Shell expands its investments in Venezuela via Trinidad economy

The Republic of Trinidad and Tobago announced the conclusion of an agreement with the British company Shell to develop and exploit natural gas in the Venezuelan Loran field, in a step that may enhance regional gas production and open a new path for Venezuelan energy exports to global markets.

Trinidadian Energy Minister Rodal Moonilal said that the agreement allows Shell to export the entire production of the first phase of the Loran field, located off the coast of Venezuela, to Trinidad and Tobago, where the gas will be processed at the Beechfield facility before being re-exported.

The agreement comes days after Venezuela granted Shell a license to explore and export gas under a new hydrocarbon resources law aimed at attracting foreign investments by reducing the state’s direct role in the oil and gas sector.

According to official data, the first phase of developing the Loran field contains 48.14 billion cubic meters of natural gas designated for export, making it one of the most prominent new gas projects in the Caribbean.

Moonilal stressed that the agreement, which still requires final approval by the Trinidadian government, will have a “major impact on our energy sector and on the economy of Trinidad and Tobago,” as the country seeks to compensate for the decline in its domestic gas production and strengthen its position as a regional center for energy processing and export.

For her part, Acting Venezuelan President Delcy Rodriguez considered – Thursday – that awarding the field to Shell represents a “very important step forward” in the path of developing the Venezuelan natural gas sector and enhancing the country’s position as a gas exporter.

Delcy Rodriguez opened the energy sector to foreign investment in January after a reform law was passed through the Venezuelan legislature under pressure from Washington, which followed the arrest of former President Nicolas Maduro during a US military operation in Caracas.

This project is an extension of the existing cooperation between Venezuela, Trinidad and Tobago, and Shell, as the three parties signed an agreement in 2023 to develop the offshore Dragon field, which contains about 120 billion cubic meters of natural gas, and its production was affected by the US sanctions imposed on the Venezuelan oil sector since 2019.

Venezuela is believed to have the largest oil reserves in the world, and is also rich in natural gas.

Economic and regional importance

The agreement has dimensions that go beyond developing a new gas field, as it reflects an increasing Venezuelan trend towards attracting international companies to the energy sector after recent legislative amendments. It also gives Trinidad and Tobago an opportunity to benefit from its advanced infrastructure in processing liquefied natural gas.

The Loran field gains additional importance because it includes 7 natural gas reservoirs, 6 of which extend across the shared maritime border between Venezuela and Trinidad and Tobago, which makes cooperation between the two countries necessary to develop the common resources and achieve the maximum economic benefit from them.

The island of Trinidad and Tobago is located in the Caribbean, between the Atlantic Ocean and the Caribbean Sea. It is located north of Venezuela. It has an area of ​​5,128 square kilometers, and its most important natural resources are oil and natural gas.