BY CHRISTINA HOAG
 Special to The Herald

 GEORGETOWN, Guyana -- Thinking it was ushering in a new economic era,
 Guyana began the year with prospects for four new offshore oil exploration
 concessions, worth about $50 million, and a $100 million satellite launch project.

 But word of the new projects revived this former British colony's century-old border
 disputes with Venezuela and Suriname, threatening at best to delay investment or
 at worst to send investors fleeing.

 ``We're obviously disappointed,'' says Prime Minister Samuel Hinds. ``We would
 hope that potential investors would not be put off.''

 Attracting foreign investors is no small task for this tiny country, one of the
 continent's poorest, with an annual per capita income of about $750.

 Guyanese officials believe the answer to their economic woes could lie in oil. The
 U.S. Geological Survey pinpointed the country's coast as one of the world's two
 large, still-unexplored offshore oil basins. That was enough to convince several oil
 companies to seek exploration licenses.

 But plans suffered an embarrassing setback on June 3 when Surinamese
 gunboats, in the middle of the night, towed off a CGX Energy drilling rig because it
 was sitting in waters claimed by the former Dutch colony. ``We were all rather
 shocked when that happened,'' says Dennis Clement, a director of Toronto-based
 CGX.

 If that weren't enough, Venezuela is raising a diplomatic brouhaha over
 Texas-based Beal Aerospace Technologies's plan to build a commercial satellite
 platform on land claimed by Venezuela.

 Venezuela alleges that the 1899 border treaty is null because it was the result of
 a secret deal between Britain and Russia. Venezuela is also protesting the oil
 exploration concessions in western maritime territory that it claims.

 The Guyanese are bewildered over the sudden revival of the dormant disputes, a
 legacy from colonial days. Officials attribute the newfound attention to political
 tactics to divert public attention from economic crises in both Venezuela and
 Suriname.

 ``Over the years we've given out major concessions and there was never a
 problem,'' says former President Desmond Hoyte.

 Investors are also taken aback by the fuss.

 ``We weren't even aware there was a border dispute,'' says Beal vice president
 David Spoede.

 Both Suriname and Venezuela are pressuring investors to withdraw or see their
 projects paralyzed.

 ``This is economic warfare,'' says Frank Beckles, chairman of a government
 watchdog group Guyana Is First.

 Officials admit their neighbors' actions could have serious repercussions. The
 two-thirds of Guyana that Venezuela claims is rich with gold, diamonds, bauxite
 and other minerals, timber and possibly oil.

 Venezuela is a particular threat as several investors, such as ExxonMobil and the
 Chinese government, have multibillion-dollar investments in that country.
 Venezuelan Foreign Minister José Vicente Rangel says he has already asked
 those companies to halt their Guyanese plans.

 Venezuela is also using its leverage as a top oil supplier to the United States to
 conduct a lobbying campaign in Washington to thwart State Department approval
 needed to transfer sensitive technology for the Beal project.

 In another move, Venezuela has announced a plan to offer its own offshore oil
 licenses in the disputed maritime area late next year.

 The fuss has already had a chilling effect as companies have started to hold up
 their projects hoping that diplomacy will resolve the impasses.

 ``Companies aren't going to start drilling if there's instability,'' warns CGX's
 Clement.