WEBVTT	#Elemental Media Engine(TM) 2.17.1.0

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Guyana is a tiny nation home to
just more than 800,000 people.

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This small South American
country though has been making

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big headlines.

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Venezuelan President Nicolas
Maduro and Guyana president

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Irfaan Ali met in the Caribbean
yesterday.

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Tensions between South American
neighbors Venezuela and Guyana

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escalated this week over a
century old territorial dispute.

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As Venezuela threatens to annex
more than half of the country of

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Yes, Venezuela wants to annex
Essequibo part of Guyana. Why? A

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Guyana.

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one word answer to this is oil.

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So, it's all about the oil. In
2015 discovery by Exxon Mobil as

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you noted, there's enormous
wealth there and Guyana has been

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in the last three years - their
standard of living has

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skyrocketed with this newfound
source of wealth

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This discovery has made has made
it seem more attractive to

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Venezuela to pursue this course
of action.

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Venezuela has laid claim to this
for more than 100 years.

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Venezuela even though they have
300 billion barrels of proven

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reserves in Venezuela that they
can't manage to drill on their

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own. They would like to lay
claim to this area as well. So

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this is why there's been a
rising tension escalation.

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Amid rising tensions with
Venezuela, Guyana has become the

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world's fastest growing economy
recording the world's highest

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real GDP growth rate in 2022.
And that happened again in 2023.

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Guyana is at a crossroads in its
history. It is about to become

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one of the most exciting and
important oil producing

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countries in the world. And that
matters a great deal both for

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the Guyanese people and also for
the United States, which will be

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heavily impacted by the growth
of Guyanese oil production and

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by the trajectory that Guyana
takes over the next 10 to 15

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years whether oil boom happens
or whether it suffers an oil

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bust.

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Everything changed for Guyana, a
country the size of Idaho in

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2015.

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ExxonMobil says it has made a
significant oil discovery off

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the coast of Guyana.

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Guyana joined the ranks of the
world's oil producers for the

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first time on Friday. As US oil
company Exxon Mobil said it

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began producing crude off the
coast of the South American

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Exxon made a major discovery
that then led to a string of

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country.

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discovery after discovery after
discovery. And at that time,

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Guyana, like many of the
countries that we work with, had

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only a couple of people in
government who really were

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familiar with the oil and gas
sector, and so had to quickly

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ramp up its capacity in order to
oversee this rapidly growing

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sector. We started drilling and
2019
started producing in 2019. So

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We started drilling and 2019
started producing in 2019. So

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sector.

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production has gone from
basically zero to almost 600,000

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barrels a day of oil by the end
of next year. And that

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production is going to double to
almost 1.2 million barrels by

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the end of 2027. So the growth
trajectory has been tremendous.

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The only English speaking
country in South America has

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been witnessing tremendous
economic growth since the

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discovery of oil. This chart
from the International Monetary

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Fund shows how its GDP has
skyrocketed since it began

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pumping oil in 2019.

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Really massive changes to the
economy in the last two years.

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And we're expecting that to
continue for the foreseeable

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It's a moment of great
excitement in the in the

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future.

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economic landscape of the
country. The challenge though

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it's really too tied to the oil
and gas industries.

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Guyana is one of the great
success stories in the oil

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industry in the western
hemisphere of the last 10 years.

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It has gone from being a
relatively impoverished poorer

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country to one of the richest
countries in South America on a

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per capita basis, and it stands
to increase its wealth as it

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continues to grow its oil
production.

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This is the map of Guyana and
this region is called Essequibo,

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which makes up two thirds of the
total land. Venezuela claims

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this region as part of its
territory, even after the

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dispute was resolved by an
international tribunal all the

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way back in 1899. Ever since the
oil discovery in Guyana in 2015,

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Nicolas Maduro led Venezuela has
been very vocal about annexing

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this region. The escalation
raised eyebrows when Venezuela

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held a referendum in December to
seek approval to take over the

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area.

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However, a few days later,
leaders of both countries met

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and agreed not to use force or
threaten one another in a

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dispute.

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We are a peace abiding country
and people. We have have no

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other ambition than to pursue
the peaceful coexistence with

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Venezuela at every country in
this region.

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Venezuela doesn't truly have
sources of support in its

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ambitions to take over that
territory of of Guyana, whereas

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Guyana has seems international
public law on its side, as well

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as the United States.

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We absolutely stand by our
unwavering support for Guyana

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sovereignty.

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I'm not sure Guyana standing on
its own. To tell you the truth.

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I think, you know, there are a
lot of we've all seen what

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happens when nation
sovereignties are challenged and

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unilateral actions taken. I
think the world and outside

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community have grown pretty
sensitive to that. So my

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expectation is, there's more
support more broad support in

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the international community to
make sure that the right

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processes are followed to
resolve this dispute.

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Critics also argue that Maduro
is playing the Guyana card to

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win the country's 2024
presidential election. They say

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Maduro may be trying to distract
voters from his country's dire

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economic situation, once the
wealthiest nation in South

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America thanks to its oil
industry, Venezuela's economy

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has collapsed since Maduro took
power in 2013.

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So this has has two purposes for
Venezuela, one for a government,

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which is providing a relatively
poor quality of life to its own

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citizens, that gives them an
opportunity to rally around the

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flag and say, Oh, there's more
to be had across the border. It

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allows President Maduro to
activate the sort of electoral

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machinery that he will need for
elections in 2024. That gives

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him a bit of a dry run on
mobilizing his constituencies.

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It also gives him a, you know, a
way to to position himself for

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the presidential election in
2024. By saying, I'm the one who

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fights for Venezuela. But it is
a very thin legal claim. And I

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think it's going to be an
enormous strategic mistake by

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Maduro. Because Venezuela is
trying to reconnect to the

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international community, regain
legitimacy and remain free from

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sanctions. And there is no
better way to organize the

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entire international community
against you than to

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impermissibly transgress a
border with your peaceful

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I wouldn't believe anything,
Nicolas Maduro said yesterday,

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neighbor.

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he's proven to be a very
untrustworthy negotiating

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partner, particularly with the
United States. Back in October,

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the US came to deal with
Venezuela saying, Okay, if you

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promise to have free and fair
elections, we will in advance of

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that we will ease sanctions, and
that's what allowed Chevron to

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get a license at least for six
months to go back in there and

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start resuming work. Within two
weeks of that agreement, he

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outlawed the opposition
candidate and said the person

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could run for office. You know,
the Financial Times has written

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an editorial saying that the US
should reimpose the sanctions

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right away. Because he's so
untrustworthy.

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We have the international world.
On our side. There'll be very

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few countries who would approve
of what President Maduro and

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Venezuela have been suggesting
and indicating and doing in the

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last six months or so.

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US oil giant Exxon and its two
partners Hess and the China

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National offshore oil company
have discovered more than 11

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billion barrels of oil in Guyana
since 2015. Ghana's economy has

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exploded since then. Critics
argue that Exxon Mobil is

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reaping the most benefits from
this oil bonanza.

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For many years, there's been
controversy surrounding Guyana

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and Exxon's oil deal with many
critics within Guyana,

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challenging the validity or the
soundness of that deal, because

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it's very much to the advantage
of Exxon.

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It's a one sided deal because
Exxon pays no taxes. Exxon

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didn't put up the insurance
they're responsible for putting

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up Exxon has a special
arrangement, where they maximize

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profit first. They get their
profits first and Guyana gets

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theirs later.

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On the question of whether the
arrangement with Exxon is fear

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or not for Guyana. I was with it
from the very beginning. And it

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may be that way. I think it was
a fear or I think it is a fee

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arrangement. It is a production
sharing arrangement.

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Deals get struck. And sometimes
the deals don't always favor you

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in all of the aspects and I
think that Guyanese have to

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embrace that if they want to
continue to participate in this

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broad global setup. And to say
how do we ensure that the terms

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going forward. For all the
international oil
companies they look for big

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For all the international oil
companies they look for big

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going forward.

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finds and Guyana is the biggest
that anybody has found that a

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long time and there may not be
other giants, as they're called

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in the business that are left.
So it's extremely important. And

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I think that's why you see
ExxonMobil play such a high

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priority not only on the
development of the asset, but on

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the development of the country.
Because, you know, for

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international oil companies,
these are 30 year projects,

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they're going to be there for a
long time. And so if the country

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doesn't succeed, neither do
they.

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Guyana is very close to the
United States. It's close to the

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Gulf of Mexico, where the United
States has an enormous array of

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refinery and oil and gas
refining infrastructure, so a

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lot of Guyana's oil will go to
the United States and

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potentially could be consumed by
the American market. So the

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United States is in a pretty
strong position to benefit from

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the exploration and expansion of
Guyana's oil both in terms of

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corporate infrastructure, and
also in terms of the American

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economy.

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On paper, Guyana's sky high GDP
growth looks like the envy of

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the developing world. However,
critics highlight that the

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country's weak democratic
institution, and deeply divided

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politics among ethnic lines
could cause Guyana to suffer

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from the so called resource
curse.

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So, the resource curse is this
unfortunate historical

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circumstance that countries
which have significant wealth in

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a single sector, which dominates
their economy tend to have worse

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development outcomes after the
discovery of the resource than

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they had before.

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Guyana created the Natural
Resource Fund in order to set

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aside some of the fiscal
restraints from the oil sector.

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It's a precautionary step really
to avoid having a situation

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where revenues are just spent as
they come in. And you end up

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with a quite an erratic economy
as the commodity prices go up

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I think the fund is being it's a
very, very poor fiscal choice by

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and down.

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the government to put the money
in a fund like this and to not

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have it subject to normal rules
of accountability. I'm a former

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Comptroller of the state of New
York, and I manage both the fund