Exxon's $40 Billion Oil Discovery Sparks a Nasty Feud

For generations, Venezuela has formally laid claim to most of its tiny neighbor, Guyana. Many dismissed the case, given Venezuela’s oil wealth and Guyana’s penury. Hugo Chavez, longstanding president of Venezuela, even let it slide, referring to the Guyanese as his brothers. Then in May, Exxon Mobil Corp. revealed that under contract from Guyana it had found massive offshore oil and gas deposits. Chavez’s successor, Nicolas Maduro, demanded that the drilling stop because the area was Venezuela’s. He dismissed Guyana’s president as a tool of Big Oil, declared his statements “nauseating” and Guyana’s actions likely to “bring war to our border.” He withdrew his ambassador, and Guyana announced the end to a long-time rice-for-oil deal. For Guyana -- which produces no oil and whose 800,000 inhabitants live with unpaved flooded roads and power outages -- the estimated offshore find of 700 million barrels promises a revolution, a shift from negligible food exporter to global energy dealer. The combined oil and natural-gas deposits appear to be worth $40 billion, at least 10 times the country’s gross domestic product. More…