is already on par with Venezuela in terms of daily production (620,000 barrels versus 750,000).
However, Guyana sees the oil deposits as an opportunity that could propel the country to the forefront of the global oil market. It is worth noting that, unlike its unsuccessful neighbour, the government of Guyana is attempting to diversify its revenue sources. This is accomplished by investing money generated by oil production in highly productive sectors (education, infrastructure, and medicine). The country’s economy grew by 57% in 2022, more than any other country on the planet.
Friendship in a dictatorship
Russia’s support for Venezuela’s territorial claims to Guyana can be seen as part of the country’s efforts to increase its influence in Latin America. Russia could assert its presence and influence in a region traditionally dominated by the United States if a hypothetical Venezuelan operation succeeds.
Furthermore, Venezuela and the Russian Federation have enjoyed close historical ties since the Venezuelan president Hugo Chavez (1999-2013). Chavez was a frequent visitor to the Kremlin at the time and a key kremlin ally when it came to anti-Americanism.
Following Hugo Chavez’s death, Nicolas Maduro maintained his focus on Moscow. However, as a less charismatic and strong leader, he became more reliant on his geopolitical partner, especially against the backdrop of domestic political protests and a deepening economic crisis.
According to various sources, during the opposition protests in Venezuela in 2019, this was when Moscow dispatched a number of Wagner PMC fighters to protect the dictator.
Simultaneously, the Kremlin used the protests to bolster its narrative to demonise the West. According to the Russian Ministry of Foreign Affairs, “Only Venezuelans have the right to determine their own future.” External interference is unacceptable, especially in the current extremely tense situation. Incitement has no place in the democratic process. It leads straight to lawlessness and bloodshed.”
All anti-Russia protests are accompanied by similar rhetoric. Such statements were made during Ukraine’s Dignity Revolution and in Belarus in 2020-2021, and they are now being made in the context of protests in Serbia.
In turn, Maduro expressed his support for Putin’s regime during the so-called “March of Justice” led by Wagner PMC leader Yevgeny Prigozhin. The Venezuelan president declared “Putin’s great victory over the attempt to start a civil war” after the uprising was squashed.
As preparations for the annexation of the Essequibo region began, Guyanese authorities attempted to resolve the territorial dispute through international organisations. Caracas, on the other hand, has already stated that it will not recognize any decision made by the International Court of Justice.
As a result, Venezuela remains one of the Russian regime’s most important global allies. Both of these states are not only attempting to destabilise their respective regions, but they are also constantly pointing out that international organisations do not play the necessary role of arbitrators in international conflicts.
Economic interests of Russia
Guyana has currently licensed many foreign companies to develop and produce in its own fields. To avoid the fate of the Maduro regime, most activities in the oil basin are much more transparent and based on market mechanisms. Simultaneously, the Kremlin did not respond to the “Guyana oil boom” because doing so would contradict friendly relations with Venezuela.
At the same time, Moscow, whose economy is under pressure from a slew of sanctions, needs to keep energy prices as high as possible. The global oil market crisis will provide it with the necessary revenues to continue its expansionist policy.
Furthermore, the discovery of large oil fields in the Essequibo region presents a lucrative opportunity for Russian companies, as Russian oil companies are among Venezuela’s main creditors. Venezuela’s economic reliance on Russia is one of the key components of the dictators’ alliance.
If Maduro’s regime annexes Essequibo, Moscow will be able to expand its mining operations in the region, and thus receive new dividends from Latin America. Furthermore, tensions in the energy-rich region, as well as the possible suspension of production at Guyana’s facilities, will also drive up oil prices. Therefore, the Russian Federation will be able to continue selling its own resources at super-profitable prices.
The Kremlin’s strategic calculations
- Russia strategically supports Venezuela’s claims in the Essequibo dispute, enabling a continued military presence in the region while also serving as a major consumer of Russian military equipment in Latin America.
- Following the outbreak of the Israeli-Palestinian war, international attention to the Russian-Ukrainian war has waned. As a result, increased tension in the United States’ “backyard” is extremely beneficial to Moscow. Not only would this divert attention, but it would also disperse military and financial support formally allocated to Ukraine.
- Venezuela’s territorial claims to neighbouring states (tensions also exist with Colombia) could set a number of precedents that the Russian leadership could use to undermine international law. The Kremlin’s stooges are concocting the idea of redistributing global influence spheres. Destabilisation in various parts of the world, they believe, will eventually exhaust the West’s resources and force Washington to negotiate a separate peace on Moscow’s terms.
However, the Russian leadership must also consider the consequences of backing Caracas’ ambitions. Brazil, for example, has expressed concern about Venezuela’s claims and has actively participated in the mediation mission. Russia’s support for Venezuela may aggravate relations with Brazil, with which it has been attempting to strengthen economic and political ties within the BRICS framework.
In summary, Russia’s support for Venezuela’s territorial claims to the Essequibo region stems from a mix of geopolitical, economic, and strategic considerations. Moscow’s primary motivation is a desire to disperse US military and technological resources. As a result, Kremlin strategists believe that Washington will be forced to diversify its limited resources of foreign policy assistance aimed at deterring Russia and China. That is, Russia seeks to expand its influence in Latin America, challenge Western dominance, and gain valuable economic opportunities in solidarity with Venezuela.
