US allows Trinidad to access Venezuelan gas
The Trinidad government and the business community-the energy sector in particular-are celebrating an announcement by the Biden administration this week that it is lifting restrictions on Trinidad and Venezuela developing a major natural gas field on the marine border between the two nations.
Desperate to remove the administration of President Nicholas Maduro, Washington had imposed sanctions on Venezuela in 2019 as it had tried to dislodge Maduro from power and install its own, pro US administration. Critics say that Washington’s effort has failed abysmally and the latest lifting of restrictions on doing business with Caracas is reflection of today’s realities triggered by increased global demand for oil and gas with war in Europe being a major factor.
Prime Minister Keith Rowley called a special press conference late Tuesday to indicate that the way is now cleared for the two sides to jointly develop the Dragon Natural Gas Field that will allow the twin island federation with Tobago to access millions of cubic feet of supplies daily when the project gets going in the coming years.
“Happy days” are ahead for the country and CARICOM, Rowley told reporters.
“Today is a significant and happy day for me and my team, the people of T&T and the people of CARICOM. This is a significant development with far reaching consequences. The US government has today approved T&T development of the Dragon field via a waiver on sanctions with specific terms to be finalized,” he said.
The two sides had signed a joint development and production sharing agreement back in 2018 but its progress had been stalled by the imposition of trade and other restrictions with Venezuela, which holds a large part of the world’s oil and gas reserves.
Rowley said he and other Caricom leaders had been lobbying for a waiver so that the project could be executed. He praised many by name at the conference. The issue had been a key agenda item at last year’s Summit of the Americas in California.
The US$1.8 billion agreement involved Trinidad, Venezuela and energy supermajor Shell as well as Venezuela’s state energy agency, PDVSA. The project was supposed to deliver around 160 million cubic meters of gas daily.
The full details of what Trinidad and Venezuela can now do with this new arrangement are still to be hammered out, Rowley said. One thing was made clear by Washington — and that is Venezuela is not to be paid in cash, while the waiver is in effect currently for two years rather than 10 that Trinidad was hoping for.
The PM also said that international markets are already asking for a supply commencement date as demand is high.
“The first hurdle we have is to maintain the level of utilization that we have. We are at peak. We were producing about one billion cubic feet of gas a day because of our old maturing fields. We are producing 2.8 billion cubic feet a day now so there is a considerable gap.” The ideal is for production to reach four billion cubic meters daily.
