Middle East Strategic Perspectives – Eastern Mediterranean New Frontiers:
Middle East Strategic Perspectives has agreed to a media partnership with Marcus Evans for the second edition of Eastern Mediterranean New Frontiers Forum, which will be held in London, on 22-23 April 2013. The event, attended by senior-level executives and government officials, will offer an opportunity to:
- Examine geological horizons of the Eastern Mediterranean
- Assess deepwater exploration challenges and discuss the ways around them
- Review Cyprus’ second licensing round and learn from companies’ success stories
- Examine the regulatory framework for oil and gas exploration in the Eastern Mediterranean
- Evaluate the current downstream infrastructure in the Eastern Mediterranean and assess the opportunities for future development.
Panels will address a wide range of subjects including: regional offshore projects (Lebanon case study is scheduled on the first day), commercializing eastern Mediterranean discoveries, current policy and regulations, drilling technologies etc. A detailed agenda will be provided once it is finalized.
Lebanon – First licensing round:
Energy Minister Gebran Bassil launched the pre-qualification round for companies wishing to bid for an offshore hydrocarbon license during a press conference, on Friday, 15/02, along with the members of the Petroleum Administration. The event was attended by a host of ambassadors and diplomatic representatives from the United States (Ambassador Maura Connelly), Europe (including UK ambassador Tom Fletcher) and Asia, in what seemed like a strong backing for the Ministry and the government’s work in this field, regardless of certain political alliances they might perceive with suspicion. Representatives of major oil and gas companies were also present at the event.
Interested companies have until March 28, 2013 to apply, as operators or non-operators (for more details on the application procedure please visit: http://www.lebanon-exploration.com). The list of qualified companies will be announced by April 18, 2013, and the first licensing round will be launched on May 2, 2013, and will be open for a period of six months. According to Bassil, contracts will be signed in February 2014, and the first drilling is expected by the end of 2015. The process is now autonomous and impervious to political deadlock, whether parliamentary elections are held next June or not, and whether a new cabinet is formed after these elections or the prospect of a lengthy political void taking place instead. However, two important steps still need to be finalized before May 2013: adopting a decree defining offshore blocks and their coordinates and approving the model exploration and production sharing contract. If these deadlines are respected, Lebanon will be following what Citigroup called the “positive scenario” in its recent report on Lebanon and the prospect of exploitation of its offshore resources [see “Lebanon – Economic prospects”, in our Feb. 11, 2013 roundup].
The Minister thanked friends and partners who helped Lebanon get this far, particularly the Norwegians for the assistance they provided through the years, free of charge [Since 2007, Norway has been assisting the Lebanese government, within the framework of its Oil for Development programme, in drafting legislation and capacity building]. Bassil also added that Lebanon, starting with the oil and gas sector, is getting rid of corrupt practices in which it was “draped”, and hoped other sectors would follow suit.
Lebanon – Reserve estimates:
Beicip Franlab, a French energy consultant group, which among other things analyses seismic studies and with whom the Ministry of Energy and Water signed an agreement in 2011 to prepare the tenders for offshore oil and gas exploration, announced that waters off the northern coast may hold between 440 and 675 million barrels of oil and 15 trillion cubic feet of gas. Beicip Franlab’s website is not regularly updated so we’re not able to link directly to the announcement. The information, published by Lebanese daily Annahar on 13/02, was quickly relayed by Lebanese media (press, TV, news websites etc). It came two days ahead of the formal launching of the first licensing round by Energy Minister Gebran Bassil on 15/02 and clearly boosted expectations.
The first revelation about the oil and gas potential in northern waters came on Dec. 8, when, in an interview with Lebanese daily Al-Akhbar, Bassil announced that initial analysis indicated that an area of around 660 Km2, off the coast of Tripoli and Akkar, seems to hold an even bigger potential than the field that was first studied off the southern coast [see “Lebanon – seismic surveys” in our Dec. 10, 2012 roundup]. Ironically, this means that different regions, with different sectarian and political allegiances, can claim a share of the wealth, and might, in the future, be a cause of dispute. Back in December, the news was immediately seized by local leaders, always thrilled by lucrative opportunities [see “Lebanon – Internal politics” in our Dec. 17, 2012 roundup].
Lebanon – Environment:
Environmental concerns arising from the eventual exploitation of offshore resources are starting to surface. The 2010 Offshore Petroleum Resources Law certainly addresses the issue of environment but only provides a broad framework, and gives a central role to the Ministry of Environment in this regard. Phase one of the Strategic Environmental Assessment was completed in April 2012. The report outlines recommendations to oil and gas companies, including the identification of the most vulnerable areas. Annahar published a report on 12/02, in part dedicated to environmental concerns. The report quoted public policy expert Georges Sassine who pointed to the Leviathan 2 leak in Israel, and urged the authorities – government and parliamentary committees – to address the issue without delay. He called for the establishment of an independent body tasked with monitoring the implementation of environmental regulations.
It would also be interesting to see if these topics will be debated during the campaign preceding the parliamentary elections (scheduled in June 2013). This is the first occasion that will allow us to measure how active and vocal civil society is going to be in following up on environmental concerns. The Green Party, young and modest in numbers, has not seriously addressed the issue yet.
Lebanon – Crisis communication:
Two incidents this week brought to attention the need for an effective communication strategy. First, the opposition accused the government of facilitating fuel shipments to Syria, in what it considered as a backing of the Assad regime. Second, on 16-02, a day after Energy Minister Gebran Bassil launched the pre-qualification round, Lebanese daily Almustaqbal accused Bassil of selling seismic data for millions of dollars to 29 international oil companies. In fact, the government was not involved in shipping fuel to Syria, private companies were, and some of these are backed by opposition parties. And Bassil did not amass millions from selling seismic data. It is standard procedure for the Ministry to sell such data to companies interested in the hydrocarbon potential off the Lebanese coast. An interesting workshop, organized by the Skeyes Center for Media and Cultural Freedom in cooperation with the Global Center for Journalism and Democracy, will be held on 15-17 March, to train Lebanese economic and business journalists on covering news related to the oil and gas sector.