ConocoPhillips obtains authorization to seize PDVSA payments in Trinidad

ConocoPhillips secured the right to seize payments from PDVSA related to the Dragon gas project between Trinidad and Venezuela. This decision is part of ongoing efforts to recover a $1.33 billion debt linked to the nationalization of its assets.

Share:

The conflict between ConocoPhillips and the Venezuelan oil company Petróleos de Venezuela, S.A. (PDVSA) stems from the nationalization of the American company’s assets by Venezuela in the early 2000s. After several years of litigation and arbitration, ConocoPhillips secured a $1.33 billion compensation award against PDVSA. However, payments were halted in 2019, ending a partial settlement agreement worth $700 million. Since then, ConocoPhillips has been seeking to enforce this judgment in various jurisdictions.

The recent decision by the Court of Trinidad and Tobago is a significant milestone in this strategy. Judge Frank Seepersad authorized the seizure of payments linked to PDVSA’s participation in the Dragon gas project, estimating that the company might transfer its assets out of jurisdiction to avoid its obligations. He highlighted PDVSA’s prior move of its European headquarters to Moscow as a worrying precedent for international creditors.

Implications for the Dragon project

The Dragon gas field, located on the maritime border between Trinidad and Venezuela, is a key component of the region’s energy strategy. The project, developed in partnership with the National Gas Company of Trinidad and Tobago (NGC) and Shell, aims to exploit underwater gas reserves within a complex framework marked by U.S. sanctions. PDVSA’s involvement in this project makes its payments vulnerable to seizures, complicating negotiations with other partners and delaying the start of production.

ConocoPhillips’ intervention highlights PDVSA’s difficulties in protecting its international assets, as seizure attempts increase. PDVSA could see its revenues decrease, further limiting its ability to finance other cross-border projects, including the development of the Manakin-Cocuina and Loran fields, which are also being targeted by the American company.

Financial consequences for PDVSA

The potential seizure of payments from the Dragon project by ConocoPhillips exposes PDVSA to new financial risks. Already affected by declining production and severe sanctions, PDVSA is in an increasingly precarious position. This court decision could also affect other international partnerships, notably those with Guyana and Jamaica, where the company still holds exploitable assets. The Guyanese government recently challenged a similar decision by the local court, which would have allowed ConocoPhillips to seize payments related to a petroleum agreement with PDVSA.

In this context, PDVSA’s ability to meet its commitments to its partners and creditors becomes increasingly limited. The use of specific licenses from the Office of Foreign Assets Control (OFAC) for the Dragon project illustrates the delicacy of the situation: companies such as Shell and NGC must navigate legal restrictions while trying to secure their investments. This additional pressure could call the project’s viability into question and, by extension, the expected revenues for PDVSA.

Impact on regional cooperation

Beyond the financial implications for PDVSA, this court decision raises broader questions about energy cooperation between Trinidad and Venezuela. For several years, the two countries have been trying to establish cross-border collaboration to exploit gas resources in a region where energy demand is growing. However, legal disputes and asset seizures make this cooperation challenging, potentially discouraging other players from getting involved in similar projects.

U.S. support in the form of special OFAC licenses for the Dragon project reflects the geopolitical importance of this collaboration. However, if PDVSA continues to see its payments seized by foreign creditors, this could deter Trinidad from further engaging in joint projects with Caracas, pushing the country to turn to other regional partners.

The outcome of this case could redefine how international energy companies approach their relationships with Venezuela, both in terms of managing legal risks and investment strategy.

Facing an under-equipped downstream sector, Mauritania partners with Sonatrach to create a joint venture aiming to structure petroleum products distribution and reduce import dependency, without yet disclosing specific investments.
Dalinar Energy, a subsidiary of Gold Reserve, receives official recommendation from a US court to acquire PDV Holdings, the parent company of refiner Citgo Petroleum, with a $7.38bn bid, despite a higher competing offer from Vitol.
Oil companies may reduce their exploration and production budgets in 2025, driven by geopolitical tensions and financial caution, according to a new report by U.S. banking group JP Morgan.
Commercial oil inventories in the United States rose unexpectedly last week, mainly driven by a sharp decline in exports and a significant increase in imports, according to the US Energy Information Administration.
TotalEnergies acquires a 25% stake in Block 53 offshore Suriname, joining APA and Petronas after an agreement with Moeve, thereby consolidating its expansion strategy in the region.
Orlen announces the definitive halt of its Russian oil purchases for the Czech Republic, marking the end of deliveries by Rosneft following the contract expiry, amid evolving logistics and diversification of regional supply sources.
Equinor and Shell launch Adura, a new joint venture consolidating their main offshore assets in the United Kingdom, aiming to secure energy supply with an expected production of over 140,000 barrels of oil equivalent per day.
Equinor announces a new oil discovery estimated at between 9 and 15 mn barrels at the Johan Castberg field in the Barents Sea, strengthening the reserve potential in Norway's northern region.
Sierra Leone relaunches an ambitious offshore exploration campaign, using a 3D seismic survey to evaluate up to 60 potential oil blocks before opening a new licensing round as early as next October.
Faced with recurrent shortages, Zambia is reorganising its fuel supply chain, notably issuing licences for operating new tanker trucks and service stations to enhance national energy security and reduce external dependence.
The closure of the Grangemouth refinery has triggered a record increase in UK oil inventories, highlighting growing dependence on imports and an expanding deficit in domestic refining capacity.
Mexco Energy Corporation reports an annual net profit of $1.71mn, up 27%, driven by increased hydrocarbon production despite persistently weak natural gas prices in the Permian Basin.
S&P Global Ratings lowers Ecopetrol's global rating to BB following Colombia's sovereign downgrade, while Moody’s Investors Service confirms the group's Ba1 rating with a stable outlook.
Shell group publicly clarifies it is neither considering discussions nor approaches for a potential takeover of its British rival BP, putting an end to recent media speculation about a possible merger between the two oil giants.
The anticipated increase in the tax deduction rate may encourage independent refineries in Shandong to restart fuel oil imports, compensating for limited crude oil import quotas.
Petro-Victory Energy Corp. starts drilling of the AND-5 well in the Potiguar Basin, Brazil, as the first phase of an operation financed through its strategic partnership with Azevedo & Travassos Energia.
The Texan Port of Corpus Christi has completed major widening and deepening work designed to accommodate more supertankers, thus strengthening its strategic position in the US market for crude oil and liquefied natural gas exports.
BP Prudhoe Bay Royalty Trust is offering its interest in Prudhoe Bay, North America’s largest oil field, as part of its planned dissolution, assisted by RedOaks Energy Advisors for this strategic asset transaction.
CNOOC Limited’s Hong Kong subsidiary and KazMunayGas have concluded a nine-year exploration and production contract covering nine hundred and fifty-eight square kilometres in Kazakhstan, sharing investment and operations equally.
Donald Trump announced that the United States will no longer oppose Chinese purchases of Iranian oil, immediately triggering a drop in global crude oil prices and profoundly reshaping international energy trade partnerships.