Venezuela’s Position on the supply of Dragon gas to Trinidad and Tobago
In a news report dated March 16, 2017 on the PDVSA website in Spanish stated that the Framework Agreement for the supply of natural gas to T&T was signed in Caracas. This agreement has as its parameter the building, operation and maintenance of a pipeline connecting the Dragon field Venezuela to the Hibiscus field T&T some 30 kilometres long. The report stated that a special project vehicle constructed as a joint venture was signed between NGC of T&T and Shell international at the said meeting in Caracas. It was reported that Luis Prado signed for Shell. The report states that Minister Martinez of Venezuela indicated that Shell will construct the infrastructure necessary in T&T to receive the gas from Venezuela and that the Dragon gas deal involves the negotiation and finalisation of an agreement between three parties to the mutual benefit of all three: Venezuela, T&T and Shell. Minister Young of T&T in the report describes Shell as a “collaborating partner”.
A news report dated March 31, 2017 on the PDVSA website in Spanish reported that representatives of Shell and the NGC had visited Guiria to confirm that that the mechanical completion of the submarine infrastructure of the Dragon field was in fact realised. Necessary for completing the project to supply 300 million cubic feet of dry gas to T&T. The joint coordinating commission formed in T&T comprises Venezuela, NGC and Shell was reported by the news report.
A news report dated May 17, 2017 on the PDVSA website in Spanish reported that PDVSA and Shell held a meeting in Venezuela to discuss matters concerning the gas supply from Dragon to T&T with no member of the NGC and the T&T government mentioned as being present at this meeting in the news story. The president of PDVSA and the president and vice-president of PDVSA Gas were there along with Luis Prado president of Shell Venezuela and T&T and the Shell representative for the Americas and Africa but no mention of NGC representation. The news stated that the PDVSA and Shell officials discussed gas prices, gas volumes and the point of interconnection between the Dragon field gas supply and the pipeline to T&T. The vice-president of PDVSA indicated that they are presently reviewing the gas export base of the field, they have received proposals to complete the project and to increase production from the field to enable an increased gas supply to T&T. The meeting also discussed the joint venture Shell has with PDVSA, the Petroregional del Lago project which is a land based oil producing joint venture project.
Shell has then irons in the fire with the prime agenda being the Petroregional del Lago project as Venezuela needs to raise oil production and PDVSA simply doesn’t have the cash to spend to bring about this increase. On del Lago Shell then announces its intention to invest USD 400 million in the venture and its now Maduro’s sweet heart on both sides of the border. What is Shell’s locus standi in this Dragon gas supply project? Is Shell negotiating gas prices and volumes with PDVSA in our absence simply because Venezuela is selling the gas to Shell who is then selling it to the NGC? Is Shell building the necessary infrastructure in T&T waters in keeping with the task of being the vendor for Dragon gas to the NGC? The news report of March 16, 2017 stated that gas from Dragon will be going to the LNG plant in T&T. The power relations of the geopolitics of the gas supply between Venezuela and T&T are not in T&T’s favour unlike the deal with Aruba and the key to these power relations is Venezuela’s gambit. What does Venezuela intend to achieve in its favour that redounds to the benefit of Maduro with this gas supply deal is the primary question that must be answered realistically. When PDVSA sits in a room with Shell and negotiates only with Shell it’s also negotiating with the largest single shareholder of Atlantic and the Dragon field is a very small field in the arsenal of offshore gas plays of Venezuela. The people of T&T remain in the dark on this reality as we did with the deal negotiated for trains 1 to 3 at Atlantic LNG and as always we’re left holding the dirty end of the stick as the gas economy has become unstuck.