Sept. 4 (Bloomberg) -- Lebanon delayed its first auction of exploration licenses for offshore oil and natural gas after the government failed to vote on decrees needed to start the bidding process, Energy Minister Gebran Bassil said.
The bid round, postponed to Dec. 10 from Nov. 4, may be delayed again if the cabinet doesn’t vote for the decrees by Oct. 2, Bassil said in a press conference in Beirut today. A meeting between the Energy Minister and caretaker Prime Minister Najib Mikati yesterday failed to approve a special government session for the necessary vote.
International companies such as Exxon Mobil Corp. and Total SA have pre-qualified to bid for energy exploration in the Mediterranean Sea off Lebanon’s coast, near Israeli waters where Noble Energy Inc. has discovered commercial quantities of gas. Lebanon, wracked by sporadic violence as the civil war in negihboring Syria spills over, seeks revenue to help reduce its $56 billion public debt, the highest as a share of annual economic output among 22 Arab nations at 135 percent of gross domestic product.
“This is a big loss for Lebanon,” Bassil said. “This delay gives an advantage to Israel,” which is seeking export markets for its gas and benefits from hold-ups in the development of Lebanon’s energy resources, Bassil said.
If a vote on the decrees is held by Oct. 2, the government can proceed with its plan to sign contracts by March 31, 2014, he said. The caretaker government has no legal right to issue decrees.
Lebanon has opened offshore blocks 1, 4, 5, 6 and 9 for exploration, and may make available a total of 10 blocks, including some in areas contested by neighboring Israel, Bassil said. The two nations haven’t defined their maritime border.
The government needs to approve decrees that would demarcate the blocks to be explored, to establish production-sharing contracts and specify tender protocols, Assem Abou Ibrahim, president of the Petroleum Authority said in a May 2 interview. Lebanon passed an oil law in 2010 and appointed a six-member petroleum board in November
Companies which prequalified to bid as operators are Chevron Corp., Royal Dutch Shell Plc, Eni SpA, Anadarko Petroleum Corp., Petroleo Brasileiro SA, Statoil ASA, A.P. Moeller-Maersk A/S, Repsol SA, Inpex Corp. and Petroliam Nasional Bhd, as well as Exxon and Total, according to the energy ministry’s website.
Among the 34 companies that pre-qualified as non-operators are Genel Energy Plc, Suncor Energy Inc, Marathon Oil Corp., Santos Ltd., OMV AG, INA Industrija Nafte DD, GDF Suez, MOL Hungarian Oil and Gas Plc, Cairn Energy Plc, Cairn India Ltd., Dana Petroleum Plc, Japex Corp., Mitsui E&P Middle East BV, Korea Gas Corp., Lukoil Overseas Lebanon BV, Rosneft OAO, TPAO Turkiye Petrolleri AO, Crescent Petroleum Co., Dana Gas PJSC, and Dragon Oil Plc, the ministry said on its website.
To contact the reporter on this story: Nayla Razzouk in Dubai at firstname.lastname@example.org
To contact the editor responsible for this story: Stephen Voss at email@example.com