The project awaits a new licence from the Trump administration, which would exempt it from sanctions.
Shell is gearing up to restart preliminary work on the Dragon gas field, located offshore Venezuela, to supply gas to Trinidad and Tobago, reported Bloomberg, citing people familiar with the matter.
The project awaits a new licence from the Trump administration, which would exempt it from sanctions.
This move is expected to help Trinidad’s liquefaction complex and petrochemical plants, which face gas shortages.
The Dragon gas field, situated in shallow waters between Venezuela and Trinidad, is crucial for replenishing feedstock for Trinidad, a significant exporter of liquefied natural gas (LNG), ammonia and other gas-based products.
The anticipated licence for Shell highlights the administration’s dual approach towards Venezuela, balancing military actions with diplomatic efforts to revive gas projects.
The White House previously revoked oil and gas licences in Venezuela to increase pressure on the country, viewed as a haven for drug cartels.
However, in July, Chevron received a restricted licence to resume Venezuelan heavy oil production and exports. Similar licences are expected for Shell and other companies involved in gas projects, benefitting Trinidad, the media outlet reported, citing sources.
The US Treasury Department, responsible for issuing these licences, has not commented on the matter.
Shell aims for a long-term licence of up to ten years to facilitate sustained investment. Trinidad’s National Gas Co. is Shell’s partner in the Dragon project, home to more than four trillion cubic feet of reserves.
BP is also working to reinstate its licence for the Manakin–Cocuina gas field, located along the maritime border between Venezuela and Trinidad.
Both Shell and bp hold major stakes in Trinidad’s Atlantic LNG complex, where gas output has been declining for more than a decade, reducing exports of LNG and petrochemicals.
The Trump administration is reportedly open to allowing oil companies to resume work in Venezuela, provided they avoid paying taxes and royalties to the Venezuelan Government in hard currency.
US Secretary of State Marco Rubio expressed support for Trinidad accessing the Dragon field, with conditions that limit benefits to the Venezuela regime.
In late 2023, Venezuela’s Oil Ministry awarded Shell and the National Gas Company of Trinidad and Tobago a 30-year production-sharing contract for the Dragon gas field.
The initial terms were settled in 2018, but progress stalled after US sanctions were imposed in January 2019 to challenge Nicolás Maduro’s government in Venezuela.
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