The US Treasury Department has issued Trinidad and Tobago with a licence to develop the Dragon gas field in Venezuelan territorial waters, reported Reuters, citing US and Trinidad officials.

The licence allows Trinidad to undertake business related to the Dragon gas field with Venezuela’s heavily sanctioned state-run oil company Petroleos de Venezuela (PdVSA).

The US initially imposed sanctions in 2019 against Venezuelan President Nicolás Maduro Moros for stealing the South American country’s assets and natural resources using PdVSA.

As per the sanctions, companies and governments are barred from doing business with PDVSA without prior authorisation from the US Treasury Department.

Trinidad and Tobago Prime Minister Keith Rowley was cited by the news agency as saying that the country anticipates securing access to 350 million cubic feet of gas per day from the Dragon field.

A senior US official told Reuters, on the condition of anonymity, that “the Maduro regime will not be permitted to receive any cash payments from this project”, and that all remaining sanctions imposed by US would be unchanged and enforced.

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By GlobalData

The project was scheduled to start production over a decade ago. However, production was delayed due to US sanctions and a lack of capital and partners.

The latest licence will allow Trinidad to work with PdVSA and Shell to jointly plan and develop a gas-exporting project.

Under the licence, which has a two-year term, part of the gas produced from the field is required to be exported to Jamaica and the Dominican Republic, Rowley said.

Earlier, PDVSA discovered 4.2 trillion cubic feet of reserves in the Dragon field, located on the Venezuelan side of its maritime border with Trinidad.

In November 2022, the Biden administration issued a six-month licence authorising Chevron to resume oil production in Venezuela.