Guyana oil and mining sectors gain as Venezuela risk eases

Guyana’s mining and oil industries are drawing renewed investor interest as recent US military action in Venezuela reshapes regional risk perceptions and reduces uncertainty around offshore operations.For years, Guyana’s economic rise has been overshadowed by a territorial dispute with Venezuela over the Essequibo region, a resource-rich area of nearly 160,000 square kilometres that Caracas claimed as its own and that includes offshore oil reserves. Tensions escalated last year after Guyana backed a US military deployment in the Caribbean, following reports of gunfire from the Venezuelan coast near a vessel linked to Guyana’s general elections. Venezuela’s defence minister accused Georgetown of encouraging a “war front,” while President Irfaan Ali said Guyana would support any action that removed threats to its sovereignty.That backdrop has shifted since recent US military operations on Venezuelan territory led to the capture of Nicolás Maduro this past weekend. Ali said stability, respect for the rule of law and a democratic transition were essential for Venezuela and the wider region, and confirmed talks this week with US Secretary of State Marco Rubio, citing Washington’s support for Guyana’s sovereignty and cooperation against transnational crime.“The geopolitical risk associated with the regional environment could be reduced after the political change in Venezuela,” Angélica Méndez, a Guyana analyst at Control Risks, told Bloomberg Línea on Thursday, adding that a recurring source of uncertainty around offshore security, including Venezuelan military activity in Guyanese waters, had been removed.Beyond oilOil has transformed Guyana since ExxonMobil (XOM) discovered major offshore reserves in 2015, but mining long predates the petroleum boom and remains central to the economy. Gold, diamonds and bauxite, a raw material for producing aluminum, were being extracted commercially by the late 19th century, and bauxite production surged from the 1910s as foreign companies supplied aluminium markets during World War II and beyond. After independence in 1966, bauxite assets were nationalized, then later reopened to foreign investment following privatization in the 1980s.Today, gold is Guyana’s most important mineral export after oil and is produced largely by artisanal and small-scale miners, a sector formalized under the 1989 Mining Act and now a major source of employment. Large-scale operators are also active. Zijin Mining runs Aurora mine, the only large-scale gold operation in the country. Other companies including Aris Mining (TSX. ARIS), G Mining Ventures (TSX: GMIN), Omai Gold Mines (TSXV: OMG) and G2 Goldfields (TSX: GTWO) are advancing projects across the interior. Bauxite production continues under firms including BOSAI, the Bauxite Company of Guyana and First Bauxite Corporation.Consultancy Control Risks said Guyana, despite lacking a formal sovereign credit rating, is viewed as a low- to medium-risk investment destination. Its main vulnerabilities lie in governance and institutional capacity rather than political or fiscal instability, a profile typical of small emerging economies. The consultancy expects the outlook for oil and mining investment to remain positive, supported by President Ali’s pro-investment agenda, a planned auction of new offshore oil blocks this year and continued development of gas and energy transition projects.Economic liftAnalyst Roberto Pérez told Bloomberg Línea that while global oil markets remain well supplied with moderate demand growth, broader geopolitical volatility poses a greater risk than price levels alone. Even with stable fuel prices, uncertainty around trade, diplomacy and energy policy could weigh on the global economy.Guyana’s macroeconomic fundamentals, however, have strengthened sharply. World Bank data cited by Pérez show the loan risk premium averaged between 7.2% and 7.3% from 2020 to 2024, more than 350 basis points lower than in the previous five-year period. The IMF’s 2025 Article IV consultation noted that the country’s economic transformation continues to advance strongly.Rapid growth in oil output, resilient mining activity and heavy public investment have pushed Guyana to the highest real GDP growth rate in the world. Growth in 2026 is projected at 22.4% by the World Bank and 24% by ECLAC. Non-oil GDP expanded by more than 13% in the first half of 2025, inflation hovered near 3% late in the year, and gross international reserves exceeded US$1 billion in October 2025. The Natural Resource Fund held nearly $3.6 billion by September, equal to more than 12.5% of GDP.“These factors explain the reduction in geopolitical risk and suggest Guyana’s fundamentals are strong enough to withstand current tensions between Venezuela and the US,” Pérez said.(With files from Bloomberg)Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com