BEIRUT, Dec 14 (Reuters) - Lebanon's cabinet approved a bid on Thursday for offshore energy exploration by a consortium made up of France's Total, Italy's ENI and Russia's Novatek, in the country's first oil and gas offshore licensing round, a government source told Reuters.
"Congratulations to the Lebanese people on the passing of the oil decree and on Lebanon entering the club of oil countries," Oil Minister Cesar Abi Khalil said on Twitter in response to the decision.
Lebanon sits on the Levant Basin in the eastern Mediterranean where a number of big sub-sea gas fields have been discovered since 2009, including the Leviathan and Tamar fields located in Israeli waters near the disputed marine border with Lebanon.
The first licensing round for exploration and production rights was re-launched in January after a three-year delay due to political problems in the country.
Total-ENI-Novatek was the only consortium to submit an offer, bidding for block 4 and block 9 of the available five blocks.
Lebanon Gas and Oil Platform reported last month that the LPA, the body that governs upstream oil and gas operations in the country, would hold discussions with the consortium, which submitted the sole bids for the two blocks in October.
High-profile discoveries offshore the Mediterranean in Egypt and Cyprus have raised Lebanon’s hopes of finding hydrocarbon reserves to help mitigate its huge energy import bills, which have added to the country's rising budget deficit.
The country currently burns environmentally inefficient fuel oil, of which 90 per cent is imported, to keep its power stations running. A population surge from refugees fleeing the civil war in neighbouring Syria has added to rising power demand.
According to some Lebanese government estimates, the territorial waters of the country could hold as much as 96 trillion cubic feet of natural gas and 850 million barrels of oil, which could translate into huge savings for its economy and end its dependence on fuel imports.
Lebanon's hopes for energy independence revived last year following the formation of the new government. In January, the energy ministry passed two decrees to kickstart a stalled tender process for nine offshore blocks.
The Lebanese government had also passed the much-awaited petroleum tax law in September, just ahead of the October deadline for companies to form consortia of three to submit bids.
One of the blocks, which the Total-led consortium will now conduct studies in, lies in disputed territory with Israel, which remains at war with Lebanon and has threatened arbitration should Beirut sanction exploration work in the area.