MercoPress. South Atlantic News Agency

Venezuela hands Shell a license for the cross-border Loran gas field shared with Trinidad

Rodríguez described the award as a “historic step,” recalling that the field had remained “without development” for 23 years

Venezuela on Thursday granted the British company Shell a license for a first phase of exploration and exploitation of the Loran gas field, which has seven reservoirs, six of them transboundary with Trinidad and Tobago. The signing was led by acting President Delcy Rodríguez at Miraflores Palace, the seat of the Venezuelan government.

Five instruments were signed at the event: the Loran field license and four others stemming from the technical-financial alliance established in March, which include the first service and purchase orders. Agreements were also signed for the development of the Carito and Pirital production units, of the Punta de Mata division, in the eastern state of Monagas. Rodríguez described the award as a “historic step,” recalling that the field had remained “without development” for 23 years, and said the license would allow “adequate use of the gas for export.” Shell's President of Exploration and Production, Peter Costello, called the signings “a wonderful achievement” for Venezuela and the company, during the event broadcast by the state channel VTV.

Loran is part of the cross-border Loran-Manatee system, a single natural gas reservoir divided by the maritime boundary between Venezuela and Trinidad and Tobago, with reserves estimated at about ten trillion cubic feet, most of them in Venezuelan waters. Shell expects to start production in 2027 through infrastructure connected to Trinidad, which needs fresh gas supplies for its liquefied natural gas and petrochemical plants. The project had been stalled after the field was “de-unitized” in 2019, amid delays and sanctions.

The license is part of the energy-sector opening driven by the Venezuelan government after the capture of deposed president Nicolás Maduro by the United States on January 3. The reform to the Hydrocarbons Law approved that month opened the door to private and foreign investors under Washington's auspices. In April, Shell and the US company Chevron agreed to an asset swap under which Chevron ceded its stake in Loran and strengthened its presence in the extra-heavy crude of the Orinoco Belt, while Shell consolidated its position in gas. Several of those signings took place with US officials present; US Interior Secretary Doug Burgum attended an earlier meeting in Caracas.

Hydrocarbons Minister Paula Henao said the first service and purchase orders would materialize “in the short term.” Hours earlier, the state company Petróleos de Venezuela (PDVSA) had reported an inspection together with Shell at a gas reception and distribution complex in Monagas, to assess the strengthening of infrastructure and production.