Shell and BP seek US licenses for shared Trinidad-Venezuela gas fields

Shell and BP are actively pursuing US licenses to begin extracting natural gas from shared fields in Trinidad and Tobago and Venezuela, the Caribbean country’s energy minister Roodal Moonilal announced on Wednesday, according to a Reuters report.

As Latin America’s top exporter of liquefied natural gas and a major global supplier of ammonia and methanol, Trinidad is now focusing on developing offshore fields in Venezuela and along the maritime border. 

The above strategy is intended to counteract the island’s dwindling reserves and secure its supply.

Headwinds faced by Trinidad and Tobago

Trinidad and Tobago’s natural gas project development has faced considerable headwinds in recent years, primarily due to the inconsistent and shifting policy stance of the US toward neighbouring Venezuela. 

The frequent changes in US sanctions and energy policy concerning Venezuelan gas reserves and potential joint ventures have created a climate of regulatory uncertainty. 

This instability has made international investment in cross-border gas field development, particularly those involving shared reserves like the Loran-Manatee field, extremely cautious. 

As a result, critical projects intended to bolster Trinidad’s gas supply—essential for its significant liquefied natural gas (LNG) export industry and petrochemical sector—have been significantly delayed, hindering the nation’s efforts to maximise its hydrocarbon potential and secure its long-term energy future. 

The slow pace of progress underscores the complex geopolitical challenges involved in developing major energy resources in the Caribbean region.

Last year, President Nicolas Maduro’s administration in Venezuela halted energy-development collaboration with Trinidad and Tobago.

This suspension affected various initiatives, including planned joint natural gas projects.

The US is expediting developments in Venezuela’s oil and gas sector, particularly after the capture of Maduro this month. 

Due to Washington’s sanctions on Venezuela’s energy industry, US licenses are a prerequisite for companies to proceed with project development.

Shell, BP want US licenses 

Shell is pursuing a license to develop the Loran-Manatee discovery, according to Moonilal, who spoke to reporters at the Indian Energy Week conference. 

The natural gas field is estimated to contain approximately 10 trillion cubic feet (tcf) of gas.

Of this total, 7.3 tcf is located on Venezuela’s side of the boundary, with the remaining 2.7 tcf situated in Trinidad.

BP is currently seeking a license to develop the Cocuina-Manakin field.

Notably, the Venezuelan section of this field is part of the inactive Plataforma Deltana gas offshore project, which possesses 1 trillion cubic feet of proven gas reserves.

Moonilal said:

The United States is an ally and a very strong friend trying to reform, so we would help the companies when it comes to supporting their applications.

Dragon gas

In October, Washington had authorised Shell and Trinidad and Tobago to proceed with the development of the Dragon gas field. 

This project, located offshore Venezuela near the maritime border, is intended to supply Venezuelan gas to Trinidad.

Production at the Dragon gas field is anticipated to commence in the fourth quarter of 2027, according to Moonilal, with an expected daily output of 350 million cubic feet of gas.

Venezuela’s Dragon field contains one of the largest natural gas deposits.

Trinidad, suffering from insufficient reserves and production, requires this gas to supply its revenue-generating sectors, such as liquefied natural gas (LNG) and petrochemicals.

Moonilal stated that Trinidad is looking to lead and collaborate with other Caribbean nations, including Suriname, Guyana, and Grenada, to advance natural gas development now that its projects are operational again.

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