Venezuela’s president ordered the creation of a new state called “Guayana Esequiba” on Tuesday, following a controversial Sunday referendum which saw Venezuelan voters approving the annexation of land from neighboring Guyana.
The area in question, the densely forested and oil-rich Essequibo region, amounts to about two-thirds of Guyana’s national territory. Venezuela has long claimed the land and dismisses an 1899 ruling by international arbitrators that set the current boundaries.
Guyana has called the move a step towards annexation and an “existential threat.”
Talking to legislators on Tuesday, President Nicolás Maduro showed a “new map” of Venezuela including the disputed territory and said all residents from the area would be granted Venezuelan nationality. He said the map would be distributed throughout all schools and public buildings in the country.
Maduro also signed a “presidential decree” creating the “High Commission for the Defense of Guayana Esequiba.
The measures announced include the approval of oil, gas and mining exploration licences. Maduro ordered the state oil company PDVSA to create a special department, “PDVSA-Esequibo,” to manage the activities in the region which are to start immediately.
The president also asked legislators to draw up a law banning the hiring of any companies that have worked with Guyana in areas of disputed water, and giving companies currently in the region three months to leave the area.
The measures also include a census among residents of that territory in order to facilitate the attribution of the Venezuelan nationality.
Speaking to reporters on Monday, US State Department spokesperson Matthew Miller said Washington continues to “a peaceful resolution of the border dispute between Venezuela and Guyana”.
“The 1899 award determined the land boundary between Venezuela and Guyana should be respected unless or until the parties come to a new agreement or a competent legal body decides otherwise. So we would urge Venezuela and Guyana to continue to seek a peaceful resolution of their dispute. This is not something that will be settled by a referendum,” he said.
Sparsely-populated and with high rates of poverty, Guyana has seen rapid transformation since the 2015 discovery of oil off the coast of the Essequibo region by ExxonMobil, with over $1 billion in annual government oil revenue fueling massive infrastructure projects. The country is set to surpass the oil production of Venezuela, long dependent on its own oil reserves, and is on track to become the world’s highest per capita oil producer.
Writing for Foreign Policy last year, ahead of the announcement of the referendum, Paul J. Angelo of the Council on Foreign Relations and Wazim Mowla, the assistant director for the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center, called the border dispute a “powder keg,” arguing that Russian President Vladmir Putin’s “defiance of international norms” with the invasion of Ukraine “could give new wings to Maduro’s territorial ambitions.”
Guyanese Vice President Bharrat Jagdeo echoed the comparison at a recent news conference.
“I don’t know if they are miscalculating based on what happened in Crimea and other places, but it would be a grave miscalculation on their part,” Jagdeo said.
“We can’t just think that this is internal politics (in Venezuela) without taking all possible measures to protect our country, including working with others,” he added, citing a visit in late November by US military officials to discuss ongoing joint training exercises.
Maduro stands to gain politically from Sunday’s referendum amid a challenging re-election campaign. In October, the Venezuelan opposition showed rare momentum after rallying around Maria Corina Machado, a center-right former legislator who has attacked Maduro for overseeing soaring inflation and food shortages, in the country’s first primary in 11 years.
“An authoritarian government facing a difficult political situation is always tempted to look around for a patriotic issue so it can wrap itself in the flag and rally support, and I think that’s a large part of what Maduro is doing,” said Phil Gunson, a Caracas-based analyst with the International Crisis Group.
CNN’s David Shortell in Washington contributed reporting to this piece.
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