LONDON, April 2, 2026, 12:15 BST
Shell Plc is deep into negotiations with Venezuela as it looks to expand its offshore gas ambitions, hoping to tap roughly 20 trillion cubic feet of reserves off the coast near Trinidad and Tobago, say two people with knowledge of the matter. The plan is to pipe that gas over to Trinidad, where Shell would convert it into LNG — liquefied natural gas ready to be shipped.
Timing is key here. Shell stands as the top global LNG trader, and the Middle East conflict has sidelined almost 20% of the world’s LNG supply, sending buyers scrambling for alternatives. U.S. exports surged, hitting an all-time high of 11.7 million metric tons in March.
Europe held onto its spot as the top destination for U.S. LNG in the past month, although cargoes to Asia surged—more than doubling—as prices climbed, underscoring the market’s squeeze. Shell is eyeing Venezuelan gas to support Atlantic LNG in Trinidad, where missing volumes have dragged output below full tilt.
It’s a key point: Atlantic LNG, split evenly between Shell and BP at 45% each, can churn out 12 million metric tons a year. But in 2025, output shipped came in at just 9 million, according to LSEG figures—Trinidad’s gas supply fell short. Back in February, Shell pointed to fresh U.S. general licenses allowing oil and gas work in Venezuela, saying those would finally clear the way for progress on Dragon, its offshore gas project long stuck on the drawing board.
Shell has acknowledged it’s eyeing some of the additional blocks. “The proximity to Manatee makes Loran an attractive investment opportunity for Shell,” the company wrote in an email to Reuters, pointing to the field neighboring its Manatee project in Trinidad. According to a source with knowledge of negotiations, the idea is to drill subsea wells on Venezuela’s side, then connect them back to Shell’s Manatee platform. Reuters
The package on the table involves Dragon, three adjacent zones tied to Venezuela’s Mariscal Sucre, plus the Loran field, which holds 7.3 tcf. Altogether, it’s about 20 tcf, according to people familiar with the matter. Back in March, Reuters said Shell had inked early-stage deals in Caracas aimed at pushing ahead with Dragon and possibly tapping Carito and Pirital onshore. As for Chevron, it’s expected to exit stakes in Loran and related blocks.
Sources say Dragon could hit a final investment decision—the official approval to fund the project—before the year wraps up. Last week, Chief Executive Wael Sawan told reporters Shell might give the nod to one or two Venezuela projects in 2026, but only if fiscal and legal terms get better. The priority for now: gas “that can be monetized through LNG,” Sawan said. Reuters
Shell’s push to secure new gas supplies comes as it grapples with a longer-running issue. According to Reuters, by the end of 2025, the company’s reserve life will have dipped below eight years. RBC’s Biraj Borkhataria flagged the situation back in February: “Absent M&A in the near term, we expect these concerns over [production] longevity to linger.” Reuters
Yet obstacles persist. Russian entities still control two Mariscal Sucre blocks, according to people familiar with the matter, and Shell hasn’t budged from its position: workable fiscal conditions and legal clarity in Venezuela are non-negotiable. Dragon, too, has previously hit delays from changing U.S. sanctions policy.
Shell’s leadership has been raising the alarm about tightening conditions in the gas market. Back on March 24, Sawan flagged the risk of European shortages as soon as April if the Middle East conflict drags on. Cedric Cremers, who runs Shell’s integrated gas business, added that geopolitical jolts “send the wrong signals” on both the affordability and reliability of gas. Reuters
Shell advanced 3.3% Thursday in London, while BP shot up 4.5%. Oil prices moved sharply higher, pulling the FTSE energy index up 3.6%. Traders cited fresh concerns over extended supply disruptions after U.S. President Donald Trump threatened tougher action against Iran.
