Lebanon signs offshore energy exploration deal amid dispute with Israel

BEIRUT / Reuters

Lebanon said it had signed its first offshore oil and gas exploration and production agreements for two blocks, including a block disputed by neighbouring Israel.
Lebanon’s energy minister said the dispute with Israel would not stop Lebanon benefiting from potential undersea reserves in the contentious Block 9, while consortium operator Total said it would not drill the block’s first well near the disputed zone.
A consortium of France’s Total, Italy’s Eni and Russia’s Novatek signed the agreements for the two blocks, which are among five that Lebanon put up for tender in the country’s much-delayed first licensing round.
Israel and Lebanon, which regard each other as enemy states, have exchanged threats and condemnation over the tender, amid rising tensions over territorial and marine boundaries between them.
“Today, we announce that we have started our petroleum path … after signing the agreements and launching the exploration activities,” Lebanese Energy Minister Cesar Abi Khalil said at a ceremony in Beirut. The contracts were signed on January 29.
Data suggests there are reserves in Lebanon’s waters, but no exploratory drilling has taken place to estimate their size. Abi Khalil has said a second offshore licensing round would be held once the first commercially viable discovery was made.
The first exploratory well will be drilled in Block 4 in 2019, said Stephane Michel, Total’s head of exploration and production in the Middle East and North Africa. The second well will be drilled in Block 9 more than 25 km (15 miles) from the maritime border claimed by Israel, he said at the ceremony. “There is no reason not to proceed in this way,” Michel added.
Lebanon has an unresolved maritime border dispute with Israel over a triangular area of sea of around 860 sq km (330 square miles) that extends along the edge of three of its total 10 blocks. Total said in a statement the disputed waters comprise 8 percent of Block 9 and that its exploration well “will have no interference at all with any fields or prospects” in the disputed sliver of water.
Lebanese and Israeli officials said David Satterfield, acting assistant US secretary of state, was in Israel last week and in Lebanon this week on a mediation mission. US officials confirmed his travels without detailing his agenda.