Oil major Shell is pushing for a longer license from the US before giving the green light to a natural gas project in Venezuela. The “Dragon” field, located near the maritime border with Trinidad and Tobago, holds significant gas reserves and could provide a vital energy source for both nations.
A Project on Hold: US License Key to Development
The project, already approved by both Venezuela and Trinidad, hinges on US authorization. Washington granted Trinidad a two-year license in early 2023 to negotiate and develop Dragon, with Shell as the operator. However, this license is set to expire in October 2025, potentially delaying the project’s final investment decision (FID) and first gas production.
Shell is now lobbying the US for a longer-term license, ideally lasting 15 years. This extended authorization would provide the investment certainty Shell seeks to move forward with the multi-billion dollar project alongside Trinidad’s National Gas Company (NGC).
“Shell would not expect to invest over $1 billion without certainty of that investment,” said a source familiar with the discussions. The extended license would provide this stability and allow Shell and NGC to confidently develop the Dragon field.
Collaboration Efforts: Trinidad Seeks US Support
Trinidad’s Energy Minister, Stuart Young, has actively engaged with both Venezuela and the US to move the project forward. He recently met with a US Assistant Secretary of State for Energy Resources, highlighting the need for a longer-term license due to the project’s timeline.
The Dragon project is crucial for Trinidad’s energy security, providing much-needed fuel for its liquefied natural gas (LNG) and petrochemical industries. Venezuela also sees the project as an opportunity to generate revenue through gas exports.
With continued cooperation between Shell, Trinidad and Tobago, Venezuela, and the US, the Dragon project has the potential to unlock significant benefits for all parties involved. The extended US license is a key factor, and a positive decision could pave the way for the development of this critical energy resource.
Source: Reuters
