Shell and Trinidad and Tobago's National Gas Company (NGC) are close to agreeing to credit Venezuela's state-run oil firm for its $1 billion investment in a gas field the three want to jointly develop, four people close to the discussions said.
and Trinidad and Tobago's National Gas Company are close to agreeing to credit Venezuela's state-run oil firm for its $1 billion investment in a gas field the three want to jointly develop, four people close to the discussions said.
If agreed, the move could help speed a long-stalled offshore development. The U.S. in January granted Venezuela's PDVSA, Shell and NGC a two-year authorization to revive the project, which could boost Trinidad and Tobago's gas processing and exports. Negotiations between the trio initially had progressed little over a U.S. demand that the proposed Dragon gas project exclude cash payments to Venezuela or its state companies. That remains a hurdle, though Trinidad has asked the Biden administration to reconsider. Much of the $1 billion that Venezuela wants recognized as its contribution belongs to a nearly-completed gas line connecting the offshore field to Venezuela's shore, two of the people said. The field is in Venezuelan waters and past efforts to find partners for its development stumbled over PDVSA's demands for compensation. Shell and NGC have not given final word to PDVSA on the reimbursement, but are prepared to pay for "all legitimate claims," one of the sources said. PDVSA in 2013 finished testing gas output at Dragon, whose reserves it estimated at 4.2 trillion cubic feet. But the field has never been commercially active due to Venezuela's lack of capital and, more recently, U.S sanctions."Discussions on the Dragon project involving the governments of Venezuela and Trinidad and Tobago and Shell are ongoing and commercially confidential," Shell told Reuters. Trinidad's Energy Minister Stuart Young met Venezuela's President Nicolas Maduro last week, the Venezuelan government said on social media. PDVSA, Venezuela's oil ministry and Trinidad's energy ministry did not reply to requests for comment. The U.S. Treasury Department declined to comment. A U.S. State Department spokesperson said its overall Venezuela sanctions policy remains in place to limit revenue flows to Maduro with the goal of "encouraging a return to democracy in Venezuela."
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