(Trinidad Guardian) Experts in the energy sector are warning that T&T’s Dragon gas agreement with Venezuela, upon which T&T’s economic fortunes depend, could be in jeopardy. They are now “uncertain” about the future of the deal after Donald Trump won Tuesday’s presidential elections in the United States, urging T&T to adopt a wait-and-see approach.
On Wednesday, on his Instagram page, Venezuela’s Foreign Affairs Minister Yván Gil congratulated Trump on his victory. Francisco Monaldi, an energy economist and a director at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy in the United States, told Guardian Media on Wednesday that although Trump tightened sanctions on Venezuela, he may modify his policies in his second term.
“I think it is hard to read the exact policies that Mr Trump will enact with respect to sanctions in Venezuela in the oil sector. On one hand, his team included very hawkish people who tend to favour policies that are very tough against the (Nicolas) Maduro administration.
“On the other hand, Mr Trump has criticised the use of sanctions in the case of Russia and even hinted that sanctions on Iran should significantly change. It is hard to know what will be his position in terms of sanction policies in Venezuela. There is significant uncertainty over how Trump’s administration will approach sanctions with Venezuela.”
Monaldi is advising T&T and other countries involved to take a wait-and-see approach, as it would take time for Trump’s new team to settle and begin defining his energy policy.
“What is clear is that in order for the Dragon project to move ahead, they need a long-term licence, and I do not think in the first few months of the Trump administration that would be defined. That might produce a delay, but eventually they will define their policies and know what decision to take on that.
“I think in a pragmatic approach, they should be more flexible with the gas licences over the oil licences given that these are projects that will take time and will not represent for Maduro significant financial contributions compared to the oil.”
He also pointed out that the European lobby, which is interested in T&T’s gas, might be less influential on Trump’s administration on this issue. In a statement to Guardian Media earlier this year, the European Union’s Ambassador to T&T, Peter Cavendish said, “The European Union is, of course, very interested in diversifying its sources of energy, and in this context, the possible support to the exploitation of the Venezuelan gas field is of great interest.”
Last December, T&T and Venezuela signed an agreement that allows T&T a 30-year official licence for the exploration, production, and export of natural gas from the Dragon Gas Field in Venezuela.
Emphasising the importance of this agreement in September, Prime Minister Dr Keith Rowley warned the country that difficult days lie ahead and that citizens should tighten their belts until there is new gas production in 2027.
Venezuela’s oil and gas have been under heavy sanctions, which began under President Barack Obama in 2015 and have continued under the Donald Trump and Joe Biden administrations until the present.
However, at the signing of the Dragon gas agreement in December 2023, Prime Minister Rowley assured that his Government had secured a licence to proceed with the extraction of natural gas from Venezuela’s Dragon gas field from the Office of Foreign Assets Control (OFAC).
Former energy minister and energy consultant Kevin Ramnarine said this country, like the rest of the world, has to wait to see what Trump’s policies will be like.
“With regard to Dragon and Coucina-Manakin, it is left to be seen what his foreign policy stance on Venezuela will be. The change in administration in the USA thus introduces another layer of uncertainty over the two licences. I’m sure BP and Shell, the two investors in Dragon and Cocuina-Manakin, would be concerned about the OFAC licences and their renewal.”
Ramnarine also spoke on bilateral relations between T&T and the US and referred to past friction between the two countries over relations with Venezuela. “The last US ambassador that President Trump appointed to Port-of-Spain was the late Mr (Joseph) Mondello. I recall that there was a serious dispute between the current Minister of Energy (then National Security Minister), the Prime Minister, and Mr Mondello over a visit by Venezuelan Vice President Delcy Rodriguez to this country.
“I’m sure President Trump and the people around him who support his foreign policy formulation and direction would not have forgotten that incident, and it may form part of their briefing notes.”
He added, “As can also be expected, the incoming president will also want to appoint a new ambassador to Port-of-Spain to replace Ambassador (Candace Bond). The Rowley administration seems to have a good relationship with her, so it’s left to be seen how they navigate the changes that will come to the US Embassy once Donald Trump settles into the White House in January 2025.”
Guardian Media also tried to contact Energy Minister Stuart Young by phone, but he did not answer the calls or respond to messages. The Energy Chamber and Venezuelan Ambassador to T&T Álvaro Enrique Sánchez Cordero declined to comment on the matter at this time.
