Lloyd’s adds Guyana offshore sector to War Risk List

The recent escalation of a long-running border dispute between Venezuela and Guyana has led Lloyd’s Joint War Committee (JWC) to add the Guyanese offshore sector to its list of areas of elevated risk.

In an update to its Listed Areas the JWC said on Monday December 18th that it was adding Guyana, but only for calls to offshore installations within the Guyanese EEZ between the 12-mile and 200-mile lines (beyond territorial waters).

This has become a booming sector. ExxonMobil is developing multiple offshore oilfields in its Stabroek Block lease area off Guyana, and is deploying multiple FPSOs to increase production relatively rapidly. Vessel traffic includes OSVs and large tankers, which call at Exxon’s FPSOs to load crude.

Tensions along the border have risen because Venezuelan President Nicolas Maduro has reasserted old claims to the province of Essequibo, Guyana. It is a region of undeveloped rainforest that accounts for fully two-thirds of Guyana’s land area, but only a small fraction of its population. Its attraction to Venezuela is that it contains valuable prospects for oil and gold extraction. Maduro has told Venezuelan state natural resource companies to pursue opportunities in a region internationally recognized as Guyanese territory.

The dispute dates back to the 19th century. British administrators of British Guiana in 1840 selected a border demarcation west of the Orinoco River, and then entered into an agreement with Venezuela in 1899, formalizing the current border. Venezuela protested in 1966, and the UK promised to discuss the matter further or refer the dispute to the UN. In 2020 the International Court of Justice (ICJ) agreed to take up a Guyanese case to settle the dispute once and for all.

However, Maduro claims that the ICJ does not have jurisdiction on this issue. He held a popular referendum asking whether Essequibo should become part of Venezuela. Maduro claimed that there was overwhelming Venezuelan popular support for the idea.

The referendum was accompanied by small-scale military movements along Venezuela’s side of the border. It is a case of a depleted military force (Venezuela) facing an almost non-existent Guyanese land and sea force. The latter’s “Navy” consists of about half a dozen maritime patrol vessels.

A recent summit between Maduro and the Guyanese leadership reduced the tension. At an airport conference room in Kingstown, St Vincent the two presidents shook hands and agreed to mediate the dispute peacefully.