Lebanese exploration blocks in limbo

: Crude oil, Natural gas
24/02/21

The fate of two exploration blocks offshore Lebanon remains in limbo, with the government yet to agree contractual terms with the consortium that bid for the licences last year, the country's energy minister Walid Fayad said.

A consortium consisting of TotalEnergies, Italy's Eni and state-owned QatarEnergy submitted bids to explore Blocks 8 and 10 in October last year as part of Lebanon's second licensing round. The blocks lie on Lebanon's recently delineated border with Israel.

The same consortium drilled an exploration well in the adjoining Block 9 in August last year but failed to find any commercial volumes of oil or gas.

Speaking on the sidelines of the Egypt Energy Show in Cairo, Fayad said the main issue with the bids for Blocks 8 and 10 relates to timeframes for 3D seismic surveys and drilling decisions. TotalEnergies' insistence on a one-year period to decide whether it would shoot 3D seismic on Block 8 is too long, Fayad said. The government's position is that three months should be more than enough, he added.

"For Block 10, they're asking for two years to make a decision whether to drill or not. And we're saying you don't need to, you can do it in one year," Fayad said. "That's why they did not sign."

TotalEnergies has yet respond to a request for comment.

It is unclear whether there will be any further negotiations for Blocks 8 and 10, both of which have been included in Lebanon's third licensing round launched late last year.

Fayad said interest in the latest bid round "has yet to be elicited", which is why he is proactively engaging with companies and countries. "It's an uphill battle," he said.

The conflict in Gaza is making it more difficult to create a stable environment for the eastern Mediterranean's oil and gas sector to grow, Fayad said.

"It makes risk a lot higher, it makes the financing cost a lot higher, and it makes any investment decision a lot more cumbersome. It is crippling the region," he said.

By Aydin Calik

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25/05/20

Shell CEO defends 'resilient investment strategy'

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Unsold German storage tightens 3Q global LNG balance

25/05/20

Unsold German storage tightens 3Q global LNG balance

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Brazil to walk tightrope in Cop 30 fossil fuel talks

25/05/20

Brazil to walk tightrope in Cop 30 fossil fuel talks

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Libyan crude returns to Asia after one-month hiatus

25/05/20

Libyan crude returns to Asia after one-month hiatus

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US budget bill not enough of permitting fix: CEO

25/05/19

US budget bill not enough of permitting fix: CEO

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