IN A BLOW to the government and country, the United States government has revoked the licences it had earlier granted allowing this country to monetise gas from both the Dragon and Cocuina-Manakin cross-border gas fields with Venezuela.
The announcement was made by a sombre Prime Minister Stuart Young at an unexpected press conference called on April 8 at Whitehall.
These licences were granted to Trinidad and Tobago by the US Department of the Treasury's Office of Foreign Assets Control (OFAC).
“We have now been informed that our licence from OFAC, which is dated December 18, 2023, has been revoked by OFAC, as well as our Cocuina-Manakin licence. It came a while after the others.
“I can tell TT, because I don’t have more details than that, that I have been in touch with our attorneys-at-law in Washington, DC. There is a process for, I wouldn’t say appeal of this revocation, but for you to make an application for it not to be, or for there to be amendments. We are going to be engaging that process on behalf of TT.”
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Young said he had reached out to US Special Envoy for Latin America and the Caribbean, Mauricio Claver-Carone and requested a telephone call with US Secretary of State Marco Rubio.
“I expect us to have the opportunity on behalf of TT to present our case. This doesn’t come necessarily as a surprise seeing how volatile things are not only with respect to the policy with Venezuela but what we’re seeing with the imposition of tariffs.”
He said based on the personal discussions he had with Claver-Carone and Rubio, as well as others being pursued, he expects TT will be given an audience and the opportunity to continue to make out its case.
“I am not surprised by the outcome because they did explain to me the US policy and what they were trying to achieve with respect to Venezuela, but the words ‘they would not harm TT,’ I believe and have no reason to doubt it whatsoever, remains in play. I also had discussions, which I am not at liberty to get into details now, as to what we may be able to go forward now.
“We will continue to fight for the ability and the opportunity to keep our energy sector whole and the future of TT and the Caricom region in the manner we have become accustomed to.”
Young said only the administrative notice had been received from OFAC, which contained very legalistic language.
“There is a process that allows you to advocate for why this shouldn’t be taken. There is a wind-down period, it is not immediate. The wind-down period for this is until May 27, which allows you an opportunity before it kicks in fully for you to engage with the US.
“The good thing is they understand and have taken careful note of what it is TT can do. I am going to have more discussions with them but they understand what we can do, and it’s not only in the energy sector.”
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Asked whether the revocation of the licence would mean the gas would no longer be extracted from the Dragon field, or if extracted it could not be sold to the international markets, Young said he needed to continue meeting with the lawyers.
“It prevents payment at this stage to the Venezuelan government. We are going to continue doing the work. Secretary of State Rubio told me, ‘Stuart, in this thing there are many ways and times can change, but don’t worry, we’re not going to harm TT.’
“We are going to continue the engineering work. Shell was telling me, we were looking for a rig and we were about to sign a contract for a rig. Things are still progressing and we’re hoping there could be some cost benefits for the Manatee, which is full-speed ahead and we are expecting first gas in 2027, which is significant gas and we’re looking at how to increase that because we knew there were a possibility on the Dragon site.”
Young said he had not yet had any discussions with anyone in the Venezuelan government, as he had made the announcement immediately on receiving the news.
“I am remaining in direct conversation with bp and Shell. I was in contact with the Venezuelan government up to a few days ago and I will be speaking with them as well.”
Young said the population should not buy into the narrative that all the eggs are in the Dragon gas deal.
“If you ask the people in the energy sector in TT, you’ve seen that rise in activity that has kept us stable at 2.6 billion cubic feet a day in production, with the bp, Shell, EOG, Perenco, even on-shore with Touchstone for the gas industry and Woodside and bp up with deep water gas in Calypso project. You’re seeing the shallow water bid rounds were successful. What this would have done is give us that extra additional injection of gas that can use some of the capacity that exists at Pt Lisas and Pt Fortin in the LNG.”
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Young was reminded that former PM Dr Rowley had said if the Dragon gas deal fell through, TT’s "coo coo would be cooked.” He was asked what government would do if the deal did not work out.
“We don’t have it yet. Every time there has been some adversity presented, I have found a new plan and we will now put in place a new plan. We will also be talking about the diversification plan we have, but don’t give up. Don’t give up hope. Go based on the track record you’ve seen and let’s get it done, what we can.”
The PM said this was not a failure of the PNM administration.
He said he had been told by Rubio and Claver-Carone that TT’s reputation and how it is respected by the US administration was at a top-tier level due to the work put in by the administration.
“I’ll go as far to breach a bit of Mauricio’s confidence in the conversation he had with me. He said, ‘we are going to work with TT because we want TT to continue and be competitive in this area and we recognise the importance of TT for the energy security not only of TT and the region, but even out of the region.’ So they are going to work with us as they enforce their policies. Other people cannot get the types of audience and conversation we are getting.”
Asked how he would restore the public’s confidence in him, Young said the population had the report card beginning in 2016 where negotiations began on the issue, a commercial term sheet was negotiated with Venezuela in 2018, and negotiations continued after the first round of sanctions from the US came in.
“We pursued it, developed the strategy, had conversations with the policy-makers in Washington, DC. We were the first, other than Chevron, to get an OFAC licence. That says a lot. Then we got the amendment. So this is a track record of an ability to negotiate successfully on behalf of TT, and have a way to strategically develop relationships, which has also happened with the oil and gas companies.”
“We have to continue with this. What you have to decide is who is capable of doing it, who has the credibility to be able to do it, because as the former PM said, without the ability and the opportunity to get access to cross-border gas, this is not for the government of today, it is for the future citizens of tomorrow.”
Young said this is not the first time a hurdle has been put in TT’s way. He said he had been discussing what could happen in the Manatee field with Shell's President of Integrated Gas Cederic Cremers if there was a delay on the Dragon field.
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