Sunday Express
The National Newspaper of Trinidad & Tobago
No: 20,186 Sunday 24 September 2023
OPINION
EVEN in the best of times, the profit-sharing agreement between Trinidad and Tobago and Venezuela to export gas from the Dragon field would be wonderful news. And, since our country is arguably in the worst of times, this development should be celebrated all the more.
Kudos must be given to the Government for pulling off this negotiation coup, with particular congratulations to Energy Minister Stuart Young, who has been spearheading this initiative for months. It should be borne in mind that Mr Young was not merely negotiating with Venezuelan President Nicolás Maduro's team but, indirectly, also the United States government, which in January granted the PDVSA, T&T and Shell a two-year waiver to revive the Dragon project.
That ease-up came with the caveat that no cash payments could be made to Venezuela or its state companies. At the same time, the Venezuelan regime, having invested US$1 billion to construct the pipeline from the Dragon field to on-shore, had been insisting that any partners pay compensation for Venezuela's investment.
Minister Young has not revealed how these hurdles were negotiated nor any other details of the agreement. But, assuming the T&T Government made only reasonable commitments, the Dragon field, with reserves estimated at 4.2 trillion cubic feet (tcf), has significant potential for this country to maintain its status as a key energy sector player in the region.
Doing so, however, will require a pivot from the traditional focus on exploration and production. Given our declining oil and gas production over the past decade, exploration can no longer be this country's energy priority. Figures from the Ministry of Energy show that T&T produced just 2.61 billion cubic feet a day in May 2023, which compares to a peak of 4.52 bcf/d in 2010. The Central Bank, in its July 2023 bulletin, noted that in the fourth quarter of 2022, yearon- year decreases in domestic energy production were recorded in the upstream (2.4 per cent), midstream (22.3 per cent), and downstream (16.4 per cent) industries. And, according to BP, Trinidad will exhaust its gas reserves in less than a decade.
Venezuela, however, has proven gas reserves of 221 tcf, according to BP's Statistical Review of Energy, making that country the world's seventh largest holder of gas. Indeed, more natural gas is flared away in Venezuela's North Monagas oilfields than the entire current shortfall in Trinidad's production.
This is why the implications of the Dragon deal go beyond the expected boost in T&T's energy-based revenues, which in any case may take at least two years to manifest. But, if T&T handles this project effectively, we may be able to strike additional agreements for the three fields that straddle the borders of T&T and Venezuela (Loran-Manatee, Coquina and Kapok/Dorado), which are estimated to have 21-38 tcf of reserves.
In the even longer term, we must focus on gas resources in neighbouring Caribbean territories, like Barbados and Grenada. T&T's energy future most likely lies in distribution and marketing. The Government can use the Dragon deal to build on that foundation now.
