Lebanon moves closer to removing hurdles to offshore gas exploration

Published July 3rd, 2016 - 09:00 GMT
One of the thorny issues Lebanon may need to solve before embarking on gas exploration is the 870 square kilometer disputed zone near the southern territorial waters. (Shutterstock)
One of the thorny issues Lebanon may need to solve before embarking on gas exploration is the 870 square kilometer disputed zone near the southern territorial waters. (Shutterstock)

Lebanon may pass two decrees on offshore exploration in one month after all hurdles have been removed, a source familiar with oil exploration said Friday.

“The speaker of the Parliament played a vital role in persuading Foreign Minister Gebran Bassil to endorse the two decrees as soon as possible. The report presented by the [Lebanese] Petroleum Administration which showed a potential Israeli threat to siphon off our gas in the southern territorial waters has persuaded all sides that the issue of oil should be a top priority,” the source told The Daily Star.

The source claimed that some parties in Lebanon had previously refused to raise the issue of gas exploration until a president is elected.

“But the ministers who were adamant in refusing any discussion of the gas file are now convinced that Israel could steal our gas if we didn’t move fast,” he added.

Earlier in the day, Bassil and Finance Minister Ali Hasan Khalil made a joint statement that they had settled their dispute over Lebanon’s offshore oil and gas reserves, which has hindered any agreement on energy extraction for years. Bassil is the head of the Free Patriotic Movement and Khalil is a top official in Amal, which is headed by Berri.

“We discussed the extraction of oil and gas, and we agreed on the points of dispute with the Amal Movement. This will guarantee Lebanon’s stability,” Bassil told reporters.

Khalil called on Prime Minister Tammam Salam to convene the Cabinet and oil committee to approve decrees. “We want to tell Salam, who was waiting for an agreement between us, [that we came to an agreement]. It will be on the Cabinet agenda of discussions at the earliest possible time,” he said.

The source expected Salam to call for a meeting of the ministerial committee designated to handle gas exploration before convening a special Cabinet session dedicated only to discuss and approve the two decrees.

“Salam wants to make sure that the committee removes all ambiguity surrounding the two decrees so that no minister would make any reservation about passing these decrees,” the source explained. He said that Salam is expected to make a move after the Eid al-Fitr holiday.

The LPA’s report is a geological interpretation of the 3-D seismic survey conducted by international companies in the southern territorial waters. It stresses that there are potential gas reserves in blocks 8 and 9 that border Israeli territorial waters. The report said there is a high probability that Lebanon shares gas reserves with Israel and this should prompt the government to discuss and endorse the two decrees delineating the offshore blocks and laying out a model exploration and production sharing agreement.

One of the thorny issues Lebanon may need to solve before embarking on gas exploration is the 870 square kilometer disputed zone near the southern territorial waters. Both Lebanon and Israel claim ownership over that maritime area. Seismic studies carried out over the last few years have shown that Lebanon may have sizable quantities of natural gas in its territorial waters, boosting international confidence in Lebanon’s economic future.

The source said although some international oil companies may not be too keen to take part in future gas exploration in Lebanon due to the sharp drop in oil prices, other firms have expressed interest in the country.

“I know for sure that giant U.S. oil companies are still eager to take part in the next offshore licensing round in Lebanon. Oil firms make long-term investments because they understand that the gas supply could shrink in the next 10 years,” he added.

But the source admitted that even if the decrees were passed in one month, it will take at least eight to nine months to launch a licensing round and even longer until Lebanon can start extracting any gas that is found.

By Osama Habib 

 

 

Copyright © 2022, The Daily Star. All rights reserved.

You may also like