The Venezuelan navy has intercepted a ship exploring for oil on behalf of Exxon Mobil Corp. in Guyanese waters, according to Guyana's foreign ministry.
A series of offshore oil discoveries in recent years has given Guyana the potential to become one of Latin America's largest producers.
Meanwhile, Venezuela’s crude output has tumbled to its lowest levels in 70 years amid an economic crisis.
The Ramform Tethys– which belongs to Norwegian company Petroleum Geo-Services (PGS) – was conducting seismic survey work on behalf of Exxon when it had to stop exploration and turned east after being approached by the Venezuelan navy.
"Guyana rejects this illegal, aggressive and hostile act," Guyana's foreign ministry said in a statement, adding that the move "demonstrates the real threat to Guyana's economic development by its western neighbour and violates the sovereignty and territorial integrity of our country."
The ministry added that it would report the incident to the UN and send formal communication to Venezuela's government.
It said it would inform the governments of the various homelands of the 70 crew members aboard the vessel, flagged by the Bahamas, of the "threat to their safety."
An Exxon spokeswoman said seismic explorations in the western portion of Guyana's Stabroek Block "have been paused until they can be safely continued," and that the vessel was operating in Guyana's exclusive economic zone.
Venezuela's socialist President Nicolas Maduro has previously criticized Guyana's decision to allow oil exploration to go ahead in the waters off the shore of the Essequibo region – a sparsely populated and dense jungle area equivalent to around two-thirds of Guyanese territory that Venezuela also claims.
Guyana says Caracas agreed to relinquish the area after a ruling by an international tribunal in 1899, but Venezuela later backtracked on that decision.
Earlier this year, the UN referred the dispute to the International Court of Justice.
The dispute has heated up in recent years as Exxon has announced the discovery of more than four billion barrels of oil off the shore of Guyana, an English-speaking nation of 750,000 with no history of oil production.
(Reuters reporting by Neil Marks in Georgetown and Vivian Sequera in Caracas; Additional reporting and writing by Luc Cohen; Editing by Hugh Lawson and Kirsten Donovan)