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|21 March, 2019

Lebanon's minister to ask govt to launch second oil, gas licensing round

Cabinet is set to discuss a law for onshore oil and gas exploration

Workers conduct an onshore gas and oil inspection in Batroun, northern Lebanon, October 2, 2013.

Workers conduct an onshore gas and oil inspection in Batroun, northern Lebanon, October 2, 2013.

REUTERS/Mohamed Azakir

BEIRUT: Energy Minister Nada Boustani announced Wednesday that she would soon ask Cabinet to approve the launch of a second licensing round for maritime oil and gas exploration. Boustani’s remarks came during a news conference to mark the beginning of the “implementation phase” in Lebanon’s nascent oil and gas sector, which is set to see exploratory drilling in two offshore blocks by a consortium of international companies later this year.

Boustani was speaking onboard a survey vessel docked at Beirut’s port just before it set sail to undertake a marine baseline assessment - a survey of marine life and water quality in blocks 4 and 9.

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The Janus II vessel will “determine the [precise] areas for exploration so as not to threaten marine life,” Boustani said in her brief televised remarks.

Italian company Eni, French company Total and Russian company Novatek make up the consortium that is expected to commence exploratory drilling in the two blocks in the fourth quarter of this year.

Looking forward to the next licensing round, Nasser Hoteit, a board member of the state’s Lebanese Petroleum Administration, said the LPA would complete its work on a “second generation” exploration production agreement this week, after which it would be ready for approval by Cabinet.

This document will form the basis of the second round.

He told The Daily Star the new document took into consideration lessons learned from the first licensing round in 2017.

“It’s very advanced, and secures the state’s interest to a greater degree,” he said.

“There are 150 licensing rounds ongoing in the world right now, so we have to remain dynamic for companies to keep thinking about us. “If we don’t move quickly, we lose,” Hoteit added.

An Energy Ministry statement later noted that Total was carrying out the marine baseline assessment launched Wednesday.

Company officials explained that first, remotely operated vehicles would visually assess the area to identify its characteristics and the potential environmental impacts. The company will then take samples from the water and sea floor to be analyzed for biological factors and pollution, including the presence of heavy metals.

These samples will mark the baseline against which future samples will be assessed over the coming decades, Hoteit said.

Diana Kaissy, executive director of the Lebanese Oil and Gas Initiative, said Wednesday’s development showed “we’re going in the right direction.”

Kaissy noted the consortium would have to complete several studies in the next six months if it hoped to begin drilling this year.

These include the marine baseline assessment, an environmental impact assessment that will cover a larger area than the marine baseline assessment, and a social baseline assessment that looks at the impact drilling will have on nearby coastal communities.

“After these are done, they can bring in the drill ship,” she said.

In another development for the sector, Cabinet is set to discuss a law for onshore oil and gas exploration at a session at Baabda Palace Thursday.

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