WASHINGTON/PORT OF SPAIN, Jan 24 (Reuters) – The Biden administration has granted a license to Trinidad and Tobago to develop a significant gas field situated in Venezuelan territorial waters, U.S. and Trinidad officers mentioned on Tuesday, marking an additional easing of some sanctions on Venezuela.
The license, issued by the U.S. Treasury Department at Trinidad’s request and supposed to improve Caribbean regional vitality safety, means the island nation can do enterprise associated to the Dragon gas field with Venezuela’s closely sanctioned state-run oil firm PDVSA.
Prime Minister Keith Rowley, talking at a information convention in Port of Spain, mentioned Trinidad expects to achieve entry to 350 million cubic ft of gas per day from the Dragon field.
He mentioned he utilized for the license in mid-2022 and gained approval after discussing it with prime U.S. officers, together with U.S. President Joe Biden, whereas additionally retaining open a channel of communication with Venezuelan President Nicolas Maduro.
A senior U.S. official, talking to Reuters on situation of anonymity, mentioned “the Maduro regime is not going to be permitted to obtain any money funds from this undertaking” and all remaining U.S. sanctions could be unchanged and enforced.
The choice was the results of in depth diplomacy between Vice President Kamala Harris and Caribbean leaders in an effort to guarantee regional vitality safety and cut back reliance on different nations’ sources, together with Russia, the official mentioned.
“The U.S. Vice President has been a cautious and dedicated listener,” Prime Minister Rowley mentioned.
PDVSA has discovered reserves of 4.2 trillion cubic ft (TCF) in Dragon, on the Venezuelan aspect of its maritime border with Trinidad. The undertaking was headed for manufacturing over a decade in the past, however stalled over lack of capital and companions, in addition to sanctions.
Under U.S. sanctions, firms and governments should get hold of authorization from the U.S. Treasury Department to do enterprise with PDVSA. The Biden administration has granted only some such licenses since taking workplace in January 2021, totally on a closely restricted foundation.
The license follows a spherical of negotiations in November between Maduro’s Socialist authorities and the opposition, geared toward discovering a path to new elections. But Maduro, whose 2018 re-election was broadly derided by Western governments as a sham, has resisted sending his negotiating staff again to the desk since then.
With Maduro’s hand strengthened by fractures inside the opposition and eroding diplomatic isolation in Latin America, it was not instantly clear whether or not the brand new U.S. license may assist lure him into a brand new spherical of talks in Mexico.
REGIONAL ENERGY NEEDS IN FOCUS
One of Washington’s key goals appeared to be a response to U.S. companions within the Caribbean who’ve known as for assist to take care of excessive vitality costs following Russia’s invasion of Ukraine.
“The Vice President conveyed to the Prime Minister that the Treasury Department would take motion to assist meet the area’s long-term vitality wants,” an announcement from Harris’ workplace mentioned, referring to a name with Rowley on Tuesday.
The license will enable PDVSA, Shell (SHEL.L) and Trinidad to collectively plan and develop a gas-exporting undertaking after agreeing to pending particulars in coming days. A portion of the ensuing gas should be exported to Jamaica and the Dominican Republic, in accordance to the two-year license’s phrases, Rowley mentioned.
Trinidad is Latin America’s largest liquefied pure gas (LNG) exporter, with put in capability to course of 4.2 billion cubic ft per day (bcfd) into LNG, petrochemicals and energy. But its gas manufacturing is just below 3 bcfd.
Even with Washington’s granting of Trinidad’s request, it may take years of funding and effort to convey Venezuelan gas to Trinidad and increase LNG exports, specialists say.
In addition, with no funds approved to Venezuela, it may very well be tough for Trinidad to craft a take care of Caracas.
Cash-strapped PDVSA is anticipated to function the Dragon undertaking on the Venezuela aspect. The U.S. authorization may open the door for transferring forward with one other gas undertaking with Trinidad, within the Loran-Manatee fields.
In November the United States issued a six-month license to Chevron (CVX.N), authorizing it to broaden operations in Venezuela and convey oil to the United States.
The Chevron license was one in all Washington’s first vital steps to ease sanctions as an incentive for Caracas to work with opposition leaders.
Reporting by Matt Spetalnick in Washington, Marianna Parraga in Houston and Curtis Williams in Port of Spain, Editing by Rosalba O’Brien
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