Business Day Editorial: Face facts on Dragon

It’s understandable that Government would cling to the notion that the Dragon gas deal can still happen by the estimated timeline of 2021. After the failure of the much-touted Sandals Tobago project, it desperately needs a major win as it gears up for back-to-back elections.

The deal – which from a purely economic context is a practical solution for both Trinidad and Venezuela to solve two fundamental problems in their energy sectors – has now morphed into a political, diplomatic and ideological conundrum. Desperate to seal the deal, TT has formed close alliances with Venezuela’s embattled incumbent President Nicolas Maduro. Now, Maduro’s hold on power is becoming increasingly tenuous as he faces mounting international pressure to step aside and allow his challenger, National Assembly president Juan Guaido, to lead in the interim, or call immediate fresh and free elections.

TT’s position remains “non-interference and non-intervention,” and has called for dialogue. This is fair, because, as the Prime Minister has constantly pointed out, this country is too small to be caught in the middle of an international skirmish. This neutrality, is, however, starting to be interpreted as an implicit support of the Maduro-led regime, and the Venezuelan opposition has noticed. In a Twitter post, Guaido’s deputy, Carlos Valero went so far as to call Dr Rowley “an accomplice of Maduro.”

Such a public rebuke does not bode well for Dragon in its current form. Long before the deal was even signed last August, there had been questions about its legitimacy, since it would need to be approved by the National Assembly – Venezuela’s democratically elected legislature made up primarily of Maduro’s political opponents.

Should the opposition become the government, it’s a long shot that they will uphold any agreement signed by its predecessor, no matter how much TT insists the deal is so commercially sound it can stand any scrutiny.

At this point, though, what’s clear is that Dragon is not happening right now. Whatever else, the political turmoil in Venezuela is not going to be resolved overnight, and they have bigger things to worry about than a gas deal that’s only going to deliver 150 million standard cubic feet per day.

And despite the Prime Minister and the NGC’s hopeful projections that factor in Dragon gas into the country’s outlook to 2023, Shell, which is putting up the money to build the pipeline that connects Dragon with TT infrastructure, in its 2019 update at the Energy Conference last week, did not mention Dragon as any substantial part of its strategy. This, more than anything, points to a deal in limbo.

The US has also imposed economic sanctions on Venezuela’s state oil company PDVSA, the third commercial partner in the Dragon deal, along with Shell and the NGC, effectively cutting off its cash flow. Sovereign nation or not, continuing with the deal right now could negatively affect TT’s relation with its biggest trade partner – not to mention almost logistically impossible if any part of Dragon is routed through the US or US financial institutions.

It’s disingenuous at the least, then, for the Government to pretend that Dragon will soon be a reality. What’s more, it seems as if Government is aware of the stalemate. Last week, speaking to the press, Rowley said, “If it never works, out, well, it never works out… We don’t have it yet, so you can’t lose what you don’t have.” It’s almost like the foreshadowing when he hinted the Sandals Tobago demise before the official announcement.

Government should make more than a superficial attempt to reach out to the Venezuelan opposition, especially as most of the West has already recognised Guaido as the leader of the country. Even China, which holds most of Venezuela’s debt, is hedging its bets with Guaido. It’s also not hard to advocate for the democratic process, no matter how neutral you purport to be. Free and fair elections are the hallmark of democracy, not dialogue.