In a move that could reshape the energy landscape of the Caribbean, the United States government has granted a pivotal authorization for Shell and Trinidad and Tobago to jointly develop the Dragon offshore gas field in Venezuela, a project that has long been stalled due to shifting U.S. sanctions and regional geopolitics. The announcement, made public by Trinidad’s Attorney General John Jeremie on October 9, 2025, marks a significant breakthrough for both Trinidad’s energy security and Venezuela’s efforts to monetize its vast natural gas reserves.
The U.S. Treasury Department’s new license, issued on October 8, 2025, is structured in three distinct stages and extends through April 2026. The first stage allows Trinidad and Shell to negotiate the project with Venezuela’s state-owned oil company PDVSA, but with a crucial condition: U.S. companies must be included in the development, and specific commercial targets for American firms are mandated. "You have to hit commercial targets for U.S. companies. We don’t think those targets are hard to meet. They are reasonable," Jeremie emphasized during a press conference, according to Reuters.
For Trinidad and Tobago, the stakes couldn’t be higher. The twin-island nation has been facing a steady decline in domestic gas production, threatening the lifeblood of its economy: liquefied natural gas (LNG) plants and petrochemical industries that underpin much of its export revenue. The Dragon field, located near the maritime boundary between Trinidad and Venezuela, holds proven reserves of approximately 4.2 trillion cubic feet of natural gas, making it one of Venezuela’s largest deposits and a potential economic lifeline for Trinidad. As BNamericas reported, the first phase of the project could deliver around 185 million cubic feet per day of gas to Trinidad, helping to offset the country’s supply shortfall.
The journey to this point has been anything but straightforward. The Dragon project has been hampered by years of uncertainty and changing U.S. policy toward Venezuela, which has been under strict U.S. energy sanctions since 2019. Previous licenses that permitted development of the field, initially granted under President Joe Biden’s administration, were abruptly revoked in April 2025 by the Trump administration, effectively halting progress for Shell, Trinidad’s National Gas Company (NGC), and BP, which had been working on a separate nearby gas development. Shell managed to complete a critical marine survey at the Dragon site before the previous license expired, a step expected to inform future drilling locations and pipeline design once full operations resume.
The new U.S. authorization comes with familiar strings attached. Consistent with prior restrictions, no direct cash payments to the government of Venezuelan President Nicolás Maduro are permitted under the terms of the license. This aligns with Washington’s ongoing efforts to prevent the Maduro administration from reaping significant financial benefits from international energy deals. In late September 2025, the U.S. State Department reaffirmed its support for Trinidad’s Dragon gas proposal, stating that the arrangement would not provide a "significant benefit" to Maduro’s government, as reported by Reuters and BNamericas.
The diplomatic backdrop to this development is complex. On September 30, 2025, Trinidad’s Prime Minister Kamla Persad-Bissessar met with U.S. Secretary of State Marco Rubio to discuss the importance of regional energy security and stability. According to BNamericas, Rubio outlined U.S. support for the Dragon gas proposal and emphasized steps to ensure that any deal would not significantly benefit the Maduro regime. The new license, submitted by Trinidad and Tobago and the NGC in May 2025, is seen as a carefully crafted compromise—one that allows much-needed energy cooperation without violating U.S. sanctions law.
"The effect of the grant of this license is to permit the government and the NGC to engage in negotiations with the government of Venezuela and other stakeholders to advance the Dragon gas project without breaching sanctions imposed by the United States government and U.S. law," Jeremie explained at the press conference, as cited by BNamericas. He further noted, "The Ministry of the Attorney General, the Ministry of Foreign Affairs and the Ministry of Energy, together with the National Gas Company, are now tasked with taking the necessary steps to advance this project, which is important to the future development of our energy sector." Over the next six months, stakeholders are expected to resume work on the commercial and technical terms of the deal.
The Dragon field’s potential impact extends beyond Trinidad’s borders. As Thackwray Driver, head of the Energy Chamber of Trinidad and Tobago, told local media, "We’re surrounded by Venezuela, which has huge natural gas resources—some of the biggest in the world—which they have not managed to monetize. So, an obvious route to monetize Venezuela’s natural gas resources is through the Trinidad infrastructure." Driver also highlighted the opportunity for Trinidad to become a regional hub for processing Venezuelan gas, noting international oil and gas companies’ interest in working with Trinidad on this opportunity.
Industry analysts, including those at PwC, have described the Dragon project as "crucial" for offsetting Trinidad and Tobago’s declining gas production. The project’s timeline remains ambitious. Following a December 2023 agreement involving Shell and NGC, initial gas deliveries were tentatively expected to begin in 2027, assuming negotiations and technical preparations proceed without further geopolitical snags.
Despite the optimism, significant challenges remain. It is not immediately clear how the U.S. requirement to include American companies and avoid direct payments to the Maduro government will impact negotiations with Caracas or whether Venezuela will accept these new terms. The project’s success hinges on the ability of all parties—Trinidad, Shell, PDVSA, and potential U.S. partners—to navigate a thicket of political and commercial hurdles.
BP, a key player in the region, declined to comment on the latest developments, while Shell referred all inquiries to the Trinidadian government, noting that Trinidad remains the official license holder for the Dragon project. The government’s next steps will be closely watched by energy markets and regional policymakers alike, as the outcome could set a precedent for future cross-border energy cooperation in the Caribbean and beyond.
For Trinidad and Tobago, the stakes are clear: securing a reliable source of natural gas is vital to sustaining its export-driven economy and maintaining its status as a regional energy powerhouse. For Venezuela, the project offers a rare chance to monetize its abundant natural gas reserves—resources that have remained largely untapped amid years of political turmoil and international isolation. For the United States, the deal represents a delicate balancing act: supporting a key Caribbean ally’s energy needs while keeping pressure on the Maduro government and ensuring American companies have a seat at the table.
As negotiations proceed under the watchful eyes of Washington, Caracas, and Port of Spain, the Dragon gas project stands as a testament to the complex interplay of energy, politics, and diplomacy in the region. The coming months will reveal whether this latest U.S. authorization can truly unlock the vast potential of the Dragon field and deliver much-needed stability to Trinidad’s energy sector.
