Venezuelans vote to claim sovereignty over a part of oil-rich nation Guyana
President of the Bolivarian Republic of Venezuela, Nicolás Maduro, gestures as he speaks after the National Electoral Council published the results of the consultative referendum on Venezuelan sovereignty over the Essequibo, in Caracas, on December 3, 2023. Venezuelan electoral authorities on December 3 claimed that 95 percent of voters in a nonbinding referendum approved of the nation’s territorial claim on a huge chunk of neighboring oil-rich Guyana.
It is “an evident and overwhelming victory for the ‘Yes’ in this consultative referendum,” said the president of the National Electoral Council, Elvis Amoroso. (Photo by Pedro Rances Mattey / AFP) (Photo by PEDRO RANCES MATTEY/AFP via Getty Images)
Pedro Rances Mattey | Afp | Getty Images
Venezuelans on Sunday voted to claim sovereignty over a large swathe of their oil-rich neighbor Guyana, marking the latest escalation in a long-standing territorial dispute between the countries.
Voters were asked if they supported the establishment of a new state in the contested area, known as the Essequibo. Venezuela’s National Electoral Council counted more than 10.5 million votes, the country’s local media stated. The number of voters were not specified, however, and the Associated Press reported that few voters could be seen at polling sites throughout the voting period.
The 61,600 square-mile Essequibo region makes up two-thirds of Guyana, and holds enormous oil reserves off its coast.
Friction between both countries has flared since 2015 following oil exploration operations by companies like ExxonMobil. Venezuela believes that Guyana has no right to grant oil concessions in the maritime areas off the disputed territory. Venezuelan President Nicolas Maduro’s government is also facing international pressure to facilitate free and fair elections in 2024.
The dispute over Essequibo is more than a century old. In 1899, an international arbitral tribunal awarded the territory to Britain, when Guyana was still under its colonial rule. Venezuela has since actively disputed this. Maduro in November accused Guyana, the U.S. and oil firms of robbing Venezuela of its territory through “legal colonialism.”
Guyana has maintained that the accord is legal and binding, and in 2018 had sought the International Court of Justice to rule it as such.
Other questions in the referendum included whether or not to grant citizenship to current and future residents in the region, as well as whether there should be a rejection of the ICJ’s jurisdiction over the territorial dispute between both countries. It remains unclear how Maduro’s government will enforce the results.
Markets haven’t really reacted to the planned referendum yet as there has been no physical supply disruption. This also seems unlikely for now.
Henning Gloystein
Eurasia Group Director
“I want to assure Guyanese there is nothing to fear over the next number of hours, days, months ahead,” Guyanese President Irfaan Ali said in a televised statement aired on local media.
“Of course, our vigilance will be enhanced, but we are working around the clock to ensure that our borders remain intact and the people in our country remain safe,” he added.
On Friday, the ICJ ordered Venezuela to refrain from making any move that would change Guyana’s control over Essequibo.
Oil prices year to date
“Venezuela shall refrain from taking any action which would modify the situation that currently prevails in the territory in dispute, whereby the Co-operative Republic of Guyana administers and exercises control over that area,” the ICJ’s statement said.
Both Venezuela and Guyana are critical oil hotspots. Venezuela is the 10th largest producer in OPEC. And the Stabroek Block in Guyanese waters is estimated to hold about 11 billion barrels of oil.
Market impact
U.S. West Texas Intermediate futures traded 0.4% lower at $73.76 a barrel Monday at roughly 7 a.m. ET time, while global benchmark Brent futures stood 0.4% lower at $78.56 per barrel.
“Markets haven’t really reacted to the planned referendum yet as there has been no physical supply disruption. This also seems unlikely for now,” Eurasia Group’s Director Henning Gloystein told CNBC via email.
However, Venezuela’s actions are unlikely to help it improve relations with the U.S., which it needs to improve its own oil production, he added.
The U.S. imposed oil export sanctions against Venezuela in 2019 to punish Maduro’s government following 2018’s elections which Washington considered a sham.
Dan Yergin, vice chairman of S&P Global, told CNBC’s “Street Signs Asia” that the “absurd referendum” is one risk that current crude markets have yet to price in.
Yergin expects that the U.S. government will defend Guyana if Venezuela attacked the country — “it would be like [Russian President Vladimir] Putin going into Ukraine.”
Lucid Motors (LCID) will continue offering the $7,500 federal EV tax credit for Gravity buyers until the end of the year. Lucid’s interim CEO, Marc Winterhoff, said the electric SUV has “so many orders” and it doesn’t want buyers to lose out on the savings.
Are orders for Lucid’s Gravity SUV picking up?
Apparently, demand for Lucid’s new Gravity SUV is picking up. A recent Automotive News report claimed that Lucid registered just nine Gravity models in its first six months on the market, but the company was quick to shut down the rumors.
Lucid’s communication boss, Nick Twork, told Electrek in an email that the report was “completely inaccurate,” adding “a quick review of social media postings from our customers shows that those numbers are simply not credible.”
According to Twork, Gravity deliveries are “well into the 3-digit range.” In the second half of the year, Lucid expects the SUV to account for the majority of deliveries and production.
Winterhoff confirmed on Lucid’s second-quarter earnings call that production of the Gravity SUV was “beginning to ramp up” after resolving most of the supply chain issues that had limited output in the first half of the year.
Since it started offering test drives while adding Gravity models to its studios, Lucid’s interim CEO said the daily order rate for the electric SUV has nearly doubled.
During a new interview with Brew Markets on Tuesday, Winterhoff suggested that the Gravity is quickly attracting buyers. Lucid’s chief confirmed it will honor the $7,500 federal EV tax credit for Gravity buyers until the end of the year “because we have so many orders and we don’t want to tell order holders, you know what, you’re out of luck, we didn’t deliver in time.”
Winterhoff also said that Lucid expects a limited impact on sales from the loss of the credit due to its market position and pricing.
Lucid views the German luxury brands, including Mercedes, BMW, and Audi, as its primary competitors. Although it does view Tesla as a competitor, “we see ourselves a little bit of a notch higher than Tesla,” Winterhoff said, when comparing the interior, materials, and luxury.
Despite several luxury brands recently pulling back on their electrification plans, like Porsche, Lucid will remain a pure EV company and still believes electrification is the future.
Lucid’s vehicles currently start in the $70,000 to $80,000 range, but the company is working on launching its midsize platform in late 2026, which will bring the price down to around $50,000. The midsize platform will wear at least three “top hats,” including a crossover SUV, a more rugged variant, and a third, rumoured to be a midsize sedan aimed at the Tesla Model 3.
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The Trump administration is seeking to acquire a 10% stake in Nevada’s upcoming lithium mine, operated by Lithium Americas (LAC).
Lithium Americas (LAC) has a flagship lithium mining project, Thacker Pass, located in Nevada.
With the Biden administration, the company had secured a $2.26 billion government loan to advance the project to production. However, since taking office, Trump has been attempting to claw back many loans related to the energy transition.
Last night, reports began to circulate about the Trump administration attempting to renegotiate the terms of the loans to include a 10% stake in the project.
It sent LAC’s stock surging by as much as 80% in after-hours trading.
The reports forced the company to issue a comment. Lithium Americas confirmed being “in discussions” with both the Department of Energy, which issued the loan, and General Motors, which holds a 38% stake in the company and a right to buy the lithium from the mine, about drawing from the loan:
The Company is in discussions with the DOE and General Motors Holdings LLC (“GM”), its joint venture partner in the Thacker Pass lithium project (“Thacker Pass” or the “Project”), regarding first draw on the DOE Loan. The topics of these discussions include certain conditions precedent to draw on the DOE Loan and associated loan specifics, as well as incremental requests from the DOE for potential further conditions to first draw and/or potential amendments to the DOE Loan and associated transaction documents, including corresponding consideration. The Company continues to work with the DOE and GM regarding proposals for a mutually agreeable resolution.
This would be the latest example of the Trump administration taking direct stakes in companies and using “national security” as the reason.
Electrek’s Take
The Biden administration was attempting to establish a North American battery supply chain, but Trump has significantly hindered that effort over the last few months.
However, this is a good move.
The loan would have likely worked as well, but direct ownership is essentially how China operates, and it has worked out quite well for them. There’s a word for this, but Trump’s base hates it.
My main issue with how Trump is doing these market-moving announcements and leaks looks a hell of a lot like insider trading.
Even with this move on LAC, there was suspicious short-term option trading on the stock leading up to this.
The US is in its era of grifters.
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