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Lebanon Speeds Push to Ratify Energy Law After Gas Discoveries Off Israel

Lebanese leaders are speeding up efforts to ratify an energy law amid concern that Israel’s offshore exploitation of natural gas could infringe on Lebanon’s claim to gas in adjacent waters.

Parliament Speaker Nabih Berri convened a meeting of parliamentary committees to discuss the issue on June 21. Berri is the leader of the Shiite Muslim Amal movement, a close ally of the anti-Israel movement Hezbollah.

“We need to move quickly, as Israel’s explorations are fast approaching Lebanon’s waters, and we cannot sit and watch,” Berri’s adviser Ali Hamdane said in a June 24 telephone interview.

Berri said he would chair a new session on Monday at which parliamentary committees could discuss details of the law and the official bodies that are to oversee exploration. The draft law must eventually go before parliament for ratification.

Large discoveries of gas off Israel’s Mediterranean coast have sparked a debate between the neighboring countries over their respective rights to energy resources in the area. While Lebanon has not officially accused Israel of exploring for gas outside its territorial waters, the issue has inflamed tensions because the two states are technically at war.

Israel’s Minister of National Infrastructures Uzi Landau warned on June 23 that his government was willing to use force to protect its undersea gas finds .

U.S.-based Noble Energy Inc. and Israeli companies have announced two offshore gas discoveries in the past 18 months. Noble has said the deposits may hold 24 trillion cubic feet of gas: that would be twice the size of Britain’s proved gas reserves in 2009, according the CIA’s World Factbook.

‘Exciting New Province’

Waters off Lebanon and the nearby island of Cyprus may prove to be “an exciting new province for oil and gas,” Norway-based Petroleum Geo-Services said in October in a statement on its website.

Lebanese Energy Minister Gebran Bassil said on June 17 that his government has warned Noble not to work near Lebanon’s maritime economic zone. He said his country would not allow Israel or a company working on its behalf “to take any amount of our gas that is falling in our zone.”

The government drew up a draft energy law in 2007, with help from Norwegian legal experts. Bassil said he hopes parliament will ratify the oil and gas exploration law by the end of the summer so the country can start seeking bids from interested companies.

Hezbollah, which fought a war with Israel in 2006, urged the law’s prompt adoption.

‘Necessary Measures’

“The indicators and evidences which emanated from the Zionist enemy concerning the hydrocarbon deposits in the water basins show the need to speed up the necessary measures to help benefit from such vital energy resources,” Hezbollah lawmakers said in a statement on June 23.

Israel’s exploration for gas has aggravated divisions within Lebanon, with the Hezbollah-led opposition accusing the government of pro-Western Prime Minister Saad Hariri of neglecting the country’s offshore energy potential. A meeting of parliamentary committees on June 22 failed to make progress toward ratifying the law because of disputes between the two sides.

The opposition has pressed for progress. “There is neglect,” said Hamdane, Berri’s adviser. “This issue has taken much too long, the government has been studying this for several years now, and this is not acceptable.”

Berri said he would chair the new session on Monday.

Revenue from any offshore gas finds could help Lebanon finance its public debt, which totaled $52 billion at the end of February, or about 147 percent of the country’s gross domestic product.

“Lebanon also badly needs these vital resources because it has a frightening debt which we are finding hard to repay,” Hamdane said. “These resources are necessary to help a country under tremendous social pressures, including unemployment and immigration.”

To contact the reporter on this story: Nayla Razzouk in Amman at nrazzouk2@bloomberg.net.

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