Raphael John-Lall

If T&T does ne­go­ti­ate new en­er­gy con­tracts with Venezuela, both coun­tries would have to get rid of the pre­vi­ous con­tracts that were signed and ne­go­ti­ate new ones that would ben­e­fit Venezuela and not on­ly T&T.

In an ex­clu­sive in­ter­view with the Busi­ness Guardian, Dr Ein­stein Mil­lán Ar­cia—a promi­nent for­mer PDVSA con­sul­tant and Venezue­lan en­er­gy an­a­lyst who has a PhD from Ok­la­homa Uni­ver­si­ty in the US—gave his views on the pre­car­i­ous re­la­tions be­tween the two coun­tries.

From 2016 to 2017, he was a per­son­al ad­vi­sor to for­mer Venezue­lan Oil Min­is­ter Nel­son Martínez and he does con­sul­tan­cy work through­out the Mid­dle East and Africa.

On Oc­to­ber 27, 2025, de­posed Venezue­lan pres­i­dent, Nico­las Maduro, sus­pend­ed all en­er­gy co­op­er­a­tion agree­ments with T&T, in­clud­ing ma­jor nat­ur­al gas projects like the Drag­on gas deal. The next day, Venezuela's Na­tion­al As­sem­bly of­fi­cial­ly de­clared T&T's Prime Min­is­ter Kam­la Per­sad-Bisses­sar per­sona non gra­ta, which means she is not wel­come in the South Amer­i­can na­tion.

The chain of events took an even more dra­mat­ic turn in Jan­u­ary when the US mil­i­tary cap­tured Maduro and his wife, trans­port­ing them to New York, where he faces fed­er­al charges.

Last Fri­day, the US Of­fice of For­eign As­sets Con­trol (OFAC) is­sued gen­er­al li­cens­es al­low­ing BP and Shell to ne­go­ti­ate con­tracts with Venezuela for oil and gas op­er­a­tions.

Giv­en the lat­est turn of events, Mil­lán Ar­cia ar­gues that Venezuela did not ben­e­fit from the pre­vi­ous en­er­gy agree­ments with T&T.

“Venezuela must cer­tain­ly rene­go­ti­ate any fu­ture agree­ment with Trinidad and To­ba­go from scratch, both be­cause of the dis­as­trous diplo­mat­ic prece­dent set dur­ing this Kam­la Per­sad-Bisses­sar ad­min­is­tra­tion and be­cause of how dis­ad­van­ta­geous the agree­ment pre­vi­ous­ly signed by for­mer Venezue­lan oil min­is­ter Pe­dro Rafael Tel­lechea and Stu­art Young in De­cem­ber 2023 was.”

While he be­lieves that T&T should ben­e­fit, he said that the last agree­ment was “harm­ful” to Venezuela’s in­ter­ests.

“We have in the past de­nounced that the Venezuela/Shell/Trinidad and To­ba­go agree­ment signed by Tel­lechea is in­con­ve­nient and harm­ful to the na­tion­al in­ter­est and there­fore should not be re­sumed, but rather rene­go­ti­at­ed from scratch, tak­ing ad­van­tage of the en­tire down­stream val­ue chain.”

The Busi­ness Guardian re­port­ed in its Feb­ru­ary 7, 2024 edi­tion that the De­cem­ber 2023 agree­ment for the de­vel­op­ment of the Drag­on field states, "In no case may the Venezue­lan State’s in­come from the project be less than 45 per cent of the gross in­come of the li­cencees."

Mil­lán Ar­cia ex­plained why the re­cent gas agree­ments be­tween T&T and Venezuela were “dis­ad­van­ta­geous” for Venezuela.

“From Trinidad’s per­spec­tive, the sign­ing of the agree­ment was a win-win, but not for Venezuela, a coun­try that has some 202 tril­lion cu­bic feet (TCF) of proven gas re­serves, of which about 10 per cent are con­cen­trat­ed off­shore.”

He added that the first wells drilled in the In­dus­tri­al Com­plex Gran Mariscal de Ay­acu­cho with its Span­ish acronym (CIG­MA) in Venezuela’s Su­cre state showed an ab­solute flow rate of up to 75 mil­lion cu­bic feet per day (mm­cf/d) in the case of the first well in the Drag­on field. It was called “the fa­mous flare.”

The Mariscal Su­cre project com­pris­es three gas fields, Drag­on, Patao and Mejil­lones, and one con­den­sate field, Rio Caribe.

Mil­lán Ar­cia added that the cost of pro­duc­ing a bar­rel of oil equiv­a­lent (BOE) in that ini­tial stage from CIG­MA was around $20 to $25. He said that was a rel­a­tive­ly low cost, giv­en that op­er­a­tional costs in this ex­plorato­ry phase tend to be much high­er. He point­ed to a sta­bilised de­vel­op­ment cost of less than $6/BOE, while pro­duc­tion costs in the Hi­bis­cus field on the T&T side, for ex­am­ple, ex­ceed $8/BOE.

“Be­tween the Gran Mariscal and Deltana Plat­form projects, a stag­ger­ing US$12 bil­lion has been spent since their in­cep­tion in 2007 (ap­prox­i­mate­ly US$17 bil­lion in cur­rent dol­lars), in­clud­ing cor­rup­tion, over­priced land pur­chas­es and the failed, aban­doned in­fra­struc­ture in Güiria. The cap­i­tal dis­bursed by PDVSA in CIG­MA and Deltana alone far ex­ceeds the US$3.9 bil­lion val­ue of At­lantic LNG in 2007. This is the lega­cy of cor­rup­tion that de­voured the CIG­MA project and crushed Venezuela’s hopes of be­com­ing an in­de­pen­dent gas pro­duc­er and ex­porter.”

He blunt­ly stat­ed that the Drag­on gas agree­ment in its last in­car­na­tion was mere­ly "po­lit­i­cal pro­pa­gan­da," which did not make busi­ness sense.

“For Venezuela, the sign­ing of the Drag­on gas agree­ment is more po­lit­i­cal pro­pa­gan­da than ben­e­fits, giv­en that the pro­ject­ed rev­enues, even at max­i­mum pro­duc­tion of the project, will not even re­mote­ly cov­er the amor­ti­sa­tion of the cap­i­tal in­vest­ed so far in the said de­vel­op­ment of CIG­MA, while for Trinidad, I re­peat, it is a win-win.”

He added that Venezuela’s off­shore as­sets are par­tic­u­lar­ly vi­tal, not on­ly from the point of view of the hy­dro­car­bons they con­tain, but al­so be­cause of their im­pli­ca­tions for the en­er­gy se­cu­ri­ty of Venezuela, the con­ti­nent, and the rest of the world.

“Dur­ing 2016 to 2017, I had the op­por­tu­ni­ty to per­son­al­ly ad­vise the then oil min­is­ter and pres­i­dent of PDVSA, the late Nel­son Martínez, amid ne­go­ti­a­tions with the then min­is­ter of en­er­gy of Trinidad and To­ba­go, Stu­art Young. There, we warned about the ad­vis­abil­i­ty of not lim­it­ing our­selves as a coun­try and en­er­gy cor­po­ra­tion to sell­ing our hy­dro­car­bons to Trinidad and To­ba­go, but rather en­sur­ing ac­cess to down­stream busi­ness­es through­out the val­ue chain, since T&T’s grow­ing de­pen­dence on our hy­dro­car­bons would make it un­fea­si­ble for Trinidad and To­ba­go to sus­tain it­self in the medi­um and long term, ex­pos­ing it to los­ing every­thing; not on­ly their in­ter­na­tion­al cus­tomers, but al­so do­mes­tic pro­duc­tion in the petro­chem­i­cal area, as well as oth­er de­riv­a­tives such as methanol and am­mo­nia,” the en­er­gy con­sul­tant said.

Asked whether Venezuela should in­vest cap­i­tal if it wants a share of T&T's down­stream in­dus­tries, Mil­lán Ar­cia said, "Per­son­al­ly, I do not think it is of in­ter­est nor is it nec­es­sary for Venezuela, as the own­er of the re­source to pro­vide cap­i­tal in or­der to par­tic­i­pate in the prof­its of the down­stream gas busines in T&T."

US in­flu­ence

Mil­lán Ar­cia al­so spoke about the new re­la­tions be­tween the US and Venezuela and how it may im­pact a new Drag­on gas deal.

Last week, the US En­er­gy Sec­re­tary dur­ing his vis­it to Venezuela spoke about plans to mod­ernise Venezuela’s en­er­gy in­fra­struc­ture and in­crease oil pro­duc­tion by 30 to 40 per cent in 2026.

Last year, T&T’s Prime Min­is­ter ex­pressed for her full sup­port for the US Gov­ern­ment’s mil­i­tary pres­ence in the Caribbean and Mil­lán Ar­cia opined on how the US could po­ten­tial­ly in­flu­ence new en­er­gy deals be­tween T&T and Venezuela.

Mil­lán Ar­cia re­count­ed the chain of events that led to Venezuela break­ing off en­er­gy talks with T&T late last year and said even if new en­er­gy talks be­gin, T&T will not ben­e­fit in the short term.

“Venezuela sus­pend­ed and can­celled all en­er­gy agree­ments with Trinidad and To­ba­go be­tween Oc­to­ber and De­cem­ber 2025, pre­cise­ly be­cause of Port-of-Spain’s ex­plic­it sup­port for US mil­i­tary ac­tions, in­clud­ing the re­cep­tion of war­ships, the in­stal­la­tion of the US radar in To­ba­go, the tran­sit of mil­i­tary air­craft through the is­land and co­op­er­a­tion in the seizure of Venezue­lan tankers, he said.

He added that while there is a re­al pos­si­bil­i­ty that ne­go­ti­a­tions for new en­er­gy arrange­ments be­tween Venezuela and T&T could re­sume this year, in his opin­ion T&T will not ben­e­fit dur­ing 2026.

He al­so ar­gues that the large multi­na­tion­al cor­po­ra­tions are re­quest­ing OFAC li­cences and act­ing as if Venezuela did not break off re­la­tions with T&T in 2025.

“Shell and BP have cer­tain­ly act­ed as if the can­cel­la­tion or­dered by Maduro in 2025 did not ex­ist, hav­ing for­mal­ly re­quest­ed li­cences from OFAC be­tween Jan­u­ary and Feb­ru­ary for the Drag­on, Lo­ran-Man­a­tee, and Man­akin-Cocuina projects. Ac­cord­ing to Shell, the cur­rent Drag­on li­cence grant­ed in Oc­to­ber 2025 re­mains in force and it main­tains that the Fi­nal In­vest­ment De­ci­sion (FID) and first pro­duc­tion will be for Q4 2027. We per­son­al­ly sup­port a rene­go­ti­a­tion from scratch of all agree­ments with Trinidad and To­ba­go.”

He con­clud­ed by say­ing T&T has its own eco­nom­ic chal­lenges and needs Venezuela’s vast en­er­gy re­sources more than Venezuela needs T&T.

“Trinidad and To­ba­go has no oth­er vi­able, sus­tain­able, and im­me­di­ate al­ter­na­tive but Venezuela. The Per­sad-Bisses­sar ad­min­is­tra­tion has caused an un­prece­dent­ed diplo­mat­ic cool­ing be­tween Venezuela and Trinidad, so the Drag­on project and shared fields must be re­viewed to an­tic­i­pate pos­si­ble fu­ture po­lit­i­cal set­backs that could dis­ad­van­tage Venezuela,” said Mil­lán Ar­cia.