Following the closure of the Chevron-Hess merger, market intelligence firm Welligence is advising that Chevron, now holding a 30% stake in Guyana’s Stabroek Block, to act with caution amid the ongoing border controversy with Venezuela.
The Stabroek Block operated by ExxonMobil lies in Guyana’s territory, being claimed by Venezuela.
“What remains uncertain is how the Venezuelan government will react to Chevron’s formal entry into a Block located in waters claimed by both Guyana and Venezuela and operated by in partnership with ExxonMobil,” Welligence said in a July 18 update.
Chevron has been deeply involved in Venezuela’s oil industry for over a century, playing a key role in keeping it going during some of its toughest times. Through joint ventures like Petroboscán and Petropiar with state-owned PDVSA, Chevron helped produce a significant share of the country’s oil at times up to 150,000 barrels a day. Even as U.S. sanctions tightened, Chevron remained one of the few international players allowed to operate in the country. When restrictions eased in 2022, the company quickly ramped up output, helping to revive Venezuela’s oil flow and bring in much-needed revenue.
“Chevron will need to navigate this situation with extreme caution, given its significant footprint in Venezuela and its status as the country’s most important commercial partner,” Welligence advised.
Venezuela and Guyana have been embroiled in a territorial controversy over the Essequibo territory for several decades. The case is currently before the International Court of Justice. Tensions have risen in recent months following skirmishes between persons in civilian clothing on the Venezuela side and Guyanese military personnel near the border. There was also the recent Venezuelan navy incursion at the Stabroek Block.
Welligence posited that Chevron might “even find itself acting as a bridge between the two governments as tensions over the territorial dispute continue to simmer,” but this is highly unlikely.
Guyana has taken the diplomatic route to resolve the issue and has maintained that the ICJ is the only option for settling the controversy.
The ICJ case focuses on the validity of the 1899 Arbitral Award that legally determined the boundary between Venezuela and then-British Guiana. Venezuela accepted the award for decades before declaring it null and void in 1962, laying claim to more than two-thirds of Guyana’s landmass in the Essequibo region.
Both the Biden and Trump administrations have increased security cooperation with Guyana and warned of consequences if Venezuela aggression continues.
