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The Trump administration has revoked licences for BP and Shell gas projects in Venezuelan waters intended to supply a massive liquefied natural gas plant critical to the economy of Trinidad and Tobago.
The decision marks the latest move by the US to ratchet up by economic and diplomatic pressure on Venezuela’s autocratic President Nicolás Maduro, who was sworn in for a third term in January despite widespread evidence of fraud in the July election.
The licences relate to Shell’s Dragon and BP’s Cocuina-Manakin projects, which are joint ventures involving Trinidad and Tobago’s National Gas Company and its government. Both of the development projects would have used existing gas infrastructure owned by both companies in Trinidad and Tobago waters to transport gas to the Atlantic LNG plant on the Caribbean island, in which BP and Shell both own stakes.
The projects represented one of the few ways that Venezuela could generate revenue from its vast gas reserves.
The revoking of the licences, which were held by the government of Trinidad and Tobago, marks a setback for BP and Shell, which had sought to expand development into Venezuela’s gas-rich waters. The companies were relying on special licences issued by the Biden administration that enabled them to operate despite US sanctions against the authoritarian government in Venezuela of Nicolás Maduro.
Washington’s action also represents a blow to Trinidad and Tobago’s struggle to supply the Atlantic LNG project, which has been forced to idle a fifth of its capacity since 2020 due to shortages of domestic gas.
Stuart Young, the prime minister of the Caribbean island, said on Tuesday that his government had been informed by the Trump administration that both licences were revoked. He said his government would seek to appeal.
“This does not come necessarily as a surprise, seeing how volatile things are, not only with respect with Venezuela, but what we are seeing for example with the application of tariffs . . . There seems to be a lot of unsettling times in Washington DC,” Young said at a news conference.
The revocation of the Trinidad and Tobago licences follow similar measures taken by the US against other companies as it seeks to isolate Venezuela.
Last month the US Treasury revoked exemptions to operate in Venezuela for Chevron, Repsol, Eni and Global Oil Terminals, a company owned by Floridian Republican donor Harry Sargeant III. They have been ordered to wind down operations by May 27.
US sanctions prohibit any business with Venezuela’s state-owned oil major Petróleos de Venezuela, though the Biden administration granted exemptions as it tried unsuccessfully to coax Maduro into pro-democracy political reforms.
LNG is central to Trinidad’s economy, with exports worth $3.6bn in 2023, according to the Observatory of Economic Complexity. The Dragon field, the development of which Trinidad and Tobago has said is vital for its energy security, is estimated to contain about 4tn cubic ft of gas reserves. Shell had hoped to begin producing gas by 2026 or 2027 to supply Atlantic LNG.
Spokespeople for the US Treasury and the Venezuelan government did not immediately respond to requests for comment. BP did not immediately respond to a request for comment. Shell declined to comment.
Francisco Monaldi, a Latin America energy expert at Rice University in Houston, said the revocation of licences for the Trinidadian projects came as a surprise.
“I thought that they would make an exception for these projects as they were not going to be giving any significant amount of money to Maduro in the foreseeable future,” Monaldi said.
https://www.ft.com/content/9fae64f6-7f0f-4f50-aedb-d4fa21f39502
