United States Rejects Permits for Venezuela-Trinidad Natural Gas Projects Amid Maduro's Declaration of Economic Crisis
Title: Trump Administer Shoves Trinidad and Venezuela Natural Gas Projects Under the Mat in Escalating Economic Warfare
April 9, 2025 | (our website)
In an unexpected yet seemingly foreseeable move, the Trump administration has pulled the plug on licenses that enabled Venezuela, Trinidad and Tobago, and international corporations to progress two offshore natural gas ventures. This announcement was made by Trinidadian Prime Minister Stuart Young during a press conference on Tuesday, describing Washington's decision as "disappointing but not unexpected."
The Nacional Gas Company (NGC) of Trinidad, alongside partners BP and Shell, are to abide by a May 27 deadline to sever ties with Venezuela's state energy company PDVSA. Young disclosed that he intended to petition for an audience with US Secretary of State Marco Rubio to defend the projects, crucial for Trinidad and Tobago's strategic interests. Port of Spain currently serves as the key Latin American exporter of liquefied natural gas (LNG).
At the time of this writing, Venezuelan authorities are yet to comment on the withdrawals of the licenses.
This latest development follows the Trump administration's recent intensification of economic sanctions against Venezuela. Major players such as oil titan Chevron, European conglomerates Repsol, Eni, and M&P, along with crude and asphalt importers, were all handed May 27 deadlines to wrap up their engagements with Venezuela's energy sector.
The White House's heightened measures signal a return to its "maximum pressure" campaign against Caracas, which has targeted the oil industry specifically. Venezuela has been subject to financial sanctions, an export embargo, secondary sanctions, and a plethora of actions designed to strangle its primary income source.
The NGC had obtained the green light from the US Treasury Department to develop two offshore natural gas projects. The enormous 4-trillion cubic feet (tcf) Dragon field, entirely located in Venezuelan waters, secured a 30-year license from PDVSA for NGC and Shell to extract gas.
Additionally, the Cocuina-Manakin field, with 1 tcf worth of reserves split 34-66 between Venezuela and Trinidad, was to be developed by BP on a 20-year contract. In both projects, PDVSA was left out as a shareholder and was only due taxes and royalties.
Venezuela's 200 tcf of officially assessed natural gas reserves remain largely untapped. The Maduro administration has sought investment, leveraging a legal framework that offers more favorable conditions for foreign corporations in natural gas projects than oil projects.
The Cardón IV venture in western Venezuela is owned by Eni (Italy) and Repsol (Spain) with equal shares. On Tuesday, Eni CEO stated that natural gas production, which caters to Venezuela's domestic market, would continue. The company expressed eagerness to find solutions with US authorities to receive payments from PDVSA.
Maduro Signs “Economic Emergency” Decree
In a defiant response to the increased sanctions and tariff threats, the Maduro government has pledged to resist. On Tuesday, President Maduro signed a decree granting the executive emergency powers to implement economic measures. The 60-day mandate is renewable, subject to approval from the National Assembly and Supreme Court.
"In the face of global trade tensions and international circumstances, the Economic Emergency Decree allows me to protect productive sectors and ensure balance and recovery," Maduro declared in a televised address.
The executive bill empowers the government to temporarily suspend tax collection, implement extraordinary expenditures outside the budget, and promote private sector investment and national production.
"It is essential to open the doors to new investment sources," the president emphasized. "Investors who bring their resources to Venezuela will receive special treatment and become a powerful force for stability and growth in the coming years."
Maduro previously invoked similar emergency powers in 2016 and 2021. Despite seven consecutive years of recession, Venezuela has experienced economic growth since 2021, albeit at a meager 30% of its 2014 size. A more liberal policy approach from the Maduro administration also led to inflation dropping to 12-year lows at the end of 2024.
However, recent foreign exchange instability has rekindled uncertainty and rekindled inflation, with the parallel rate reaching as high as 50% above the official bolivar-USD exchange rate in recent days. The opposition-backed Venezuelan Finance Observatory reported double-digit monthly inflation rates in the first three months of 2025.
Edited by Cira Pascual Marquina in Caracas.
Insight: The Trump administration's hard-line approach seeks to choke Venezuela's energy sector, benefitting from Trinidad's role as a significant LNG exporter by cutting off partnerships with Venezuela and multinational entities. Strategically, limiting Venezuela's ability to benefit from partnerships curtails the country's prospects for economic recovery, potentially fueling further unrest.
- The Trump administration's decision to suspend licenses for Venezuelan exporters of liquefied natural gas (LNG), such as the Nacional Gas Company (NGC), is part of a broader policy-and-legislation aimed at escalating economic warfare against Venezuela.
- In the energy industry, this move has significant implications for sectors like oil-and-gas, especially considering that Venezuela has the world's largest untapped natural gas reserves.
- The cancellation of collaboration between Trinidad and Venezuela's energy sectors, like the partnership between the NGC and PDVSA, could impact the finance sector by causing potential losses for international corporations like BP and Shell.
- The conflict between Venezuelan politics and US politics has led to continuous war-and-conflicts, including economic sanctions, hard-line policies, and the withdrawal of licenses, which disrupt the general-news equilibrium.
- In response, the Maduro administration has signed an "Economic Emergency" decree to implement measures that promote private sector investment and national production, hoping to attract finance and alleviate economic strife.
- The Trinidadian Prime Minister Stuart Young intends to lobby US Secretary of State Marco Rubio to discuss the crucial financial implications of this decision for his country, which is currently a key exporter of LNG in Latin America.
