Venezuela crisis slowing down Loran-Manatee development

The ongoing political unrest in Venezuela is slowing down efforts to produce the giant Loran-Manatee cross-border natural gas field.

The ongoing political unrest in Venezuela is slowing down efforts to produce the giant Loran-Manatee cross-border natural gas field.

OGJ has been informed that Venezuela and Trinidad and Tobago negotiating teams have not met since March, and that is keeping back the unitization and unit operator agreement that is crucial for Royal Dutch Shell PLC, Chevron Corp., and Petroleos de Venezuela SA (PDVSA) to move forward with a development plan for the field.

Loran-Manatee field contains in excess of 10 tcf of gas with 7.3 tcf on the Venezuela side and 2.7 tcf on the Trinidad and Tobago side of the border.

The two countries have been working towards the field being produced by 2022 and have already signed several agreements, including a decision to have the gas developed in Trinidad and Tobago because of the country’s significant infrastructure and its plants involved in the production of LNG, methanol, ammonia, and urea.

Venezuela politically has been in a downward spiral for more than a year. The country has also suffered from shortages in food, medicine, and electricity and now faces possible US sanctions for its attempts to rewrite the constitution.

Trinidad and Tobago is among Venezuela’s neighbors carrying some of the burden of the ongoing crisis with more than 20,000 Venezuelans now being accommodated on the island and Trinidad and Tobago providing food, paid for by Caracas, to the remote states closer to the Caribbean island.

In addition, Shell’s purchase of BG Group PLC and subsequently of Chevron’s Trinidad assets has further complicated the negotiations with no decision on whether Shell will be prepared to leave Chevron as the operator of the field.

Initially Chevron was the joint venture partner with BG Group on the Trinidad side of the border and was also a partner with PDVSA on the Venezuelan side, and therefore it was agreed that Chevron would be the operator of the field. With Shell’s purchase of both BG Group’s assets and Chevron’s Trinidad assets, rights have to be reassigned and there is not yet clarity if the operator will remain in place.

Both sides are now carded to meet Aug. 8-9 in Port of Spain.

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