Commentary: The Unrealistic Dragon Deal

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THE type of geopolitical risk that exists in Venezuela is a serious problem and no matter how you try to sugarcoat it, the Dragon deal seems unrealistic in the foreseeable future.

The United States took a decision last Wednesday to resume sanctions against Venezuela but our government and prime minister are trying very hard to insist that the Dragon gas’s deal is not affected. 

Prime Minister Dr Keith Rowley in addressing the Dragon gas deal said, “But we have some things in place which are not directly affected by that. But that doesn’t mean that it wouldn’t be affected sometime in the future, as the goalpost keeps changing.”

In trying to still convince the nation public that getting export gas from Venezuela to T&T is a good move, he went on to say “if it does not happen this year and it happens ten years from now, then that is a good thing.” 

However, I would like to say we don’t have ten years to wait on this gas, our energy sector needs it now and we cannot be giving out mixed signals like this.

The decision by the US government to reimpose sanctions on Venezuela’s oil and gas sector does affect us and implies that the special amended licence that was given to the Government of Trinidad and Tobago on October 17, 2023 will be affected. There are no ifs or buts about that reality. Let’s wake up and smell the coffee.

The Biden administration has reimposed energy sanctions on Venezuela and although our government wants to be optimistic and state that the amended OFAC licence issued to us last October is valid until October 31, 2025, and that Shell and NGC can continue to explore the opportunity to produce and export natural gas from the Dragon field. 

However, it doesn’t really look feasible with this reimposing energy sanctions on Venezuela. The sanctions make this more difficult and again doesn’t look like it will get off the ground. We all must recognise that Shell will have great difficulty in implementing this project in a sanctioned environment.

Doing business with Venezuela is difficult already and in this sanction environment it is even more difficult and we will see this deal frizzle out like a fart in the wind. It doesn’t look good and further for Shell to consider doing this is a hard task at this point in time. 

The cost of this deal could be in the region of hundreds of millions of dollars and maybe even a billion dollars as the infrastructure cost alone for this cross-border gas extraction is very difficult in these waters. 

I just can’t understand why we continue to play games with the people, keeping this hope alive. There is an election in the US in November and again if the administration changes in the White House then this deal also has little chance of succeeding with the incoming administration. 

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 with no chance of getting it done. 

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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