by Reuters and Israel Hayom Staff
Energy Minister Steinitz: "We made two things clear. ... Don't provoke us, and don't explore in, or even get close to the disputed line of contact."
Lebanese Energy Minister Cesar Abi Khalil hands a document
to Total's head of exploration Stephane Michel in Beirut, Feb. 9
Photo: Reuters
Lebanon said on
Friday it had signed its first offshore oil and gas exploration and
production agreements for two blocks, including a block disputed by
neighboring 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 Jan. 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% 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 U.S. secretary of state, was in Israel
last week and in Lebanon this week on a mediation mission. U.S.
officials confirmed his travels without detailing his agenda.
Israel's Energy Minister Yuval Steinitz said on Friday that a diplomatic resolution to the dispute "is preferable to threats."
But, speaking to Tel Aviv radio station 102
FM, Steinitz added: "We made two things clear, in a very forthright
manner, over the last year. One, don't provoke us, and don't explore in,
or even get close to, the disputed line-of-contact."
Abi Khalil told Reuters the heightened
tension between the two countries in recent weeks has "not had an
effect" on the consortium's plans to explore.
Lebanon is on the Levant Basin in the
eastern Mediterranean where a number of big sub-sea gas fields have been
discovered since 2009.
Eni reported the Mediterranean's largest
discovery in 2015: the Zohr field off Egypt, which holds an estimated 30
trillion cubic feet of gas.
And on Thursday Eni said it and Total had discovered a promising natural gas field off Cyprus.
Fuad Krekshi, Eni's executive vice
president of the Middle East, said Eni's entry into Lebanon's market is a
"natural consequence" of its existing role in the Mediterranean region.
Total, with 40%, heads the consortium drilling Lebanon's first offshore well. Eni also holds 40% and Novatek 20%.
Vyacheslav Mishin, head of Novatek's new
Lebanon office, said the projected global growth in natural gas and LNG
consumption was key to his company's future growth.
"The Middle East market for LNG consumption is forecast to grow by more than 100% by 2030," he said.
Potential reserves could be used domestically or exported.
Both are attractive for Lebanon which has
been short of electricity since its 1975-1990 civil war and has an
anemic economy battered by war in neighboring Syria and political
tensions.
It is also hoped the developing oil and gas
industry will create jobs and economic growth. To this end, the EPA
contracts say 80% of people employed by the consortium should be
Lebanese, with priority given to local suppliers and contractors.
But the commercial viability of potential
reserves depends on energy market prices, the ability to secure
customers and the cost and politics of building export infrastructure.
"For all the fields in the region, there
are commercial, political, and technical challenges that hinder
exploitation for the purposes of export," Tareq Baconi, a European
Council on Foreign Relations visiting fellow on MENA energy told
Reuters.
"Many of the challenges for export will be faced by Lebanon as well when, and if, it discovers offshore reserves," he said.
Reuters and Israel Hayom Staff
Source: http://www.israelhayom.com/2018/02/11/lebanon-to-begin-offshore-energy-search-despite-israels-objections/
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