Lebanon's government approved late on Wednesday the conditions for companies bidding in the country's first offshore oil and gas exploration license, as Israel and Cyprus press on with plans to develop their fields in the contested waters of the Mediterranean.
A list of qualified explorers is expected to be issued by March 31 and they can place bids starting May 2 for six months, Lebanon's the Daily Star reported. Royal Dutch Shell, Cairn Energy and Cove Energy are among companies that have expressed interest in bidding for a license, the newspaper said.
Though Lebanon's parliament passed legislation in 2010 that was supposed to pave the way for the exploration licences, the country has lagged behind Israel and Cyprus, which have discussed the possibility of constructing liquefied natural gas (LNG) terminals or a pipeline to transit gas. The discoveries off the coast of Cyprus are estimated to be worth about US$75bn, according to Nicosia-based Sapienta Economics, an economic research consultancy, while Israel's range between US$140bn and US$240bn, depending on different industry estimates.
In September, the Daily Star reported the size of the country's offshore natural gas deposits in the eastern Mediterranean is greater than that of Cyprus and Syria, citing Spectrum Company, which carried out 3D seismic surveys off the southern shore of Lebanon. The surveys estimated the country has about 25 trillion cubic feet (tcf) in the 3,000 sqkm zone, which puts the country's estimated findings ahead of Syria and Cyprus combined.
For Lebanon the potential fuel reserves could help the country lower its public debt, among the highest in the world, which reached US$57.6bn at the end of November, 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. However, any extraction or production is unlikely to take place before five to eight years, according to analysts and industry experts.
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 the area has about 122tcf of undiscovered, technically recoverable natural gas and holds 1.7bn barrels of undiscovered, technically recoverable oil.
In 2009, Israel discovered what is known as the Tamar field in the Mediterranean Sea, which has 10 tcf of natural gas. Then, a year later, it discovered the Leviathan gas field, the largest discovery of its kind for a decade, but nowhere near the world’s biggest gas field, which is shared by Qatar and Iran. In 2011, two new offshore natural gas fields, Sarah and Mira, were also discovered, by an Israeli company.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.