U.S. grants license to Trinidad and Tobago to develop Venezuela offshore gas field

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(Adds statement from VP Harris’ office)

WASHINGTON/HOUSTON, Jan 24 (Reuters) – The U.S. Treasury Department has granted Trinidad and Tobago a license to develop a major gas field located in Venezuela’s territorial waters, a senior Biden administration official said. on Tuesday, which marks a further reduction of some sanctions. on Venezuela.

The license, issued at Trinidad’s request and intended to improve regional Caribbean energy security, means the island nation can once again do business related to the Dragon gas field with the company Venezuela’s heavily sanctioned state-run oil company PDVSA, the senior US official told Reuters.

Speaking to Reuters on condition of anonymity, the official said that “the Maduro regime will not be allowed to receive any cash payments from this project” and that all US sanctions that they remain unchanged and will still be enforced.

“This decision is the result of extensive diplomacy between Vice President Kamala Harris and Caribbean leaders, who have made it clear that granting this specific license will help ensure the safety of -their energy and reduce the region’s dependence on energy resources from other countries, including Russia,” the official said.

PDVSA found reserves of 4.2 trillion cubic feet (TCF) in the Dragon field, on the Venezuelan side of its maritime border with Trinidad. The project was headed for production more than ten years ago, but stopped due to lack of capital and partners, as well as sanctions.

Under US sanctions, companies and governments must obtain authorization from the US Treasury Department to do business with PDVSA. The administration of President Joe Biden has granted only a few such licenses since he took office in January 2021.

The latest move follows a series of negotiations in November between Maduro’s Socialist government and the opposition, with the aim of finding a way for new elections. But Maduro has resisted sending his negotiating team back to the table since then.

America’s Caribbean partners have called for help to deal with higher energy prices after Russia’s invasion of Ukraine last year.

“The Vice President conveyed to the Prime Minister that the Treasury Department take action to help meet the long-term energy needs of the region,” said a statement from Harris’ office, referring to call on Tuesday with Prime Minister of Trinidad Keith Rowley.

Trinidad is Latin America’s largest exporter of liquefied natural gas (LNG), with installed capacity to process 4.2 billion cubic feet per day (bcfd) into LNG, petrochemicals and power. But its gas production is just under 3 bcfd.

Even with Washington granting Trinidad’s claim, it could take years of investment and development to bring Venezuelan gas to Trinidad and boost LNG to Europe, experts say.

In addition, without any authorized payment to Venezuela, it may be difficult for Trinidad to make a deal with Caracas.

“At the request of the Government of Trinidad and Tobago, the US Treasury Department issued a specific license to allow Trinidad and Tobago to develop the Dragon gas field,” said the senior administration official.

But, the official added, “the policy of the United States towards Venezuela has not changed, and we will continue to enforce the sanctions and restrictions that remain in place.”

In November the United States issued a six-month license to Chevron, authorizing it to take an expanded role in four Venezuelan joint ventures that produce, process and export oil, and to bring their oil to the United States .

The Chevron license is intended to reopen some oil flows that were closed by US sanctions almost four years ago. The license was one of Washington’s first significant steps to ease sanctions as an incentive for Caracas to work with opposition leaders on a presidential election in late 2023. (Reporting by Matt Spetalnick and Marianna Parraga, Editing by Rosalba O’Brien)

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