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Shell plc SHEL has planned to complete a marine survey at the Dragon offshore gas field ahead of its May deadline to wind down energy projects in Venezuela.
The survey will be conducted by the Colombia-flagged vessel Dona Jose II, which will gather some essential data for Shell and Trinidad National Gas Company (NGC). The survey will help Shell pinpoint future drilling sites and finalize the design of the pipeline that will be used to transport the gas to Trinidad. The company is going ahead with this survey with the hope that the U.S. government will eventually ease sanctions on it and allow the project’s development in the future.
Shell had contracted the vessel earlier this month, just as the U.S. administration announced the revocation of a 2023 license that permitted the company earlier for planning and development of the Dragon field. Both Shell and NGC were instructed to conclude their operations in Venezuela by May 27.
A Critical Opportunity for Trinidad's Energy Future
Trinidad, a major exporter of LNG, ammonia and methanol, is facing declining natural gas reserves. The Dragon gas field represented a rare and valuable opportunity to enhance Trinidad’s gas reserves, ensuring long-term energy security for the nation’s industries. The field, located just off the Venezuelan coast, is rich in untapped gas reserves, and Venezuela granted Shell a 30-year operating license last year. The company was expected to begin gas exports to Trinidad by 2025.
Geopolitics at Crossroads
Since 2019, when the U.S. government started imposing sanctions on Venezuela, special licenses have been required by companies to plan and develop oil and gas projects with the Venezuelan state-owned company PDVSA. While the U.S. government accuses Venezuela of not restoring democracy by returning illegal migrants, Venezuelan officials condemn the sanctions as an attempt toward economic war.
SHEL’s Zacks Rank and Key Picks
London-based Shell is one of the primary oil supermajors — a group of the U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some top-ranked stocks like Expand Energy Corporation EXE, Delek Logistics Partners, LP DKL and Diversified Energy Company PLC DEC. While Expand Energy and Delek Logistics currently sport a Zacks Rank #1 (Strong Buy) each, Diversified Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.