The trinidad Guardian / A team from the Bolivarian Republic of Venezuela is expected in T&T on November 2 to resume negotiations on the Loran/Manatee cross-border gas field.
The Venezuelan team will be led by its deputy minister of the people’s power for petroleum and mining of the Bolivarian Republic of Venezuela, Douglas Sosa, and he is expected to be here for two days.
This will be the first time in nearly six months that the Venezuelans have been at the negotiation table as the country grapples with political upheavals and sanctions from the United States.
The meeting also follows a commitment given by President Nicolás Maduro to return to T&T before the end of the year to sign another natural gas agreement that would ensure the two neighbours move together as partners in the Dragon gas project.
The meeting on November 2 and 3 will examine the unitisation and unit operator agreements (UUOA) which, if accepted, will then trigger a 90-day period in which the partners-Chevron, Shell, and PDVSA-will have to come up with a development plan for the 10 trillion cubic feet (tcf) field.
If that development plan is then accepted, the parties will be allowed to pursue it and there is already agreement that some, if not all that gas, will come to T&T to process, although some of it is expected to go to Venezuela to support electricity generation.
In the past both T&T and Venezuela governments have supported Chevron Global to be the operator, since Chevron had shares on both sides of the border. But with Shell’s purchase of BG Group and with Chevron’s assets in T&T, there was some concern that the super major may want to replace Chevron as operator. However, sources in the Venezuelan and T&T governments say this is unlikely.
Chevron, Shell and PDVSA have been working with the teams from the two countries to try and ensure that when they produce a joint development plan that is closely aligned with the thinking and goals of the two governments, there is limited delay between the presentation of the plan and its eventual acceptance.
Negotiations between Venezuela and T&T have continued for the last 14 years starting in 2003 with the signing of a memorandum, followed by five years of technical studies of several reservoirs to determine if they crossed and to what extent they crossed the border.
A framework treaty was then signed and a unit operator selected.
The consortium has presented a UUOA after which a development plan will follow. After that approvals will have to be sought and the financing determined.
Professor emeritus at the University of Miami, Anthony Bryan, had urged that T&T move quickly and skilfully to complete negotiations with Venezuela over the Loran/Manatee field before there is regime change.
Bryan said he expects that the Venezuelan opposition may be successful in its efforts to effect regime change.
“T&T should move quickly and skilfully to wrap up negotiations on the Loran/Manatee field to ensure it is not slowed by a change in administration in Caracas,” Bryan told Business and Money.
Speaking from his home in Florida, Bryan opined that the Venezuelan opposition will do all in its power to slow and stop the deal only on the basis that it is supported by the president. Bryan added it was in
Venezuela’s interest to have the deal done.
At a recent luncheon to discuss Shell’s strategy in T&T, the company noted it had plans to bring the gas to market by mid-2020s.