20 August 2010
BEIRUT: Lebanon is keen to start all-out offshore gas and oil exploration by the start of 2012 once interested companies submit their bids next year, Energy and Water Minister Jebran Bassil said on Thursday.
Speaking during a news conference, Bassil stressed that the oil law which was approved by the Parliament two days ago should be seen as a big achievement for Lebanon.
Bassil and other officials also touched on the deteriorating electricity conditions in most parts of the country and Electricite du Liban (EDL) reiterated that the problem will get worse if the government does not allocate additional funds to build more electricity plants that can cover the growing demand of the market.
He emphasized that water demarcation, to determine offshore Lebanese boundaries, must begin as soon as possible.
“The passage of the law is the first step which will put Lebanon on the road of oil industry. We can’t claim that we have become an oil producer but rather a state with crude resources and this is a serious test for our capability,” Bassil said.
There is no official accurate data on the actual size of the gas and oil reserves both offshore and on shore. But some experts believe that Lebanon may be sitting on oil and gas reserves valued at more than $1 trillion.
“The first thing we should do is to work closely with companies that have financial means in addition to vast experience. These two elements are lacking in Lebanon,” Bassil said.
He added that Lebanon will split profits with companies that explore for oil and gas offshore.
Bassil said the law would operate on the principle of “production-sharing.”
And while Lebanon has passed the law, it still has a long way to go before catching up with the Israelis. It must identify blocs, supply data to interested investors, and select bidders to start exploration work, while the Israelis already have firms drilling for gas.
Bassil said that the oil project will create additional jobs for the Lebanese.
He said that a conference would be held in Lebanon in October of this year that will include all the companies that are interested in bidding.
“We welcome any assistance from all the countries and companies that desire to explore for gas,” Bassil said.
Bassil and EDL director Kamal Hayek attributed the severe electricity rationing to the growing energy consumption this summer.
They highlighted that Lebanon produces 1,600 MW of electricity while the actual demand is more than 2,500 MW.
Hayek said that EDL has adopted a series of emergency measures this summer to ensure that consumers get enough electricity.
He added that Lebanon must build 700 MW of power plants and has asked French Consultant Company EDF to prepare a tender proposal for firms interested in building more power plants in the country.
According to Hayek, the best way to address the electricity shortage in the short and medium term is to lease powerful electricity generator ships or to lease electricity from private generator companies.
But the EDL official admitted that the option of buying electricity from private generators may be more expensive then building power plants.
He added that all these proposals need political consensus and if this is done then EDL can embark on a workshop to carry out reforms in the electricity sector. – The Daily Star
Copyright The Daily Star 2010.
