Oil giant Shell plc has signed a series of agreements with the government of Venezuela aimed at expanding oil and gas development and reviving a long-delayed offshore gas project that could reshape energy flows across the Caribbean.
The agreements, announced Thursday, cover offshore natural gas exploration and onshore oil and gas opportunities. Shell also struck technical and commercial partnerships with Venezuelan engineering company VEPICA, as well as global energy services firms KBR and Baker Hughes.
The deals come amid a renewed phase of diplomatic engagement between Washington and Caracas. U.S. Interior Secretary Doug Burgum visited Venezuela this week for talks with Venezuelan President Delcy Rodríguez, becoming the second U.S. cabinet official to travel to the country this year after Energy Secretary Chris Wright made a similar trip in February. The visits point to a cautious thaw in relations after years of sanctions that isolated Venezuela’s energy sector.
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At the center of the agreements is the long-stalled Dragon offshore gas project, a field located off Venezuela’s eastern coast that Shell has been trying to develop for years. The project is designed to transport natural gas from Venezuelan waters to neighboring Trinidad and Tobago, where the fuel would feed the country’s liquefied natural gas export facilities.
Energy officials say the latest agreement clears the way for development of the field and for the first exports of gas to Trinidad by the third quarter of 2027. The gas would be transported via pipeline to Trinidad’s Atlantic LNG facility, one of the Caribbean’s largest export terminals.
Atlantic LNG is jointly owned by Shell, BP, and Trinidad’s National Gas Company. The plant has been operating well below capacity in recent years because of declining domestic gas supply. According to industry data, the facility produced about nine million metric tons of liquefied natural gas last year — significantly short of its roughly 12-million-ton nameplate capacity.
Securing gas from Venezuela could therefore play a crucial role in stabilizing Trinidad’s LNG industry, which has been grappling with feedstock shortages that threaten exports and government revenue. Analysts say the Dragon project would effectively link Venezuela’s vast gas reserves with Trinidad’s established LNG infrastructure, creating a regional supply chain capable of feeding global markets.
The Dragon field itself is estimated to contain several trillion cubic feet of natural gas, making it one of the most commercially attractive undeveloped gas deposits in the Caribbean basin.
For Shell, the project fits into a broader strategy of expanding its integrated gas portfolio — a segment the company increasingly sees as central to the global energy transition. Natural gas is widely viewed as a bridge fuel that can replace more carbon-intensive sources such as coal while renewable energy capacity continues to scale up.
But the project has faced repeated delays, largely because of shifting U.S. policy toward Venezuela. Washington’s sanctions against the government of Nicolás Maduro have complicated investment decisions for international oil companies, forcing them to rely on special licenses from the U.S. Treasury to operate in the country.
Earlier this year, however, Venezuela’s legislature approved sweeping reforms to its oil sector designed to attract foreign investment back into the country. The new framework lowers taxes on energy projects, expands the decision-making authority of the oil ministry, and gives private companies greater operational autonomy — a departure from earlier policies that placed strict limits on foreign control.
Caracas hopes the reforms will help revive an industry that once formed the backbone of the national economy. Venezuela holds the world’s largest proven crude oil reserves, but years of sanctions, economic crisis, and underinvestment have sharply reduced production and left much of its energy infrastructure in need of repair.
Officials in the country say the new agreements with Shell demonstrate that global energy companies are beginning to regain confidence in Venezuela’s energy sector. A statement posted by the military-linked television network TV FANB described the deals as evidence that Venezuela remains “a safe and reliable destination for foreign investment.”
Still, the risks have not gone away.
Large-scale offshore developments require billions of dollars in long-term investment, and energy companies remain wary of political uncertainty in Venezuela as well as the possibility that U.S. sanctions could tighten again.
The success of the Dragon project will also depend on continued cooperation between Venezuela and Trinidad and Tobago, whose LNG facilities would process the gas before it is exported to international buyers.
If completed, the project could restore part of the Caribbean’s role in global gas markets while offering Venezuela a new source of revenue and Trinidad a lifeline for its LNG sector.