Can Guyana-Venezuela border dispute spill over into a regional dispute?

Brazil's President Luiz Inacio Lula da Silva on Thursday expressed his "growing concern" regarding the Venezuela-Guyana land dispute, in an area that is rich in oil, during the inauguration of the Mercosur summit in Rio de Janeiro.

Alongside officials from Mercosur - South America's economic and political bloc made up of Argentina, Brazil, Paraguay and Uruguay - Lula underscored the need for leaders to pay close attention to the renewed dispute concerning the Essequibo region.

Brazil, which borders both nations, is offering help for negotiation to help bring down the tension.

"One thing we don't want here in South America is war. We don't need war, we don't need conflicts. What we need is to build peace because only with widespread peace can we develop our countries," Lula said.

"Mercosur cannot remain oblivious to this situation.”

The dispute between Venezuela and Guyana escalated after Venezuelan President Nicolas Maduro announced a bid to annex the Essequibo territory, rich in oil, after a referendum on December 4. Essequibo is a forested region with a river and an offshore area.

Around 96 percent of Venezuelans back their government’s claim over the span of 160,000-square-kilometer (61,776-square-mile) territory, which both countries claim as their own.

Around eight years ago, multinational ExxonMobil made an oil discovery in Essequibo, leading to a protracted dispute between Guyana and Venezuela.

The area has been disputed since the 19th century when Guyana was a British colony. In 1899, an international tribunal had given the territory to Guayana despite strong protest from Venezuela.

Guyana has now sought international support with its Attorney General Anil Nandlall saying he will ask the UN Security Council to intervene if Venezuela takes further action.

Brazil’s Lula says he doesn't wish the situation "to contaminate the resumption of the regional integration process or constitute a threat to peace and stability."

As per estimates, there are around 11 billion barrels of recoverable oil and gas reserves located off Guyana's coast.

Venezuela's leader has sent military forces to Puerto Barima, close to the disputed territory.

Amid rising tensions, regional neighbour Brazil has mobilised troops on its border, which it shares with both Venezuela and Guayana.

Brazil's Ministry of Defence announced on Tuesday that the soldiers have been deployed at Boa Vista, the capital of the State of Roraima.

Venezuela’s Maduro doesn’t appear to be backing off as he has ordered his officials to grant over 125,000 Guyanese people Venezuelan citizenship - signalling that Caracas wants to annex Essequibo.

Maduro has ordered Venezuela's state-owned companies be granted operating licences to explore and exploit oil, gas and minerals in the region.

The Venezuela leader has also presented a new Venezuela map with the Essequibo region.

In addition to Exxon Mobil, there are other international firms interested in the region.

The area already produces around 400,000 barrels per day, with production expected to increase to over 1 million barrels by 2027.

In April, the International Court of Justice (ICJ) said it had jurisdiction over the issue to determine which nation has rights to the territory.

However, on Friday, the ICJ called for Venezuela to "refrain from any action that modifies the situation currently in force" and avoid “any action that could aggravate or extend the dispute."

Maduro’s decision comes months before the 2024 presidential elections in the financially-strapped Latin American country.