TTNGL reports $35.8m loss after US revoked Dragon licences

TTNGL says the decision by the US government to revoke the licences regarding the exploration of gas fields in Venezuela, has resulted in an after after tax loss of $35.8 million.

“Following the announcement of the revocation of licences issued by the Office of Foreign Assets Control (OFAC) of the US Department of Treasury, regarding the exploration of gas fields in Venezuela, management has relooked its impairment assessment of the company’s shareholding investment in the Phoenix Park Gas Processors Ltd (PPGPL) group.

“This review was conducted based on the assessed most likely outcomes and risks associated with updated inputs and cash flows provided by PPGPL and the National Gas Company of TT (NGC),” the company’ said in its condensed interim financial statements for the six months ended June 30.

“This assessment resulted in the recognition of an impairment loss of $85.2 million and consequently a loss after tax of $35.8 million (2024: profit after tax of $$46.7 million),” it added.

In April, the US has revoked the OFAC licences that allowed TT to pursue natural gas projects with Venezuela, specifically the Dragon field and the Cocuina-Manakin field.

The licences had allowed multinational energy giants Shell and BP, along with Trinidad’s state-owned NCG, to develop offshore gas fields near the Venezuelan maritime border. The Dragon field alone holds an estimated four trillion cubic feet of gas, with first exports initially slated for 2026.

Trinidad had already begun paying over US$1 million annually in taxes to Venezuela for the expected 20-year Dragon project. But the move by Washington, citing concerns over Venezuela’s failure to restore democratic norms and manage illegal migration, has effectively frozen the deal.

The Energy Chamber of TT in a statement following the revocation of the licences, said the importation of pipeline gas from Venezuela for processing and onward sales to international markets as either LNG or petrochemicals, remains a significant economic opportunity for TT.

“It is important that the government of TT continues to engage actively with both the government of the US and Venezuela to find a mechanism to pursue this opportunity,” the Energy Chamber said then.

After she was sworn into office as the country’s new head of government, Prime Minister Kamla Persad-Bissessar gave the biggest hint that her administration, unlike the previous PNM governments, would not be putting a lot of emphasis on the Dragon Field project with Venezuela.

She told reporters “we will be foolish to not look elsewhere, and we should have started that search long ago; we should not have put everything into the Dragon gas.

“That is dead. The (PNM) kept it alive for ten years, and if you couldn’t do that in ten years, you cannot do it now,” she said, adding that there could also possibly be oil and gas in Tobago’s territorial waters.

She said in her discussions with the US Secretary of State, Marco Rubio, soon after coming to office, while they spoke about the energy sector, there were no discussions about the Dragon gas project.

In its financial statement, TTNGL, which was incorporated in 2013 by the NGC enable the public to participate in an initial public offering (IPO) to own an equity interest in PPGPL, benefitted from its investment in PPGPL, which recorded an after-tax profit of US$19.3 million ($130.86 million) in the six-month period. TTNGL’s share of the PPGPL profit was $50.8 million.

In its statement TTNGL said it has not been able to declare and pay dividends to its shareholders because of the issues relating to its impairment losses.

“TTNGL continues to explore the options available to remedy this, subject to requisite stakeholder and statutory approval.

“The success of the government’s continued commitments to further exploration and continued efforts to secure a new OFAC licence has a direct impact on the prospects for additional gas volumes to PPGPL.

“Should these materialise, they can result in improvements in the financial performance of PPGPL and consequently, TTNGL. We remain committed to updating shareholders on these matters,” it added.