Raphael John-Lall

Lo­cal and for­eign en­er­gy ex­perts do not ex­pect T&T’s en­er­gy and busi­ness re­la­tion­ship with Venezuela to be af­fect­ed by the re­cent ap­point­ment of the new oil min­is­ter in Venezuela.

Af­ter claim­ing vic­to­ry in Ju­ly’s con­tro­ver­sial pres­i­den­tial elec­tions, which the op­po­si­tion claimed to have won, Venezue­lan Pres­i­dent Nicolás Maduro reshuf­fled the cab­i­net and added the Oil Min­istry to Vice Pres­i­dent Del­cy Ro­driguez’s port­fo­lio.

Ro­driguez is seen by in­ter­na­tion­al ob­servers as the min­is­ter who was re­spon­si­ble for re­turn­ing Venezuela’s econ­o­my to dou­ble dig­it growth by im­ple­ment­ing free mar­ket and busi­ness-friend­ly re­forms. These in­clude the es­tab­lish­ment of Spe­cial Eco­nom­ic Zones (SEZ) to at­tract in­ter­na­tion­al pri­vate sec­tor in­vest­ment, par­tial pri­vati­sa­tion of state-owned in­dus­tries and al­low­ing greater use of the US dol­lar for dai­ly busi­ness trans­ac­tions.

Ro­driguez’s vis­it to Port-of-Spain on March 27, 2020, gen­er­at­ed a con­tro­ver­sy here as it came when T&T’s bor­ders were closed due to the COVID-19 pan­dem­ic.

For­mer US Am­bas­sador to T&T, Joseph Mon­del­lo, pub­licly ex­pressed con­cern at the vis­it of Ro­driguez to T&T, point­ing out its lack of con­sis­ten­cy with T&T’s oblig­a­tions as a par­ty to the Rio Treaty of the Or­gan­i­sa­tion of Amer­i­can States.

“Ar­ti­cle 20 of the Rio Treaty makes it un­am­bigu­ous­ly clear that all mea­sures im­posed by the Or­gan of Con­sul­ta­tion — like the trav­el re­stric­tions on Ms. Ro­driguez — are bind­ing on all treaty par­ties, whether or not they vot­ed in fa­vor of such mea­sures,” ac­cord­ing to Mon­del­lo’s state­ment.

In 2018, Ro­driguez was one of 11 Venezue­lan of­fi­cials who faced sanc­tions im­posed by the Eu­ro­pean Union. She was banned from trav­el­ling to the EU and had her as­sets frozen.

In an­oth­er im­por­tant change, Héc­tor An­drés Obregón Pérez was des­ig­nat­ed as the new pres­i­dent of Venezuela’s im­por­tant state-owned en­er­gy com­pa­ny Petróleos de Venezuela (PDVSA).

In a Face­book post over a week ago, En­er­gy Min­is­ter Stu­art Young gave an up­date on en­er­gy co-op­er­a­tion be­tween T&T and Venezuela: “We signed the li­cence for Cocuina in Venezuela on Ju­ly 24, 2024. Seis­mic sur­vey work is go­ing to be com­menced on Man­akin and Cocuina in the next cou­ple of days. We con­tin­ue to set records. De­liv­er­ing re­al re­sults.”

Young is well ac­quaint­ed with Ro­driguez as he has met her sev­er­al times in the past in Venezuela dur­ing his en­er­gy ne­go­ti­a­tions with 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, told the Sun­day Busi­ness Guardian that he ex­pects Venezuela to main­tain its oil and gas poli­cies and to con­tin­ue the re­la­tion­ship it has with T&T.

“I think that Del­cy Ro­driguez who is the vice pres­i­dent is one of the most in­flu­en­tial peo­ple in the Gov­ern­ment. Her broth­er is pres­i­dent of the Na­tion­al As­sem­bly (Venezuela’s Par­lia­ment) tak­ing a di­rect in­ter­est in oil pol­i­cy. She used to be the Min­is­ter of Fi­nance and it sig­nals the im­por­tance that she gives the oil sec­tor in two ways. She wants, as much as pos­si­ble, to con­tin­ue with the poli­cies of try­ing to get for­eign cap­i­tal and sec­ond­ly, I think she al­so wants to be pre­pared in case the US im­pos­es fur­ther sanc­tions in terms of be­ing able to col­lect oil rev­enue ex­port­ed to the black mar­ket.

“You can see that by the fact that al­though she is the Min­is­ter of Oil, she al­so ap­point­ed to PDVSA some­one who is very close to her, which will work for her. He is not some­one who will have an in­de­pen­dent power­base. So, it is pret­ty much some­one on her team. He al­so used to work in the cryp­tocur­ren­cy reg­u­la­tor’s of­fice. So, he will al­so be in charge of try­ing to col­lect rev­enue from the oil sold on the black mar­ket,” he said.

Monal­di is con­fi­dent that both Venezuela’s new Oil Min­is­ter and PDVSA’s new Pres­i­dent will con­tin­ue to ho­n­our the con­trac­tu­al oblig­a­tions of deals signed with T&T.

“They will con­tin­ue the gas deals signed with T&T. I do not see any change in pol­i­cy. Now, there is even more con­nec­tion to the Pres­i­dent as Del­cy Ro­driguez is al­ways in con­tact with Maduro. So, the bot­tom line, I think, is this does not change and in fact makes it eas­i­er for some of these deals to con­tin­ue be ne­go­ti­at­ed and en­forced.”

Tack­ling the thorny is­sue of more sanc­tions, Monal­di was asked whether he thinks the US will refuse to ex­tend the li­cences with T&T mak­ing these projects un­vi­able.

“I think for now, it is like­ly it will not hap­pen. Prob­a­bly in the fu­ture the li­cences could be re­voked. I think Venezuela’s new Oil Min­is­ter will be more hands on and will have bet­ter con­nec­tions to the Pres­i­dent and will purse the same poli­cies. I do not see any in­di­ca­tions that the projects with T&T will slow down in any way.”

In a move that in­creased the ten­sions be­tween the Unit­ed States and Venezuela, the US Gov­ern­ment seized the Venezuela’s Gov­ern­ment pres­i­den­tial plane in the Do­mini­can Re­pub­lic last Mon­day.

For­mer en­er­gy min­is­ter and en­er­gy con­sul­tant Kevin Ram­nar­ine said he ex­pects Venezuela to main­tain a sim­i­lar en­er­gy pol­i­cy as the new Oil Min­is­ter with the new PDVSA pres­i­dent.

“I see no im­pact on Venezue­lan en­er­gy pol­i­cy giv­en Del­cy Ro­driguez’s ap­point­ment to the post of Oil Min­is­ter. What I think is that we have to keep an eye on the US’s stance to­wards Venezuela which ob­vi­ous­ly im­pacts how we do busi­ness with Venezuela.”

Ram­nar­ine al­so warned that T&T must al­ways be aware of the dan­gers of more sanc­tions in the en­er­gy re­la­tion­ship with Venezuela.

“The pos­si­bil­i­ty of more sanc­tions is al­ways a like­li­hood, es­pe­cial­ly giv­en that the US recog­nis­es that Ed­mun­do González Ur­ru­tia won the elec­tion. The re­cent seizure of the pri­vate jet in the Do­mini­can Re­pub­lic al­so points to a height­en­ing of ten­sion be­tween both coun­tries. That is a part of the over­all risk pro­file of these Venezue­lan gas deals. Hav­ing said that, they are im­por­tant to us go­ing for­ward,” he said.

New busi­ness strate­gies

In new re­struc­tur­ing plans which will im­pact Venezuela’s gas co­op­er­a­tion with T&T, Ro­driguez has al­ready cre­at­ed new vice min­istries in the en­er­gy sec­tor.

She has set up a new Vice Min­istry of Gas re­spon­si­ble for mon­etis­ing Venezuela’s gas re­sources. That will be head­ed by Pauli­na Henao.

There is al­so a new Vice Min­istry of In­te­gra­tion and In­ter­na­tion­al Af­fairs, which will be head­ed by Ed­uar­do An­to­nio Ramírez Cas­tro. Its re­spon­si­bil­i­ty will be to co­or­di­nate, pro­mote and de­vel­op in­ter­na­tion­al co­op­er­a­tion in en­er­gy mat­ters, rep­re­sen­ta­tion be­fore mul­ti­lat­er­al or­ga­ni­za­tions in oil, gas and re­lat­ed ar­eas, as well as de­ter­min­ing the prices of hy­dro­car­bons for ex­port.

Venezue­lan an­a­lyst Werther San­doval who writes reg­u­lar busi­ness and en­er­gy columns in the Venezue­lan dai­ly news­pa­per El Ul­ti­mas Noti­cias, gave an idea of what kind of busi­ness strate­gies PDVSA will con­tin­ue to adopt in do­ing busi­ness with T&T and oth­er for­eign coun­tries.

In an ar­ti­cle dat­ed Au­gust 28, he not­ed that PDVSA is de­vel­op­ing a re­struc­tur­ing and re­or­gan­i­sa­tion of the oil in­dus­try based on plans aimed at cre­at­ing “new busi­ness mod­els with world-class com­pa­nies.” Among these are joint ser­vice agree­ments that guar­an­tee pay­ment schemes through trusts and buy­ers in or­der to achieve sources of fi­nanc­ing and di­rect in­vest­ments from com­mer­cial part­ners.

He added that the re­struc­tur­ing and re­or­gan­i­sa­tion ac­tiv­i­ties, car­ried out dur­ing 2020, 2021, 2022 and 2023, in­clude defin­ing de­tails, in­clud­ing up­stream ex­plo­ration, pro­duc­tion, treat­ment and ini­tial stor­age.

He quot­ed from a re­port on the re­struc­tur­ing of Venezuela’s oil and gas in­dus­try: “It has been pro­posed that ac­tiv­i­ties from up­stream to down­stream may be de­vel­oped un­der four busi­ness mod­els de­pend­ing on the busi­ness sec­tion, name­ly: a) joint ven­tures, b) shared pro­duc­tion con­tracts, c) ser­vice con­tracts (with or with­out risk) and d) li­cences. pre­serv­ing in all busi­ness mod­els the re­serve of own­er­ship of hy­dro­car­bons for the state through PDVSA.”