Lebanon-UK Business Meetings: Promising Vibes For The Country’s 2nd O&G Licensing Round
The start of 2019 kicks-off with a set of consecutive deadlines and commitments for Lebanon’s Offshore O&G sector. Earlier in 2018, the Lebanese Government has licensed two offshore blocks (4 & 9) to an international consortium led by French giant Total, Italy’s ENI and Russian Novatek. Yet, the work of the Ministry of Energy & Water (MEW) as well as the Lebanese Petroleum Administration (LPA) did not end at that stage, and the negotiations with the winning consortium started since February to set a clear development plan for both blocks, which was then approved in May. Exploration drilling in block 4 is expected toward the end of 2019 and will be followed by a more sensitive drilling in Block 9 later in 2020.
The successful outcomes of the first licensing round allowed the Council of Ministers to approve in May 2018 the LPA’s recommendation to prepare for a Second Licensing Round, which will extend over 12 months and will pave the way to the award of additional exclusive petroleum rights to develop Lebanon’s offshore hydrocarbon resources. Since then, the LPA undertook the required preparations and organized several marketing and outreach events during November & December 2018, the most important of which were Lebanon’s day in London (November 25-29 in parallel to PETEX Conference) & Lebanon – UK business investment forum (December 12). High profile Lebanese delegations met with International officials, delegates and industry players to explore the future of the petroleum sector and present the criteria of the upcoming pre-qualification round for interested companies wishing to take part in it. In addition, the Minister of Energy and the LPA members held fruitful bilateral meetings with international exploration companies interested to know more about Lebanon’s Offshore.
Sources have told Lebanon Gas and Oil that both exhibitions were at a high level of coordination and professionalism between the Lebanese delegations and UK-officials, especially with the participation of key economic sectors’ stakeholders headed by HE Prime Minister Saad Hariri. LPA were able to present the geological and geophysical features of the Lebanese offshore, provide an overview of the legislative and fiscal systems put in place and communicate with interested IOCs the second licensing round’s process as well as their potential participation.
The forums aimed at fostering and developing the bilateral relationship between Lebanon and the United Kingdom and served as a platform for investors and businesses to engage with Lebanon on recent developments and pressing opportunities. The 2nd round is expected to kick-off with a detailed timeline as soon as a Government is formed. The calendar will start with a prequalification round (2 months), a bidding process of around 6 months, and an evaluation and awarding phase (2 months), and the LPA has recommended to the MEW the opening of blocks 1,5,8 and 9 in this 2nd licensing round, with a strong re-confirmation of its right to explore in its southern waters.
With the ongoing fiscal challenges at all levels, the only hope remains in forming a new government the soonest, not only to kick-off the 2nd round processes, but also to abide by the April’s CEDRE conference promises, and start the investment plan development programs in all sectors.
Lebanon Gas and Oil Editorial