Lebanon risks losing oil and gas investments over licensing delays: minister

Published June 2nd, 2015 - 06:34 GMT

Energy and Water Minister Arthur Nazarian warned over the weekend that international oil companies could lose interest in bidding for oil and gas exploration inLebanon if the government fails to speed up licensing procedures.

He spoke during a conference Saturday organized by the Order of Engineers in north Lebanon.

The government has yet to issue two decrees that would pave the way for the first licensing round for offshore gas exploration in Lebanon’s exclusive economic zone.

“We could lose all this interest [by international oil companies] if we continue to delay and postpone the issuance of the two decrees required to launch the licensing round for oil and gas exploration,” he told participants.

The first licensing round was postponed last August for the fifth time due to political disagreements over the decrees pertaining to the designation of blocks that would be open for bidding and the terms of a draft on the Exploration and Production Agreement.

Nazarian said he expected explorations works to take off relatively quickly once the licensing round takes place, mainly owning to the large quantity of data already available to international companies interested in investing in Lebanon.

Industry sources have warned that some international companies that prequalified for the first licensing round were re-evaluating the situation in light of the repeated delays as a result of the government’s failure to issue the two decrees.

Out of the 52 companies that applied for prequalification, 46 were accepted and of those 12 can bid as operators and 34 as non-operators.

Last month, Nazarian told The Daily Star that there was no indication yet on whether the Cabinet would hold a meeting in the near future to discuss and approve the two decrees concerning the number of blocks that will be auctioned and the revenue sharing agreement.

Lebanon’s potential offshore natural gas reserves are estimated at 25 trillion cubic feet, according to initial estimates carried out in the country’s exclusive economic zone.

The estimates are based on 2-D and 3-D seismic surveys carried out over the past few years in Lebanon’s EEZ.

By Antoine Amrieh

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