Essequibo binational refinery

Private license recently awarded by the OFAC to Chevron has supplied controversy. Department of Treasury simultaneously provided a political definition for Venezuelan President Nicolás Maduro. It looks like the carrot is the license, and the stick is the definition awarded to President Maduro. Everyone is acting cautiously: Chevron is not commenting much publicly, probably because right now it is concentrated in developing its newly found relationship with Exxon Mobil, regarding Stabroek joint venture in Guyana. We must also remember that Exxon Mobil used to work at Cerro Negro, also known as Carabobo Orinoco Belt oil field. Such investment was expropriated by former President Hugo Chávez, which led to Exxon Mobil's recent embracement of Guyana.

Cerro Negro, Hamaca, Zuata and Machete are well known Orinoco fields: in need of investment to which ENI, Repsol and Chevron are already working. Exxon Mobil would probably like to return, if conditions become more favorable. Since Exxon Mobil and Chevron are already learning how to work together in Stabroek, the next step should be building the Avanza refinery in Essequibo, probably in Pomeroon Supenam Atlantic coast. This will provide an opportunity for Guyana to hold the juiciest part of oil business: which is refining and upgrading crude, instead of just selling it directly from offshore into the international community. The new Essequibo refinery would be suitable for the needs of Orinoco Belt Fields in Venezuela, which would be linked by pipelines to decongest Puerto La Cruz, El Palito and the new Carabobo upgrader.

Essequibo refinery amount of production is expected to be enormous, meeting refining requirements across all over Venezuela and Guyana. There is noise that Exxon Mobil left other ventures in Guyana, to only concentrate in Stabroek. That should not be considered a flag. It's just a recomposition of business. Guyana will probably award those concessions to other petroleum companies. Hopefully Pdvsa will become more solvent and more reputable, with all this investment that is receiving from Chinese, Vietnamese, Spanish, Italian, French, Indian and Russian oil interests. Pdvsa could also enter the profitable Guyana oil industry, and Guyana can start refining Venezuelan oil. The more we concentrate in fostering the wonders of economies of scale, along with Latin American and Caribbean integration, through harmonious relationships between Venezuela and Guyana: through a combined escape refinery facility, the less important will become the border disputes.

The Geneva Agreement of 1966 already provides for joint economic exploitation of Essequibo. So the legal framework is there. We just need some political agreements between Nicolás Maduro and Irfaan Ali, or the next president of Guyana who will be known on September 1st. Of course additional investment in Trinidad and Tobago, mostly by Shell, could also benefit from a new refinery in Essequibo, enhancing Trinidad and Tobago's traditional role in functioning as a reasonable neighbor: often inviting Guyana and Venezuela to dialogue. Building a pipeline between the Orinoco belt and the new Essequibo refinery would require an additional bridge over the Orinoco, and perhaps over rivers such as Cuyuní or Mazaruni, or any of their tributaries, as well as the roads which would also develop tourism for benefit of Warao communities, and educational opportunities on the job training for petroleum industry, which would also include language learning so that Guyanese learn Spanish and Venezuelans learn English.

Venezuelans recently elected their mayors in municipalities. I was surprised that there were no elections of mayors in the municipalities of Barima Waini, Pomeroon Supenaam, Cuyuní Mazaruni, and Potaro Siparuni, among others. I was absolutely displeased when I heard Diosdado Cabello mentioning that there were no elections for those municipalities, with the excuse that the territory was not divided into municipalities. We all know those municipalities, or regions as they are called in Guyana, already exist. Therefore, at this time I do not agree with the lack of precision in the handling of Venezuelan claims for the state of Guayana Esequiba. If Venezuela intends to exert power over Guayana Esequiba municipalities, or in Guyana's Western regions: the existing names and regional borders should be respected. Guayana Esequiba, as is considered Venezuela's 24th state, is too big to only consist of one municipality. These imprecisions do not help the Venezuelan cause.

We recently elected a national assembly that should also address a similar situation, that happens in the Capital district of Caracas and in Vargas state recently renamed La Guaira. Caracas is the Capital District and is divided into parishes. The idea is to combine some of the parishes into new municipalities. That has not been done yet. Vargas also has many parishes, and they should be combined in three or four municipalities: La Guaira, Maiquetía, Naiguatá and Catia La Mar. Perhaps Caracas could also be divided into Northwest Caracas, Northeast Caracas, Southwest Caracas, Southeast Caracas and Downtown. You see names like El Recreo, El Paraíso, Catia, the most populous parishes. So my personal preference at this time, regarding the Essequibo dispute, is to continue using the Guyana assignments for regions, because Venezuela did not care to organize municipal elections for such municipalities.

I voted in the December 2023 referendum to disregard the International Court of Justice verdict on the Essequibo disputes. I still don't like much the idea, but I recognize that if I am proposing a refinery: that must be built according to thousands of international law details, perhaps it will be better just to abide. The economic interest of both Venezuela and Guyana should prevail, over a territorial dispute in which neither of the two countries have done enough, for the populations of what in Guyana are called regions and in Venezuela has not been defined as municipalities. Such territory is the Essequibo or Guayana Esequiba. Conducting business with this uncertainty is obviously a mess.

It will be necessary that the populations of Guyana and Venezuela, who want economic development, start talking to each other: and see how a common refinery in Pomeroon Supenaam region 2 would be beneficial for both countries. It is true that Guyana's Stabroek oil is light: it needs little refining. It could be used for the production of gasoline or kerosene, for export to regional and international markets. It would be wise for Guyana to invest in upgraders and pipelines, not only in extracting pure crude. Downstream jobs would be created. Venezuela definitely needs to diversify: because Venezuela has much oil which should be developed, as we compete with other countries with higher costs. As the price of oil might not rise much, and it could actually decline, we should be prepared to increase our production: so that we can secure some revenue and also bring more costly producers in other continents out of business.

There is also the controversy on ExxonMobil, whether they would be interested in coming back to Venezuela, after resentment for having been expropriated. It is my personal opinion that Nicolás Maduro is a better president than what was Hugo Chávez. Hugo Chávez expropriation of ExxonMobil was a very bad move. The Carabobo field has been very difficult to operate. Cerro Negro investment by ExxonMobil was substantial: a lot will need to be reinvested because previous historical decisions were bad and wasteful for the environment, wasteful for our finances, wasteful for our political inclusion. Perhaps if Chevron and ExxonMobil develop a harmonious relationship on Stabroek, and the Essequibo refinery is supported by PDVSA, and Guyana oil companies and pipelines arrive from Orinoco Belt, then Chevron and ExxonMobil will cooperate even more. It would be interesting to see if ExxonMobil and Chevron will continue being antagonistic competitors, in the United States and most countries around the world, but will work in harmonious partnership in both Guyana and Venezuela. That would be a hilarious example of careful and strategic diversification of interests.

In the meantime, we must still be very cautious as information is not complete. I would like to thank Tammy Bruce from the Department of State. She is an excellent spokeswoman. She is very precise in translating the horrendous Marco Rubio statements that provide no trust in mostly any country. Tammy Bruce stated that there are two details and she was probably referring to OFAC, Office of Foreign Assets Control, that she was not sure as they are secret. She promised to get back to us and explain what those two details are. We should be patient as Tammy Bruce will probably explain a little more. Tammy Bruce is probably aware that Chevron has joined ventures such as Petroindependencia, Petroindependiente, Petropiar and Petroboscán with Pdvsa which are Venezuelan companies. Their accounting is in Venezuelan Bolivars and transactions are legally conducted in Bolivars.

The reason why OFAC is not publishing the license is because they are aware of this contradiction. If Chevron owns 40% stakes of joint ventures, it can legally conduct Venezuelan business using the Bolívar currency, because it has a special license allowing it to do so. We still hear the rhetoric of Marco Rubio, that no oil money will be transacted into Venezuela, which Tommy Bruce had to repeat in haste. Notice that in Tammy Bruce's press conference, she went extensively in details of Gaza, because those are easier to explain. The carrot and stick strategy of the United States with respect to Venezuela and Nicolás Maduro, is so contradictory that they don't know how to legally frame it. Of course they are not willing to publish it. But it exists.

Reuters reported as a fact that such a private license for Chevron exists. Usually when Reuters publishes something, it has already been confirmed. Reuters usually doesn't mess up these sensitive matters. It is necessary that Venezuela and Guyana get along. When a Guyanese speaks about Essequibo being a part of Guyana, Venezuelans must place themselves in the shoes of the Guyanese and remember that of course you have to fight for your country. And similarly, when a Venezuelan speaks that Guayna Esequiba is Venezuelan, a Guyanese must understand that Venezuelans are supposed to speak like that. We must further recognize that we own great territories in the Guyana Shield, South America. We wish our resources to support our population in Caracas, Anna Regina, Eterinbang and Georgetown, as well as Lethem if we want to consider a relationship with Brazil.

Another interesting regional development for further uniting our countries would be connections to Potiguar fields in northeastern Brazil, next to Natal in Rio Grande do Norte. That would involve a very long pipeline that could provide excellent access to South American petroleum into the African markets. Natal could be a major Brazil destination, close to Georgetown and Caracas for our access into Senegal and Nigeria. South American countries must learn how to live together and how to minimize historical border disputes. We need an outcome on the Essequibo border dispute, that is acceptable for all parties and would enable preferential access for both countries into the disputed region. We have the example of Belgium and the Netherlands, where they don't have any border controls and they have historically been linked together for trade respecting municipal differences.

Sovereignty is always an issue because the United Nations has the system of one country, one vote. Several islands are countries, especially in Oceania and the Caribbean, with very small populations, but still they have one vote as if they were Brazil, South Africa or any other large country. So the only way that Essequibo could satisfy the maximum ambitions of Venezuela and Guyana, is if Venezuela and Guyana are fused into the same country. We would have to fight over which would be the capital: Georgetown or Caracas? Colombia and Venezuela already know this very well, and also Ecuador because Quito and Caracas did not want to be ruled by Bogotá. It seems that border disputes are actually disputes between capital cities, that want to be more important than other capital cities. Inhabitants of Pasto or Ipiales in Colombia, or of Ibarra in Ecuador, conduct business with each other because they are close by. But then they must be subject to Quito or Bogotá.

With Guyana a similar situation occurs. Paramaribo, Cayenne, and Georgetown, they all fight for regions that they want to control. The more countries decentralize, the less important the capitals become. So border disputes also become a little bit more irrelevant. We shall continue researching deeply on strong innovative ideas to promote South American integration energy and road communication projects.