Guardian ( Trinidad and Tobago )
25 April 2024 ( Page 18 )
Dragon deal will fizzle out!
By Dr Neil Gosine
The type of geopolitical risk that exists in
Venezuela is a serious problem and no matter
how you try to sugarcoat it, the Dragon deal
seems unrealistic in the foreseeable future.
The United States took a decision last Wednesday
to resume sanctions against Venezuela but our
Government and the Prime Minister are trying
very hard to insist that the Dragon gas deal is not
affected. Prime Minister Dr Keith Rowley, in
addressing the Dragon gas deal, said, “But we
have some things in place which are not directly
affected by that. But that doesn’t mean that it
wouldn’t be affected sometime in the future, as
the goalpost keeps changing.”In trying to still
convince the public that getting export gas from
Venezuela to T&T is a good move, he went on to
say, “If it does not happen this year and it
happens ten years from now, then that is a good
thing.”
However, I would like to say we don’t have ten
years to wait on this gas, our energy sector needs
it now and we cannot be giving out mixed signals
like this. The decision by the US government to
reimpose sanctions on Venezuela’s oil and gas
sector does affect us and implies that the special
amended licence that was given to the
Government of Trinidad and Tobago on October
17, 2023, will be affected. There are no ifs or buts
about that reality. Let’s wake up and smell the
coffee.
The Biden administration has reimposed energy
sanctions on Venezuela and our Government still
wants to be optimistic and state that the
amended OFAC licence issued to us last October is
valid until October 31, 2025, and that Shell and
NGC can continue to explore the opportunity to
produce and export natural gas from the Dragon
Field. However, it doesn’t really look feasible
with this reimposing of energy sanctions on
Venezuela. The sanctions make this more
difficult and again doesn’t look like it will get off
the ground. We all must recognise that Shell will
have great difficulty in implementing this project
in a sanctioned environment.
Doing business with Venezuela is difficult already
and in this sanctioned environment, it is even
more difficult and we will see this deal frizzle out
like a fart in the wind. It doesn’t look good and
further, for Shell to consider doing this is a hard
task at this point in time. The cost of this deal
could be in the region of hundreds of millions of
dollars and maybe even a billion dollars, as the
infrastructure cost alone for this cross-border
gas extraction is very difficult in these waters.
I just can’t understand why we continue to play
games with the people, keeping this hope alive.
There is an election in the US in November and
again if the administration changes in the White
House, then this deal also has little chance of
succeeding with the incoming administration.
We are really in a terrible state where we have
gone from a position where the Dragon Gas
would not affect our gas supply to one where we
are now very dependent on Dragon Gas to come
our way with no chance of getting it done.