Technical, Political Disputes Hindering Oil Exploration as Cabinet Set to Tackle Topic

Head of the parliamentary energy committee MP Mohammed Qabbani stressed that the delay in exploring Lebanon's offshore gas and oil exploration is due to technical obstacles and other unannounced interests as officials are at loggerheads over the demarcation of the 10 maritime oil exploration blocks.

“We have agreed to open the tenders for three blocks as a first step, but the main obstacles impeding the process remains the adoption of the petroleum decrees,” Qabbani said in comments published in An Nahar newspaper on Monday.

The lawmaker pointed out that the exploration of Lebanon's natural wealth is still awaiting the endorsement of a decree, which tackles the demarcation of the 10 maritime oil blocks, and touches on the division of the Exclusive Economic Zone (EEZ) to several blocks that are not entirely equal. And another decree, which is linked to setting up a revenue-sharing model, tackles the contracts signed with the international companies.

Qabbani also revealed that a tax law should be also issued.

The MP said that the comments of the ministry of energy on the two decrees are almost finalized, and awaiting for the cabinet's approval.

However, the lawmaker expressed optimism over the near endorsement of the two decrees by the government, hoping it would be in the upcoming two months.

For his part, Energy Minister Arthur Nazarian told An Nahar that the last meeting for the committee tasked with following up the matter held a meeting three weeks ago.

“We sent our comments to Prime Minister Tammam Salam, who is currently reviewing our report,” Nazarian remarked.

Lebanon is seeking to renew the interest of international companies in offshore oil exploration despite the stalling of the government in issuing licensing and amid reports that Israel was “stealing” Lebanese gas.

Last August, the government postponed for the fifth time the first round of licensing for gas exploration over a political dispute.

The disagreements were over the designation of blocks open for bidding and the terms of a draft exploration agreement.

Asked about the dispute with Israel over a maritime zone that consists of about 854 square kilometers and suspected energy reserves there could generate billions of dollars, Qabbani said that Lebanon will not back down on its rights to explore its southern offshore blocks.

He revealed that the United States is playing a key role to resolve the dispute by proposing a solution that grants Lebanon two thirds of the area, but we rejected it.

“We will hold onto every square meter of our EEZ,” the MP added.

In March 2010, the U.S. Geological Survey estimated a mean of 1.7 billion barrels of recoverable oil and a mean of 34.5 trillion cubic meters of recoverable gas in the Levant Basin in the eastern Mediterranean, which includes the territorial waters of Lebanon, Israel, Syria and Cyprus.

Beirut argues that a maritime map it submitted to the U.N. is in line with an armistice accord drawn up in 1949, an agreement which is not contested by Israel.

H.K.

G.K.