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Clint Chan Tack
10 Hrs Ago
Venezuelan Oil Minister Pedro Tellechea, left, with Venezuelan vice president Delcy Rodríguez, and Energy Minister Stuart Young at the signing ceremony for the Dragon Gas Field licence in Caracas, Venezuela, on Thursday. Photo: Stuart Young’s Facebook page –
Trinidad and Tobago got an early Christmas present from the Government on Friday, with the announcement that it has secured the licence to develop the Dragon maritime energy field which lies in Venezuela’s waters.
The Prime Minister and Energy Minister Stuart Young made the announcement of the gift.
Around 9 pm on Thursday in Caracas, Young signed the final documents that gave the green light for natural gas from Dragon to flow to TT.
Young first broke the news around 11 pm on Thursday via a Facebook post.
“Historic moment as the Bolivarian Republic of Venezuela has granted the licence for the Dragon Gas Field to NGC and Shell to develop and produce gas for export to TT. This is a huge win for the people of Venezuela and TT.”
Young said, “I am humbled and privileged to have played a key role in making this a reality.”
Dr Rowley followed with a Facebook post on Friday.
“We have secured the licence to the Dragon gas field!
“Yes, in the spirit of good neighbourliness, the dragon can dance.”
Hours later at a news conference at the Diplomatic Centre in St Ann’s, Rowley and Young explained the significance of the development.
Rowley declared, “This is a historic development on a historic day for the people of Venezuela and TT. While it is not a boom, it a brighter future, as of today.”
He reminded the media of efforts made by the PNM since returning to office in September 2015 to repair the damage he said the UNC-led People’s Partnership (PP) coalition government had done to the energy sector.
Rowley said that damage included natural gas curtailments, no new gas contracts being negotiated and the National Gas Company (NGC) facing $8 billion in claims from energy companies.
From as early as 2015, he continued, Government realised one of the strategies it could use to remedy that situation was to look to its neighbours.
“Venezuela has a large confirmed reserve of natural gas. We are seven miles from Venezuela.”
PM: Huge diplomatic effort
Rowley said one country processing raw material from another country and exporting it was not new.
He added that since the 1970s, prime minister Dr Eric Williams had established a foreign-relations policy which continued to give TT excellent relations with its international partners, “Where the Government is strong is on policy and diplomacy.”
He recalled the visits he and Young had made to Washington, DC, and Caracas over the last five years, to convince policymakers there to secure the licence for the Dragon field.
Rowley praised Foreign and Caricom Affairs Minister Dr Amery Browne, Guyana President Dr Mohammed Irfaan Ali, Barbados Prime Minister Mia Mottley and Antigua & Barbuda Prime Minister Gaston Browne for their help on the diplomatic front.
He also praised US Congresswoman Maxine Walters for opening many doors in Washington for TT to argue its case for Dragon.
Rowley said the US Office of Foreign Assets Control (OFAC) licence which TT received to pursue the Dragon project was “a carve-out” from the US so TT could continue to do business while US sanctions were in effect against Venezuela.
He rejected repeated claims from the Opposition UNC that Government was putting all its eggs in one basket in pursuing the Dragon deal.
“Ignore the naysayers.”
Rowley reminded the media that this month, Government also successfully completed the restructuring of Atlantic LNG (ALNG) to give Government, through NGC, a ten per cent shareholding in all four of the company’s LNG trains.
He then disclosed a new feature of the restructured ALNG.
“The new agreement allows third-party gas (gas not produced by any of ALNG’s shareholders- BP, Shell and NGC) to come to plant for processing.”
Rowley said that was important for energy companies working in the region that did not have a way to get their gas to market.
He said that was why Government had memoranda of understanding with Barbados and Grenada for offshore energy companies operating in those countries to provide surplus natural gas to plants in TT.
Rowley said part of Government’s vision was to develop TT as a manufacturing and exporting hub for petrochemicals within Caricom and for the northern part of South America.
Young: All bases covered
Asked how Dragon would benefit the population, Rowley said it would help to “protect our revenue stream.”
In the short term, he continued, it would help TT preserve the revenue it has now.
Going forward, Rowley was confident Dragon and other energy initiatives being pursued would put TT in a better position where gas production and consumption was concerned.
Young agreed with Rowley.
“We have covered all bases.”
Young said Government remained hopeful that the first gas from Dragon could reach TT in 2025. He added that a ship would do a survey of the field in April 2024.
Young reminded the media that Dragon was not the only energy initiative TT was pursuing with Venezuela.
He said last month, Shell announced it had awarded a contract to McDermott to build the infrastructure to bring natural gas from the Manatee field, which lies in TT’s territorial waters.
Young reiterated the contract was possible because of negotiations with Venezuela to delink Manatee from the Loran-Manatee field, which straddles the TT-Venezuela maritime border.
He hinted that the possibility of obtaining gas from the Loran field, which lies in Venezuela’s waters, was being looked at.
Venezuela VP: Friendship with TT getting stronger
Reaction to the securing of the licence was generally positive in TT and in Venezuela.
In a statement, Venezuelan vice-president Delcy Rodriguez said, “Without a doubt, this project marks a historic moment for the homeland, as part of the energy polices promoted by the president (Nicolas Maduro).”
Rodriguez witnessed the signing of the documents for the Dragon licence on Thursday.
She said the Dragon deal would strengthen Venezuela’s role as a gas exporter.
Rodriguez also viewed the securing of the licence as further evidence of strong and growing diplomatic relations between Venezuela and TT.
“Venezuela and TT continue to strengthen their relations of friendship and bilateral co-operation.”
Former minister in the ministry of finance Vasant Bharath said, “Although I am pleased from a country perspective that the licence has been granted, a critical assessment would require information on investment terms, project timelines, and the distribution of responsibilities between the two companies.
“Without such specifics, it’s challenging to gauge the potential impact and risks associated with this venture.”
Bharath said, “Concerns about the Venezuelan government’s track record with foreign companies, as evident in ongoing cases before the International Court for Arbitration, further emphasise the need for careful consideration of sovereign rights, obligations, and cross-border arrangements in this venture.”
He observed that upcoming presidential and general elections in the US and TT, in 2024 and 2025 respectively, could have an effect on the Dragon project.
Bharath said Opposition Leader Kamla Persad-Bissessar had publicly taken an anti-Maduro stance for a long time.
He added that the outcomes of both elections could add an additional layer of risk and uncertainty to the situation.
Economist: TT must seek more opportunities in Venezuela
UWI economist Dr Vaalmikki Arjoon said, “This is yet another significant and successful step taken in the process for us to monetise and export gas from the Dragon field.”
He added that the overall success of the project could also open up further opportunities to access gas from other fields in Venezuela.
But while Venezuela has the ninth largest gas reserves in the world, at 203 trillion cubic feet (tcf), Arjoon said it also had many stranded and idle fields, owing to insufficient investment and maintenance.
“Venezuela is in need of much foreign investment in their proven oil and gas fields to regenerate their hydrocarbon sector, and TT can be a part of this equation especially once the Dragon gas project is successful.”
Arjoon said the Dragon project could bolster regional energy security and support the rehabilitation and development of Venezuela’s oil and gas industry.
He reiterated that apart from supplementing future gas production with gas from the Dragon field, “Another key priority ought to be making the terms of investment for the energy companies as attractive as possible to encourage greater exploration and drilling activities.”
Arjoon said that was important since the transition toward green energy was likely to move at a faster pace given the recent outcomes of COP 28.
“We, therefore, do not want to risk getting to a state where there is still much gas left to monetise but little global demand. Gas underground has no value until it is extracted and monetised.”
With gas production levels being 34 per cent lower than a decade ago, Arjoon said this is vital, “given that we are a mature province.”
Should TT be able to access Dragon gas by 2025, Arjoon estimated that this could increase gas production from 2.8 to 2.85 billion scf per day.
Energy Chamber: Dragon could help rebuild downstream gas industry
The Energy Chamber said, “This is a very significant development for the energy industry in TT. The announcement represents an important further milestone in the plans to import natural gas from Venezuela for use in our well-developed existing downstream gas industry and LNG export facilities.”
The chamber said. “This natural gas will help return the mid- and downstream infrastructure in Trinidad to capacity utilisation and will provide the world with a much-needed secure source of LNG and petrochemicals, such as methanol and ammonia.”
The NGC praised the efforts of all players involved in bringing the deal over the line.
Those players included the Energy Ministry and its Venezuela counterpart, Shell, NGC and Venezuela’s state energy company, Petroleos de Venezuela SA (PDVSA).
“All parties worked steadfastly and amicably to bring this significant signing one step closer to operationalising gas production from Dragon.”
In the short term, the company continued, the immediate benefit to be obtained from Dragon was the potential to “buttress gas supplies and by extension energy industry development in the twin-island (state).”
NGC said, “The signing has strengthened and deepened energy relations between TT and Venezuela and opened prospects for the future development of other cross-border and across-border gas reserves between both countries.”
Story of the Dragon
The US$1 billion Dragon deal was signed between TT and Venezuela in August 2018. This involved included energy giant Shell, Venezuela’s state oil company PDVSA, and the NGC.
The Dragon deal will see TT developing the field, which is estimated to produce approximately 150 million standard cubic feet of gas a day. The gas will be imported through a billion-dollar pipeline to the Hibiscus platform off the northwest coast of TT. The platform is jointly owned by the Government, NGC and Shell.
The deal was left in limbo after the US imposed sanctions on Venezuela in 2019.
On January 24, the Prime Minister announced that the US had lifted the sanctions to allow TT to extract gas from Venezuela. This waiver came after almost four years of lobbying led by Dr Rowley and supported by other Caricom leaders.
Rowley said the waiver came with stipulations, one being a two-year licence with an optimistic view of an extension and priority given to Caribbean countries, except Cuba.
In October, the US Office of Foreign Assets Control (OFAC) offered an extension of the licence it issued to TT to access natural gas from the Dragon gas field and the ability to pay for that gas in different ways.
Energy Minister Stuart Young announced the extension of the licence to October 31, 2025 at a news conference on October 17.
He said the extension also allows Government to pay for gas from the field in “fiat currency, as well as US dollars, as well as (Venezuelan bolivares), as well as via humanitarian measures.”
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