Shell completes survey of Venezuelan gas field as winding down of license approaches

Shell, the oil and gas company, plans to finish a marine survey of the offshore Dragon gas field in Venezuela before the May deadline set by the United States to close all energy licenses in the country.

According to LSEG vessel tracking data, the Colombian-flagged Dona Jose II survey vessel arrived in Venezuela sanctioned by the U.S. this month to collect data for Shell and Trinidad’s National Gas Company.

Two sources said that the exploration work will be completed within the next few weeks and allow the company determine drilling locations as well as pipeline design, should Washington allow the development of the project, which is planned to supply gas to Trinidad.

Shell had chartered the vessel when the Trump administration announced earlier this month that it was canceling a license granted by the U.S. government in 2023 for the planning and development of the Dragon field. Shell and NGC have until May 27th to end operations in Venezuela.

Since Washington first imposed sanctions on Venezuela's energy sector in 2019, U.S. licensing is required for foreign companies who want to plan, negotiate and develop oil and natural gas projects with the state-owned PDVSA.

Shell, NGC, and PDVSA have not responded to comments immediately.

Trinidad is Latin America’s largest LNG exporter and one of the largest ammonia and methane exporters in the world. However, the Caribbean nation must develop offshore fields near Venezuela and the maritime border. This will help to secure its supply and counteract the decline of its reserves.

The Dragon gas project was seen as one the few opportunities Trinidad had to secure gas supplies for its industries while Venezuela could begin to monetize its vast offshore reserves.

Shell was granted a license by Venezuela to operate the Dragon Field for 30 years in 2023. Gas exports are expected to start as soon as next year, and will be converted into LNG at Trinidad.

Venezuelan officials said that the sanctions amounted to "economic warfare". (Reporting and editing by Curtis Williams in Houston, Marianna Pararaga)

(source: Reuters)