Border tensions threaten new foreign investment in Guyana
BY CHRISTINA HOAG
Special to The Herald
GEORGETOWN, Guyana -- Thinking it was ushering in a new economic
Guyana began the year with prospects for four new offshore oil exploration
concessions, worth about $50 million, and a $100 million satellite launch project.
But word of the new projects revived this former British colony's
disputes with Venezuela and Suriname, threatening at best to delay investment or
at worst to send investors fleeing.
``We're obviously disappointed,'' says Prime Minister Samuel Hinds.
hope that potential investors would not be put off.''
Attracting foreign investors is no small task for this tiny country,
one of the
continent's poorest, with an annual per capita income of about $750.
Guyanese officials believe the answer to their economic woes could
lie in oil. The
U.S. Geological Survey pinpointed the country's coast as one of the world's two
large, still-unexplored offshore oil basins. That was enough to convince several oil
companies to seek exploration licenses.
But plans suffered an embarrassing setback on June 3 when Surinamese
gunboats, in the middle of the night, towed off a CGX Energy drilling rig because it
was sitting in waters claimed by the former Dutch colony. ``We were all rather
shocked when that happened,'' says Dennis Clement, a director of Toronto-based
If that weren't enough, Venezuela is raising a diplomatic brouhaha
Texas-based Beal Aerospace Technologies's plan to build a commercial satellite
platform on land claimed by Venezuela.
Venezuela alleges that the 1899 border treaty is null because
it was the result of
a secret deal between Britain and Russia. Venezuela is also protesting the oil
exploration concessions in western maritime territory that it claims.
The Guyanese are bewildered over the sudden revival of the dormant
legacy from colonial days. Officials attribute the newfound attention to political
tactics to divert public attention from economic crises in both Venezuela and
``Over the years we've given out major concessions and there was
problem,'' says former President Desmond Hoyte.
Investors are also taken aback by the fuss.
``We weren't even aware there was a border dispute,'' says Beal
Both Suriname and Venezuela are pressuring investors to withdraw
or see their
``This is economic warfare,'' says Frank Beckles, chairman of
watchdog group Guyana Is First.
Officials admit their neighbors' actions could have serious repercussions.
two-thirds of Guyana that Venezuela claims is rich with gold, diamonds, bauxite
and other minerals, timber and possibly oil.
Venezuela is a particular threat as several investors, such as
ExxonMobil and the
Chinese government, have multibillion-dollar investments in that country.
Venezuelan Foreign Minister José Vicente Rangel says he has already asked
those companies to halt their Guyanese plans.
Venezuela is also using its leverage as a top oil supplier to
the United States to
conduct a lobbying campaign in Washington to thwart State Department approval
needed to transfer sensitive technology for the Beal project.
In another move, Venezuela has announced a plan to offer its own
licenses in the disputed maritime area late next year.
The fuss has already had a chilling effect as companies have started
to hold up
their projects hoping that diplomacy will resolve the impasses.
``Companies aren't going to start drilling if there's instability,''