Lee: Dragon deal squeezed by US, Venezuela

DAVID LEE, Pointe-a-Pierre MP, was downbeat on the prospects of the Dragon deal for TT to access natural gas from a Venezuelan gas field, saying the arrangement was now under pressure from legalities posed by both the US and Venezuela.

At a UNC news briefing on Sunday, he also suggested splits within Cabinet on the prospects for this deal and suggested that oil firm Shell might be having second thoughts about the deal, in which it is licensed to extract the gas.

The uncertainty arose last week when the US Treasury's Office of Foreign Assets Control (OFAC) said it would not extend OFAC General License 44 beyond expiration on April 18, and all entities operating under it have until May 31 to wind down all oil and gas operations in Venezuela.

The Ministry of Energy said that occurrence would not affect a separate OFAC licence granted to TT for Shell, the National Gas Company (NGC) and contractors to work on the Dragon field.

"The specific amended OFAC Licence issued to TT on October 17, 2023, is valid until October 31, 2025, and permits Shell, NGC and contractors to continue the works being undertaken to explore, produce and export natural gas from the Venezuelan Dragon Gas Field."

Energy Minister Stuart Young said TT has a 30-year exploration and production licence from the Venezuelan government on December 21, 2023 for the Dragon gas field, upon which work to "explore, produce and export" was continuing.

However, the Prime Minister later said TT was not immune to US/Venezuela dynamics.

Lee said last Friday his supplemental question in the House of Representatives had asked Dr Rowley if he was confident in the deal, but Speaker Bridgid Annisette-George had disallowed it.

He said he was shocked when his main question revealed no physical work has been done on the Dragon field yet, even as the PM said the project has long gestation times.

Lee, however, said on Sunday the Dragon deal was "no ordinary project" but that "investors want some certainty before they go forward."

He said Shell was seeking a long-term licence for 15 years before investing hundreds of millions of dollars in the project.

Lee said Shell would not wait until October 2025 to see if the Dragon field OFAC licence is renewed, saying Shell's global portfolio was under some pressure.

"Can Dragon survive this latest uncertainty?" he mulled.

Lee said the Venezuelan Government, in the Venezuelan official gazette of an unstated date, had published article 66 of the TT/Venezuela Dragon field licence, which he said stated that any non-compliance with licence obligations caused by sanctions would result in an exceptional and singular extension of six months to the licence after which it would be terminated.

"We call on the Minister of Energy and Prime Minister to give us some clarity, and to Shell."

Replying to a reporter's question, Lee said, "The Government has placed all its eggs in the Dragon gas deal, to the extent of not doing any incentivisation within our own borders."