BEIRUT- A drilling rig arrived in Lebanon on Wednesday to begin offshore oil and gas exploration later this month, French energy group TotalEnergies (TTEF.PA) said.
The start of drilling offshore Lebanon follows a landmark U.S.-brokered agreement last year that set a maritime border between Lebanese and Israeli waters for the first time.
Lebanon hopes gas and oil discoveries will help it to reverse a crippling economic crisis that has cost the local currency more than 98% of its value, eroded the country’s foreign reserves and caused rolling blackouts across towns and cities.
TotalEnergies leads a consortium on the offshore project, known as Block 9, which includes Italian oil group ENI (ENI.MI) and state-owned QatarEnergy.
“The arrival of the equipment marks an important step in the preparation of the drilling of the exploration well in Block 9, which will begin towards the end of August 2023,” TotalEnergies said in a statement.
Lebanon’s Energy Minister Walid Fayad said in May that he expected to know whether there would be a discovery there by the end of the year.
ENI CEO Claudio Descalzi said in January that he was “positive” about a discovery there.
Lebanon’s Minister of Public Works and Transport, Ali Hamie, a cabinet member from the Iran-backed Hezbollah party, said in a statement the prospect of oil discoveries could bolster the economic fortunes of the cash-strapped country.
“This is survival (for Lebanon). Hopefully before the end of the year there will be positive results and Lebanon becomes an energy producer. This offers a glimmer of hope,” Hamie said.
A mechanism for the consortium to exploit possible discoveries that extend south from Block 9 past that border has also been established. That exploitation would be done on behalf of Lebanon but with a royalties system set up for Israel.
Lebanon does not recognise Israel’s right to exist and still considers itself at war with its neighbour, with laws barring contact with Israeli officials.
REUTERS
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