T&T’s 30-year agree­ment with Venezuela to de­vel­op the Drag­on Gas Field is not with that coun­try’s state-owned en­er­gy com­pa­ny Petroleos de Venezuela SA (PDVSA), this coun­try’s En­er­gy Min­is­ter, Stu­art Young, said in the Sen­ate yes­ter­day.

Re­spond­ing to a mo­tion on the ad­journ­ment by Op­po­si­tion Sen­a­tor Wade Mark, re­quest­ing an up­date on the Drag­on gas arrange­ments, Young said, “For­tu­nate­ly once again, for the peo­ple of Trinidad and To­ba­go, it was an in­tel­li­gent, con­fi­dent and com­pe­tent PNM gov­ern­ment that ne­go­ti­at­ed the li­cence for Drag­on. That same 30-year li­cence is not any­where re­lat­ed to PDVSA.”

Young said the 30-year li­cence is with the Gov­ern­ment of Venezuela, which is a sov­er­eign en­ti­ty.

“There is al­so a con­cept called sov­er­eign im­mu­ni­ty, so while you may have a de­ci­sion against a com­mer­cial en­ti­ty called PDVSA, and pay­ments with re­spect to PDVSA, that does not au­to­mat­i­cal­ly equate to the Gov­ern­ment of Venezuela,” Young said, adding that the T&T gov­ern­ment had the fore­sight to struc­ture the deal to ex­clude PDVSA.

Mean­while, High Court Judge Frank Seep­er­sad yes­ter­day grant­ed two US en­er­gy com­pa­nies, which have suc­cess­ful­ly reg­is­tered their US$1.2 bil­lion ar­bi­tra­tion award against PDVSA, an ex­ten­sion to serve the court doc­u­ments. 

Seep­er­sad grant­ed the ex­ten­sion as Phillips Pe­tro­le­um Com­pa­ny (Venezuela) and Cono­coPhillips Petrozu­a­ta BV’s case against PDVSA and two sub­sidiaries came up for hear­ing yes­ter­day morn­ing. 

Dur­ing the hear­ing, Jus­tice Seep­er­sad ex­pressed con­cern over the fact that the doc­u­ments in the case had not been served on PDVSA and its sub­sidiaries af­ter he grant­ed the or­der reg­is­ter­ing the sig­nif­i­cant award lo­cal­ly late last month. 

“Nat­ur­al jus­tice man­dates that the oth­er side should be af­ford­ed an op­por­tu­ni­ty to be heard. This court will, how­ev­er, not con­done any abuse of its process­es. Nei­ther will it tol­er­ate its is­sued or­der be­ing held over the head of the de­fen­dants like the ‘Sword of Damo­cles,’ said Seep­er­sad. 

The judge not­ed that the ar­bi­tra­tion pro­ceed­ings, which led to the award, were con­duct­ed in Eng­lish and held in the Unit­ed States. Seep­er­sad point­ed out that the com­pa­nies could serve the Eng­lish ver­sion first and serve the trans­lat­ed ver­sion at a lat­er date. 

It was agreed that the doc­u­ments would be served in Eng­lish be­fore the end of the week. 

Jus­tice Seep­er­sad or­dered that the Span­ish trans­la­tion be served by Ju­ly 9. 

Pro­vid­ed that the or­der is com­plied with, PDVSA and its sub­sidiaries will have un­til Ju­ly 17 to de­cide whether they would ap­ply to set aside the reg­is­tra­tion of the debt. 

In their court fil­ings, the com­pa­nies claimed that they be­gan do­ing busi­ness in Venezuela af­ter that coun­try’s gov­ern­ment of­fered tax in­cen­tives and ma­jor­i­ty eq­ui­ty stakes in long term en­er­gy projects. 

The com­pa­nies brought ar­bi­tra­tion pro­ceed­ings af­ter the Venezue­lan gov­ern­ment ex­pro­pri­at­ed its ex­tra-heavy crude oil ex­trac­tion fa­cil­i­ties in the Orinoco Oil Belt be­tween 2004 and 2007. 

In April 2018, a tri­bunal of the In­ter­na­tion­al Cham­ber of Com­merce (ICC) up­held the com­pa­nies’ case and or­dered the com­pen­sa­tion. 

At­tached to the Cono­coPhillips claim is an af­fi­davit from com­pa­ny’s lawyer Stephen Hayes, of Unit­ed King­dom law firm Ko­bre and Kim, who spent a sig­nif­i­cant por­tion of his ev­i­dence deal­ing with the Drag­on gas field project. 

Un­der the project, which has been un­der dis­cus­sion since 2016, the Na­tion­al Gas Com­pa­ny (NGC) and Dutch en­er­gy gi­ant Shell were al­lowed to de­vel­op the gas field pre­vi­ous­ly held by PDVSA and sup­ply nat­ur­al gas to this coun­try via a pipeline con­nect­ed to the Hi­bis­cus plat­form off the north west coast of Trinidad. 

Hayes point­ed out that in Au­gust, last year, Shell and NGC com­mit­ted to re­im­burs­ing PDVSA for all its le­git­i­mate claims aris­ing out of its ear­li­er in­vest­ment in the field, which it es­ti­mat­ed at ap­prox­i­mate­ly US$1 bil­lion.