A couple of years ago, Venezuela’s government decided to revive a territorial claim over much of its neighbor, Guyana. The tiny country was emerging as a major oil producer, and Venezuela wanted a piece. Then came Trump and removed the head of that government.

Essequibo lies between Guyana and Venezuela, with both claiming sovereignty, while Venezuela is planning a referendum on Sunday to determine the territory’s ownership future.

The 61,000+ square mile territory represents about two-thirds of Guyana’s territory and is also the site of a string of huge offshore oil discoveries by Exxon. Those discoveries, the first of which was announced in 2015, were what reinvigorated Venezuela’s claim on the territory.

Over the ten years since then, Exxon and its partners in the Stabroek Block have tapped reserves estimated at over 11 billion barrels of crude, and Guyana’s production is rising in leaps and bounds. Last year, Exxon reported output of over 660,000 barrels daily in mid-2025, rising further to 900,000 barrels daily, eyeing production capacity of as much as 1.7 million barrels daily by 2030. But Nicolas Maduro’s ambitions in Essequibo were threatening that.

Now, with the Venezuelan president ousted by the United States, analysts believe oil production in Guyana will go more smoothly, without the risk of the country ceding two-thirds of its territory to its larger neighbor.

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“Sighs of relief will have been exhaled in some offices, particularly on the ground, because that’s a constant threat whether you’re trying to manage logistics and so on, or making sure that ships are getting around safely,” Verisk Maplecroft analyst Eileen Gavin told CNBC this week. “These are all offshore facilities — and highly expensive ones at that. So, having the U.S. armada, as they are calling it, is certainly helpful,” she added.

Some noted that an actual incursion by Venezuela into Essequibo was unlikely to begin with, because it would have triggered an immediate U.S. response to protect business interests in oil. “With Venezuela already in the US’s crosshairs and Exxon the largest operator in Guyana, any aggression would likely have elicited a US response,” Morningstar director of equity research Allen Good told CNBC. “Now, with the US’s intent to control the country, any action by Venezuela becomes even more remote, removing a nuisance for Exxon and Guyana,” Good noted.

That would be most welcome news to Exxon, which has turned Guyana’s Stabroek Block into a prominent jewel in its crown. Low breakeven costs, massive reserves to recover, and a friendly government determined to make the best of its resources without succumbing to the so-called oil curse—Guyana was a jackpot for Exxon.

It may well be this fact that made chief executive Darren Woods tell President Trump Venezuela was uninvestable without some serious reforms, prompting, in turn, a threat to lock the company out of Venezuela. Would Exxon care? No, it would not because it is the operator of Guyana’s only commercial oil project to date and is reaping all the benefits of that position.

“We’re in a depletion business for a product that is in great demand and will be in demand for many, many, many decades to come,” Darren Woods told President Trump at last week’s meeting with the industry. “And as a depletion business, the biggest challenge we have is finding resources,” Exxon’s top executive also said.

Woods was speaking about Venezuela and the potential opportunities—and challenges there, but at the same time, his speech highlighted all the points that made Guyana a much better bet. It certainly has the resources, it has the investment-friendly legal framework, and, not least, it has no crippling U.S. sanctions to interfere with oil production. Now, with the removal of a Venezuelan incursion, all will be going even better for Exxon in Guyana.

By Charles Kennedy for Oilprice.com

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