Washington clears the way
Shell confirmed this week that new U.S. general licenses will allow the company to push forward with its Dragon natural gas project off the coast of Venezuela. The offshore field holds an estimated 4.5 trillion cubic feet of gas and sits near the maritime border with Trinidad and Tobago.
"The issuance of the recent general licenses is a positive signal, and it allows for progress on our Dragon project," a Shell spokesperson said.
The U.S. Treasury's Office of Foreign Assets Control approved the licenses earlier in February, permitting American entities to supply goods, technology, and services for oil and gas exploration in Venezuela under limited conditions.
Trinidad's LNG plant needs the gas
Dragon's output will feed Atlantic LNG, Shell's liquefaction plant in Trinidad with 12 million metric tonnes of annual capacity. The facility has been running well below that level for years because Trinidad simply does not have enough feedstock gas.
Atlantic LNG accounts for about 10% of Shell's global LNG production and 15% of BP's exports. Both companies hold 45% stakes, with state-owned NGC owning the remaining 10%.
Shell CEO Wael Sawan said the company is targeting first gas from Dragon within three years, with production expected to reach 350 million cubic feet per day by late 2027.
Trinidad's Energy Minister Roodal Moonilal welcomed the development. "The United States is an ally and a very strong friend," he told reporters, pledging that Trinidad would back the companies' license applications.
Bigger fields waiting in the wings
Dragon is the opening act. Shell is also applying for a license to develop Loran-Manatee, a cross-border discovery holding 7.3 trillion cubic feet on the Venezuelan side and 2.7 trillion cubic feet in Trinidad waters. Together, Dragon and Loran-Manatee would unlock nearly 15 Tcf of gas for the Caribbean market.
BP is chasing its own opportunity nearby. The British company is seeking a license for the Cocuina-Manakin field, part of the idled Plataforma Deltana project, which holds about 1 trillion cubic feet in proven reserves.
With Europe's gas storage at its lowest since the 2022 crisis, new supply from the Caribbean could find willing buyers across the Atlantic, particularly if Trinidad ramps up LNG exports.
Sanctions backdrop
Washington's decision to issue general licenses marks a broader shift in how the U.S. handles Venezuelan energy. The move comes alongside separate diplomatic tracks, including energy-related negotiations with Iran, that are reshaping where oil and gas investment dollars flow.
Venezuelan crude production dropped 210,000 barrels per day in January to 780,000 bpd, according to the latest IEA data. But with Shell, BP, and potentially other operators moving back in, gas production could tell a different story.
Brent crude traded at $71.76 per barrel on Saturday while WTI sat at $66.48. Natural gas at the Henry Hub benchmark held at $3.05 per MMBtu.