WTI Crude Goes Global
A delivered crude has been added to the Brent pricing basket for the first time in history. From this month, Midland WTI will now supplement the Brent pricing complex. Learn more: (link to www.argusmedia.com/wti).
This change means that to understand Brent, you must understand the supply chain of an entirely different crude – WTI.
Argus assessments at Midland and Houston are the standard physical benchmarks for US crude and settlement indexes for robust derivatives markets.
White House Rolls Out Red Carpet for Modi
June 20, 2023
WASHINGTON
In a clear sign that India is increasingly crucial for the United States, the White House will roll out its full pageantry on Thursday for Prime Minister Narendra Modi’s official state visit and state dinner. President Joe Biden has only twice previously extended such an invitation, the highest-ranking and most prestigious of White House visits, to French President Emmanuel Macron and South Korean President Yoon Suk Yeol, leaders of U.S. treaty allies.
Even the term “official state visit” is distinctive. As heads of government, prime ministers are usually invited on an “official visit” instead of a “state visit,” which is given to heads of state such as monarchs, as well as presidents of countries where he or she is also the head of government.
The White House has not responded to queries about why Modi is given this exception. Protocol-wise, it will be a step up compared to his previous White House visits in 2014, 2016 and 2017, which were a “working visit,” “working lunch,” and “official working visit,” respectively. Before he left New Delhi, Modi said Biden’s invitation was a “a reflection of the vigor and vitality of the partnership between our democracies.”
Key partner
For over two decades, U.S. administrations have treated India as a key partner. Successive American presidents from Bill Clinton, George W. Bush, Barack Obama and Donald Trump have made the 15-hour flight to New Delhi. Trump even campaigned for Modi, heaping praise on the Indian leader in front of tens of thousands of Indian Americans at a “Howdy, Modi!” 2019 rally in Texas. Modi reciprocated by hosting the “Namaste Trump” 2020 event where Trump was cheered on by a crowd of more than 100,000 in Ahmedabad, Modi’s political homeland.
No American president has granted Modi what Biden will this week — maximum display of White House respect and hospitality, including a full honor guard arrival and departure ceremony, lavish dinner reception and accommodation at Blair House, the official guest house located across the street from the White House.
It will be the same full-on pomp that Obama rolled out in 2009 for Indian Prime Minister Manmohan Singh. Modi also will be invited to speak to a joint meeting of Congress on Thursday, his second time speaking to American lawmakers following his speech in 2016. His predecessors, Atal Bihari Vajpayee and Singh, delivered addresses in 2000 and 2005.
Geostrategic interests
Biden has at least two reasons to roll out the red carpet for Modi: to bolster India’s role in the region to counterbalance China and to wean it off Russian arms. India is the only country that has engaged in open conflict with China in the past decades.
From Washington’s perspective, a robust partnership with New Delhi is critical to realizing the U.S. vision of a free and open Indo-Pacific, said Ely Ratner, assistant secretary of defense for Indo-Pacific security affairs, at a recent event at the Center for a New American Security, a think tank working on defense and national security policies.
“A stronger India that can defend its own interest, and its sovereignty is good for the United States.“
Modi said India and the U.S. are collaborating to further “shared vision of a free, open and inclusive Indo-Pacific.” Local media have reported that during his visit, Modi will sign a $3 billion deal to purchase more than two dozen armed Predator drones for surveillance along India’s border with China and Pakistan.
Another potential deliverable — a technology transfer by American company General Electric for state-owned Hindustan Aeronautics Limited to produce engines for Tejas military fighter jets at its facility in Bengaluru.
Critical and emerging technologies
In an effort to diversify supply chain away from China, the administration announced the Initiative on Critical and Emerging Technology (iCET) with India last year.
As part of iCET, earlier this month during National Security Adviser Jake Sullivan’s visit to New Delhi, India and the U.S. unveiled a road map for enhanced collaboration in high-technology areas, with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.
“India is also seeking sensitive, critical and emerging technologies that the U.S. is often loath to share,” said Donald Camp, chair in U.S.-India policy studies at the Center of Strategic and International Studies during a recent briefing at the nonprofit research organization. “So, they will be talking about cooperation in artificial intelligence and quantum computing.”
Micron Technology Inc. is reportedly close to committing at least $1 billion toward setting up a semiconductor packaging plant in India — a deal blessed by the administration as it seeks to diversify the supply chain of chips away from China.
Russian weaponry
Tensions with China and Pakistan have long driven India to become the world’s largest arms importer. From 2018 to 2022, it purchased 11% of the world’s weapons, almost half of it from Russia, according to the international arms transfer report by the Stockholm International Peace Research Institute.
It is one reason why India was reluctant to condemn Moscow’s invasion, said Aparna Pande, director of the Initiative on the Future of India and South Asia at the Hudson Institute. The war on Ukraine, she told VOA, has provided the Biden administration a “once in a lifetime opportunity” to wean India away from its dependence on Moscow. “Because the equipment is not as easily available, spare parts are not coming through, and it’s not really performing that well.”
Russia was also the largest supplier of arms to India from 2013 to 2017, accounting for 64% of total Indian arms imports. It fell to 45% during the period from 2018 to 2022 due to increased domestic Indian arms production, and since 2022, constraints related to its invasion of Ukraine.
Global South
This year, India holds the presidency of the G20, a group of 20 developing and developed economies, including the G7, the world’s seven richest democracies. It will host the G20 summit later this year, with an agenda heavy on the interests of the so-called Global South, shorthand for low- and middle-income countries. Biden is expected to consult with Modi on the G7’s outreach to the Global South, which is partly based on concerns about China’s heavy footprint across the developing world, which is creating unsustainable levels of infrastructure debt in some countries, as well as Beijing’s clout over supply chains and critical minerals.
A proposal is being pushed by Modi to give the African Union permanent membership at the G20. The move could be strategic to regain ground lost to China and Russia — countries that have taken a head start in forging relations with the group’s 55-member nations, Beijing with its infrastructure loans and Moscow with its arms export.
Modi will also likely discuss with Biden the awkward task of finalizing the G20 guest list — whether to invite Russian President Vladimir Putin, whose country is a member. Amid threats of G7 leaders’ boycott, last year’s G20 president, Indonesia, navigated the diplomatic headache by convincing Putin to send his foreign minister and inviting Ukrainian President Volodymyr Zelenskyy to attend virtually as an observer.
UN adopts historic High Seas Treaty
June 20, 2023, by Jasmina Ovcina Mandra
193 UN member states adopted a legally binding marine biodiversity agreement following nearly two decades of negotiations over forging a common wave of conservation and sustainability in the high seas beyond national boundaries – covering two thirds of the planet’s oceans.
It forms the substance of an international legally binding instrument under the United Nations Convention under the Law of the Sea (UNCLOS) on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction (BBNJ agreement).
75 articles aim at protecting, caring for, and ensuring the responsible use of the marine environment, maintaining the integrity of ocean ecosystems and conserving the inherent value of marine biological diversity.
“The ocean is the lifeblood of our planet, and today, you have pumped new life and hope to give the ocean a fighting chance,” the UN Secretary-General António Guterres told delegates.
One important feature is that it sets out a process to enable the establishment of cross-sectoral Marine Protected Areas and other area-based management tools in the high seas and the underlying seabed. This is of particular note as currently with just over 1% of the high seas region protected, the BBNJ will be a key tool in delivering agreed-upon targets of 30% global MPAs.
According to UN estimates, by 2050, there could be more plastic in the sea than fish unless action is taken.
Over 17 million metric tons of plastic entered world oceans in 2021, making up 85 percent of marine litter, and projections are expected to double or triple each year by 2040, according to the latest Sustainable Development Goals (SDG) report.
The treaty aims at strengthening resilience and contains provisions based on the polluter-pays principle as well as mechanisms for disputes. Under the provisions, parties must assess the potential environmental impacts of any planned activities beyond their jurisdictions.
Emissions-reduction efforts must be collaborative
15 jun
In his keynote address to the Society of Petroleum Engineers Latin America and Caribbean Petroleum Engineering Conference, Energy Minister Stuart Young said for the industry to be part of a sustainable solution to global energy needs, it has to collaborate with regulators.
Young told media drilling and development programmes must provide for the reduction of emissions, including flaring, a reduced surface footprint and optimal field development and management.
“In order to sustain the use of oil gas to meet energy demands in a carbon-constrained world, it will be necessary to implement carbon capture sequestration (CCS) as a carbon reduction strategy,”
Young addressed the recent onshore bid-round in which the successful bidders have been informed of their success.
The Society of Petroleum Engineers (SPE) is a not-for-profit professional association with members engaged in energy resources development and production.
SPE serves over 119,000 members in 138 countries worldwide. The society is a key resource for technical knowledge related to the oil and gas exploration and production industry.
The SPE conference was centred around engineering opportunities, the technologies that shape the energy landscape and providing new insights on how science, resources, and people are advancing energy solutions in the region.
The Latin American and Caribbean Petroleum Engineering Conference (LACPEC) has been held for over 30 years and its purpose is to showcase the latest research and development in petroleum engineering, with focus on meeting the current and future technical needs of the industry.
This week Young met executives of Repsol for updates on business activities and insight on prospective projects. Young discussed local and regional gas development and the possibility of supplying Europe and other markets with executive director of Europe, Africa, Asia, Brazil and Venezuela Ángel Bautista, institutional director Pablo Hernando and technical manager at Repsol Maria Cristina Legarza.
Both parties exchanged views guided by their expertise on approaches and strategies which would be mutually beneficial in consideration of the current and future global market .
The parties agreed to work together and explore the development of significant future projects which would provide sustainable energy security.
“Minister Young looks forward to the continued collaboration with Repsol in his commitment to promote the long-term growth of the energy sector for the benefit of our local economy on behalf of the Government.”
5.0 earthquake shakes Trinidad and Venezuela
2023 05/25
A moderate-magnitude 5.0 earthquake located at a preliminary depth of 59km. shook north-western Trinidad
According to the UWI Seismic Research Centre, the earthquake was recorded at approximately 8:35pm and felt in both Port of Spain and Venezuela.
Cuba
Melbana mobilises rig
Drilling rig on the way to Alameda-2
Dragon gas
Dr Francisco Monaldi of the Latin American Energy Program at Rice University Baker Institute for Public Policy, thinks that Venezuela’s new Petroleum minister Pedro Tellechea, appointed in March is “serious” about continuing negotiations with T&T over the offshore Dragon Gas field.
Monaldi was referring to hopes of the Energy Minister Stuart Young for the United States to grant more concessions to T&T and Venezuela during the negotiations.
On June 1 at the Energy International Summit of the Association of International Negotiators in Miami, United States, Young said there needs to be more discussions among the United States, Venezuela and T&T on the Dragon Gas Field Project.
“T&T has become a victim of the geopolitics surrounding our nearest neighbour (Venezuela) and unfortunately, we are experiencing the collateral damage from this,” Young said.
Monaldi said Tellechea has begun to “take action. Minister Tellechea is taking significant action. As always, there is the rhetoric of big plans to increase oil production but you can see, for example, the decision to allow ENI and Repsol to export natural gas liquids from their off shore project and the announcement that this is a first step to potentially develop an LNG project on the eastern side of Venezuela. This project in Venezuela’s Paraguana Peninsula is a very interesting move. I am not sure that it would happen but the needle is starting to move in terms of getting these companies to stay. That signals to me that he is really interested in moving ahead in the project with T&T.”
Venezuela and T&T are expected to meet later this month to continue negotiations.
In January 2023, T&T secured a two-year licence from the United States Government to commence the development of the long-stalled Dragon project, scheduled to start production over a decade ago. However, US sanctions and lack of capital, delayed the production start of the field.
The licence allows T&T to undertake business related to the Dragon field with heavily sanctioned state-run oil company PDVSA.
As per the estimates, the PDVSA-owned Dragon field has up to 4.2 trillion cubic feet of natural gas.
In January, Prime Minister Dr Keith Rowley indicated that the payment to Venezuela could be made through humanitarian supplies such as medicine and food as a result of the sanctions against Venezuela, which preclude the country or its state-owned companies from receiving cash payments in US dollars.
Washington last year authorised US and European firms to resume taking Venezuelan crude oil on the condition no funds be paid to Venezuela. The U S authorised T&T to import gas from the Dragon field, north of the most westerly tip of the Chaguaramas peninsula in Venezuelan waters.
Monaldi said that the Venezuelan side wants to move ahead in its discussions with T&T but not without getting concessions in exchange whether it be cash payments or other valuable returns.
“The thing is that they probably feel that the pressure by the Europeans and the potential interest by the United States in helping the LNG market that it might be possible to get a better deal in terms of cash payments and as we know that has been signalled and announced by T&T. And it makes sense with what Tellechea has been signalling in other areas. That is the willingness of Venezuela to move ahead but trying to get something in exchange. In the case of ENI and Repsol the Venezuelans are trying to invest in trying to further expand production and use it as an opportunity to earn hard currency.”
In terms of increasing oil production, the Venezuelan Government said it wants to increase to 1 million barrels of oil in 2023 and although that target may not be achieved, at least the corruption scandals seem to be a thing of the past.
“However, it is very unlikely that this will happen but there is no doubt that Venezuela’s new Petroleum Minister is trying to move things around to help Chevron, ENI, Repsol and others to get production up. As for the corruption scandals, it seems that all has been normalised.”
Firearms and Haiti on VP agenda
JUNE 08,
CARICOM leaders arrived in Nassau through June 7 for meetings on June 8 with US Vice-President Kamala Harris. Vice-President Harris will meet with CARICOM HoGs at Atlantis, Paradise Island. BIS The Biden administration is creating a new position at the U.S. Department of Justice to tackle the illicit trafficking of U.S. weapons into the Caribbean — many of them being shipped through South Florida ports.
The initiative is among several new investments Vice President Kamala Harris will announce on a historic visit to Nassau, Bahamas, for a high-level meeting with leaders of the 15-member Caribbean Community known as CARICOM and the Dominican Republic.
The Dominican Republic is not part of the mostly English-speaking regional bloc of former British territories but its president, Luis Abinader, joined in the discussions with Harris over U.S.-Caribbean relations for over a year.
Harris will seek to highlight the U.S. commitment and plans for strengthening what had been fraught relations during the administration of Donald Trump. One step she hopes will demonstrate that is the announcement of the creation of the Coordinator for Caribbean Firearms Prosecutions in the Justice Department to increase information sharing as traffickers are prosecuted.
“Disrupting illicit firearms trafficking in the Caribbean is a shared priority for the United States and our Caribbean partners and an important aspect of our cooperation to address rising levels of crime and violence in the region,” a senior administration official said.
Harris will also discuss the implication of the new bipartisan Safer Communities Act, which was signed into law by President Biden last year. The law increases penalties for firearms trafficking and “straw” buyers — individuals who fraudulently purchase weapons and then resell them. The practice is common in states like Florida and has helped to fuel unlawful weapons exports and violent crime in the West Indies.
Since 2020, the Caribbean area, with its sun-drenched beaches and laid back lifestyles, has become a top smuggling destination for illegal U.S. firearms, which are leading to rising homicide rates. The region now accounts for about half of all firearms export investigations by U.S. federal agencies.
That led several Caribbean governments including The Bahamas earlier this year to support the government of Mexico in a $10 billion lawsuit against U.S. gun manufacturers. Their friend-of-the-court brief in the First U.S. Court of Appeals in Boston was later followed by a request from three members of Congress to its investigating arm, the General Accounting Office, for a probe of the illegal pipeline into the region.
Harris is the highest-ranking U.S. official to visit the island-nation since its independence in 1973. The last high level White House visitor was President John F. Kennedy in 1962 when the Bahamas, which will celebrate its 50th anniversary of independence next month, was still a British territory.
Bahamian Prime Minister Philip Davis is currently chairman of the Caribbean Community group CARICOM and will co-host the gathering alongside Harris. Davis said his 700-island archipelago, just off the southeastern coast of Florida, is proud to welcome Harris during Caribbean-American Heritage Month as :
“we celebrate the enduring partnerships through our nations. Together, we will address the challenges of climate change and work towards a sustainable future.”
Harris will be joined by senior administration officials ,including Assistant Secretary of State for Western Hemisphere Affairs Brian A. Nichols who will speak at the U.S.-Caribbean Partnership to Address the Climate Crisis 2030 Climate Resilient Clean Energy Summit hosted by the Atlantic Council’s Caribbean Initiative on Paradise Island.
The intention of the conference is to facilitate connections between Caribbean and U.S. governments, the private sector, non-governmental organizations and philanthropists to identify, build and operate new clean energy projects in the region.
The Bahamas meeting will be the fourth discussion between Harris and Caribbean leaders. Like previous meetings, including last year’s Ninth Summit of the Americas in Los Angeles, the focus will be on climate change, access to low-interest development financing, clean energy and security.
The senior administration official said this gathering is “really an acute demonstration of how important she sees this partnership and how important she sees leader-level engagement with Caribbean counterparts. She views strengthening our partnership is key to our shared prosperity and security,.”
Following a bilateral meeting with Davis, Harris, who is of Jamaican descent, will move into wider closed-door discussions with leaders. She will announce more than $100 million, including $98 million in new funding from the United States Agency for International Development (USAID), to address climate, energy, food security, and humanitarian assistance in the Caribbean.
A primary focus of the Bahamas meeting will be the climate crisis and initiatives being taken through the U.S.-Caribbean Partnership to Address the Climate Crisis 2030. Among the steps already taken is the facilitation of clean energy infrastructure development, climate adaption projects and technical assistance projects, her team said.
“We have provided assistance to deploy solar micro-grids to develop geothermal power projects to train a clean energy workforce and to sport battery storage and energy grids among other projects,” said the senior administration official. “We’ve built Caribbean capacity with regard to disaster preparedness, and we work to bring investors to the Caribbean to identify and develop new clean energy projects.”
Another issue of priority for Caribbean leaders is access to development financing, on which Harris has worked with leaders in Washington and elsewhere. She has asked the new president of the World Bank, Ajay Banga, to join her as she informs leaders of the U.S. policy position for reforming multilateral development lending.
There will also be special attention on Haiti where the humanitarian and security crises are worsening. and Davis is set to host a three-day meeting on behalf of CARICOM, in Jamaica with Haiti politicians in hopes of forging a governance agreement in lieu of elections.
Though Caribbean leaders in February rejected the call to support the deployment of a multinational force to help Haiti’s beleaguered national police, Harris will reiterate the United States’ support for such a force.
She will also announce over $50 million in new humanitarian aid and will announce support for the extension of the Haitian Hemisphere Opportunity through Partnership Encouragement Act and the Haiti Economic Lift Program Extension, trade preferences for Haiti, which are due for renewal in 2025.
At the meeting the vice president will also announce tens of millions of dollars in new initiatives in the area of energy and climate and also focused on Haiti, a member of CARICOM.
Among the other announcements Harris will make:
- ▪ $20 million for the Caribbean Climate Investment Program to mobilize the private sector to deploy new technologies to help with climate adaptation.
- ▪ $15 million to support disaster risk reduction and emergency response efforts.
- ▪ Assistance to help Caribbean nations investigate and prosecute firearms trafficking.
- ▪ The establishment of two new U.S. embassies and additional diplomatic support presence in the eastern Caribbean, where residents from the region have to travel to Barbados for embassy services.
US Congress propose bipartisan roadmap for Caribbean Engagement
2023 06/08
US Congressman Joaquin Castro (TX-20), Congresswoman María Elvira Salazar (FL-27), and Congressman Adriano Espaillat (NY-13) are piloting legislation which they hope could modernise U.S. engagement with Caribbean nations.
The U.S.-Caribbean Strategic Engagement Act of 2023 urges the U.S. Department of State to develop a multi-year strategy for. engagement with the Caribbean region.
The proposal comes as U.S. Vice President Kamala Harris meets Caricom leaders in the Bahamas, in keeping with a promise last year to hold more meetings with leaders of the region. The team from the U.S Congress proposed several measures in the Bill aimed at:
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- Reducing the flow of illicit United States firearms to the Caribbean region and providing technical support, training, and information-sharing to Caribbean security forces charged with monitoring maritime borders, including formal and informal ports of entry.
- Improving energy security, resiliency, and independence by working to finance increased access to diverse, reliable, secure, and affordable renewable power solutions.
- Supporting regional adaptation and resilience to the climate-driven effects of severe weather events and natural disasters.
- Advancing cooperation on democracy and human rights throughout the region and in multilateral fora.
- Improving public health cooperation and infrastructure to mitigate health concerns and threats to the Caribbean region, including through professional exchanges, medical education, and U.S. exports of medical services, technology, and pharmaceuticals to prepare for future pandemics and health emergencies, expanding the accessibility of health services to marginalized populations, and reducing dependence on medical imports from malign actors in the region and elsewhere.
- Supporting regional initiatives to advance food security throughout the Caribbean.
- Expanding internet access throughout the region, especially for marginalized communities, while working cooperatively to enhance data privacy and security.
- Advancing access to education and critical skills for at-risk youth, women, and girls in the Caribbean region.
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“Over the seven years since Congress last directed the State Department to develop a strategy for engagement with the Caribbean, the challenges and opportunities faced by the United States and our Caribbean partners have changed significantly,” said Congressman Castro.
“Today, as we explore new possibilities for regional integration and economic growth and confront new threats – from climate change to democratic backsliding – the time has come for an updated strategy. The U.S.-Caribbean Strategic Engagement Act of 2023 demonstrates Congress’ bipartisan commitment to deepening our relationship with Caribbean nations and improving the lives of people across the Western Hemisphere. I thank Chairwoman Salazar and Congressman Espaillat for their partnership on this bill and look forward to moving this important legislation forward.”
“It is in the best interest of South Florida and the United States to have a secure, prosperous, and sovereign Caribbean,” said Congresswoman Salazar. “We need to have a productive strategy to make sure it remains one of the world’s top destinations for investment and tourism. A safe Caribbean is good for tourism, national security, and eases the migration crisis.”
“As we continue our coordinated efforts to strengthen U.S. relations throughout the Caribbean, my colleagues and I feel it is important to update the U.S.-Caribbean Strategic Engagement Act of 2016 to reflect the current challenges the region is facing as of 2023. I am proud to co-lead this new bill, which will update the 2016 law to require our government to create a strategy to address the growing threat of illicit gun trafficking and violence in the Caribbean, while simultaneously improving renewable energy access, climate adaptation efforts, and public health cooperation efforts throughout the region,” said Congressman Espaillat.
Responsible stakeholders welcome the US efforts which can offer repatriation to AU domiciles for those wishing to be with lookalikes. The cosmopolitan community can then focus on developing the Caribbean Sea region as Unincorporated Territories of the USA.
Amcham hopes for better business conditions
American Chamber of Commerce CEO Nirad Tewarie said members hope for “better business conditions within our neighbourhood” so that they could expand. Responding to the Prime Minister’s endorsement of companies considering Venezuela for business despite the challenges of US sanctions, at Amcham’s launch of the Tech Hub Islands Summit (THIS) 2023, Tewarie said while he had not seen the comments:
“Our members are looking to do business wherever the business conditions are right. We hope that business conditions within our neighbourhood continue to improve so that we can expand our business activities and our relations with our neighbours.”
Venezuela ranked 188 out of 190 countries according to the World Bank latest annual ratings which compare and rank countries against each other based on their regulatory environments.
It got the same ranking in an index of trading across borders, according to tradingandeconomics.com and was ranked 181 out of 185 economies for investor protection, with low marks in each of the indicators, including soundness of banks, ease of access to loans, control of corruption, country capacity to retain and attract talent and domestic market size.
Gov.UK overseas business risk guidelines with a focus on Venezuela, advised that since 2006 the government has pursued a policy of state control of strategic sectors in the economy for the purpose of national development. Oil, power, metals, mining and cement industries are all controlled by the state.
TMF Group, a Dutch multinational professional services firm, said on its website that trading across borders could take longer than a month-two months to be completed – 49 days to export and 71 days to import. It also costs more than double the OECD average for trading. Businesses needed to make 71 tax payments , taking an average of 792 business hours to process.
Registering a business in Venezuela is a 20-step process which could take over 8 months , according to doingbusiness.org, with some applications taking between 1 and 3 months. Processes which take the longest include registering with the local mercantile registry (34 days), registering at the social security institute (130 days) and obtaining a licence from a competent municipality (50 days).
In comparison, TT business registration must be completed within three months.
An InvesTT guideline on registering businesses said sole proprietors, partnerships and limited-liability companies must complete the first step in the registration process – reserving a business name.
For the second step, limited-liability companies file articles of incorporation, which can take up to two weeks to be completed.
These issues with doing business in Venezuela are not counting the heavy US sanctions on Venezuela, which severely limit how outside investors treat and trade with the country.
On January 2019 the US Office of Foreign Asset Control (OFAC) designated SOC PDVSA on its specially designated nationals and blocked persons list, to “hold those responsible for Venezuela’s decline,”
As a result, all property and interests in property of PDVSA subject to US jurisdiction was blocked. This was a severe blow to trade agreements being made between TT and Venezuela over Dragon gas field.
However, several licences in place allow trade and business. TT acquired a licence valid for two years
Last year, after lobbying US officials, including President Biden, which will allow PDVSA, Shell and the TT Government to jointly plan and develop a gas-exporting project, under conditions. These include a promise that a portion of the resulting gas would be exported to Jamaica and the Dominican Republic and that the Maduro regime would not receive any cash payments from the project. The Prime Minister said TT suffers from collateral damage because of the US sanctions but eastern Venezuela was a market for traders to offer goods and services as part of the Dragon gas deal.
More talks on Dragon gas field
TT Minister of Energy Stuart Young seeks further negotiations with the US and Venezuela to bring the Dragon gas deal to fruition.
Young delivered the keynote address, Pursuit of Energy Security and Sustainability
– a Caribbean Perspective, at the Energy International Summit of the Association of International Negotiators on June 1 in Miami, Florida.
He said, “TT has become a victim of the geopolitics surrounding our nearest neighbour (Venezuela) and unfortunately, we are experiencing the collateral damage from this. With respect to TT’s access to the Dragon gas field, both the Prime Minister and myself spent significant time and energy last year meeting with the decision-makers in Washington, DC, negotiating and advocating for a grant of a waiver from Office of Foreign Assets (OFAC) for TT to produce the Dragon gas field with our partner Shell. This included meeting with President Biden at the summit of the Americas, vice president Kamala Harris, congressmen and women on both sides (and) the leadership of the Departments of State, Energy, Agriculture and the Treasury.”
In January, OFAC granted TT a waiver and the government has since been pursuing negotiations with Venezuela over a licence to produce the Dragon gas field.
“With the support of other leaders of Caricom, we pursued the ability to access this gas field, as there is the immediate excess capacity in Trinidad for us to produce additional LNG, ammonia and fertiliser products and methanol, thereby contributing to energy security in the Caricom and wider region. We would be able to provide additional LNG supplies to Caricom countries and even Europe as it looks for alternatives to Russian gas,” he said.
Young said TT is looking at deep water as the next frontier for gas exploration and production.
“Our shallow waters have been exploited for decades and are in decline. We are in active negotiations with Woodside on a project called Calypso which holds medium term future for TT’s gas production.”
The Ministry of Energy has been negotiating with bp and Shell as a joint consortium on other deepwater blocks and looks forward to the conclusion of those negotiations in the coming weeks.
“As a responsible hydrocarbon country, TT has also been undertaking several new energy projects with the aim of reducing greenhouse-gas emissions,” he said.
Young said TT recently turned the sod for the commencement of the construction of a solar project, in collaboration with bp and Shell, which will produce 112.2 MW of power, ten per of the country’s power needs. The government is also exploring the use of wind turbines for power generation. These renewables projects would also feed into the recently Cabinet-approved construction of the first green hydrogen project, which will be done under the direction of the Ministry of Energy.
“TT is actively looking at carbon capture sequestration and utilisation to do our part in carbon reduction but also if done properly and in a public-private partnership (PPP) with our petrochemical stakeholders, it could provide them with the opportunity to ‘blue’ their products, thereby keeping them competitive in the changing energy landscape.”
Young highlighted the challenges for the government since it assumed office in 2015.
“We met a crisis in our energy sector that was unprecedented in our country’s long hydrocarbon history. The previous administration, from 2010-2015, negotiated no new upstream gas supply contacts and there was significant gas curtailment that had begun to take place with declining gas production. This had contractual consequences against our National Gas Company (NGC) with claims for damages.”
Young added that the former administration, unbeknownst to the population had implemented a gas allocation policy called a “greenfield gas policy” which mandated that NGC would first allocate and supply gas to newer plants and curtail gas supply to older plants despite the contractual obligations in its various GSCs. This policy immediately exposed the NGC to billions of dollars in claims for breach of its contractual supply obligations. The government went through difficult rounds of negotiations, with down-streamers shutting down plants to pressure the government.
“I can report to you now, that by holding to our principles of fair prices and a fair sharing of upside prices, we were able to secure excellent returns for our citizens in 2022 when ammonia and methanol prices reached highs as a result of the Russia/Ukraine conflict.”
Trinidad and Tobago suffering from US policy on Venezuela
The Prime Minister said during recent talks with the US, he informed them that TT was suffering from collateral damage from US sanctions against Venezuela. He is encouraging busines to see eastern Venezuela as a market for their goods and service as part of the Dragon gas deal.