Gas licensing set to be further delayed


The absence of a president and the deep discord among ministers will further delay the offshore gas licensing round in Lebanon for near future, a minister and insiders said Wednesday.

“I still don’t have any idea when the Cabinet will hold a meeting to discuss and approve two decrees concerning the number of blocks that will be auctioned and the mechanism for revenue sharing,” Energy and Water Minister Arthur Nazarian told The Daily Star.

He added that Prime Minister Tammam Salam has not yet added the item to the Cabinet’s agenda.

The two decrees are essential to launch the licensing round, which has already been delayed five times due to political gridlock.

The minister refused to say whether there might be deliberate attempts on the part of powerful political parties to thwart the approval of the two decrees.

However, a source close to Parliament told The Daily Star that the failure to elect a president has further hampered efforts to pass the two decrees in the Cabinet.

“What made matters even worse is that Salam agreed in principle that the next Cabinet session should not exceed three hours. You can’t discuss a sensitive issue like oil and gas in only three hours,” the source said.

The prime minister has insisted on limiting the upcoming Cabinet session to three hours in order to avoid any confrontation between the ministers on key issues.

The source said there was no indication that the decrees would be approved anytime soon, noting that the Cabinet was more concerned about security developments along the Lebanese-Syrian border.

Some political quarters are pressing the Parliament to elect the president as soon as possible to help break the deadlock.

They warn that Lebanon is missing great opportunities to develop its potential oil and gas resources due to the absence of a president.

Parliament Speaker Nabih Berri has repeatedly urged the Cabinet to pass the two decrees, warning that procrastination would encourage Israel to siphon off gas from Lebanon’s southern waters.

Spectrum, a British oil company, has conducted 2-D and 3-D seismic surveys covering a 5,200 square kilometer area of Lebanon’s coast.

In addition, Petroleum Geo-Services (PGS) has covered a larger region of 9,700 square kilometers.

Some MPs have stressed the importance of accelerating the award process for blocks of territory that border Israeli waters. Israel has discovered natural gas fields in the territory bordering these blocks.

Spectrum has said that Lebanon’s southern territorial waters could hold more than 25 trillion cubic feet of natural gas.

However, experts stress that it is difficult to give accurate estimations of Lebanon’s potential oil and gas reserves both offshore and onshore until actual drilling starts.

There is also concern that the international oil companies may not be too enthusiastic to bid for the next licensing round in Lebanon amid a sharp drop in the oil prices and abundant supplies of crude in the international market.

Source: The Daily Star.