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.

The expansion of the global oil and gas fishing market is accelerating on the back of offshore projects, with annual growth estimated at 5.7% according to The Insight Partners.
The Competition Bureau has required Schlumberger to divest major assets to finalise the acquisition of ChampionX, thereby reducing the risks of market concentration in Canada’s oilfield services sector. —
Saturn Oil & Gas Inc. confirms the acquisition of 1,608,182 common shares for a total amount of USD3.46mn, as part of its public buyback offer in Canada, resulting in a reduction of its free float.
OPEC slightly adjusts its production forecasts for 2025-2026 while projecting stable global demand growth, leaving OPEC+ significant room to increase supply without destabilizing global oil markets.
Talks between European Union member states stall on the adoption of the eighteenth sanctions package targeting Russian oil, due to ongoing disagreements over the proposed price ceiling.
Three new oil fields in Iraqi Kurdistan have been targeted by explosive drones, bringing the number of affected sites in this strategic region to five in one week, according to local authorities.
An explosion at 07:00 at an HKN Energy facility forced ShaMaran Petroleum to shut the Sarsang field while an inquiry determines damage and the impact on regional exports.
The Canadian producer issues USD 237 mn in senior notes at 6.875 % to repay bank debt, repurchase USD 73 mn of 2027 notes and push most of its maturity schedule to 2030.
BP revised upwards its production forecast for the second quarter of 2025, citing stronger-than-expected results from its US shale unit. However, lower oil prices and refinery maintenance shutdowns weighed on overall results.
Belgrade is engaged in complex negotiations with Washington to obtain a fifth extension of sanctions relief for the Serbian oil company NIS, which is majority-owned by Russian groups.
European Union ambassadors are close to reaching an agreement on a new sanctions package aimed at reducing the Russian oil price cap, with measures impacting several energy and financial sectors.
Backbone Infrastructure Nigeria Limited is investing $15bn to develop a 500,000-barrel-per-day oil refinery in Ondo State, a major project aimed at boosting Nigeria’s refining capacity.
The Central Energy Fund’s takeover of the Sapref refinery introduces major financial risks for South Africa, with the facility still offline and no clear restart strategy released so far.
PetroTal Corp. records production growth in the second quarter of 2025, improves its cash position and continues replacing key equipment at its main oil sites in Peru.
An explosion caused by a homemade explosive device in northeastern Colombia has forced Cenit, a subsidiary of Ecopetrol, to temporarily suspend operations on the strategic Caño Limón-Coveñas pipeline, crucial to the country's oil supply.
U.S. legislation eases access to federal lands for oil production, but fluctuations in crude prices may limit concrete impacts on investment and medium-term production, according to industry experts.
Permex Petroleum Corporation has completed a US$2mn fundraising by issuing convertible debentures, aimed at strengthening its cash position, without using intermediaries, and targeting a single institutional investor.
Petróleos de Venezuela S.A. (PDVSA) recorded $17.52bn in export sales in 2024, benefiting from increased volumes due to U.S. licences granted to foreign partners, according to an internal document seen by Reuters.
The detection of zinc in Mars crude extracted off the coast of Louisiana forced the US government to draw on its strategic reserves to support Gulf Coast refineries.
Commissioning of a 1.2-million-ton hydrocracking unit at the TANECO site confirms the industrial expansion of the complex and its ability to diversify refined fuel production.