Lebanon Oil and Gas Exploration Status During Covid-19 Pandemic
06 Apr, 2020

The COVID-19 pandemic and the forthcoming global recession will have major consequences for budget considerations around the world as well as in Lebanon over the next few years, as recovery and growth are prioritized after many months of severely curtailed real economic activity.

Governments and industries around the world are grappling with responses to the novel coronavirus health crisis that is affecting the economy and daily life. The unfolding economic slowdown is compounded by the collapse of global oil prices and the erosion of global energy demand.

Lebanon extends offshore licensing round due to Covid-19 pandemic

The Lebanese Petroleum Administration (LPA) has extended its deadline for offers in the country’s second licensing round. The Covid-19 pandemic has meant more time for oil and gas exploration firms to bid on five blocks offshore Lebanon.

The deadline is now 1 June 2020,  moving from 30 April.

The Government of Lebanon approved the launch of the second offshore licensing round in April last year, in a bid to further develop its energy sector.

Lebanon Minister of Energy and Water Raymond Ghajar said: “Given the implications of the spread of coronavirus (Covid-19) worldwide, the Council of Ministers’ announcement of public mobilisation in Lebanon, and the resulting impacts on the course of the Second Offshore Licensing Round on deadlines given to International Oil Companies to undertake preparations to submit Licensing Round Applications.

“The Minister of Energy and Water issued a decision to postpone the deadline to submit applications to participate in Lebanon’s Second Offshore Licensing Round from the 30th of April 2020 to the 1st of June 2020. The decision will be published in the Official Gazette and on the LPA website.”

Note that Norwegian survey services firm Petroleum Geo-Services (PGS) is the official data provider of the round.

Lebanon Oil Exploration Continues Amid Preventive Measures

Gas and oil exploration off the Lebanese coast has not been obstructed by the coronavirus outbreak, as drilling continued in Block 4 and reached the depth of 3,000 meters, in preparation for reaching 4,200 meters in the coming weeks.

While many believed that the process might be affected by the new lockdown measures, member of the Lebanese Petroleum Administration (LPA) Dr. Nasser Hoteit told Asharq Al-Awsat that the exploration process was taking place “professionally and transparently.”
He stressed that all necessary health standards were respected to protect workers from the coronavirus.
The Tungsten Explorer drilling ship started operation on February 25, and is drilling the first exploration well in the Special Economic Zone in Block 4 off the Lebanese coast, about thirty kilometers from Beirut.
Hoteit, who is following-up the drilling operations with French Total, said there was close cooperation with the two other members of the Consortium, Italian ENI and Russian Novatek.
Eni announced last week that it was reviewing all of its energy projects in the region for the year 2020-2021, due to the outbreak of the coronavirus and the current situation in the oil market. The company said it would announce its revised plan this month.
Regardless of ENI’s position, Hoteit said that Total was drilling the wells.
“The two affiliated companies within the consortium are constantly updated about the developments,” he emphasized, adding that ENI’s upcoming decisions would not hinder the exploration process.
Sources told Asharq Al-Awsat the measures adopted to face the coronavirus outbreak included, among others, “reducing the alternation of shifts onboard the drilling ship,” and imposing a two-week quarantine at a dLebanese hotel to all the staff coming from abroad to work on the ship.

Note that many termination of energy projects comes after several international company announced their plans to postpone development until further notice due to the Covid-19 pandemic.

In February 2018, Lebanon signed its first offshore oil and gas exploration and production contracts for two energy blocks with a consortium of Total, Eni and Novatek. In December 2017, Total, Eni and Novatek consortium secured offshore energy rights from the Lebanese Government to find and develop oil and natural gas off the country’s Mediterranean coast.; This February, Total anchored a drilling vessel off the coast of Lebanon, set to drill the first exploration well in the country’s waters.

- Sources:
- Photo:
Reuters/Essam Al-Sudani

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