Lebanon readies to tap gas wealth after FPM, Amal agreement

BEIRUT: The Free Patriotic Movement and Speaker Nabih Berri's Amal Movement have resolved differences that have long delayed offshore oil and gas exploration in Lebanon's exclusive economic zone (EEZ); paving the way for a Cabinet session to kick off the process.

The first licensing round for offshore gas exploration has been postponed several times over the past years due to political disagreements over two decrees pertaining to the designation of blocks that would be open for bidding and the terms of a draft on the Exploration and Production Agreement (EPA).

"Today, we can officially say that the Free Patriotic Movement and the Amal Movement have agreed on previously disputed issues relating to Lebanon's offshore oil and gas exploration," FPM President Gebran Bassil told a news conference following his meeting with Berri and Finance Minister Ali Hasan Khalil.

Khalil, a member of Berri's Amal Movement, called on Prime Minister Tamam Salam to convene the Cabinet as soon as possible to issue the decrees that would pave for the first oil and gas licensing round.
"We call on the prime minister...to include the oil and gas issue on the cabinet agenda to pass the decrees," he said.

The FPM and the Amal Movement have long disagreed over whether to open the entirety of Lebanon's EZZ for bidding at once or adopt the gradual licensing of blocks.

The Lebanese Petroleum Administration, a regulatory body in charge of managing the petroleum sector in Lebanon, has already drafted and submitted to the Energy Ministry an EPA proposal and recommended, according to sources, the gradual licensing of the 10 blocks that form Lebanon's EEZ.

Experts say the gradual licensing of blocks would enable the government to secure better terms in future licensing rounds.

Lebanon's potential offshore natural gas reserves are estimated at 25 trillion cubic feet.

Industry sources had previously warned that some international companies that prequalified for the first licensing round were re-evaluating the situation in light of the repeated delays as a result of the government's failure to issue the two decrees.

Out of the 52 companies that applied for prequalification, 46 were accepted and of those 12 can bid as operators and 34 as non-operators.