US sanctions puts Trinidad-Venezuela gas deal on hold

PORT OF SPAIN, Trinidad –The Trinidad and Tobago Government disclosed that a 2013 agreement with Venezuela for the joint development of a natural gas field straddling their maritime border has been put on hold.

And Prime Minister Dr Keith Rowley has blamed the decision on the United States’ imposition of sanctions on Venezuela’s state-owned oil and natural gas company, Petróleos de Venezuela, S.A. (PDVSA) last year.

As a result, he said, Venezuela and Trinidad would independently develop the shallow-water field which is estimated to contain 10.25 trillion cubic feet of natural gas.

Rowley made the disclosure about the latest development in the Dragon Deal – considered a landmark cross-border agreement between the two Caribbean neighbours – at the Trinidad and Tobago Energy Conference and Trade Show last Tuesday.

“Progress in the development of the unitized Loran-Manatee field has been impeded by the sanctions imposed by the US government, which inhibit US companies from doing business with Venezuelan oil company PDVSA,” he said.

“This impacts on the ability of US company Chevron, which has a 60 per cent interest in the Loran field, to participate in the development of the Loran-Manatee Field. As a consequence, the Government of the Republic of Trinidad and Tobago and the Bolivarian Government of Venezuela have agreed to the independent development by each Government of the field within the Loran-Manatee cross-border that falls within its marine area.”

Shell Trinidad and Tobago has full stake in the Manatee field and it is projected that gas production there could start by 2024 or 2025, at rates ranging from 270 to 400 million standard cubic feet per day.

“Shell is in conversation with the government and is working on various development scenarios to determine the best option,” Prime Minister Rowley told those gathered at the energy conference which was organized by the Energy Chamber of Trinidad and Tobago and is being held under the theme, ‘Shaping the Caribbean’s Energy Future’.

He added that should the US sanctions be lifted, both parties would be in a position to move ahead with their cooperation as “virtually all the preparatory work has been done”. Under the gas deal signed in 2013, 73.75 per cent of the joint field belongs to Venezuela and the rest to Trinidad and Tobago.

In imposing the sanctions in January last year, the US government alleged that PDVSA has been a vehicle for corruption, and that a variety of schemes have been designed to embezzle billions of dollars from the state-owned company for the personal gain of corrupt Venezuelan officials and businessmen. As a result of the action, all property and interests in property of PDVSA subject to US jurisdiction were blocked, and Americans were generally prohibited from engaging in transactions with them.