Raphael John-Lall

Venezuela is one of the coun­tries that re­ceived let­ters of in­vi­ta­tion in Ju­ly from T&T’s Min­istry of Works and Trans­port to sub­mit pro­pos­als for the sup­ply of over 100 bus­es to T&T.

Venezuela’s Am­bas­sador to T&T, Ál­varo En­rique Sánchez Cordero who shared this in­for­ma­tion with the Sun­day Busi­ness Guardian said that Venezuela’s ve­hi­cle as­sem­bly in­dus­try has been ex­pe­ri­enc­ing growth as the econ­o­my has seen a re­bound. Large Venezue­lan ve­hi­cle man­u­fac­tur­ers like En­ca­va have been di­ver­si­fy­ing their prod­uct lines by de­vel­op­ing new ve­hi­cles, with Venezue­lan tech­nol­o­gy and parts, like vans, bus­es and trucks.

“It speaks vol­umes of T&T’s con­fi­dence in Venezuela’s in­dus­tri­al ca­pac­i­ty and eco­nom­ic re­cov­ery and will­ing­ness to co-op­er­ate,” the Am­bas­sador said.

Ac­cord­ing to the Pres­i­dent of the Venezue­lan Cham­ber of Au­to­mo­tive Prod­ucts Man­u­fac­tur­ers (FAVEN­PA), Omar Bautista, Venezuela should as­sem­ble rough­ly 15,000 ve­hi­cles by the end of 2024.

Last Wednes­day, Venezuela’s Min­is­ter of Tourism, Alí ​​Padrón, wel­comed al­most 500 Russ­ian tourists to Mar­gari­ta is­land and he specif­i­cal­ly men­tioned that T&T as well as sev­er­al oth­er coun­tries have been send­ing tourists to Venezuela which ex­pects 1.5 mil­lion tourists this year.

Apart from tourism and the po­ten­tial to sup­ply ve­hi­cles man­u­fac­tured in Venezuela to T&T, Venezuela and T&T have signed im­por­tant en­er­gy agree­ments over the last year. How­ev­er, these busi­ness and en­er­gy ties are be­ing called in­to ques­tion by some as so­cial un­rest rocked Venezuela fol­low­ing last Sun­day’s pres­i­den­tial elec­tions.

Vi­o­lence erupt­ed in Venezuela since last Sun­day’s pres­i­den­tial elec­tions which saw Pres­i­dent Nicolás Maduro claim­ing vic­to­ry while the op­po­si­tion claimed the elec­tions were fraud­u­lent.

Op­po­si­tion clash­es with Venezue­lan po­lice have re­sult­ed in more than ten dead and over 1,000 per­sons ar­rest­ed, ac­cord­ing to the Of­fice of the At­tor­ney Gen­er­al in Venezuela.

On Thurs­day, the US Gov­ern­ment, in a state­ment, said it now recog­nis­es Ed­mun­do González Ur­ru­tia as the suc­cess­ful win­ner of the elec­tions in Venezuela.

Rus­sia and Chi­na, on the oth­er hand, have recog­nised Maduro as the de­mo­c­ra­t­i­cal­ly re-elect­ed Pres­i­dent.

En­er­gy agree­ments

De­spite the po­lit­i­cal un­cer­tain­ty that hangs over Venezuela, Fran­cis­co J. Monal­di—who is a fel­low in Latin Amer­i­can en­er­gy pol­i­cy and the di­rec­tor of the Latin Amer­i­ca En­er­gy Pro­gram at the Cen­ter for En­er­gy Stud­ies at Rice Uni­ver­si­ty’s Bak­er In­sti­tute for Pub­lic Pol­i­cy in the Unit­ed States— said he is op­ti­mistic that the nat­ur­al gas agree­ments be­tween Venezuela and T&T’s will sur­vive in the long term. Monal­di said, how­ev­er, there could be some chal­lenges in the short term.

Fol­low­ing last Sun­day’s pres­i­den­tial elec­tions, act­ing Prime Min­is­ter Stu­art Young, who is al­so En­er­gy Min­is­ter, said that all oil and gas projects and deals with the Venezue­lan Gov­ern­ment will con­tin­ue.

He gave this state­ment while speak­ing at the launch of the so­lar park at the Pi­ar­co In­ter­na­tion­al Air­port last week.

Young was in Venezuela, four days be­fore the elec­tions and an­nounced the li­cence grant­ed to T&T by Venezuela for the ex­plo­ration and pro­duc­tion of nat­ur­al gas from Cocuina, part of the Man­akin-Cocuina field.

On De­cem­ber 21, the Venezue­lan Gov­ern­ment al­so signed a li­cence for Shell plc and the Na­tion­al Gas Com­pa­ny (NGC) to op­er­ate and ex­ploit the Drag­on gas field.

Monal­di in an in­ter­view with the Sun­day Busi­ness Guardian spoke about the short-term chal­lenges that could emerge.

“The T&T En­er­gy Min­is­ter pushed for that sign­ing be­fore the Venezue­lan elec­tions. I think that the in­tent of the Biden ad­min­is­tra­tion is that the gas projects should be con­tin­ued and pro­ceed, but it may be po­lit­i­cal­ly hard to ap­prove a li­cence in the fol­low­ing months. That might have to wait un­til the next US ad­min­is­tra­tion af­ter the US elec­tions. In case of the Shell project, they will not can­cel the ex­ist­ing li­cence but they need an­oth­er long-term li­cence that they have asked to pro­ceed with the in­vest­ment. I think that might be al­so de­layed be­cause of the cur­rent sit­u­a­tion.”

He gave the opin­ion that even if there is a tran­si­tion to the op­po­si­tion tak­ing pow­er in Venezuela, the agree­ments will not fall apart and in fact, there will be greater in­vi­ta­tion to for­eign in­vestors.

“Of course, if there is a po­lit­i­cal res­o­lu­tion, a tran­si­tion in Venezuela, all these things will have a high­er prob­a­bil­i­ty of be­ing ac­tu­al­ly pur­sued and greater in­vest­ment will ac­tu­al­ly hap­pen. I tend to think that the Venezue­lan op­po­si­tion will not want to rene­go­ti­ate and will want to move for­ward with what­ev­er is signed. How­ev­er, we don’t know the de­tails of the con­tracts. There could be some things that they ob­ject to. In gen­er­al, they will be more pro for­eign in­vest­ment in the oil and gas sec­tor and they will be very in­ter­est­ed in get­ting these projects done. Even if there is min­i­mal rene­go­ti­a­tion, I don’t see it as an ob­sta­cle for the projects to go for­ward.”

He not­ed that Pres­i­dent Maduro’s rul­ing So­cial­ist Par­ty is in con­trol of the Venezue­lan Par­lia­ment, the ju­di­cia­ry as well as the oil com­pa­ny PDVSA and even if the op­po­si­tion is able to wrest pow­er, his par­ty could stand in the way of re­forms the new Gov­ern­ment could take.

“The­o­ret­i­cal­ly, these agree­ments do not need to go through the Na­tion­al As­sem­bly, so it should not be a prob­lem. That is an­oth­er rea­son why the op­po­si­tion would want to leave the con­tracts as they would not want to open up any red flags there. The bot­tom­line is li­cences are un­like­ly to be giv­en in the next few months be­fore the US elec­tion un­less here is a res­o­lu­tion and even­tu­al­ly the US wants these con­tracts to move for­ward. The wild card is Trump as he has not said any­thing so far about Venezuela, so he could be hawk­ish against the Maduro regime or he could be trans­ac­tion­al. So that’s an un­known at this point.”

Econ­o­mist and for­mer head of the In­sti­tute of In­ter­na­tion­al Re­la­tions at the Uni­ver­si­ty of the West In­dies (UWI) St. Au­gus­tine Cam­pus, Dr An­tho­ny Gon­za­les said there are a lot of un­known vari­ables that could af­fect the diplo­mat­ic and busi­ness re­la­tion­ship be­tween T&T and Venezuela giv­en the un­rest in Venezuela at the mo­ment.

“We have to wait un­til all this plays out and to see if Maduro will stay. The mil­i­tary step­ping in, in some tran­si­tion is al­so pos­si­ble. Al­so, US sanc­tions may in­crease but they may con­tin­ue with some ex­cep­tions for T&T. It’s im­pos­si­ble to pre­dict how the sit­u­a­tion will evolve and how it will af­fect these agree­ments. And when you add Trump pos­si­bly com­ing to pow­er in the US, the prob­lem be­comes even more com­pound­ed.”