Guyana, Suriname fight over untapped oil
GEORGETOWN, Guyana (AP) -- While high oil prices spur exploration for new
fields around the world, a potentially rich deposit off the marshy northeast coast
of South America remains untapped.
The largely unexplored zone is caught in a no-man's-land because Guyana
Suriname can't agree on their maritime boundary. Guyana says the line runs
toward the north-northwest; Suriname says it runs more northward.
Last June, the two came close to war when Suriname enforced its line with
gunboats, forcing a Canadian company's oil rig to withdraw from the disputed
area before it could drill under a license granted by Guyana.
The disagreement has prompted both countries to strengthen their small
militaries. And it is stalling oil exploration off the entire coasts of both nations,
which are among the region's poorest.
"This is one of the few areas left in the world that is underexplored and
perceived potential," said Newell Dennison, manager of the petroleum division of
Guyana's Geology and Mines Commission.
The U.S. Geological Survey estimates the entire coastal area off the two
countries -- called the Guyana-Suriname Basin -- could contain as much as 15
billion barrels of oil, or about 1 percent of the estimated world total.
Guyana, a former British colony, argues the line it claims simply follows
historical marine boundary. "That's the line we inherited from the British, and
that's the line we've been using," Dennison said.
Suriname's position is equally firm. "We are not about to give it up,"
Demon, Suriname's natural resources minister. "We do not dispute the area. It is
Both sides have expressed a willingness to settle the issue peacefully,
broke down in July.
So far, only Guyana has granted oil exploration rights in the disputed
area -- a
triangle of water that covers roughly 7,700 square miles (19,700 square
kilometers), running from near the mouth of the Courantyne River out to the
limit of the countries' territorial waters.
Guyana's foreign minister, Clement Rohee, said last week that negotiations
been put on hold during campaigning for Guyana's national elections. His party
won a majority in parliament in the vote on March 19.
"I've been speaking to my colleague in Suriname on a one-on-one basis,"
said. "We have to work on it."
If oil is eventually pumped from the region, it likely would have little
world oil prices but would have a major impact on the region, said Charlie Sharp,
an oil analyst with the Canadian investment firm Canaccord Capital in London.
"The most is at stake for the people of Guyana and Suriname," he said.
countries have worked out their differences, though, oil companies probably will
be hesitant to drill anywhere along their coasts, he said.
In the lead of the companies waiting to drill is a small Toronto-based
Energy Inc., which has secured exploration rights from Guyana's government
for a 5,970-square-mile (15,280-square-kilometer) area that runs along the coast
and includes some of the disputed zone.
Other companies with concessions granted by Guyana in the disputed area
include Exxon to the north and a joint venture involving ENI of Italy and Repsol
of Spain to the west.
CGX has invested more than $12 million to explore the area in the past
years, and seismic surveys have suggested the possibility of huge oil deposits.
When the company's oil rig was evicted by Surinamese gunboats in June, CGX
drilled an exploratory well on another site outside the zone, but didn't find oil
there. Since then, there has been little coastal exploration for oil in the region.
Suriname's state oil company, Staatsolie, recently announced it will auction
rights to areas along the country's coast. But the two westernmost tracts --
located in the disputed area -- will not be included in the first round of bidding,
which is scheduled for November.
Guyana's government, meanwhile, has said it will build a navy to counter
calls Surinamese aggression. The country, which until recently had only small
coastal patrol boats, now plans to buy two used military ships from Britain and
to obtain three ships from the United States in exchange for pledging to
cooperate in anti-drug patrols.
Military leaders in Suriname, a former Dutch colony, say they plan to put
of this year's roughly 400 military recruits into its navy.
"We have heard that Guyana is trying to build a navy," Defense Minister
Assen said earlier this year. "I do not think they want to fight Suriname, but we
are watching them closely."
Copyright 2001 The Associated Press.