Fossil Energy – Dragon Gas
After nearly two years in limbo, Trinidad and Tobago’s long-anticipated Dragon gas deal with Venezuela is back on the table.
But under a new set of conditions that highlight shifting geopolitical winds in the region.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has granted a new license allowing Trinidad and energy major Shell to resume negotiations with Venezuela’s state oil company, PDVSA, over the Dragon offshore gas field.
The previous authorization, issued in October 2023, was revoked in April 2024 as Washington tightened its stance on Venezuelan energy cooperation.
Attorney General John Jeremie confirmed on October 9 that the fresh license gives Trinidad the green light to pursue the project once again. The new arrangement, however, introduces a notable caveat: U.S. participation is now mandatory.
According to Reuters, the approval is structured in three stages. The first phase permits negotiations between the parties through April 2026, while subsequent stages are expected to address development and production terms. Financial details remain undisclosed.
The Dragon field, located near the maritime border between Trinidad and Venezuela, has an estimated production potential of 350 million cubic feet of gas per day. Neighboring Manakin-Cocuina, the second-largest cross-border field, holds more than one trillion cubic feet of proven reserves.
Under the previous deal, Venezuela’s state revenues were set at a minimum of 45% of the project’s gross income, with additional royalties, commissions, and social contributions exceeding US$1 million.
The Dragon project had once been viewed as a crucial energy lifeline for the Caribbean nation, whose gas output has been in steady decline. Its revival signals a possible thaw in Washington’s energy posture toward Caracas — despite earlier statements by U.S. Secretary of State Marco Rubio that the United States would not back regional energy ties with Venezuela.
For Trinidad and Tobago, the return of Dragon could prove pivotal to sustaining its gas-based economy. But as the new license makes clear, the path forward will now run through Washington as much as through Caracas.
