Venezuela's government and an opposition coalition will press the country's longstanding claim to an oil-rich swath of neighboring Guyana and set up joint humanitarian and sanctions review groups under two "partial accords" signed late yesterday in Mexico.
Under the latter accord, each side will designate three representatives to the task of addressing short-term needs for food and medicine. In parallel, each will designate two representatives to review sanctions "overcompliance in the financial system" that is impeding access to funds needed to procure the aid.
A key focus will be the procurement of substantial Covid-19 vaccines and logistical support to administer and distribute them. Accessing multilateral funds, namely Venezuela's $5.1bn in special drawing rights (SDR) from the IMF, will be a critical element of the short-term discussions.
The parallel sanctions review is a win for President Nicolas Maduro's government, which has long blamed the US sanctions for undermining Venezuela's oil-based economy, leading to shortages of food, medicine and fuel.
The opposition routinely points the finger at the government for gutting the national oil industry and plundering the Opec country's wealth, creating hardship that has driven more than 5mn Venezuelans to emigrate.
The US imposed financial sanctions on Venezuela in 2017 and oil sanctions two years later with the unfulfilled goal of forcing Maduro out of power. The current US administration that inherited the sanctions has signaled a willingness to relax them in tandem with progress toward restoring democracy, with the bar now set at the conditions for state and local elections on 21 November.
The preamble of the new accord asserts that the negotiation process is centered on social protection but it goes on to note an "understanding of the effects that sanctions overcompliance produces in the country's economy and demanding the Nation's inalienable rights to independence, freedom, sovereignty, immunity, territorial integrity and national self-determination."
Although the sanctions do not explicitly prohibit sales of food and medicine to Venezuela, many financial institutions and intermediaries have steered away for fear of running afoul of the byzantine US rules.
Elusive claim
Under the first partial accord signed yesterday, the parties came together around Venezuela's historical claim to what it calls the Guayana Esequiba, territory which includes offshore oil acreage controlled by Guyana. An ExxonMobil-led consortium is currently producing some 120,000 b/d of crude from the Stabroek block in the disputed region, and forecasts reaching 800,000 b/d in 2025, surpassing Venezuela that once produced 3mn b/d and is now only pumping around 500,000 b/d.
The accord reiterates Venezuela's rejection of the International Court of Justice's declaration of jurisdiction over the issue, and its urging of Guyana to engage in direct negotiations.
There was no immediate response from Guyana's government today.
The historical dispute, a legacy of British colonialism, is one area around which all Venezuelans agree. But the accord signed in Mexico surprised several onlookers consulted by Argus, as it appears to fall outside the spirit of an initial Memorandum of Understanding for the Norwegian-brokered talks signed in Mexico in August.
Geoff Ramsey, director for Venezuela at the Washington Office on Latin America, says the Essequibo issue offered "low hanging fruit" to establish a "minimum consensus" in the talks.
The parties will meet again in late September. Russia and the Netherlands are accompanying the talks.
