Aoun Launches Drillship Work, Diab Says Economic Hope Grows

President Michel Aoun on Thursday launched the work of a French ship that will drill for oil and gas in block 4 of Lebanon’s Exclusive Economic Zone.

“Today is a happy day for us and for all Lebanese. We hope the dream which we sought to achieve will be realized. Today is a historic day,” Aoun said at the ceremony.

Thanking the Total, Eni and Novatek firms for their efforts, the president hoped there will be “cooperation with them in other fields in Lebanon’s Exclusive Economic Zone.”

Prime Minister Hassan Diab for his part said that “from the middle of complete darkness, today a large window of light is being opened.”

“It increases hope that Lebanon would overcome the severe economic crisis,” he said.

“It is a historic day on which we start drilling offshore to turn Lebanon into an oil producing country,” the premier added.

The ceremony at sea contrasted sharply with Lebanon's crippling financial and economic crisis, including a deepening liquidity crunch and soaring public debt. The limits have prompted protests against the financial institutions -- including violent attacks on ATM machines and some bank branches.

Lebanon has one of the highest debt to GDP ratios in the world, standing at about $87 billion or more than 150% of the country's GDP. Teetering on economic and financial collapse, the Lebanese government is now considering whether to pay or default on its $1.2 billion Eurobond debt, which matures next month.

Lebanon has never defaulted on its debt payments. Defaulting could be costly to the national economy and banking system, which until the recent financial crisis was one of Lebanon's most profitable and reputable sectors.

Experts say it would be years before the country could start extracting and reaping the benefits of any oil found in its waters, should any be found.

The media office of Lebanon's Energy Minister said the excavation work will start in a few days, after receiving drilling equipment and supplies from the logistics base at Beirut port.

In 2017, Lebanon approved the licenses for an international consortium led by France's Total, Italy's ENI and Russia's Novatek to move forward with offshore oil and gas development for two of 10 blocks in the Mediterranean Sea, including one that is partly claimed by Israel.

Total said the first well will be drilled at a depth of 1,500 meters (4,920 feet). The exploration well aims at exploring targets located more than 2,500 meters (8,200 feet) below the sea bed. The drilling of the well is estimated to last two months, after which the drill ship will leave Lebanon, Total said.

At a later stage that hasn't yet been scheduled, drilling should begin in Block 9, part of which Israel also claims. A major find in Lebanon's southernmost waters could raise the possibility of a dispute with Israel.

The U.S. has been mediating between Lebanon and Israel over the nearly 860 square kilometers (330 square miles) of the Mediterranean Sea claimed by both sides.