Lebanon re-launched its first oil and gas licensing round after a three-year delay, the energy minister said on Thursday, kick-starting the development of a hydrocarbon industry stalled by national political paralysis.
Lebanon has opened five offshore blocks (1,4,8,9 and 10) for bidding in a first licensing round of offshore oil and gas exploration in Lebanon’s Exclusive Economic Zone, Minister of Energy and Water Cesar Abou Khalil told a news conference and 23 of February will be the date of the bissing.
He added that Lebanon would seek to join the Extractive Industries Transparency Initiative (EITI) to guarantee the transparency of the process.
"At the beginning of the new term, transparency is our main focus," Abi Khalil said.
Note that On Wednesday 25 of January, the Cabinet announced it had filed a request to join EITI following recommendations by the Lebanese Petroleum Administration, the Finance Ministry and the parliamentary Public Works, Energy and Water Committee. EITI promotes public awareness of how countries manage their oil, gas and mineral resources.
The Cabinet also approved a decree to activate the first round of tenders to launch offshore oil and gas exploration.
Abi Khalil said that state profits would be determined after the bidding process, adding that the number of companies to join the tenders was still unclear.
Earlier this month, the Cabinet approved two decrees seen as a crucial step toward accessing Lebanon’s offshore resources after previous cabinets had shelved the issue of the gas exploration over deep political divisions in the country.
The decrees paved the way for the first licensing round of offshore oil and gas exploration in Lebanon’s Exclusive Economic Zone by designating which blocks would be open for bidding. They are also necessary to determining which blocks are up for auction and developing a revenue-sharing model.
Lebanon and Israel have been bickering over a disputed zone between their territorial waters. Lebanon has suggested that the United Nations broker a deal to demarcate this zone, but Israel has rejected such a move.
International companies such as Spectrum have conducted 3-D seismic surveys off most of the coast to determine the potential size of hydrocarbon deposits.
This data was sold to international oil companies.
In 2013, 46 companies qualified to take part in bidding for oil and gas tenders, 12 of them as operators, including Chevron , Total and Exxon Mobil.
But political paralysis, which left Lebanon without a president for more than two years, meant the licensing process was put on hold.
Abou Khalil said a second pre-qualification round for companies interested in exploration and production contracts would be launched soon.
Lebanon, along with Cyprus, Israel and Egypt, sits on the eastern Mediterranean gas field discovered in 2009
- Roudi Baroudi: I'm Optimist about the O&G Sector's Future
- Transparency in the Oil and Gas Sector: Much Talk but Limited Action
- Cezar Abi Khalil: Lebanon is Very Serious About Completing 1st Licensing Round of Oil Exploration