US Approves Development of Shell and Trinidad's Venezuelan Gas Field
ByAinvest
Friday, Oct 10, 2025 12:19 am ET2min read
SHEL--
The U.S. Treasury Department granted an Office of Foreign Assets Control (OFAC) license on Wednesday, allowing Shell and Trinidad to negotiate the development of the Dragon gas field located in Venezuelan waters. The license was granted following a request made in May and was secured after U.S. Secretary of State Marco Rubio met with Trinidad and Tobago’s prime minister on September 30 [2].
The Dragon gas field, located in shallow Caribbean waters near the maritime border of Venezuela and Trinidad, holds more than 4 trillion cubic feet of proven natural gas reserves. This development is crucial for Trinidad’s Atlantic liquefied natural gas (LNG) complex and petrochemical plants, which have been experiencing chronic feedstock shortages. The project aims to boost natural gas supplies to Trinidad and Tobago, stabilizing and expanding the country’s gas-based exports, which include LNG and ammonia [3].
The new authorization is structured in three stages. The first stage allows Trinidad and Shell to negotiate the project with Venezuela and PDVSA through April 2026, but requires the inclusion of U.S. companies in the development. Trinidad’s attorney general, John Jeremie, stated that the targets for U.S. companies are reasonable and not difficult to meet [2].
The approval comes as a significant step towards stabilizing Venezuela's economy and increasing its energy output. However, the development of the gas field is not without controversy. The U.S. has been under pressure to ease sanctions on Venezuela, and this decision has been met with mixed reactions. While some view it as a step towards improving regional energy security, others argue that it could inadvertently benefit the Maduro regime.
The development of the Dragon field is part of a broader resurgence of interest from multinational energy firms in re-engaging with Venezuela’s offshore resources. Shell and BP plc (BP) are both pushing to reclaim licenses for cross-border gas deposits shared between Venezuela and Trinidad, demonstrating a strategic imperative to secure long-term natural gas inputs. Both companies are primary shareholders in Trinidad’s Atlantic LNG complex, further highlighting the importance of this project [3].
The strategic implications of the Dragon project extend well beyond Shell and Trinidad. With global LNG demand surging and geopolitical risks disrupting traditional supply chains, revitalizing Caribbean energy production has international significance. Trinidad’s LNG and petrochemical exports, particularly ammonia used in U.S. agriculture, are critical to North America’s supply chains. By restoring operations at Dragon, Shell not only helps stabilize Trinidad’s domestic economy but also reinforces regional energy interdependence and geopolitical resilience [3].
As of now, the final details of Shell’s license remain under negotiation. However, there is a growing consensus among stakeholders that a favorable decision is imminent. The precedent set by Chevron Corporation’s (CVX) restricted license in July 2025 has opened the door to additional exemptions, particularly for gas projects aligned with U.S. interests [3].
Shell and Trinidad have received US approval to develop a gas field in Venezuela. This project is expected to enhance the country's energy production and exports. The approval comes as the US continues to ease sanctions on Venezuela, a move that has sparked controversy. The development of the gas field is a significant step towards stabilizing Venezuela's economy and increasing its energy output.
PORT-OF-SPAIN, Trinidad — Shell plc (SHEL) and Trinidad and Tobago have received U.S. approval to develop an offshore gas field in Venezuela, a move that is expected to enhance the country's energy production and exports. This approval comes as the U.S. continues to ease sanctions on Venezuela, a decision that has sparked controversy.The U.S. Treasury Department granted an Office of Foreign Assets Control (OFAC) license on Wednesday, allowing Shell and Trinidad to negotiate the development of the Dragon gas field located in Venezuelan waters. The license was granted following a request made in May and was secured after U.S. Secretary of State Marco Rubio met with Trinidad and Tobago’s prime minister on September 30 [2].
The Dragon gas field, located in shallow Caribbean waters near the maritime border of Venezuela and Trinidad, holds more than 4 trillion cubic feet of proven natural gas reserves. This development is crucial for Trinidad’s Atlantic liquefied natural gas (LNG) complex and petrochemical plants, which have been experiencing chronic feedstock shortages. The project aims to boost natural gas supplies to Trinidad and Tobago, stabilizing and expanding the country’s gas-based exports, which include LNG and ammonia [3].
The new authorization is structured in three stages. The first stage allows Trinidad and Shell to negotiate the project with Venezuela and PDVSA through April 2026, but requires the inclusion of U.S. companies in the development. Trinidad’s attorney general, John Jeremie, stated that the targets for U.S. companies are reasonable and not difficult to meet [2].
The approval comes as a significant step towards stabilizing Venezuela's economy and increasing its energy output. However, the development of the gas field is not without controversy. The U.S. has been under pressure to ease sanctions on Venezuela, and this decision has been met with mixed reactions. While some view it as a step towards improving regional energy security, others argue that it could inadvertently benefit the Maduro regime.
The development of the Dragon field is part of a broader resurgence of interest from multinational energy firms in re-engaging with Venezuela’s offshore resources. Shell and BP plc (BP) are both pushing to reclaim licenses for cross-border gas deposits shared between Venezuela and Trinidad, demonstrating a strategic imperative to secure long-term natural gas inputs. Both companies are primary shareholders in Trinidad’s Atlantic LNG complex, further highlighting the importance of this project [3].
The strategic implications of the Dragon project extend well beyond Shell and Trinidad. With global LNG demand surging and geopolitical risks disrupting traditional supply chains, revitalizing Caribbean energy production has international significance. Trinidad’s LNG and petrochemical exports, particularly ammonia used in U.S. agriculture, are critical to North America’s supply chains. By restoring operations at Dragon, Shell not only helps stabilize Trinidad’s domestic economy but also reinforces regional energy interdependence and geopolitical resilience [3].
As of now, the final details of Shell’s license remain under negotiation. However, there is a growing consensus among stakeholders that a favorable decision is imminent. The precedent set by Chevron Corporation’s (CVX) restricted license in July 2025 has opened the door to additional exemptions, particularly for gas projects aligned with U.S. interests [3].
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