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Matthew Smith

Matthew Smith

Matthew Smith is Oilprice.com's Latin-America correspondent. Matthew is a veteran investor and investment management professional. He obtained a Master of Law degree and is currently located…

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Is Venezuela Preparing For A Military Strike On Colombia?

Venezuelan President Nicolas Maduro is well-known for his saber-rattling, much of which is designed to distract Venezuelans from the severe economic crisis sweeping the country and the brutality of his autocratic regime. In recent weeks Venezuelan military and police have been conducting offensive operations in the southwestern state of Apure near the Colombian border. Aside from the humanitarian toll they are taking on the local civilian populace, they have sparked fears that Caracas is once again ramping up pressure on its perceived mortal enemy Colombia. Staunch regional U.S. ally Colombia, which sits at the entrance to South America from Central America, is pivotal to addressing the more than decade-long humanitarian and economic crisis which has engulfed neighboring Venezuela. Maduro and his predecessor Chavez, who on assuming the presidency in 1999 launched his socialist Bolivarian revolution, have regularly stoked fears that Colombia supported by the U.S. is intent on destabilizing Venezuela and even planning to invade. That has provided the autocratic regime in Caracas with a readily available stratagem for distracting the oil-rich country’s long-suffering population from an ever-worsening economic crisis, disintegrating rule of law and erosion of human rights.  It has long been alleged by Colombia and the U.S. that the Chavez and Maduro regimes have willingly provided sanctuary and even material support for various Colombian leftist rebel groups. This includes providing aid to the Revolutionary Armed Forces of Colombia (FARC – Spanish initials) for over a decade and the last remaining organized guerilla force the National Liberation Army (ELN – Spanish initials). More recently, Colombia’s President Duque since winning the country’s top office in 2018, has regularly accused Maduro of harboring ELN guerillas and dissident FARC groups which do not recognize the 2016 peace deal. In August 2019, some senior FARC commanders notably Luciano Marin Arango, better known by his nom de guerre Ivan Marquez, who spent four years negotiating the peace treaty in Cuba, renounced the agreement (Spanish) stating they were rearming in defiance of the Colombian government. The group, which also includes Seuxis Hernandez-Solarte, known as Jesus Santrich, are believed to be in Venezuela and are allegedly actively participating in criminal conspiracies with Venezuelan government officials.

Related: Goldman Sachs Sees Large Oil Demand Rebound This Summer

The 2,000-kilometer land border between Colombia and Venezuela has long been a hotspot for activity by illegal armed groups, smuggling, organized criminal activity, and narco-trafficking. The non-state armed groups operating along the border include Venezuelan paramilitary colectivos, organized criminal bands, FARC dissidents, ELN guerillas, and the Los Rastrojos, a neo-paramilitary group that emerged over a decade ago from the Norte Del Valle Cartel. In a surprise development, Venezuelan security forces about three weeks ago launched attacks (Spanish) on FARC dissident camps in the southwestern border state of Apure. The region on both sides of the border has long been a hotspot of activity by various illegal armed groups because of a weak ineffectual government presence in Apure and the neighboring Colombian department of Arauca. Gun battles and raids by the Venezuelan military as well as police special forces near the border of Apure have seen, it is estimated, roughly 6,000 civilians flee their homes into Colombia with many seeking sanctuary in the Colombian border town of Arauquita. The department of Arauca and the municipalities surrounding Arauquita, were before the 2016 peace deal among the FARC’s strongest zones of control, which explains the considerable presence of FARC dissidents in the region. 

While Colombia’s defense minister blames a dispute between the Venezuelan military and FARC dissidents over the control of drug trafficking, the real rationale for the operation may be far more profound. In a desperate attempt to rebuild Venezuela’s shattered economic backbone, its petroleum industry, and reconstruct a near failed economy has promised to welcome and protect private investment in the energy sector. Improved legal protection and favorable regulatory landscape, which Maduro can now provide after taking control of Venezuela’s National Assembly, are not enough. Crucially, Caracas needs Washington to ease sanctions allowing foreign oil companies to operate in Venezuela and access global energy markets without the threat of being penalized if it is to attract the necessary investment required to boost oil production. That certainly will not occur if Venezuela is perceived by Washington to be a state sponsor of terrorism and allows the remnants of U.S. designated terrorist groups to operate in its national territory. The FARC and ELN were both designated foreign terrorist organizations by the U.S. Secretary of State in October 1997. This is also the case for those individuals from the FARC leadership being pursued by the U.S. government for various criminal offenses. In March 2020, the U.S. Department of Justice announced narco-terrorism, drug trafficking, and weapons charges against Ivan Marquez and Jesus Santrich  Related: Record High COVID Cases Could Stall India’s Oil Imports

The state of Apure contains the Barinas-Apure basin, which includes the Barrancas natural gas field and is Venezuela’s third most important hydrocarbon producing area. Located in the region where Venezuelan security forces are carrying out operations against FARC dissidents are the La Victoria and Guafita oilfields. Those fields contain light and intermediate-grade crude oil which is typically seen as being more valuable than the heavy and extra-heavy grades that make up most of Venezuela’s petroleum output. This potentially further explains the reason for Caracas’s decision to commence military operations targeting Colombian FARC dissident groups in Apure.

While it is difficult to determine the real motivations for the Maduro regime’s decision to launch military assaults on illegal armed Colombian groups in Apure, it appears to be more than a drug trafficking dispute between the Venezuelan military and FARC dissidents. Aside from the region’s importance as an oil and natural gas producing area, Maduro is under pressure to create favorable political currency with Washington so that U.S. sanctions will be eased allowing vital foreign investment in Venezuela’s energy sector. A key part of that strategy is ensuring that Venezuela is not labeled as a state sponsor of terrorism while guaranteeing the security of the oil-rich Latin American nation’s petroleum basins and oilfields. It is western energy majors, like Chevron, which are key to rebuilding Venezuela’s derelict petroleum industry because only they possess the considerable capital, expertise, and technology required. Those energy companies will hold off making any decisions until there is greater clarity on whether Washington will ease sanctions sufficiently to operate in Venezuela profitability and without fear of punitive penalties.

By Matthew Smith for Oilprice.com

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  • Thomas Shaffer on April 05 2021 said:
    Actually they're preparing for a military attack on Guyana. That's were the disputed new oil finds are at .

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