Energy giant Shell is pursuing negotiations with Venezuela’s government to secure development rights for four substantial offshore regions located near Trinidad and Tobago, according to sources with knowledge of the discussions.
The British-based oil company has spent years working to move forward with the Dragon natural gas field project in Venezuelan waters, which contains 4.2 trillion cubic feet of reserves. Company officials may reach a final investment decision on this major project before the year concludes.
Sources indicate Shell is now seeking to expand its Venezuelan operations beyond the Dragon field, targeting additional areas under the administration of interim President Delcy Rodriguez.
The company’s strategy focuses on gaining access to three additional fields that, combined with Dragon, form part of the massive 12 trillion cubic foot Mariscal Sucre project located off Venezuela’s eastern coastline. Shell also has its sights set on the 7.3 trillion cubic foot Loran offshore region, which spans across the border into Trinidad waters, potentially providing access to approximately 20 trillion cubic feet of total reserves.
Last month, Shell representatives traveled to Caracas to sign initial agreements with Rodriguez’s government, covering both the Dragon project advancement and potential development of two onshore oil and gas locations called Carito and Pirital.
The company’s plan involves transporting Venezuelan natural gas to Trinidad for conversion into liquefied natural gas destined for international markets. This strategy would significantly boost Shell’s Atlantic LNG facility, which has struggled to operate at full capacity due to inadequate gas supplies.
Shell currently manages Trinidad’s section of the Loran-Manatee field development. Meanwhile, American energy company Chevron maintains ownership stakes in two Venezuelan blocks containing the Loran field, but is reportedly preparing to surrender these interests as part of a separate agreement to expand heavy oil operations in Venezuela’s Orinoco Belt region.
“The proximity to Manatee makes Loran an attractive investment opportunity for Shell,” the company stated in an email response, acknowledging its pursuit of the additional Venezuelan territories.
Representatives from Venezuela’s oil ministry, state petroleum company PDVSA, Trinidad and Tobago’s Energy Ministry, and Chevron did not provide responses to requests for comment.
“The plan is to drill subsea wells on the Loran side and tie them back to our Manatee platform in Trinidad, once we get the rest of the field. It is an easy fix and makes sense for us to produce the entire block,” explained one individual familiar with the ongoing negotiations.
Shell maintains a 45 percent ownership stake in Trinidad’s Atlantic LNG facility, which ranks as Latin America’s largest liquefied natural gas operation. The project’s original capacity of 15.5 million metric tons annually has been reduced to 12 million tons due to insufficient gas availability. Last year’s shipments totaled less than 9 million metric tons, according to industry data.
During last week’s CERAWeek conference in Houston, Shell CEO Wael Sawan indicated the company could approve up to two Venezuelan projects this year, contingent on improved financial and legal conditions.
“What we are looking at at the moment is where we can add value to Venezuela,” Sawan explained. “Initially, I would say it’s more geared towards gas, and in particular gas that can be monetized through LNG.”
Both Trinidad and Shell have been working to increase regional gas production and secure Venezuelan supplies, given that the two countries are separated by just six miles at their closest point. The Mariscal Sucre fields — including Dragon, Rio Caribe, Patao and Mejillones — are positioned closer to Trinidad’s existing infrastructure than to Venezuela’s facilities, despite Venezuela’s extensive undeveloped offshore gas resources.
Previous arrangements had granted Russia’s Rosneft interests in the Patao and Mejillones fields through agreements with PDVSA. Additionally, PDVSA has been seeking a development partner for Rio Caribe under a production-sharing arrangement, though the status of any preliminary agreements remains unclear.
Rosneft’s Venezuelan assets were transferred to Russia’s state-controlled Roszarubezhneft in 2020, but these fields have remained undeveloped. The continued Russian involvement in these areas creates complications for finalizing any Shell agreement, sources noted.
“We are making progress, and yes, the assignment of the fields to the Russian company is a problem, but we will get over it. I am sure,” stated a Shell source familiar with the negotiations.
