Exxon Mobil, Chevron, and the National
Iranian Drilling Corporation are among the 52 companies bidding to
take part in Lebanon’s first offshore gas licensing round, the Daily Star
reported, citing caretaker energy minister Gebran Bassil.
An announcement on which companies
qualified will be made on April 18, the newspaper cited Bassil as saying.
Lebanon is auctioning off licenses for
ten separate blocks off its Mediterranean coastal water in a bid to catch up with
Cyprus and Israel, which have moved forward with their exploration for oil and
In 2009, Israel discovered what is known as
the Tamar field in the Mediterranean Sea, which has 10tcf of natural gas. Then,
a year later, it discovered the Leviathan gas field, the largest discovery of
its kind for a decade, but smaller than the world’s biggest gas field, which is
shared by Qatar and Iran. Then, in 2011, two new offshore natural gas fields,
Sarah and Mira, were also discovered by an Israeli company.
Houston-based Noble Energy Inc, which is
helping Israel with its oil and gas exploration, also made a major gas
discovery last year offshore Cyprus, known as Block 12, estimated to have 7tcf
In its first study in 2010 of the Levant
Basin, the offshore Mediterranean region which stretches from the north of
Egypt to the north of Lebanon and south of Cyprus, the US Geological Survey
estimated that the area has about 122 tcf of undiscovered, technically recoverable
natural gas and holds 1.7bn barrels of undiscovered technically recoverable
While Israel and Cyprus have moved forward,
Lebanon has lagged behind. Progress on any issue in the country hinges on
political consensus among its various political factions and the tendering
process related to offshore gas exploration has been held back by political
Assuming that Lebanon's discoveries are
sizeable, the money would help the country to retire gradually part of its
public debt. It would also enable the country to slowly stop importing all of
its energy needs, as it does now, and help reduce its import bill. That would
then lower its trade deficit and in turn improve the balance of payments.
Lebanon's public debt, among the highest in
the world, reached US$56bn, according to the Association of Banks in Lebanon. The
country amassed the debt in the reconstruction phase following the end of civil
war in 1990 and a month-long conflict with Israel in 2006.
The debt-to-GDP ratio has declined to about
130 percent in 2012 from about 180 percent in 2006 and caretaker Prime Minister
Najib Mikati, has said he wants reduce the ratio to 100 percent of GDP over the
coming five years, and tabled the idea of establishing a sovereign wealth fund
to invest any potential revenue from oil and gas production in the future.
The prospect of such a revenue stream could
also enable Lebanon to shift domestic usage towards natural gas from diesel
consumption, which would help reduce the import bill and also lower the burden
of subsidising the state electricity company by as much
as US$1.5bn a year.
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