Griffith uncertain about Dragon gas deal

The content originally appeared on: Trinidad and Tobago Newsday

Political leader of the National Transformation Alliance Gary Griffith. – File photo

NATIONAL Transformation Alliance (NTA) political leader Gary Griffith has expressed uncertainty that the Dragon gas deal with Venezuela will bear any fruit.

In a statement on April 20, Griffith based this view on a decision by the US to reimpose sanctions on Venezuela.

In a statement on April 17, the US State Department said this decision was taken because the US determined that Venezuelan President Nicolás Maduro and his representatives had not fully met commitments made between them and Venezuela’s opposition in Barbados last October, towards the holding of free and fair elections later this year.

“Therefore, General License 44, which authorises transactions related to oil or gas sector operations in Venezuela, will expire at 12:01 am on April 18.”

In order to implement an orderly process following the expiration of General License 44, the State Department said the US will issue a 45-day wind-down license.

The US Treasury’s Office of Foreign Assets Control (OFAC) also will consider requests for specific licenses to continue activities beyond the end of the wind-down period on a case-by-case basis.

Griffith was concerned that renewed US sanctions against Venezuela could see more Venezuelans coming to Trinidad and Tobago.

He was uncertain as to whether the country was prepared for this and what could be the economic impact.

Griffith also asked about whether new US sanctions could affect efforts to obtain natural gas from the Loran-Manatee field, which straddles the TT-Venezuela maritime border.

Manatee falls on TT’s side of that border. An agreement was previously reached to delink it from Loran, which lies on the Venezuelan side of that border and access Manatee’s gas reserves.

Griffith said, “The lesson here perhaps is about not putting all our eggs in one basket because as is widely known, one trip and it’s a total disaster.”

In the House of Representatives on April 19, the Prime Minister said Government received a 30-year exploration and production licence from the Venezuelan government on December 21, 2023, for the Dragon gas field, and the work to develop the field is continuing.

“The National Gas Company (NGC) and Shell have been looking at the elements necessary to get the project done.”

Rowley told MPs the gestation periods for projects of this period are lengthy and involve different components.

These include getting vessels to survey the reserves in the Dragon field and doing the designs for any pipeline infrastructure needed to extract the natural gas that is there.

Rowley said these were necessary precursors for the successful undertaking of the relevant physical activity to come.

On April 18, UNC activist Ravi Balgobin-Maharaj claimed a statement made on the same day by the Office of Foreign Assets Control (OFAC), which falls under the US Treasury, meant the Dragon deal was in jeopardy

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.”

But in a subsequent statement, the Energy Ministry said Balgobin-Maharaj’s assessment of the development 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 Trinidad and Tobago, the National Gas Company of Trinidad and Tobago Ltd (NGC), Shell PLC and their affiliates to conduct business with the Government of Venezuela and Petróleos de Venezuela (PDVSA) with respect to the Dragon Gas Field in Venezuela.”

The ministry said, “The specific amended OFAC Licence issued to Trinidad and Tobago 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.”

TT and Venezuela signed the US$1 billion deal in August 2018. Those involved included energy giant Shell, Venezuela’s state oil company PDVSA, and the NGC.

The Dragon deal will see TT developing the field, which it is estimated will 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.