Page 5 - LatAmOil Week 11 2023

LatAmOil COMMENTARY LatAmOil

Additionally, he drew attention to other sup- Shell will need more than two years to bring
ports that were being put in place for the Dragon Dragon on stream. During a recent interview
initiative. Specifically, he noted that officials in with Union Radio, a Venezuela radio station, he
Washington had given Shell (UK) a green light estimated that the Trinidadian official’s timeline
to join the project as a partner to PdVSA and the was off by at least 50% and said that more infor-
state-owned National Gas Co. of Trinidad and mation was needed to make an accurate guess.
Tobago Ltd (NGC). (The waiver was previously “[The development of Dragon] requires
reported to cover only Trinidadian companies.) money, people [and] time, and we don’t know if
it’s a priority,” he remarked. “Then, it remains as
Young’s optimism a pending task. Who will be the visible face of the
Under these circumstances, Port of Spain has Venezuelan side, which is responsible for paying
reason to be optimistic about its chances of taxes and royalties? This is not so easy and fast.”
striking a deal with Venezuela in the near term, He added: “It will not happen in the next
Young told Reuters. three years.”
If it does that, he noted, it will gain access to
that field’s reserves, which amount to around 4.2 Filling the gaps
trillion feet (118.9bn cubic metres). These vol- Alvarado’s points are worth consideration, espe-
umes of gas will help shore up production levels cially since the Dragon project has remained
at Trinidad and Tobago’s Atlantic LNG plant, on hold for years because of the US sanctions
whose shareholders are slated to sign an agree- regime. Caracas and
ment with the government next month on the No exploration work has been done, and
reorganisation of their shareholder structuring, no preparations have been made at the field. Port of Spain
he said. No new onshore infrastructure has been put
Atlantic LNG has been running low on feed- in place, and any existing infrastructure has are unlikely to
stock for the last few years, and Shell had been likely been left to rust or fall apart because of the bring Dragon
eyeing the possibility of pumping Venezuelan obstacles PdVSA faces whenever it tries to find
gas from the Dragon field across the maritime replacement parts and equipment (or foreign on line before
border to Hibiscus, one of its Trinidadian gas experts capable of assisting with maintenance
fields, when it signed the original development and repairs). the two-year
deal in 2018. The multi-national’s idea had been Despite Young’s hopes, then, it does seem
to build a local pipeline or tie-back system to unlikely that Caracas and Port of Spain will suc- waiver expires
link the two fields and then use existing infra- ceed in launching gas production at the Dragon
structure to move Dragon gas from Hibiscus to field within the next two years. NGC and PdVSA
the Atlantic LNG plant. The plan was suspended therefore have little hope of achieving their
due to the imposition of US sanctions, but it is desired ends before the sanctions waiver expires.
now in play again. Venezuelan government officials have probably
And according to Young, it could take effect guessed this already, and as such, they may start
sooner rather than later. The minister told Reu- pushing later this year for additional conces-
ters on March 10 that gas from the Dragon field sions from the US – ostensibly for the purpose
might technically begin flowing in as little as two of moving the Dragon project forward, but also
years. for the purpose of undermining the sanctions
regime more generally.
More time needed? After all, Venezuelan journalist Angel
Unfortunately, Young’s optimism may be González recently wrote in El Ultimas Noticias
overstated. that Washington’s decision to grant Port of Spain
Antero Alvarado, managing partner for Ven- the waiver was “a new small opening, a new ‘tear’
ezuela at the Gas Energy Latin America (GELA) in the straitjacket that the White House has
consultancy, believes that NGC, PdVSA and imposed on Venezuela.” ™

Young (C) met with Tellechea (L) and Shell TT’s Senior VP Eugene Okpere (R) in Caracas on March 14 (Photo: MEEI)

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