Oil in Lebanon… Another challenging dream!

By Hussein Assi

Lebanon can join the club of oil and gas producing countries...

This is neither a joke nor a dream. This is rather a recently discovered reality, approved by seismic 3D surveys off the Lebanese coast which proved the existence of a substantial amount of gas.
Furthermore, and according to official reports, there is a high possibility of very promising commercial quantities of gas; quantities that are encouraging enough to probably cover Lebanon's national debt.

A Dream Come True

The story has started a few months ago, when two natural gas fields were discovered off the coast of the Zionist entity at the border with Lebanon. Since then, interest in drilling in the eastern Mediterranean has grown, and Lebanon started preparations for the drilling process despite all difficulties.

Lebanon has yet to explore off its own coast, but preliminary reports suggest increasingly large potential gas reserves, according to Energy and Water Minister Gebran Bassil, who said that data is getting even better. He noted that additional quantities, three to five times higher in the survey areas, were confirmed between the 2-D and 3-D surveys.
According to experts, there are no official estimates of the true value of the country's oil and gas reserves. However, Energy and Water Ministry sources revealed that estimates valued those reserves at tens of billions of dollars. The sources said that these estimates were based on accurate studies, performed by the ministry with the assistance of prominent experts. The sources said it was not possible to assert that the reserves were enough to cover all Lebanon's debts. "What is sure and certain, however, is that these reserves are enough to guarantee the future of all upcoming generations," the sources highlighted.
Lebanon's debt-to-GDP ratio currently stands at an estimated 137 percent, with a public debt of $53 billion as of October 2011.

Lebanon delaying tenders... 

Obviously, the discovery is more than exceptional, but... 

All seismic 3-D surveys that were carried out by European and US companies in the past few years proved that Lebanon has significant oil and gas wealth off the coast. This was enough for some officials, at the top of whom comes Speaker Nabih Berri, to start diplomatic efforts to pursue the issue, which quickly became the Lebanese people's main concern.

However, and contrary to Berri's enthusiasm, experts argue that the Lebanese government was "slow" in dealing with the issue. They point, for instance, that Lebanon has been slow to exploit its maritime resources compared with other eastern Mediterranean countries. They claim that the "Israeli" enemy, Cyprus and Turkey are all much more advanced in drilling for oil and gas.

Meanwhile, the Lebanese drilling process awaits the establishment of an administrative state oil body, after general agreement on the principle was reached within the Council of Ministers. This step is supposed to complete the various steps already taken in this regard, after the Lebanese Parliament passed in August 2010 an oil exploration bill, which calls for the establishment of a treasury and a committee to oversee exploration and drilling off Lebanon.

"There is nothing to worry about since our oil reserves are geographically protected," the Energy and Water Ministry sources assured. "The oil wealth is available thanks to God, protected thanks to the Resistance, legalized thanks to the Parliament and the ministry," the sources said. "What remains is to activate the process and make use of the wealth, and here resides the responsibility of the government," they went on to say.The sources rejected claims that the Energy Ministry was behind the obstruction taking place. "Minister Gebran Bassil assumed all his responsibilities, and the ball now is in the court of the government as a whole," they emphasized. "The previous governments of Fouad Saniora and Saad Hariri are the main responsible of the delay since they simply ignored such a first-level issue," the sources said, and explained that these governments refused to take action. "If they did what should have been done since the issue was raised for the first time, Lebanon would have now reached the production stage," they emphasized.

Who will conduct surveys and drilling?

In January, Lebanon's cabinet approved, in what was believed to be a historic achievement, decrees to implement a law to administer Lebanon's oil sector, opening the door to draw tenders to start oil exploration off the Lebanese coast. The decrees were hailed as an unprecedented achievement, but tenders for offshore exploratory drilling were not set up as they await the establishment of the oil and gas oversight committee.

Meanwhile, press reports said that twenty-seven companies have bought seismic surveys of the coastal waters, and several have expressed interest in drilling including British oil explorer Cairn Energy and London-listed Genel. Cairn's local partner is CC Energy Development SAI, an associated company of CCC, a Lebanese private company. Cove Energy, currently subject to a bid battle between Royal Dutch Shell and Thailand's PTT, has also said it is mulling entering the licensing round with Cairn and CCC. Other foreign companies have also shown interest in taking part in the drilling process. They come from US, Russia, Spain, Turkey, Norway, Austria, Holland, UK, Germany, Belgium, Denmark, France, Korea, Italy, Japan, Canada, Brazil and Switzerland.
According to Minister Gebran Bassil, launching the international tenders can and should be completed in the next three months. "The last step will be signing the first contract which we will do in the next year or less," he said, as he highlighted that the cabinet's approval of the ministry's plans would allow it to appoint a committee to oversee drilling and exploration. The committee should be appointed within a month, he said.

What if diplomacy fails?

The news about the imminent oil exploration may be one of the few encouraging challenges in the divided country. Yet, many obstacles should be overcome in order to reach the "happy ending". One of the main obstacles is, here also, related to Lebanon's one and only enemy, the "Israeli" enemy.
Indeed, Lebanon and the Zionist entity are disputing an 850-square-km stretch of sea off their coast that lies near an area where US and Zionist firms discovered the two massive natural gas fields. Suspected reserves there could generate billions of dollars. There are likely more untapped fields; the US Geological Survey (USGS) said that the Levantine Basin, which includes the territorial waters of Lebanon, "Israel", Syria and Cyprus could hold as much as 122 trillion cubic feet of gas - and 1.7 billion barrels of oil.

Thus, a prolonged debate emerged between Lebanon, Cyprus, Turkey, and "Israel" over the demarcation of maritime border for its Exclusive Economic Zone. Diplomatic efforts to reach consensus quickly emerged as UN officials said they were seeking to avoid another potential conflict between Lebanon and "Israel", but well-informed sources stressed that Lebanon will not give up its maritime rights, whatever the price was, and the Resistance has declared its readiness to take action whenever diplomacy fails in protecting the country's rights.

Meanwhile, Lebanon officially opened links with Cyprus over the issue, in light of the "memorandum of cooperation" signed between Cyprus and the "Israeli" enemy in December 2010 for surveying and mapping the area, without the Lebanese approval. The issue was raised by Speaker Nabih Berri during a recent visit in which he met Cypriot top officials and informed them Lebanon's refusal to the memorandum, believed to violate the country's sovereignty. Sources said that Berri has received promises that Cyprus would respect Lebanon's rights and interests. Lebanon is still expecting Cyprus to correct the mistake it has committed by signing the border agreement with "Israel," the sources pointed out, as they noted that Cypriot officials expressed readiness to cooperate with the Lebanese side to accelerate the achievement.

In conclusion, the news of Lebanon's oil wealth are still news, as nothing tangible was reached until the moment. It might be early to anticipate an oil and gas boom for Lebanon and to celebrate the discovery, but it is time to take action before Lebanese regret losing their right in their wealth. 

Yet, and thanks to experience, Lebanese are still concerned as they fear "mafias" would intervene, seek to politicize the whole issue and unfortunately... end the whole dream!

Source: moqawama.org