March 2023 – Mariana Vargas – During the last week of January, within the framework of the Energy Conference in Port of Spain, a particular license was made public that allows the government of Trinidad and Tobago (T&T) to access Venezuelan natural gas, in particular gas from the Dragon field. This natural gas field is located in Venezuelan waters just 17 km from the Hibiscus field on the Trinidadian side, a depleted gas field connected to Atlantic LNG.
The correct reading of this private license is not that Venezuela deserves it because of advances in the negotiations in Mexico, but that the Caribbean needs to continue having T&T as a supplier of natural gas via LNG to the Caribbean. However, T&T has seen its production fall by 15% annually and today has a deficit of over 800 Mmscfd. This means that the main gas supplier is running out of gas, both LPG and LNG.
Faced with this situation of falling gas supply, the Trinidadian government has evaluated all its options. There has been talk of bringing in gas from gas blocks in Barbados, Grenada or even gas from Guyana flowing into T&T. The latter option, of a 900+ km subsea pipeline through Venezuelan waters. We do not see that option viable for now. That leaves Venezuela as the elephant in the room. Let us also take into consideration that the negotiations that T&T has with Venezuela is not something new, they are actions that have been going on for some time.
The question is, why is the U.S. granting this license now? Biden has had a difficult year; with the war in Ukraine, shootings in several states, the oil price crisis and inflation constantly threatening him. However, being a powerful and influential country cannot afford to leave the other issues on the international agenda aside, which is why they are beginning to act on the Caribbean. The migration crisis on the border with Mexico can no longer be hidden. Haitians fleeing to the USA is becoming a major problem. A region that with the Trump administration began to decline notoriously, everything was concentrated in Venezuela. Biden has tried to continue with the Venezuela issue, but this time he wants to involve Trinidad, a country that has assumed leadership in Caricom and is also the Caribbean’s energy supplier. The risk that T&T will stop supplying LPG to Barbados and the Eastern Caribbean, as well as not being able to fulfill supply contracts to Jamaica or Barbados is something that worries the Caribbean. These two islands have asked the IMF for help following a pandemic that has brought tourism to its knees.
There are also Dutch islands that have sought access to a license, such is the case of Aruba, which has asked the U.S. government to allow it access to Venezuelan fuel oil, for quality, price and proximity Aruba seeks to depend again on this fuel. These islands have recently opened their maritime and land borders with Venezuela, and this can be read as a “soft recognition” to the Miraflores government.
The Caribbean, T&T, Europe and Colombia are the countries that have urged the United States to relax sanctions, not for political reasons, but for energy and price reasons. Miraflores knows this and it is their bet.
The Caribbean will continue to be a zone of influence for Venezuela. There has been talk of relaunching PetroCaribe, but there is already talk of a PetroCaricom. We will see under what terms this will take place, but in any case it is worth highlighting the role of T&T in this whole process and the role it will play later on in the territorial disputes between Venezuela and Guyana.
