With the drop in international oil prices, Lebanon must work on convincing companies to come to the country for oil and gas exploration, said a senior U.S. official. “Europe is currently paying no more than $4.5 per gallon for gas and therefore Lebanon must secure a very healthy environment to encourage international companies to come and invest in the country’s oil and gas exploration operations,” said Amos Hochstein, special envoy and coordinator for International Energy Affairs leading the Bureau of Energy Resources (ENR) at the U.S. State Department, at an oil and gas conference at ESA Thursday.
Dubbed “The Oil and Gas Forum: Lebanon O&G Position in the Actual Geopolitical Development Scene,” the conference was organized by Front Page Communication in coordination with the Forum for National Dialogue in the aim of discussing topics related to the oil and gas industry in Lebanon and the region.
Hochstein said that the government has a duty to secure stability in the country to attract oil companies, which prefer to invest in areas where they have the best potential.
He explained that since the drop in oil prices, major companies took off the table over $300 billion of already announced investments while laying off a big number of people working in the oil industry.
“There is a lot of competition in markets with high confidence and resources,” he said.
Hochstein said Lebanon has a great opportunity to export its oil and gas to Europe, which is currently dependent on one supplier for its energy sources. “Europe is currently trying to find new sources of energy and the Eastern Mediterranean is going to be that source,” he said.
He also noted that Lebanon has big discoveries and the area in the Mediterranean is underexplored.”
“This is why I am optimistic and I keep coming back to Lebanon because I believe in the opportunities that exist for the country,” he added.
Hochstein added that Lebanon has a great advantage over the U.S. to export to Europe because a tanker needs only three days to go from Lebanon to Alexandroupoli, an area in Greece where there will be a LNG terminal while the same trip takes two weeks from the U.S.
He noted that Lebanon’s potential is great also because of the entrepreneurship initiatives that exist in addition to its youth education and history of successful business people.
But Hochstein said Lebanon must make a firm decision to push forward the oil and gas file to gain time and benefit from this wealth especially with the new oil discoveries taking place in the region.
Over five years have passed since the ratification of the Offshore Petroleum Resources Law, but the government has yet to endorse two decrees that would pave the way for the first licensing round for offshore gas exploration in Lebanon’s Exclusive Economic Zone.
Hochstein said Lebanon must start with the oil and gas file because the sector would create job opportunities. “When you bring companies to make investments in Lebanon, this sends signals to the rest of the firms in the world to come and make business in the country,” he said.
Hochstein emphasized the need to start with oil and gas exploration in Lebanon regardless of the dispute between Lebanon and Israel over a part of the water in the south.
“Everybody in the government knows that there is a disputed area of water between Lebanon and Israel but this is a relatively small part of the sea in the country’s south,” he said. “We cannot hold hostage the rest of the territory and this is where we have to come together to figure out the disputed area and find a way to move forward with this issue,” Hochstein added.
He met on the same day with Speaker Nabih Berri to discuss the potential of resolving the Lebanese-Israeli dispute over the maritime zone off Lebanon’s southern coast.
The U.S. delegation held discussions with Berri about possible solutions to resolve this issue. “We have also expressed our optimism to reach a consensus allowing Lebanon to start with the exploration process and we will continue our discussions with other officials as well hoping to find a quick solution,” the delegation said, according to the statement.
The delegation also discussed the need to pass the two decrees with Energy and Oil Minister Arthur Nazarian, who gave a speech during the conference at ESA.
In his speech, Nazarian said the oil and gas sector could provide an opportunity for economic growth.
“The exploitation of oil resources can secure long-term cheaper energy to satisfy the national demand while exporting gas to neighboring countries and increasing commercial productivity,” he said.
He added that the ministry worked on strategies to build a sustainable oil and gas sector and avoid failures.
Copyright © 2022, The Daily Star. All rights reserved.