Jamaica to benefit from Venezuela gas deal
ENERGY Minister Daryl Vaz is now engaged in a frantic scramble to get information about an energy deal involving gas from Trinidad and Tobago, which he admits he was not aware of before it came to light in the media.
The information was contained in a Reuters article, titled ‘Exclusive: US issues licence to Trinidad and Tobago to develop Venezuela off shore gas field’, published on Tuesday.
A section of the article attributed to Trinidad and Tobago Prime Minister Keith Rowley stated, “The licence will allow PDVSA, Shell and Trinidad to jointly plan and develop a gas-exporting project after agreeing to pending details in coming days. A portion of the resulting gas must be exported to Jamaica and the Dominican Republic, according to the two-year licence’s terms.”
PDVSA or Petrolea de Venezuela SA is Venezuela’s State-owned oil producer.
“I read it too, but I don’t get nothing at all on it,” Vaz said on Wednesday when contacted by the Jamaica Observer for further details.
“We have no formal communication. I have checked with Petrojam and they are not aware. Right now we are trying to follow it to see what we can [learn about the matter] out of Trinidad,” the minister continued.
“It’s kind of difficult to see Jamaica mentioned in something like this and the Government is totally unaware. I am checking with the Ministry of Foreign Affairs and checking with Petrojam and I am asking them to get in touch and get some clarification on the matter because it is of keen interest to Jamaica,” he added.
“If it is that this will be another source for Jamaica, then obviously that will be welcoming.”
On Thursday, the minister informed Caribbean Business Report that he will provide an update by latest Monday.
But Rowley, speaking at a news conference in Port of Spain, said Trinidad expects to gain access to 350 million cubic feet of gas per day from the Dragon field, which holds 4.2 trillion cubic feet of reserves on the Venezuelan side of the maritime border with Trinidad.
The project would have Trinidad import the gas and convert it into exportable liquefied natural gas (LNG). The issuance of the licence marks a further easing of some sanctions on Venezuela.
Trinidad and Tobago had applied for the licence in mid-2022 and won approval after discussing it with top US officials, including US President Joe Biden, while keeping open a channel of communication with Venezuelan President Nicolás Maduro.
However, it appears that one of the United States’ key aims for approving the licence is a response to countries in the region calling for help to deal with high energy prices following Russia’s invasion of Ukraine last February.
With Venezuela now under US sanctions, it would be difficult for Trinidad and Tobago to pay for the gas, an issue that was highlighted by Vaz.
“When you read what Reuters says, the sanctions remain, enuh. They have a licence to drill, but Venezuela can’t benefit from no payments or nothing,” Vaz told Caribbean Business Report.
However, a subsequent article said that the twin-island republic would pay Venezuela for the gas with humanitarian supplies like food and medicine. Trinidad previously supplied Venezuela with about US$50 million in humanitarian goods, he said.
“We have done that before. So we buy the gas and we pay for it in a variety of ways,” Rowley told journalists late on Tuesday.
Venezuela has resorted to swaps to make its economy work amid stiff US sanctions prohibiting financial transactions or the use of dollars to pay Venezuela or the country’s State companies.
Maduro has been pressing Washington and other governments to free more than US$3 billion frozen in foreign bank accounts — money which could be used to import food, medicine, and other goods.
The United Nations has been called to administrate a fund that would be financed with those resources, but there has been no agreement between Maduro, the United States and the country’s political Opposition on how to implement it. The Opposition controls most of the country’s foreign assets.
Under US sanctions, companies and governments must obtain authorisation from the US Treasury Department to do business with PDVSA. The Biden Administration has granted only a few such licences since taking office in January 2021, mostly on a heavily restricted basis.
Trinidad is one of the largest exporters of LNG in Latin America and the Caribbean, 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 three billion cubic feet per day.
Even with the US granting Trinidad’s request, it could take years of investment and effort to bring Venezuelan gas to Trinidad and boost LNG exports, experts say.