Lebanon to begin offshore energy exploration in block disputed by Israel

lebanon signs oil contractBEIRUT  – Lebanon said on Friday it had signed its first offshore oil and gas exploration and production agreements for two blocks, including a block disputed by neighboring Israel.

Lebanon’s energy minister said the dispute with Israel would not stop Lebanon benefiting from potential undersea reserves in the contentious Block 9, while consortium operator Total said it would not drill the block’s first well near the disputed zone.

A consortium of France’s Total, Italy’s Eni and Russia’s Novatek signed the agreements for the two blocks, which are among five that Lebanon put up for tender in the country’s much-delayed first licensing round.

Israel and Lebanon, which regard each other as enemy states, have exchanged threats and condemnation over the tender, amid rising tensions over territorial and marine boundaries between them.

“Today, we announce that we have started our petroleum path … after signing the agreements and launching the exploration activities,” Lebanese Energy Minister Cesar Abi Khalil said at a ceremony in Beirut.

The contracts had already been signed on Jan. 29.

Data suggests there are reserves in Lebanon’s waters, but no exploratory drilling has taken place to estimate their size.

Abi Khalil has said a second offshore licensing round will happen once the first commercially viable discovery is made.


One   study  in 2008 pointed  out that the Lebanese government would bring a return of almost $8 billion annually from first oil or gas discovery to the next 20 years,
One study in 2008 pointed out that the Lebanese government would bring a return of almost $8 billion annually from first oil or gas discovery to the next 20 years,

The first exploratory well will be drilled in Block 4 in 2019, said Stephane Michel, Total’s head of exploration and production in the Middle East and North Africa.

The second well will be drilled in Block 9 more than 25 km (15 miles) from the maritime border claimed by Israel, he said at the ceremony. “There is no reason not to proceed in this way,” Michel added.

Lebanon has an unresolved maritime border dispute with Israel over a triangular area of sea of around 860 sq km (330 square miles) that extends along the edge of three of its total 10 blocks.

Total said in a statement the disputed waters comprise 8 percent of Block 9 and that its exploration well “will have no interference at all with any fields or prospects” in the disputed sliver of water.

lebanon offshore oil, gas blocksLebanese and Israeli officials said David Satterfield, acting assistant U.S. secretary of state, was in Israel last week and in Lebanon this week on a mediation mission. U.S. officials confirmed his travels without detailing his agenda.

Israel last went to war in Lebanon in 2006, against the heavily armed, Iran-backed Shi‘ite Muslim Hezbollah movement. Israel says Hezbollah has increased in strength since helping sway the Syrian civil war in President Bashar al-Assad’s favor.

Abi Khalil told Reuters the heightened tension between the two countries in recent weeks has “not had an effect” on the consortium’s plans to explore.


Lebanon is on the Levant Basin in the eastern Mediterranean where a number of big sub-sea gas fields have been discovered since 2009.

Eni reported the Mediterranean’s largest discovery in 2015: the Zohr field off Egypt which holds an estimated 30 trillion cubic feet of gas.

And on Thursday Eni said it and Total had discovered a promising natural gas field off Cyprus.

Fuad Krekshi, Eni’s executive vice president of the Middle East, said Eni’s entry into Lebanon’s market is a “natural consequence” of its existing role in the Mediterranean region.

Total, with 40 percent, heads the consortium drilling Lebanon’s first offshore well. Eni also holds 40 percent and Novatek 20 percent.

Vyacheslav Mishin, head of Novatek’s new Lebanon office, said the projected global growth in natural gas and LNG consumption was key to his company’s future growth.

“The Middle East market for LNG consumption is forecast to grow by more than 100 percent by 2030,” he said.


Kurdistan oil pipeline

Lebanon's Energy Minister Cesar Abi Khalil, explains on the map about the offshore block 9 which Israel claims, during an interview with the Associated Press at his office, in Beirut, Lebanon, February 1, 2018. (Hussein Malla/AP)
Lebanon’s Energy Minister Cesar Abi Khalil, explains on the map about the offshore block 9 which Israel claims, during an interview with the Associated Press at his office, in Beirut, Lebanon, February 1, 2018. (Hussein Malla/AP)

Potential reserves could be used domestically or exported.

Both are attractive for Lebanon which has been short of electricity since its 1975-90 civil war and has an anemic economy battered by war in neighboring Syria and political tensions.

It is also hoped the developing oil and gas industry will create jobs and economic growth. To this end, the EPA contracts say 80 percent of people employed by the consortium should be Lebanese, with priority given to local suppliers and contractors.

But the commercial viability of potential reserves depends on energy market prices, the ability to secure customers and the cost and politics of building export infrastructure.

“For all the fields in the region, there are commercial, political, and technical challenges that hinder exploitation for the purposes of export,” Tareq Baconi, a European Council on Foreign Relations visiting fellow on MENA energy told Reuters.

“Many of the challenges for export will be faced by Lebanon as well when, and if, it discovers offshore reserves,” he said.


  • Y K

    “Lebanon to begin offshore energy exploration in block disputed by Israel”

    “Lebanon” can’t take care of its garbage on land. So it won’t begin any offshore explorations anytime soon. The multinationals doing the actual prospecting will have to tread carefully, unless they want their investments to evaporate (literally).

    • Danny Farah

      Don’t worry about us Y K and we will ship over the garbage toward Israel before we commence the drilling. Worry about your country and this is not the Lebanon you have been used to stump on as you used to. The glory days are gone and instead of being smart and use your brains to create peaceful atmosphere all you want to to grab territories and from Land and the ocean. The area where Lebanon will be drilling does not belong to Israel and whether we drill it or not its not Israel damned business. Sod off.

      • Y K

        “Don’t worry about us Y K”

        Believe me, I don’t. In fact (and sadly so), looks like even the Lebanese themselves ceased to. Hence the self-abdication to the gang of bearded murderers in caftans and to their butt-lickers.

        As to the Israelis, the last to “worry” about you was Begin. He had a sentimental streak, and the Gemayels managed to sell him the “save us from the Christian Holocaust” line. Not happening again. You’re on your own, mate. 🙂

        • Danny Farah

          Begin and Sharon the animals may they both rot in hell who had him killed and and you only used us to help yourself. Begin was trying to force a peace treaty and Bashir told him we can’t do it yet with the presence of Syrian army and half of Lebanon is fractured thanks to the Plan of Henry Kissinger and Jewish Mossad who convinced their agent Arafat to take over Lebanon and divide then the small army. Bashir wanted peace with you and I am sure lots of Lebanese want it to. But you people are very selfish and you want to take and don’t give anything in return. Going back to the killing of Bashir.. Are you telling me with the best intelligence in the world, the Mossad didn’t know Bashir was going to be killed? or basically you figured since Bashir was not going to do what you wish may as well get him killed and blame it on the PLO and then the LF will go and attack the camps. And lastly if you didn’t take over palestinians homeland and kicked to Jordan and Lebanon the Christians would not have a problem dealing with them. So it’s you who caused the Holocaust in fact.

          • Y K

            Do you really expect me (or anybody) to read all of this, from beginning to end, in that order? I never made it past “animals”. 🙂

          • Hind Abyad

            Then what are you doing here