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  • 7 weeks ago
While the Prime Minister is promising big wins from her overseas trip, economist Mariano Browne is not so optimistic .
While the government might get the support from the United States for the Dragon Deal, he is of the view that there are many more hurdles to get over.
Alicia Boucher has the details from the TV6 Morning Edition.
Transcript
00:00If the drag and gas deal can be restarted, then that's positive, so says economist Mariano Brown.
00:07But there are questions over the terms this country and the United States have discussed concerning Venezuela's drag and field.
00:14The language of Mr. Rubio's department suggests that they would agree to an OFAC license if it doesn't give Venezuela any benefits,
00:29well, it's Venezuela's gas and it's Venezuela's waters.
00:34Why would I let you get access to the field, except in accordance with the arrangements which we have already made?
00:43Brown refers to the agreement signed in December of 2023 between Trinidad and Tobago and Venezuela under the former PNM administration,
00:52granting this country a 30-year exploration license through Venezuelan state oil company PDVSA.
00:58If the terms and conditions of that license is not congruent, in other words, equal,
01:05I can't see what would Venezuela agree to or why would they change what they've already agreed.
01:12It's against the backdrop that both Venezuela and TNT were said to benefit from the previous agreement,
01:18but the narrative now being put forward by the United States is to stymie benefits to the Maduro regime.
01:24And while under former Energy Minister Stuart Young, this country was able to obtain a two-year OFAC license
01:30from the Joe Biden administration, which allowed TNT to get past the sanctions on Venezuela,
01:36Brown says these time frames are also another aspect to consider.
01:41What is the term of the license?
01:43These licenses are short-term licenses.
01:46And what you would need to operate, Dragon, is a long-term license.
01:51Anything less than 15 years is useless.
01:55So, for example, if you agree a two-year license or three-year license,
01:59well, that's about the time to get mobilized and to get started, put the rigs in position and everything else.
02:04You haven't spent money, but you haven't earned any.
02:08So, no investor, Shell or anybody else for that matter, will want to go ahead on those terms and conditions.
02:17The economist says ideally the length of the OFAC license should be the same as the exploration license offered by Venezuela.
02:25But even then, Brown says, it's not the be-all and end-all.
02:29Even if, as I said, that Mr. Rubio agrees to support an OFAC license,
02:37there's still many hoodlums that have to be jumped across.
02:41So, I'm not optimistic.
02:44So, should the time the Prime Minister took to discuss Dragon with the U.S. Secretary of State have been better spent?
02:50Brown believes it should have, noting that the U.S., through the Financial Action Task Force,
02:55has a lot of leverage, especially over small countries where the U.S. dollar is needed for trade.
03:01For example, I would have thought the low-hanging fruit in a meeting with Mr. Rubio would not have been Dragon.
03:09Dragon is a longer-term issue, which would take a lot of time to sort out.
03:14On either side of the border, our relationship with Venezuela, the OFAC licenses out of the U.S.,
03:21I would have thought that the meeting with Marco Rubio would have spent a little bit more time
03:27on addressing the issue of the tariffs on Trinidad and Tobago exports,
03:32which affect ammonia, methanol, and methanol in particular, and urea.
03:36Alicia Boucher, TV6 News.
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