[Oil & Gas Updates]: Weekly Roundup, March 11, 2013

Lebanon – Reserve estimates:

Companies that have conducted seismic surveys in the past few years off the Lebanese shores have had a noticeable media presence this week, driven by a desire to market their products, roughly 20 days after the launching of the pre-qualification round. On 04/03, The Times reported that the potentially large oil and gas reserves have drawn a “stampede” of international companies. It quoted Spectrum’s chief David Rowlands as saying that the company has found what could potentially be the largest find in the Eastern Mediterranean so far, with as much as 25 tcf of natural gas, off the southern coast. Rowlands added: “We’ve seen 120 oil companies showing interest so far… I haven’t seen as much interest since Libya opened up in 2004.” Two days later, Per Helge Semb, regional manager of PGS, Lebanon’s other geological surveyor, warned it was too early to speculate on the country’s oil and gas wealth before drilling. But, Semb added, the  “GeoStreamer”, which PGS deployed during its 6th and 7th surveys (completed on 01/03), uses a more developed technology and offers better results, allowing PGS to say that the “prospectiveness is high”. The pre-qualification round is open until 28/03, and the window is still open for Spectrum and PGS to sell their seismic data to interested companies.

Lebanon – Pre-licensing round arrangements:

As of March 1, 2013, 29 companies, from 19 countries, have bought seismic data for just over $107m. Lebanon’s share amounts to $33.7m, around 31.4% of the total. 11 more have expressed interest to retrieve the information. How many will actually place a bid once the first licensing round is open remains to be seen. Lebanese daily al-Akhbar has published on 05/03 [Link in Arabic], a list of the companies that have bought the data:

  1. Chevron (United States)
  2. Esso Exploration (United States)
  3. Marathon Oil (United States)
  4. Occidental Oil (United States)
  5. Conoco Philips (Unites States)
  6. BP Exploration (United Kingdom)
  7. Cairn Energy (United Kingdom)
  8. Premier Oil (United Kingdom)
  9. Vital SA (United Kingdom/Switzerland)
  10. Total (France)
  11. GDF (France)
  12. ENI (Italy)
  13. Edison (Italy)
  14. Dong (Denmark)
  15. Maersk Oil (Denmark)
  16. Jx Nippon (Japan)
  17. Inpex (Japan)
  18. KNOC (South Korea)
  19. Statoil (Norway)
  20. LUKoil Overseas (Russia)
  21. Repsol (Spain)
  22. Shell (Netherlands)
  23. Rwe (Germany)
  24. OMV (Austria)
  25. Petronas (Malaysia)
  26. Woodside (Australia)
  27. Talisman Energy (Canada)
  28. Petrobras (Brazil)
  29. TPAO (Turkey)

On 07/03, it was reported that LukOil has reached an agreement with Total for a joint bid in Lebanon’s first licensing round, opening in May 2013. Companies conducting business in Israel, like Woodside or possibly LUkoil, may face additional challenges if they intend to work in Lebanon, and this is an element that must be taken into consideration.

Lebanon – Civil society:

In what seems like a prelude to a more involved civil society, international NGOs working to advance transparency in the petroleum sector have established a foot in Lebanon, organizing events, engaging local organizations and encouraging them to take part in their regional activities, even though some of these are not directly related to the Lebanese oil and gas sector. On March 9-10, Revenue Watch Institute organized a workshop on good governance in Libya’s oil sector in Beirut, focusing on revenue management. On March 7-8, Publish What You Pay (PWYP) hosted a regional workshop in Beirut, supported by the British and Norwegian Embassies in Lebanon, both taking the lead in reaching out to local civil society. The Workshop aimed at introducing PWYP work and coalition building to some selected outreach countries that are currently active in lobbying for transparency within Extractive Industries. Participants included representatives of CSOs from Iraq, Yemen, Libya, Egypt, Tunisia, Algeria and Lebanon. In his opening speech, the Norwegian ambassador, Svein Aass – who has an extensive experience in the Norwegian petroleum sector – announced that discussions for extending the Lebanese-Norwegian cooperation (within the framework of the Oil for Development programme) are underway. Throughout the two-day event, it was clear there was some sort of unease among participants over the British role, for “historical reasons” (Tunisian participant) and for a perceived involvement in corruption affairs (Libyan participant), preferring the more “neutral” and more “transparent” Norway. Frequent reference to former British Prime Minister Tony Blair’s role in pushing for EITI (Extractive Industries Transparency Initiative) was denounced by several participants, prompting Marinke van Riet, PWYP’s International Director, to clarify that the former PM is not, in any way, involved in PWYP.

Lebanon – Opposition oversight:

Former Prime Minister and current Future Movement MP Fouad Siniora called for strengthening transparency and accountability in the management of Lebanon’s natural wealth, whether in tenders, granting of exploration rights or revenue management. His comments came during a ceremony to launch the Abdullah bin Hamad al-Attiyah International Energy Award, in Qatar, on 05/03. Siniora presented the award to the chairman of the Administrative Control & Transparency Authority, Abdullah bin Hamad al-Attiyah. He pointed out that during his premiership, he insisted on establishing the best possible legislative and institutional framework for the country’s petroleum sector, “partly inspired by the Qatari and Norwegian experiences”. His comments can be understood as a form of diplomatic courtesy, since Qataris and Norwegians have a different approach for managing their petroleum sectors. They nevertheless indicate that the opposition is determined to monitor the government’s record in managing the sector. On 27/02, Future Movement MP Mohammad al-Hajjar held a press conference in the Parliament to blast Gebran Bassil’s record since his appointment as Minister of Energy and Water, accusing him of squandering public money, granting suspicious contracts and avoiding transparent procedures and wondered how he can be trusted to manage the country’s oil and gas wealth. Saad Hariri’s Future Movement, in the opposition since June 2011 and subsequently sidelined from the organization of Lebanon’s petroleum sector, is expected to be particularly vocal in its opposition to the government’s energy policies, especially that it presides over the largest bloc at the Parliament.

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