(Reuters) – The United States has revoked two licenses it had granted in recent years for the development of offshore natural gas projects between Trinidad and Tobago and Venezuela, the Caribbean country’s prime minister, Stuart Young, said on Tuesday.
Trinidad is the largest exporter of liquefied natural gas (LNG) in Latin America and one of the world’s largest exporters of ammonia and methanol, but the Caribbean island was aiming to develop offshore fields in Venezuela and on the maritime border to counter its declining reserves and secure supply.
The projects are seen as the only real opportunities in the near term for Venezuela to monetize its vast gas reserves and begin exports to open a much-needed new source of revenue.
The licenses, which have allowed Shell (SHEL.L), opens new tab, BP (BP.L), opens new tab and Trinidad’s National Gas Company (NGCTT.UL) to plan the projects as exemptions to the U.S. sanction regime on Venezuela, now have a May 27 deadline for the companies to wind down activities, Young said in a press conference.
Venezuela in 2023 granted Shell a 30-year license to operate the Dragon field, which contains 4 trillion cubic feet of natural gas reserves. The project aimed to begin gas exports to Trinidad next year to be turned into LNG.
A similar license was granted by Venezuela last year to BP to develop a cross-border field called Manakin-Cocuina.
U.S. licenses are needed for the companies to negotiate, plan and develop the projects because of Washington’s sanctions on Venezuela’s energy industry and its state-owned company PDVSA.
U.S. President Donald Trump‘s administration last month began suspending many authorizations linked to Venezuela, including to U.S.-based Chevron (CVX.N), opens new tab, Italy’s Eni (ENI.MI), opens new tab and Spain’s Repsol (REP.MC), opens new tab, giving them all until May 27 to wind down operations and exports.
The United States has accused Venezuelan President Nicolas Maduro of not doing enough to restore democracy and secure the return of migrants illegally in the U.S. Venezuelan officials have said the sanctions amount to an economic war.
Shell declined to comment. BP and Venezuela’s government did not immediately respond to requests for comment.
Trinidad and Tobago’s prime minister, Young, said the revocation stops any payments to Venezuela related to the projects. Trinidad is seeking a meeting with the U.S. government to discuss the suspensions and also its recent tariff imposition on Chinese shipping, which could harm the Caribbean island and others in the region.
Reporting by Curtis Williams and Marianna Parraga in Houston; Additional reporting by Julia Symmes-Cobb in Bogota; Editing by Leslie Adler and Matthew Lewis
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