Energy Ministry: OFAC statement no threat to Dragon gas deal

The content originally appeared on: Trinidad and Tobago Newsday

Energy Minister Stuart Young – File photo

THE Energy Ministry has rejected renewed claims from the Opposition UNC that the Dragon gas deal with Venezuela is in jeopardy.

The claims were made by UNC activist Ravi Balgobin-Maharaj with respect to to a statement issued by the Office of Foreign Assets Control (OFAC) which falls under the US Treasury.

In a statement, Balgobin-Maharaj said, “As was expected, the US is making good on their promise to not extend the life of OFAC General License 44 when it expires on April 18, 2024. As such, it was just announced by OFAC that all entities operating under General License 44 will be given until May 31 2024 to wind down all oil and gas operations in Venezuela.”

Balgobin-Maharaj claimed the announcement meant the Dragon gas deal would be scrapped.

But in a subsequent statement, the ministry said Balgobin-Maharaj’s assessment of the development by OFAC was wrong.

“This amendment to the OFAC General Licence 44 does not affect the specific amended OFAC licence that was issued to the Government of the Republic of Trinidad and Tobago on October 17, 2023, which authorised the Government of TT, the National Gas Company of TT Ltd (NGC), Shell PLC and their affiliates to conduct business with the Government of Venezuela and Petroleos de Venezuela (PDVSA) with respect to the Dragon Gas Field in Venezuela.”

The ministry said, “The specific amended OFAC Licence issued to TT on October 17, 2023 is valid until October 31, 2025 and permits Shell, NGC and contractors to continue the works being undertaken to explore, produce and export natural gas from the Venezuelan Dragon Gas Field.”

Energy Minister Stuart Young reminded the public that TT has secured a 30 year exploration and production licence from the Venezuelan government on December 21, 2023 for the Dragon gas field and “the work to explore, produce and export the natural gas from this field to TT is continuing.”

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.

Last January, 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.

Last October, 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.

Young announced the extension of the licence to October 31, 2025 at a news conference in the same month.

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.”