THE type of geopolitical risk that exists in Venezuela is a serious problem and no matter how you sugar coat it, the Dragon deal seems unrealistic in the foreseeable future.
Opposition MP Dr Roodal Moonilal went on task to challenge the government on January 3, 2024 to divulge the details of the agreement between Venezuela and Trinidad and Tobago on the Dragon gas deal.
He said he had in his possession a copy of the agreement between the government of Venezuela and T&T and in his opinion it was damning. He stated that to get through with the development and exportation of the natural gas from the dragon field was a new company never heard about before. NGC Exportation and Production.
NGC is in the business in this country for distribution and marketing for the selling of gas. Not for the exploration and production of natural gas. He was confused and wondered why the government never brought this to the attention of the people of T&T. Why haven’t they disclosed the details of the new company, its formation and why haven’t they brought it up in Parliament.
Imagine he said, “Why we must ask Venezuela for their gazette?”
Heritage Petroleum is the company formed from the now defunct Petrotrin to deal with production and the exploration of gas and oil. As far as we know NGC is just the “middleman seller.” As far as anyone knows NGC never dabbled in this type of oil and gas business and doesn’t have the capabilities to be involved in exploration and production.
He also raised serious concerns of what he said was Article 20 of the agreement which has a hefty US$65 million signature fee. If they go and find gas before anyone can do anything there is a condition for the payment to Venezuela. This bonus is payable in US dollars and Dr Moonilal said the Government has 90 days to pay that bonus to the government of Venezuela before you can get a cubic metre of gas.
A lot depends on the position of the Shell oil company but can we pin all our hopes on this. The United States may relook at the sanctions to be reimposed because in light of Venezuela ruling against opposition leader María Corina Machado last week where she could not run as a candidate, Washington announced that because of a decision like that, it would relook at reimpose sanctions on a Venezuelan mining company and threatened more action if Caracas does not meet its obligations under the Barbados agreement.
We are not out of the woods over this yet as you can clearly see. T&T is not the major investor here, it’s really Shell that is what the PM said. We depend on a license and if this ends then the deal ends.
Energy Minister Young reiterated that it’s normal to create a special purpose company when dealing with these types of deals and yes it’s normal to utilise this vehicle as the license holder and operator but why didn’t the government let us know before.
Yes this is a normal course of business but the question Dr Moonilal wants to know and all of us want to know is what is the secrecy about. Why are we now hearing that NGC Exploration and Production Ltd. was incorporated. The opposition went to the senate and asked for details under this contract but was denied by the Government although the independent senators voted with the opposition senators to get answers. Why is this shrouded in secrecy?
It’s a very complicated way to get information from the Venezuelan gazette, the reality is that we have to find additional gas in deeper fields that may exist but are more expensive to develop and right now no companies like Shell is willing to put that investment into T&T when Guyana oil is much easier to access.
Shell knows where the resources are and what size of field the companies like Shell are willing to access and invest into. Frankly, that is not in T&T at the moment.
Over three months ago, the government boasted to the population about their lobbyists securing exemptions for us to access Dragon gas. However, if you read the Bloomberg headline in November 2023 it stated : “US says all Venezuela SANCTIONS ARE ON TABLE IF MADURO RENEGES” (Bloomberg November 16, 2023).
With this country facing a natural gas shortage and no tangible signs of new gas, the government has to come better and give the people the information instead of hiding behind non-disclosure agreements. They are giving us false hopes, giving the country false hope on Dragon gas if they can’t come clean and divulge the information on this deal.
The PM himself stated his government had reached a “stalemate” in July 2023 and he stated, it is “a huge diplomatic boulder we have been pushing up a hill”. That boulder looks like it may roll downhill and crush our hopes as the Dragon seems to burn itself up under the current pressure. I really hope we are not back to square one, if these sanctions are reimposed and the signing of the agreement and the setting up of a special purposes company were nothing but “public relations theatrics”.
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. I really want to see this Dragon dance, not burn up like a phoenix in front of our eyes.
Neil Gosine is an insurance executive. He was appointed a temporary Opposition Senator and is also the treasurer of the UNC and a former chairman of the National Petroleum Marketing Company of Trinidad and Tobago. He holds a Doctorate in Business Administration, a Master’s in Business Administration MBA, BSC in Mathematics and a BA in Administrative Studies. The views and comments expressed in this column are not necessarily those of AZP News, a Division of Complete Image Limited.
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