Venezuela grants BP and Trinidad’s NGC license for offshore gas project

By Deisy Buitrago and Vivian Sequera

CARACAS (Reuters) – Venezuela on Wednesday granted British energy producer BP and the state-owned National Gas Company of Trinidad and Tobago (NGC) a 20-year license to develop the Venezuelan side of a natural gas field that extends into the Caribbean country’s waters.

Venezuela, whose gas reserves are largely untapped, has been offering offshore gas projects to foreign companies in recent years, but progress has been slow due to sanctions and huge investment needs.

The Cocuina-Manakin field, the Venezuelan portion of which is part of the abandoned Plataforma Deltana offshore gas project, has 1 trillion cubic feet of proven gas reserves. The U.S. Treasury Department approved the project’s continuation in May as an exemption from energy sanctions against Venezuela.

The field is to be developed jointly, with BP and NGC on Venezuela’s side and BP’s unit in Trinidad on the island state’s side. The largest investor will be selected as the operator of the project, according to the documents signed in Caracas.

In addition, a separate contract sheet was signed for the sale of gas produced on the Venezuelan side of the field to companies in Trinidad, as well as an agreement for a bonus payment to Venezuela. The amount was not disclosed.

According to sources, the companies have accelerated their negotiations with the Venezuelan government and the state-owned energy company PDVSA in recent weeks in order to sign the license before the presidential elections in the South American country on July 28.

“We are taking a monumental step in the right direction,” said President Nicolás Maduro during the signing ceremony, which was broadcast by state television VTV.

Trinidad’s Energy Minister Stuart Young and Venezuelan Oil Minister Pedro Tellechea signed some of the documents governing the project. BP Trinidad and Tobago CEO David Campbell and NGC Vice President Verlier Quan-Vie signed on behalf of the companies.

A larger project in Venezuela, also to be shared with Trinidad, is the 4 trillion cubic foot Dragon offshore gas field, to be operated by Shell, which was awarded a similar 20-year Venezuelan license in December, with first production expected in late 2025.

(Reporting by Deisy Buitrago, Vivian Sequera and Marianna Parraga; Editing by Leslie Adler and Rod Nickel)