Lebanon, Qatar sign deal for gas exploration in blocks 4 and 9
Lebanon, two international oil giants and state-owned oil and gas company Qatar Energy signed an agreement Sunday for the Qatari firm to join a consortium that will search for gas in the Mediterranean Sea off Lebanon's coast.
The deal inked in Beirut brings Qatar into Lebanon's gas exploration market three months after Lebanon and Israel signed a U.S.-mediated maritime border agreement ending a yearslong dispute. Qatar Energy is replacing 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 move forward with offshore oil and gas development for two of 10 blocks in the Mediterranean. The borders of one of the two blocks were disputed by neighboring Israel until a maritime border deal was reached last year.
The companies did not find viable amounts of oil or gas in block No. 4 north of Beirut, and drilling in block No. 9 in the south has been repeatedly postponed because of the dispute with Israel.
The agreement was signed by Saad Sherida al-Kaabi, Qatar's Energy Minister; his Lebanese counterpart Walid Fayyad; Claudio Descalzi, the CEO of Italy's state-run energy company, ENI, and TotalEnergies CEO Patrick Pouyanné. The signing ceremony was attended by Lebanon's caretaker Prime Minister Najib Mikati.
"Our concentration will be on block number nine," al-Kaabi said, adding that this could be a first step for Qatar Energy to play a bigger role in future explorations.
Back in 2017, Total and ENI each got 40% stakes in the blocs while Novatek got 20%. Under the deal signed Sunday, Qatar Energy will take the 20% stake of Novatek in addition to 5% each from ENI and Total leaving the Arab company with a stake of 30%. Total and ENI will have 35% stakes each.
Lebanese media reported that exploration in block No. 9 could begin before the end of November. "We are committed to execute this first well as soon as possible," TotalEnergies' Pouyanné said. The company said two months ago it would soon launch exploration activities in search of gas off Lebanon's coast.
Cash-strapped Lebanon hopes that future gas discoveries will help the small Mideast nation pull itself out of the worst economic and financial crisis in the country's modern history.
Since the crisis erupted in October 2019, the Lebanese pound has lost more than 90% of its value. Tens of thousands have become jobless and three quarters of the population of 6 million, including 1 million Syrian refugees, now lives in poverty.
"It is an honor to be in Lebanon with these two companies," said Descalzi. "We will work all together to give the best to your country."
According to energy consultant Naji Abi Aad, "Qatar's entry into the consortium is above all politically significant."
He told AFP that Doha's involvement "brings a political guarantee" as Lebanon grapples with deep economic, political and social crises.
Qatar is among the world's top liquefied natural gas exporters and its state-owned company operates all of the country's oil and gas exploration and production, making the nation among the world's richest per capita.
Shame that Qatar will invest in Lebanon renewable energy neglected by Fayyad and FPM ministers. Fayyad electricity plan is backward looking, full of corruption pitfalls and will bankrupt and pollute Lebanon. He did not promote renewable knowing well that Lebanon is blessed with solar, wind, hydro, and wave power. Is Fayyad aware of UAE Masdar contracts to generate solar power for 2.4 cents a KW or Saudi contract for solar power at 2 cents/KW? Does he understand solar is more efficient in high mountains than desert as PV negatively affected by heat? Is he aware of WDRVM, a Syrian firm producing large wind turbines (WT)? Has he considered WT off-shore near Tripoli islands or on mountain tops, today’s cheapest form of energy? Hydro power? benefit of distributed power and net-metering? Is he aware 20% incentive means 80% from private funds quadrupling power output? Or 4 solar panels provide 30 yrs of free 15,000 KM/year for every electric car?
The biggest theft and corruption in history is evaporating $20 billions in foreign reserve on fake subsidies and illegal crossings while government under control of Hizbollah and FPM. Second biggest corruption and mismanagement is the $50 billion deficit for EDL since FPM took control. Reforms start by bringing these culprits to justice. The axis of evil of Hizb/FPM is crumbling and our hope to see their leadership that took Lebanon to Hell, sold our freedom and democracy, stole people lifetime savings, and made us a beggar nation and Banana Republic in prison soon.