Young denies any secret company formed for Dragon Deal; says UNC misleading public

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Young denies any secret company formed for Dragon Deal; says UNC misleading public

Energy and Energy Industries Minister Stuart Young has accused the Opposition of continuing a campaign of misinformation.

This, after Oropouche East MP Dr Roodal Moonilal claimed during UNC’s Sunday morning press conference that Government secretly formed a company to help it execute the 30-year licence it has to explore and exploit the hydrocarbon resources of Venezuela’s Dragon field.

He also there is nothing suspicious or unusual about the formation of NGC Exploration and Production Limited.

Young said, “The UNC Opposition continues its campaign of misinformation and attempting to mislead the population when it comes to the energy sector with recent emphasis being on the matters surrounding the Dragon gas field development.”

On December 21, 2023, the Venezuelan government issued the licence to the National Gas Company (NGC) and Shell for the development and export of natural gas from the Dragon gas field to TT.

Young confirmed the licence was gazetted in Venezuela on January 29, in accordance with Venezuelan law.

“This 30-year licence is a result of the work of the Government of the Republic of Trinidad and Tobago, Shell and NGC negotiating with the Government of Venezuela and PDVSA (Venezuela’s state energy company). NGC and Shell are the agreed operators of the field and PDVSA is no longer the licenced operator.”

He said, “As is normal with structures of this nature, special purpose companies are utilised as the licence holders and operators.”

Young added that this is the normal and accepted course of business in the energy sector. He said this was reflected in production sharing contracts and exploration and production licences in TT.

He said NGC Exploration and Production Ltd (NGCE&PL), which is contracted on the licence for the Dragon field and mentioned in the gazetted Venezuelan licence, is a legally incorporated entity.

Young also dismissed claims from Oropouche West MP Davendranath Tancoo that he identified the cost of a pipeline from the Dragon field to the Hibiscus platform in TT waters as US$100 million.

Young said this is an attempt by the UNC to mislead the population.

He said it “should be dismissed after noting the lengths that the UNC continue to go to to try and mislead the population and negatively affect the future of TT.”

Young added that Moonilal’s claim that a bonus of US$65 million must be paid to the Venezuelan government before any hydrocarbons can be exported from Dragon is also false.

“This wild and false allegation is confirmation that the UNC has no experience in negotiating energy licences and gas contracts. Firstly, there is no bonus payment to be made in the sum of US$65 million.”

He said it is normal with exploration and production licences and production sharing contracts for the operators to pay bonus payments and other payments before any gas is produced.

Young said this process already happens with respect to licences and contracts for natural gas here.

“So to suggest that the negotiated payment of a bonus is unusual or shouldn’t be included is misleading.”

Young said, “As the licence for Dragon reflects there is a bonus payment element that has to be made by Shell and NGC.”

He added this payment is considerably less than the US$65 million alleged by Moonilal.

“The payment is a structured one, with part payments to be made over time and when certain milestones are met.”

The exact amount and terms of payment, Young continued, “are covered by strict non-disclosure obligations which again are normal in the circumstances as the issuer of the licence would not wish other parties who they are negotiating with to know as it may affect future negotiations with other unrelated parties.”

Young repeated Government’s condemnation of the UNC’s attempts to “derail” the Dragon gas deal.

“Fortunately, this Government has worked hard to ensure that we have a future in the energy sector and, in particular, in the development of future gas sources.”

He identified the Manatee field, located in TT’s maritime waters as one of those sources.

Regarding Tancoo’s claim, Young said the Prime Minister indicated “in the clearest possible terms on Friday, the work on the Dragon gas field and the pipelines will not cost US$100 million.”

He added that Tancoo’s claim was based on misinformation from an unnamed Venezuelan source in 2017.

“Costs have increased in the past seven years and that was a very different structure.”

Young said Government remains committed to fighting for TT’s future.

“The UNC decimated the energy sector between 2010 to 2015 without negotiating a single gas contract, and the only deal they did continues to cost NGC billions in losses. It is obvious that they still do not understand the energy sector.”