Shell plc (SHEL Quick QuoteSHEL - Free Report) , a London-based integrated oil and gas company, is strategically positioning itself to resume preliminary operations on the Dragon gas field offshore Venezuela, aiming to boost natural gas supplies to Trinidad and Tobago, according to Bloomberg, as cited in a World Oil article. This move reflects a growing confidence within Shell that the Trump administration will soon grant a new U.S. sanctions exemption license, opening the door for long-awaited energy collaboration between Venezuela and its Caribbean neighbor.

Dragon Gas Field: A Vital Resource for Trinidad's Energy Sector

The Dragon gas field, located in shallow Caribbean waters near the maritime border of Venezuela and Trinidad, holds more than 4 trillion cubic feet of proven natural gas reserves. With Trinidad’s Atlantic liquefied natural gas (“LNG”) complex and petrochemical plants experiencing chronic feedstock shortages, tapping into Dragon's reserves is critical to stabilizing and expanding the country’s gas-based exports, which include LNG and ammonia.

Gas production in Trinidad has been on a downward trajectory for more than a decade, placing intense pressure on its industrial output and export volumes. By securing natural gas from the Dragon field, Shell and its local partner, the National Gas Company (“NGC”) of Trinidad and Tobago, are poised to deliver a lifeline to the island nation’s energy and agricultural sectors.

Shell’s Strategy Amid U.S. Sanctions on Venezuela

While U.S. policy toward Venezuela remains fractured — marked by a dual strategy of military deterrence and energy pragmatism — Shell’s move is emblematic of a targeted approach to re-engaging with the country’s offshore energy assets. According to the report, Shell is optimistic about securing a long-term license from the U.S. Treasury’s Office of Foreign Assets Control, which would enable it to develop the Dragon field without violating current sanctions.

Unlike oil transactions that risk direct financial support to the Maduro regime, natural gas deals are seen as less politically sensitive, especially when structured to avoid hard currency payments to Venezuela. The United States appears more willing to green-light such operations if companies circumvent direct financial engagement with the government of Venezuela.

Trinidad’s Diplomatic Shuttle Between Caracas, Washington and Port of Spain

In recent months, a flurry of high-level diplomacy has taken place, with Trinidadian officials working closely with Shell and U.S. counterparts to revive the Dragon project. Prime minister Kamla Persad-Bissessar has maintained a strong dialogue with U.S. Secretary of State Marco Rubio, who, during a meeting on Sept. 30, reaffirmed U.S. support for the initiative, provided it does not significantly benefit Venezuela’s leadership.

This reflects a calculated stance — the United States seeks to support Caribbean energy security while continuing its campaign of economic pressure against the Maduro administration. Trinidad, in turn, is balancing geopolitical considerations with the urgent need to revive its struggling energy sector.

BP’s Parallel Efforts on the Manakin-Cocuina Gas Field

While Shell advances its plans for Dragon, BP plc (BP Quick QuoteBP - Free Report) is simultaneously pushing to reclaim its license for the Manakin-Cocuina field, another cross-border gas deposit shared between Venezuela and Trinidad. This demonstrates a broader resurgence of interest from multinational energy firms in re-engaging with Venezuela’s offshore resources, particularly when those projects serve regional allies such as Trinidad and Tobago.

Both BP and Shell are primary shareholders in Trinidad’s Atlantic LNG complex, further highlighting the strategic imperative to secure long-term natural gas inputs. Restoring and expanding these supplies is not only crucial for industrial output but also central to maintaining Trinidad’s role as a top LNG exporter in the Western Hemisphere.

Vision for 30 Years: Production-Sharing Agreement in Place

In late 2023, Venezuela’s Ministry of Petroleum formally granted Shell and NGC a 30-year production-sharing contract for the Dragon field. This agreement revives terms first negotiated in 2018, before the Trump administration imposed comprehensive sanctions on Caracas in January 2019.

The long-term contract demonstrates Shell’s commitment to establishing a sustainable, capital-intensive presence in the region. Company insiders emphasize the need for a 10-year U.S. license, far exceeding the short-term waivers previously issued. This extended timeframe is deemed essential to attract financing, build infrastructure and guarantee gas flows over decades.

Energy Security, Geopolitics and the Future of Caribbean LNG

The strategic implications of the Dragon project extend well beyond Shell and Trinidad. With global LNG demand surging and geopolitical risks disrupting traditional supply chains, revitalizing Caribbean energy production has international significance. Trinidad’s LNG and petrochemical exports, particularly ammonia used in U.S. agriculture, are critical to North America’s supply chains.

By restoring operations at Dragon, Shell not only helps stabilize Trinidad’s domestic economy but also reinforces regional energy interdependence and geopolitical resilience. This is especially vital as the U.S. continues to manage its complex foreign policy toward Venezuela, simultaneously pursuing containment and economic engagement.

Outlook: Awaiting the U.S. Green Light

As of now, the final details of Shell’s license remain under negotiation. However, there is a growing consensus among stakeholders that a favorable decision is imminent. The precedent set by Chevron Corporation’s (CVX Quick QuoteCVX - Free Report) restricted license in July 2025 has opened the door to additional exemptions, particularly for gas projects aligned with U.S. strategic interests.

If approved, Shell’s return to the Dragon field could signal a new chapter in U.S.-Venezuela-Trinidad energy relations, potentially unlocking billions of dollars in investment, stabilizing regional energy markets and offering a measured blueprint for future engagement in Venezuela’s resource-rich waters.

BP is a global energy company, focused on oil, gas, and renewable energy projects. The company is actively investing in cleaner energy solutions as part of its commitment to reducing carbon emissions. On the other hand, Chevron is one of the largest integrated energy companies, involved in upstream and downstream operations worldwide. The company continues to expand its oil and gas production while also exploring sustainable energy initiatives.

SHEL's Zacks Rank & a Key Pick

Currently, SHEL, BP and CVX have a Zacks Rank #3 (Hold) each.

Investors interested in the energy sector might look at a better-ranked stock like Canadian Natural Resources Limited (CNQ Quick QuoteCNQ - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural is one of Canada's largest independent oil and natural gas producers, with operations spanning exploration, development and production across North America, the North Sea and Offshore Africa. The company focuses on a diversified portfolio of assets, including oil sands, conventional crude oil, natural gas and thermal in-situ operations. Canadian Natural is valued at $67.72 billion.