U.S. Grants License for Trinidad to Develop Major Gas Field in Venezuelan Waters

The United States has issued a license for Trinidad and Tobago to develop a major gas field in Venezuelan territorial waters, the U.S. and Trinidad officials said on Tuesday, signaling a further ease of some sanctions on Venezuela. The license means Trinidad can do business in the Dragon gas field with Venezuela’s sanctioned state-controlled oil company PDVSA. Trinidad’s request for a license was granted by the U.S. to boost Caribbean regional energy security. Trinidad prime minister Rowley said the country is expected to have access to 350 million cubic feet of gas per day from the Dragon field.

Rowley also stated that the government had applied for the license in mid-2022 and gained approval after discussions with Biden, while also keeping open a channel of communication with Venezuelan President Maduro.

U.S. officials said the Venezuelan government would not receive any cash payment from this project and all remaining U.S. sanctions would remain unchanged and enforced.

The decision comes after talks between U.S. Vice President Harris and Caribbean leaders to ensure regional energy secırity and reduce reliance on other imports, including ones from Russia.

PDVSA has found gas reserves of 4.2 trillion cubic feet (tcf) in Dragon, on the Venezuelan side of its maritime border with Trinidad. The project was headed for production over a decade ago, but stalled over lack of capital and partners, as well as sanctions.

Under U.S. sanctions, companies and governments must obtain authorization from the U.S. Treasury Department to do business with PDVSA. The Biden administration has granted only a few such licenses since taking office in January 2021, mostly on a heavily restricted basis.

The Biden administration decision to grant a license follows a round of negotiations between the Maduro government and the opposition aimed at creating a path to new elections. But Maduro has since resisted sending officials to the negotiating table since then.

One of Washington’s key aims appeared to be a response to U.S. partners in the Caribbean who have called for help to deal with high energy prices following Russia’s invasion of Ukraine.

“The Vice President conveyed to the Prime Minister [Rowley] that the Treasury Department would take action to help meet the region’s long-term energy needs,” a statement from Harris’ office said.

The license will allow PDVSA, Shell and Trinidad to jointly plan and develop a gas-exporting project after agreeing to pending details in coming days. A portion of the resulting gas must be exported to Jamaica and the Dominican Republic, according to the two-year license’s terms, Rowley said.

Trinidad is Latin America’s largest LNG exporter, with installed capacity to process 4.2 billion cubic feet per day (bcfd) into LNG, petrochemicals and power. But its gas production is just under 3 bcfd.

Even with Washington’s granting of Trinidad’s request, it could take years of investment and effort to bring Venezuelan gas to Trinidad and boost LNG exports.

In addition, with no payments authorized to Venezuela, it could be difficult for Trinidad to craft a deal with Caracas.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Chinese EV Maker BYD to Build Auto Parts Plant in Vietnam

Chinese electric vehicle (EV) maker BYD is planning to build a plant in Vietnam to produce auto parts, in a move that would reduce the company’s dependence on China and diversify its supply chain in Southeast Asia as part of its efforts of global expansion. The investment in Vietnam is expected to be more than $250 million, expanding parent BYD Co.’s presence in the country, where its electronic unit is producing solar panels. BYD’s move represents a wider trend among manufacturers to diversify business away from China amid trade and political tensions with the United States and production disruptions caused by Covid lockdowns.  

Barclays to Offer Brokerage Services in Taiwan via New Subsidiary

British bank Barclays announced on Wednesday that it received permission from Taiwanese authorities to establish a subsidiary to provide brokerage and underwriting services for international and Taiwanese corporate and institutional clients. 

China Sets Out $75 Billion Infrastructure Fund to Revitalize Economy

China is set to line up a state infrastructure investment fund worth 500 billion yuan ($74.69 billion) to boost infrastructure spending and revive a stagnant economy. Chinese economy has started slowly recovering from pandemic lockdowns but headwinds that slow down growth remain. 

Stay informed

error: This content is protected !!