Lebanon says gas plans on track despite political upheaval

By Dominic Evans and Laila Bassam

BEIRUT (Reuters) - Lebanon's political turmoil will not slow its oil and gas exploration plans for now, Energy Minister Gebran Bassil said, a week before he is due to announce which companies have pre-qualified in its first licensing round.

Fifty-two firms submitted bids last month to explore Lebanon's offshore Mediterranean waters, including ExxonMobil, Repsol, China National Offshore Oil Company and Royal Dutch Shell.

Pre-qualified companies will be unveiled on April 18, the first step towards what Lebanon hopes will be final agreement on exploration licences by March next year.

But last month's resignation of Prime Minister Najib Mikati has plunged the country into political uncertainty and a possibly lengthy hiatus until a new government is agreed.

Mikati's caretaker government remains in office with limited powers until Prime Minister-designate Tammam Salam forms a cabinet. Salam also has to resolve months of dispute over a June parliamentary election which faces almost certain delay.

Only a new cabinet can approve a document setting out the 10 exploration blocs, ranging from 1,500 to 2,500 square kilometres, which was awaiting cabinet endorsement when Mikati resigned, and approve the final results of the bidding process.

And Lebanon's gas plans have already been dogged by delays since the country started moves to attract international firms - several years behind its southern neighbour Israel, which has already discovered huge gas reserves.

"In the short run, there will be no delay," Bassil told Reuters in his ministry in Beirut, although if the political stalemate dragged on for six months it would by the end of the year start to hold back the process, he said.

"In the long run, without a council of ministers, definitely (there will be an impact) because the law is structured that you need the council of ministers' approval."


Bassil said the strong interest shown by oil firms from the United States, Europe and Asia showed a degree of international confidence in Lebanon despite its domestic upheaval and the civil war in neighbouring Syria.

"Most of the big international firms ... submitted bids. That's a sign of the trust in Lebanon, trust in the administration of its oil and gas resources, and trust in the quantities - because they are very promising," he said.

Last year Bassil announced that a single offshore field could contain 12 trillion cubic feet of natural gas, and delegates at an oil and gas conference in Beirut in December said Lebanon's Mediterranean waters could hold between 30 trillion and 40 trillion cubic feet in all.

He declined to give an overall estimate of possible reserves, saying surveys showed ever more promising results.

"Every new survey and analysis reveals an additional field," he said. "We cannot give an overall estimate for an area that has not been fully surveyed and analysed."

Lebanon has been hoping that sizeable gas discoveries could help address both its high level of government debt and chronic domestic power shortages.

Interest in drilling in the eastern Mediterranean has grown since two natural gas fields were discovered off Israel, Lebanon's southern neighbour. The larger of those fields, Leviathan, has estimated reserves of 17 trillion cubic feet and their value is put at tens of billions of dollars.

Drilling could also be delayed in exploration blocs in the southern waters by disputes over a maritime border between Lebanon and Israel that has never been delineated because the two countries are technically at war.

(Editing by Jason Neely)