Guyana’s oil sector could see lower regional risk following U.S. involvement in Venezuela, but whether that translates into new exploration activity remains uncertain, according to a January 15 S&P Global analysis.
The assessment comes amid the long-running Guyana–Venezuela border controversy over the Essequibo region, which makes up about two-thirds of Guyana’s territory and has become closely linked to offshore oil development as discoveries turned Guyana into “one of the world’s most prolific new petroleum provinces”.
‘No disruption’ to Guyana’s offshore operations amid Venezuela tension | OilNOW
Analysts told S&P Global Energy that any reduction in Venezuela’s ability or incentive to escalate the controversy would materially lower political risk for producers already operating offshore Guyana.
“The US involvement in Venezuela greatly reduces the territorial risk,” said Andrés Armijos, head of Latin American analysis at energy consultancy Welligence. He said upstream operators already in Guyana stand to benefit most, as they may have opportunities to accelerate activity in the short term.
Tensions intensified in recent years. In 2025, Venezuela prepared to hold elections to select officials for the Essequibo region, but an order from the International Court of Justice required Caracas to halt the move. A Venezuelan military vessel also threatened oil vessels operating in Guyana’s Exclusive Economic Zone.
Despite this, analysts cautioned that it remains unclear whether companies will expand operations westward. The US intervention “makes it less likely that there will be any changes in the status of Essequibo, but whether that will embolden Guyana operators to shoot seismic and potentially drill wells to the West is too early to tell,” said Bob Fryklund, chief strategist for upstream at S&P Global Energy.
Geopolitics could still constrain activity. Guyana maintains strong ties with Asian countries, including India and China, said Gerardo Penchyna, a political risk analyst at consultancy Arko International. “The alignment with the U.S. is not guaranteed,” Penchyna said. He added that while the risk of a Venezuelan invasion is largely “rhetorical”, it may still be enough to deter operators from moving farther west.
“To see exploration on the Venezuela side, we might have to wait for a more stable government,” Penchyna said, noting that the idea of annexing Essequibo is still prevalent even among segments of Venezuela’s political opposition.
