Exclusive: Shell in advanced talks with Venezuela for more gas
areas, sources say
HOUSTON, April 1 (Reuters) - Shell is in advanced talks with
Venezuela's government to develop four large areas near Trinidad
and Tobago, in two of the South American country's largest
offshore natural gas fields, two people familiar with the
discussions said.
The London-based energy major has been trying for years to
advance the 4.2-trillion-cubic-feet Dragon gas field in
Venezuelan waters and could make a final investment decision on
the flagship project by the end of this year.
The sources said Shell now wants to include neighboring areas,
expanding its reach in the OPEC nation under the government of
interim President Delcy Rodriguez.
Shell is targeting access to the three fields that, along with
Dragon, are part of the 12-tcf Mariscal Sucre project off
Venezuela's eastern coast. This is in addition to the 7.3-tcf
Loran offshore area, part of a cross-border field that extends
into Trinidad, for some 20 tcf of combined reserves, the people
said.
In March, Shell executives signed preliminary deals in Caracas
with Rodriguez's administration to move Dragon forward and
possibly develop two coveted onshore oil and gas fields known as
Carito and Pirital.
GAS WILL BE PROCESSED IN TRINIDAD
Shell expects to send the Venezuelan gas to Trinidad for
processing into liquefied natural gas for export, a big push for
its shared Atlantic LNG project, which has been unable to reach
installed capacity due to insufficient gas supply.
Shell is already developing Trinidad's portion of the
Loran-Manatee field. The British company operates the Trinidad
side, while U.S. major Chevron holds stakes in two blocks that
include the Loran field on the Venezuela side.
Chevron is relinquishing its interests in those areas as part of
a deal to expand extra-heavy oil projects at Venezuela's main
crude region, the Orinoco Belt, Reuters reported last month.
Loran is expected to be re-offered soon, two of the sources said.
"The proximity to Manatee makes Loran an attractive investment
opportunity for Shell," Shell told Reuters in an email response
on Tuesday, confirming its interest in the additional areas.
Venezuela's oil ministry, state-run PDVSA, Trinidad and Tobago's
Ministry of Energy and Chevron did not respond to requests for
comment.
"The plan is to drill subsea wells on the Loran side and tie them
back to our Manatee platform in Trinidad, once we get the rest
of the field. It is an easy fix and makes sense for us to produce
the entire block," one person with knowledge of the negotiations
said.
LOOKING FOR GAS
Shell holds a 45% stake in the Atlantic LNG project in Trinidad,
Latin America's largest LNG facility. The project originally had
a capacity of 15.5 million metric tons per annum but has been
reduced to 12 mtpa because of lack of gas. The facility shipped
under 9 mtpa last year, according to LSEG data.
Last week, Shell chief executive Wael Sawan told the CERAWeek
conference in Houston that the company could greenlight up to
two Venezuela projects this year if fiscal and legal conditions
improve.
"What we are looking at at the moment is where we can add value
to Venezuela," Sawan said. "Initially, I would say it's more
geared towards gas, and in particular gas that can be monetized
through LNG."
Trinidad and Shell have been seeking to boost domestic gas
output and secure supplies from Venezuela, which lies only six
miles from Trinidad at its closest point. The Mariscal Sucre
fields — Dragon, Rio Caribe, Patao and Mejillones — sit closer to
infrastructure in Trinidad than in Venezuela, whose vast offshore
gas reserves remain largely undeveloped.
Previously, PDVSA had signed agreements giving Russia's Rosneft
interests in Patao and Mejillones. Since last year, PDVSA was
also looking for a company to develop Rio Caribe under a shared
production contract, and it was unclear if it signed any
preliminary agreement.
Rosneft's assets in Venezuela were transferred to Russia's
state-owned Roszarubezhneft in 2020, but the fields remain
untouched. Russian participation in those areas presents a hurdle
to finalizing a Shell agreement, the people said.
"We are making progress, and yes, the assignment of the fields to
the Russian company is a problem, but we will get over it. I am
sure," a Shell source said.
Reporting by Curtis Williams and Marianna Parraga, additional
reporting Sheila Dang in Houston: Editing by Nathan Crooks and
David Gregorio
https://www.reuters.com/business/energy/shell-advanced-talks-with-venezuela-more-gas-areas-sources-say-2026-04-01/