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Hess (NYSE:HES) -1.4% in early trading Wednesday to its lowest in nearly five months after Guyana said it is intensifying security measures and engaging the U.S. military to help it protect the Essequibo region, as Venezuela’s actions are seen as a threat to its territorial integrity.
Venezuela’s President Maduro ordered state-owned energy and mineral companies to begin granting exploration licenses for deposits in the oil-rich region, and claimed he ordered foreign oil companies working in Essequibo to withdraw, although he has not sent any military forces to carry out his demands.
Venezuelan voters approved a referendum Sunday calling for the annexation of the Essequibo region, which contains most of Guyana’s population and more than 15B barrels of recoverable oil reserves.
Analysts see the rising tensions with Guyana as part of Maduro’s effort to spark domestic support ahead of Venezuela’s presidential election next year.
Hess (HES) is part of the Exxon-led (XOM) consortium that began producing oil off Guyana’s coast in 2019; earlier this year, Guyana took bids for new shallow-water and deepwater blocks from local and foreign companies in its first international bidding round.
