BEIRUT (AP) – Lebanon, two international oil giants and the state oil and gas company Qatar Energy on Sunday signed an agreement through which the Qatari firm will join a consortium that will explore gas in the Mediterranean Sea off the Lebanese coast.
The agreement, signed in Beirut, brings Qatar into the Lebanese gas exploration market, three months after Lebanon and Israel signed a US-brokered maritime border agreement that ended a dispute that lasted for many years. Qatar Energy replaces a Russian company that withdrew from the Lebanese market in September.
In 2017, Lebanon approved licenses for an international consortium including France’s TotalEnergies, Italy’s ENI and Russia’s Novatek to advance offshore oil and gas development for two blocks out of 10 in the Mediterranean Sea. The borders of one of the two blocs were disputed by neighboring Israel until an agreement was reached on maritime borders last year.
Companies have not found any usable amounts of oil or gas in Block #4 north of Beirut, and drilling in Block #9 in the south has been repeatedly postponed due to the dispute with Israel.
Lebanon and Israel have been officially at war since the establishment of Israel in 1948.
The agreement was signed by Saad Sherida al-Kaabi, Qatar’s energy minister; his Lebanese counterpart Walid Fayad; Claudio Descalzi, CEO of Italian state energy company ENI, and TotalEnergies CEO Patrick Pouyanné. The incumbent Lebanese Prime Minister, Najib Mikati, attended the signing ceremony.
“Our focus will be on block number nine,” al-Kaabi said, adding that this could be the first step for Qatar Energy to play a bigger role in future exploration.
In 2017, Total and ENI each received a 40% interest in the blocks, while Novatek received 20%. Under the agreement signed on Sunday, Qatar Energy will take a 20% stake in Novatek along with 5% each from ENI and Total, leaving the Arab company with a 30% stake. Total and ENI will have 35% of the shares each.
Lebanese media reported that exploration in Block #9 could begin before the end of November. “We are committed to drilling this first well as soon as possible,” said TotalEnergies’ Pouyanné. The company said two months ago that it will soon start exploration activities in search of gas off the Lebanese coast.
Cash-strapped Lebanon hopes future gas discoveries will help the small Middle Eastern nation out of the worst economic and financial crisis in the country’s modern history.
Since the outbreak of the crisis in October 2019, the Lebanese pound has lost more than 90% of its value. Tens of thousands have been left jobless and three quarters of the 6 million inhabitants, including one million Syrian refugees, now live in poverty.
“It is an honor to be in Lebanon with these two companies,” said Descalzi. “We will all work together to do what is best for your country.”
Qatar is one of the world’s leading exporters of liquefied natural gas, and its state-owned company manages all of the country’s oil and gas exploration and production, making the nation would be one of the richest per capita in the world. The tiny country, bordered by Saudi Arabia to the east, shares control with Iran of the world’s largest undersea natural gas field in the Persian Gulf.
Bassem Mroue, The Associated Press
