The U.S. Trea­sury De­part­ment has grant­ed a li­cence to Trinidad and To­ba­go to de­vel­op a ma­jor gas field lo­cat­ed in Venezue­lan ter­ri­to­r­i­al wa­ters, a se­nior Biden ad­min­is­tra­tion of­fi­cial said on Tues­day, mark­ing a fur­ther eas­ing of some sanc­tions on Venezuela, a Reuters re­port has stat­ed.

The li­cense, is­sued at Trinidad's re­quest and in­tend­ed to en­hance Caribbean re­gion­al en­er­gy se­cu­ri­ty, means the is­land na­tion can re­sume do­ing busi­ness re­lat­ed to the Drag­on gas field with Venezuela's heav­i­ly sanc­tioned state-run oil com­pa­ny PDVSA, the se­nior U.S. of­fi­cial told Reuters.

Speak­ing to Reuters on con­di­tion of anonymi­ty, the of­fi­cial said that "the Maduro regime will not be per­mit­ted to re­ceive any cash pay­ments from this project" and that all re­main­ing U.S. sanc­tions would be un­changed and still be en­forced.

"This de­ci­sion is the re­sult of ex­ten­sive diplo­ma­cy be­tween Vice Pres­i­dent Ka­mala Har­ris and Caribbean lead­ers, who have made it clear that grant­i­ng this spe­cif­ic li­cense would help en­sure their en­er­gy se­cu­ri­ty and de­crease the re­gion's re­liance on en­er­gy re­sources from oth­er coun­tries, in­clud­ing Rus­sia," the of­fi­cial said.

PDVSA has found re­serves of 4.2 tril­lion cu­bic feet (TCF) in the Drag­on field, on the Venezue­lan side of its mar­itime bor­der with Trinidad. The project was head­ed for pro­duc­tion over a decade ago, but stalled over lack of cap­i­tal and part­ners, as well as sanc­tions.

Un­der U.S. sanc­tions, com­pa­nies and gov­ern­ments must ob­tain au­tho­riza­tion from the U.S. Trea­sury De­part­ment to do busi­ness with PDVSA. Pres­i­dent Joe Biden's ad­min­is­tra­tion has grant­ed on­ly a few such li­cens­es since tak­ing of­fice in Jan­u­ary 2021.

The lat­est move fol­lows a round of ne­go­ti­a­tions in No­vem­ber be­tween Maduro's So­cial­ist gov­ern­ment and the op­po­si­tion, aimed at find­ing a path to new elec­tions. But Maduro has re­sist­ed send­ing his ne­go­ti­at­ing team back to the ta­ble since then.

U.S. part­ners in the Caribbean have called for help to deal with high­er en­er­gy prices fol­low­ing Rus­sia's in­va­sion of Ukraine last year.

"The Vice Pres­i­dent con­veyed to the Prime Min­is­ter that the Trea­sury De­part­ment would take ac­tion to help meet the re­gion's long-term en­er­gy needs," a state­ment from Har­ris' of­fice said, re­fer­ring to a call on Tues­day with Trinidad Prime Min­is­ter Kei­th Row­ley.

Trinidad is Latin Amer­i­ca's largest liq­ue­fied nat­ur­al gas (LNG) ex­porter, with in­stalled ca­pac­i­ty to process 4.2 bil­lion cu­bic feet per day (bcfd) in­to LNG, petro­chem­i­cals and pow­er. But its gas pro­duc­tion is just un­der 3 bcfd.

Even with Wash­ing­ton's grant­i­ng of Trinidad's re­quest, it could take years of in­vest­ment and de­vel­op­ment to bring Venezue­lan gas to Trinidad and boost LNG to Eu­rope, ex­perts say.

In ad­di­tion, with no pay­ments au­tho­rized to Venezuela, it could be dif­fi­cult for Trinidad to craft a deal with Cara­cas.

"At the re­quest of the Gov­ern­ment of Trinidad and To­ba­go, the Unit­ed States De­part­ment of the Trea­sury is­sued a spe­cif­ic li­cense to en­able Trinidad and To­ba­go to de­vel­op the Drag­on gas field," the se­nior ad­min­is­tra­tion of­fi­cial said.

But, the of­fi­cial added, "the Unit­ed States' pol­i­cy to­wards Venezuela has not changed, and we con­tin­ue to en­force sanc­tions and re­stric­tions that re­main in place."

In No­vem­ber the Unit­ed States is­sued a six-month li­cense to Chevron (CVX.N), au­tho­riz­ing it to take an ex­pand­ed role at four Venezue­lan joint ven­tures that pro­duce, process and ex­port oil, and to bring their oil to the Unit­ed States.

The Chevron li­cense is meant to re­open some oil flows that were shut by U.S. sanc­tions near­ly four years ago. The li­cense was one of Wash­ing­ton's first sig­nif­i­cant steps to ease sanc­tions as an in­cen­tive for Cara­cas to work with op­po­si­tion lead­ers on a pres­i­den­tial elec­tion in late 2023.

- Source: Reuters