Venezuela, Trinidad & Tobago Discuss Energy Developments

On Friday, Trinidad and Tobago Energy Minister Stuart Young and Venezuela Vice President Delcy Rodriguez met in Caracas, Venezuela, to deepen their energy discussions. The presidents of Shell plc's (NYSE:SHEL) (London, England) operations in Venezuela and Trinidad and Tobago also were present in the meeting, signaling that discussions on the development of the Dragon field continue to progress.

Over the last few months, the nations have signed agreements to develop Venezuela's offshore Dragon field in a partnership between Petroleos de Venezuela (PDVSA), Trinidad and Tobago's National Gas Company, and Shell. The field has reserves of 118 billion cubic meters of natural gas, and the project received a green light after the U.S. granted sanctions relief in October.

Moreover, the development of the Dragon field also could lead to agreements on the Loran gas field, also located between both nations. However, the negotiation process for the Loran field is still at an early stage.

Trinidad and Tobago is in search of new sources of natural gas to feed its liquefied natural gas (LNG) and petrochemicals sectors as it faces a decline in production. According to the Gas Exporting Countries Forum data, Trinidad and Tobago produced 27.71 billion cubic meters (bcm) of natural gas in 2022 compared with 42.8 bcm in 2013.

Trinidad and Tobago has the capacity to process 113 million cubic meters of natural gas per day. However, due to production declines, the nation also has seen its LNG exports drop from 19 bcm in 2023 to 10.59 bcm last year.

In October, Port of Spain launched a shallow water bid round to auction 13 offshore blocks to expand exploration and reserves of national gas. The end of the bidding round is in April next year.

Meanwhile, Venezuela continues taking advantage of last month's sanctions relief to strengthen its energy industry. In the last few weeks, the government has called on international companies to reinvest in the country as players gain interest in importing Venezuelan oil.

It seems improbable that energy companies will pour massive investments into the South American nation given that the sanction relief is only granted for six months, with the possibility of extension. Yet, it is likely the country will see production boosts and some new investments.

Last month, Chevron Corporation (NYSE:CVX) (San Ramon, California) Chief Executive Mike Wirth said during the company's quarterly earnings conference call that it is currently producing 130,000 barrels of oil per day (BBL/d) in Venezuela, up from 60,000 BBL/d earlier this year. Wirth said he expected production to reach 150,000 BBL/d by the end of the year.

Contact us?for more information.

If you want more news,?click here.