Shell is preparing to resume preliminary work on an offshore gas field in Venezuela to supply Trinidad and Tobago, as confidence grows that Donald Trump’s administration will issue a new license that exempts the project from sanctions, according to sources close to the matter.
The project, which involves the development of the Dragon gas field, located in shallow waters between the two countries, aims to bolster supplies to Trinidad’s liquefaction complex and petrochemical plants, which are facing gas shortages. The country is an important exporter of LNG, ammonia and other gas-derived products.
The possible license for Shell highlights the Trump administration’s dual approach towards Venezuela: on the one hand, US warships and fighter jets acting against vessels suspected of drug trafficking; on the other, oil company executives and Trinidadian authorities negotiating in Washington, Caracas and Port of Spain to make gas projects viable.
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In April, the White House revoked oil and gas licenses in Venezuela to increase pressure on the country, which the Trump administration considers a haven for drug cartels. The Dragon field is one of several offshore projects that were in development before the change in stance.
In July, the administration granted a restricted license to Chevron to resume production and export of Venezuelan heavy oil, and is expected to do the same with Shell and other companies linked to gas projects that would benefit Trinidad, according to the sources.
Shell seeks for the new license to last up to 10 years, instead of the short term of the previous one, to enable long-term investments. Shell’s partner in the project is state-owned National Gas Co. of Trinidad.
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At the same time, BP is trying to restore its license to develop the Manakin-Cocuina gas field, which straddles the maritime border between Venezuela and Trinidad.
Shell and BP are major shareholders in the Atlantic liquefaction complex in Trinidad, where gas production has been falling for more than a decade, affecting exports of LNG and petrochemicals including ammonia used by US farmers.
The Dragon field is just a few kilometers from Shell’s Hibiscus platform off the coast of Trinidad. The Trump administration would be willing to allow companies to resume operations in Venezuela as long as they do not pay taxes and royalties to the Venezuelan government in hard currency.
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On September 30, US Secretary of State Marco Rubio reaffirmed support for Trinidad to access the Dragon field, as long as measures are taken to avoid significant benefits to the Nicolás Maduro regime.
In 2023, Venezuela’s Ministry of Petroleum awarded Shell and NGC a 30-year production sharing contract for the Dragon field, which has more than 4 trillion cubic feet in reserves. The initial terms had been defined in 2018, before the sanctions imposed in January 2019.
