Former Energy Minister: Reimposition of sanctions on Venezuela will make Dragon deal difficult to execute

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Former Energy Minister: Reimposition of sanctions on Venezuela will make Dragon deal difficult to execute

Former energy minister Kevin Ramnarine said doing business with Venezuela will always be fraught with political risk and that risk level will increase with the pending general election in that country.

Ramnarine’s comment follows news that the United States has reimposed sanctions on Venezuela over a ruling by the Venezuelan Supreme Court to uphold a 15-year ban on main opposition candidate María Corina Machado from the presidential election scheduled for this year.

In October 2023, the US loosened its sanctions against Venezuela under the “Barbados Agreement” where President Nicolas Maduro committed to free and fair presidential elections, among other things.

This agreement is separate from the Dragon gas deal between Trinidad and Tobago and Venezuela.

But, US Department of State spokesperson Matthew Miller issued a statement yesterday which said that the actions of Maduro and his representatives, including the arrest of members of the democratic opposition and the barring of candidates from competing in this year’s presidential election, were inconsistent with the agreements signed in Barbados last October.

Ramnarine said the reimposition of economic sanctions by the US on Venezuela will no doubt make it more difficult for Shell to execute the Dragon project.

“There is also the issue of the OFAC licence which expires in two years. I don’t know how Shell can plan a project with this level of uncertainty, let alone execute it. It is noteworthy that Shell has not made any public statement on the Dragon project even though we have had a highly optimistic projection of first gas from Dragon in two years,” he said.

He added: “What is happening now with the quick change of the US relations with Venezuela will add yet another layer of complexity to the Dragon deal. We must remember too that the Essequibo matter has not gone away. It remains very much a burning issue. In this context of regional and geopolitical risks, we cannot put all our eggs in the Venezuela basket. We need to pursue the development of what we have inside our own borders which includes the deepwater discoveries to the north-east of Tobago. I would not put Dragon gas in any forecast for Trinidad and Tobago’s natural gas production. The probability that Dragon will happen has now been lowered with these latest events.”