The Dragon gas deal between Trinidad and Tobago and Venezuela has been resurrected, but its return comes with new elements.
On April 8, the U.S. government revoked licenses previously granted to Trinidad and Tobago for the Dragon and Manakin-Cocuina cross-border gas fields. Issued by the Treasury’s Office of Foreign Assets Control, the Dragon license was approved on October 17, 2023, and set to expire in October 2024, while the Manakin-Cocuina license was granted on December 18, 2023.
It was President Trump who delivered the hatchet job. The deals were previously seen as an energy lifeline for the Twin Island Republic. But TT’s Attorney General John Jeremie announced on Oct. 9 that the country got a licence from OFAC to pursue Dragon again.
So what’s different this time?
The financial terms have not been disclosed yet, but according to Reuters, the new authorization is structured in three stages, with the first stage allowing Trinidad and Shell to negotiate the project with Venezuela and PDVSA, its state oil firm, through April 2026, “but making mandatory the inclusion of U.S. companies in the development.”
Manakin-Cocuina, the second largest field on the Trinidad-Venezuela border, holds over one trillion cubic feet of proven gas. Dragon targeted 350 million cubic feet of gas per day. The previous deal stipulated that the Venezuelan State’s income from the project must always constitute at least 45% of the gross income generated by the licensees.
Venezuela was paid royalty, a special commission of 5%, surface tax and social contributions totalling US$1 million, along with a confidential signing bonus.
TT also has several gas projects that continue to progress.
U.S. Secretary of State Marco Rubio had told Caribbean leaders the U.S. will no longer support regional energy reliance on Venezuela. But now, the tables have turned.
