THE Trinidad and Tobago High Court’s recognition of a $US 1.3 billion ICC (International Chamber of Commerce) arbitral award in a matter involving ConocoPhillips and Venezuela’s PdVsa and companies related to it is a matter for serious concern as it puts this country’s natural gas dealings with Venezuela and Venezuelan State companies at risk.
The recognition is consistent with domestic law and commitments to the international rule of law, specifically the New York Convention on the recognition and enforcement of foreign arbitral awards to which T&T acceded in 1966.
The Rowley administration has made securing natural gas from Venezuela, the centerpiece of its energy policy. To this end, the Government of T&T has pursued the Dragon deal since 2016. In December 2023, the Prime Minister and the Energy Minister displayed the 30-year license between Venezuela’s PdVsa and Shell / NGC. However, thus far, no one can say with certainty when Dragon’s natural gas will arrive in T&T.
The recognition of ConocoPhillips’ award in this jurisdiction introduces a new layer of risk to an already risky Dragon project, and there would be concerns too for the Coucina-Manakin cross-border gas project.
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The claimants have listed as “targets” for the enforcement of the award, the Dragon project, and consideration paid by NGC to PdVsa for supplies of natural gas. The Parliament was informed on May 13, 2024, that NGC and Shell had already started paying monies to PdVsa/Venezuela in the form of sub-surface rent and social contributions to Venezuela of $US1 million per annum.
If Dragon gets to commercial production, Shell/NGC would have to pay royalties and a special consideration of 5% of income obtained from the export of gas from the Dragon Field. These payments could now be at risk as ConocoPhillips seeks to enforce its award in T&T. Where does such a scenario leave the Dragon and Coucina-Manakin projects?
I expect that in the coming days, the government and/or the NGC will come forward and seek to explain the impact of this recognition. It should be noted that Venezuela is a frequent respondent before the arbitral tribunals of the International Chamber of Commerce and the World Bank’s International Center for Settlement of Investment Disputes.
In addition, ConocoPhillips has had the same award recognised in Jamaica in 2020 and Belize in 2023. This development should, therefore, not have come as a surprise to the Government of T&T. Did they anticipate the emergence of this risk?
Kevin Ramnarine is a former Minister of Energy of Trinidad and Tobago with 20 years of experience in the energy business. He holds degrees in Chemistry, Petroleum Engineering and Business Management
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Dragon Deal at Risk: After ConocoPhillips Award
Guest Commentary
THE Trinidad and Tobago High Court’s recognition of a $US 1.3 billion ICC (International Chamber of Commerce) arbitral award in a matter involving ConocoPhillips and Venezuela’s PdVsa and companies related to it is a matter for serious concern as it puts this country’s natural gas dealings with Venezuela and Venezuelan State companies at risk.
The recognition is consistent with domestic law and commitments to the international rule of law, specifically the New York Convention on the recognition and enforcement of foreign arbitral awards to which T&T acceded in 1966.
The Rowley administration has made securing natural gas from Venezuela, the centerpiece of its energy policy. To this end, the Government of T&T has pursued the Dragon deal since 2016. In December 2023, the Prime Minister and the Energy Minister displayed the 30-year license between Venezuela’s PdVsa and Shell / NGC. However, thus far, no one can say with certainty when Dragon’s natural gas will arrive in T&T.
The recognition of ConocoPhillips’ award in this jurisdiction introduces a new layer of risk to an already risky Dragon project, and there would be concerns too for the Coucina-Manakin cross-border gas project.
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The claimants have listed as “targets” for the enforcement of the award, the Dragon project, and consideration paid by NGC to PdVsa for supplies of natural gas. The Parliament was informed on May 13, 2024, that NGC and Shell had already started paying monies to PdVsa/Venezuela in the form of sub-surface rent and social contributions to Venezuela of $US1 million per annum.
If Dragon gets to commercial production, Shell/NGC would have to pay royalties and a special consideration of 5% of income obtained from the export of gas from the Dragon Field. These payments could now be at risk as ConocoPhillips seeks to enforce its award in T&T. Where does such a scenario leave the Dragon and Coucina-Manakin projects?
I expect that in the coming days, the government and/or the NGC will come forward and seek to explain the impact of this recognition. It should be noted that Venezuela is a frequent respondent before the arbitral tribunals of the International Chamber of Commerce and the World Bank’s International Center for Settlement of Investment Disputes.
In addition, ConocoPhillips has had the same award recognised in Jamaica in 2020 and Belize in 2023. This development should, therefore, not have come as a surprise to the Government of T&T. Did they anticipate the emergence of this risk?
Kevin Ramnarine is a former Minister of Energy of Trinidad and Tobago with 20 years of experience in the energy business. He holds degrees in Chemistry, Petroleum Engineering and Business Management
Support independent journalism. AZP News is an independent news organisation that is not affiliated with any big business and depends solely on advertising to pay our bills. Therefore, we are asking for the generosity of our readers to help us with small donations of any amount, but we will be happy with $20, $50 or $100. Click Here to Donate