Young: Government working towards Dragon's success

ENERGY Minister Stuart Young has said the Government has been doing the hard work to ensure Trinidad and Tobago will benefit from the Dragon gas deal with Venezuela.

"We did what we had to do. We did not give up."

Young rejected claims by Opposition Senator Wade Mark that TT is in danger of losing a licence granted by the US Office of Foreign Assets Control (OFAC) to close the deal if the US reintroduces sanctions against Venezuela unless it holds free elections next year.

Young spoke in debate on a private motion about the deal in the Senate on Tuesday

The US$1 billion deal was signed between TT and Venezuela in August 2018. Those involved included energy giant Shell, Venezuela’s state oil company PDVSA, and the National Gas Company (NGC).

The Dragon deal will see TT developing the field, which is estimated to produce approximately 150 million standard cubic feet of gas a day. The gas will be imported through a billion-dollar pipeline to the Hibiscus platform off the northwest coast of TT. The platform is jointly owned by the Government, NGC and Shell.

The deal was left in limbo after the US imposed sanctions on Venezuela in 2019.

On January 24, the Prime Minister announced that the US had lifted sanctions to allow TT to extract gas from Venezuela. This waiver came after almost four years of lobbying led by Dr Rowley and supported by other Caricom leaders.

Rowley said the waiver came with stipulations, one being a two-year licence with an optimistic view of an extension and priority given to Caribbean countries, except Cuba.

In October, OFAC offered an extension of the licence it issued to TT to access natural gas from the Dragon gas field and the ability to pay for that gas in different ways.

Young announced the extension of the licence to October 31, 2025 at a news conference on October 17.

He said the extension also allows Government to pay for gas from the field in “fiat currency, as well as US dollars, as well as (Venezuelan bolivares), as well as via humanitarian measures.”

Young said the OFAC licence is a full green light for the government.

He said there have been several virtual meetings with the Venezuelan government and PDVSA “as we now get into the granular level of detail for the pricing of the development of the gas from Dragon.

In his contribution, Young provided all these details along with a chronology of events since 2016, when the Government decided to pursue a cross-border arrangement with Venezuela to access gas from the Dragon field.

He reminded senators that one of the reasons to pursue this initiative was a decline in natural gas production, which began in 2011, and which the then UNC-led People's Partnership (PP) coalition government did nothing about.

When the PNM assumed office in 2015, Young said, it was faced "with a situation with what can you do in the short term to get additional gas when you are a mature (energy) province."

He claimed the PP had hoodwinked the public into believing this decline was due to maintenance issues by downstream energy companies.

"It was actually a set decline and a trajectory that would continue going downwards."

In considering possible solutions, Young said, the answer was literally next door.

"Venezuela sits on the largest oil reserves in the world, and they have significant proven gas reserves."

He said no exploration was required in the Dragon field.

Against this background, Young said Government began to work towards the Dragon deal and accessing gas from the Manatee portion of the Loran/Manatee field, which straddles the TT-Venezuela maritime border.

Young added that these types of natural gas negotiations were unprecedented in TT's history.

"The population is aware. We have said it many, many times. We are pursuing Manatee."

He disclosed that on Tuesday, Shell announced it has awarded a contract to McDermott to build the infrastructure to bring natural gas to TT from Manatee.

"That is a direct result of the work that we (Government) have done."

Young said that work involved successful negotiations with Venezuelan President Nicolas Maduro to delink Manatee from Loran, at a time when the US imposed sanctions against Venezuela.

He added, "That Manatee gas will come."

Young reminded senators that in September he signed an agreement with his Venezuelan counterpart to explore the possibility of TT accessing natural gas from the Loran field.

"For Venezuela, it is the first time that they are looking to export offshore gas in this type of arrangement."

Focusing on TT's OFAC licence, Young said when the US imposed sanctions against Venezuela, they fell into two categories – first and second level.

"It is the Americans and American citizens, American companies that attract the sanctions at the first level."

TT falls in the second level.

But Young said, "So we don't easily attract those (sanctions), but it is a huge risk, and no one will do business whilst that is taking place."

He rejected UNC questions over his trips to the US and Venezuela over the last eight years.

"It is for a singular purpose. The only purpose of those trips is that we were always advocating, on behalf of the people of TT, for a future for TT."

Through those trips, he saied, Government was able to maintain relations with the US and Venezuela to ensure the Dragon gas deal became a reality.

"Thankfully, it has met with a great measure of success."

He added that part of that success involved dialogue with US President Joe Biden, Vice President Kamala Harris and other top US lawmakers that led to the easing of sanctions against Venezuela imposed by the Trump administration.

Young said TT was the first country to get an OFAC licence to do business with Venezuela, at a time when other countries were lining up to do the same thing.

He added this underscored the need for confidentiality in the negotiations to bring Dragon over the line.

Young recalled that when the UNC recovered from its shock at Government's success, it tried to undermine it by claiming Maduro would not accept payment for the gas from Dragon.

He said the licence gives the Government the ability to change operators for the project if necessary.

"Even though we were under pressure to have joint applications with companies, the licence from the US to TT was to the Government of TT."

Young said UNC claims that the licence expires next April are false.

He dismissed Mark's claims that the deal would be scuttled if Venezuela does not hold free elections next year.

"I can tell you that up to a few weeks ago, the White House reached out to me, had a conversation with me and gave me a good sense of assurance.

"None of it is in my control. But I'm not going to stop and wait. I'm going to press on for the people of TT, as we are doing."

He dismissed Mark's charge that he was acting as an agent of Shell and undermining the NGC in the Dragon negotiations.

"I don't act on behalf of the NGC. I don't act on behalf of Shell," he said, but was the government's representative at the negotiations.

He said the Government will continue to be as transparent as it can as the deal progresses towards completion.