Venezuelan ambassador: Dragon deal not affected by US sanctions

The Dragon deal continues, Venezuelan ambassador Carlos Amador Perez Silva said Friday, and will not be affected by sanctions applied by the United States.

In his first interview since being appointed in May, the Venezuelan diplomat told Sunday Newsday, at the embassy on Victoria Avenue, Port of Spain, that the legal framework of the project is already subscribed and the parties are now waiting for the activation of the operative part.

“These are agreements previously signed between the two nations and that will be respected. In any case, I as an ambassador do not handle figures or dates, but it is likely that at the time indicated the governments will inform more about it.”

He said the operation of the Dragon field (deal) is being handled in Venezuela by the Ministry of Popular Power of Petroleum and Mining, the ministry that oversees Venezuelan state oil company, PDVSA. PDVSA, along with the National Gas Company of TT (NGC) and energy giant Shell are the three primary commercial partners in the Dragon deal.

On September 19, Minister of National Security Stuart Young visited Venezuela and met with the top Venezuelan government officials, including President Nicolás Maduro. He also met with Petroleum Minister Manuel Quevedo.

"Indeed, it was known in the news that Minister Young held meetings in Caracas, one of them with Petroleum Minister Manuel Quevedo and it was reported at that time that they were reviewing bilateral agreements."

Last August, Venezuela and TT signed a joint declaration for the export of gas, with the aim of maintaining bilateral energy integration.

Ambassador Perez Silva affirmed that sanctions against the Venezuelan government by the US will not affect the agreement with TT.

"There is progress. Several voices that analysed the project recognise that such a treaty will not suffer from these sanctions, but business is moving forward."

At the end of June this year, Energy Minister Franklin Khan said that the first gas from the Dragon field in Venezuela is expected by 2021.

He was responding to a question in the House of Representatives on the how far along the deal had progressed since the term sheet agreement was signed last year. He said the measurement of progress by a percentage was not an appropriate indicator. He pointed out a heads of agreement was executed on December 5, 2016 and a term sheet signed on August 25, 2018. He added other elements of the project were in train with a completion time frame of between 12 to 18 months. Khan said the last major agreement to be signed is the gas sales agreement.

Last month, NGC president Mark Loquan welcomed the focus on energy efficiency, which Government has placed in the 2019-2020 budget.

Loquan said then that he remained confident that TT will receive natural gas from Venezuela’s Dragon field. While no one knows when the political crisis in Venezuela will be resolved, Loquan said NGC continues to have talks with the players on the technical issues. He explained one just has to look at how much gas is in the Dragon field “and how near it is to the Hibiscus platform.” Hibiscus is located off the northwestern tip of TT and is jointly owned by the TT government and Shell. The Dragon deal proposed a billion-dollar pipeline system that will connect Dragon to Hibiscus and from Hibiscus to NGC’s onshore network.

With a term sheet and heads of agreement already in place for Dragon, Loquan said there were good commercial drivers on both sides that can create a win-win scenario, once the political situation is resolved. “They need to have the cash and we need to have the gas.” Loquan reiterated that obtaining gas from Dragon was “always a medium-term outlook.”

Finance Minister Colm Imbert said in May that Dragon gas from Venezuela represented 200 million cubic feet or five per cent of national production. He stressed there will be no calamity if Dragon is delayed for a year or two.