Lebanon’s parliament has approved a law to tax revenue from oil operations paving the way for the sale of offshore energy explorations licenses.

The law was approved in a vote on 19 September, according to a report in the state-run National News Agency.

The deadline for license bids has been set for 12 October 2017.

Under the draft tax law, oil companies will pay a 20 per cent income tax on petroleum operations as well as paying a fixed stamp-duty fee of 5 million Lebanese pounds ($3,311).

Earlier this month Lebanese authorities extended the bidding deadline from 15 September to 12 October in order to give companies more time to understand the law before they submitted their bids. International energy companies including France’s Total and US-based Exxon Mobil have expressed interest in the upcoming bidding round.

Political paralysis in Lebanon has stalled the planned bid licensing round for more than four years.

Lebanon currently imports more than 90 per cent of its energy needs, which is a huge drain on government revenues.

Over the past few years, high-profile discoveries made in the Mediterranean by Cyprus and Israel have raised expectations about the prospect of large reserves in Lebanese waters.

Based on seismic data, Lebanon’s petroleum ministry has estimated that there is the possibility of 95.9 trillion cubic feet of gas and 865 million barrels of oil in just a portion of the country’s territorial waters. However, the existence of these reserves can only be verified by drilling.

In 2011, the government announced a time frame for Lebanon’s first offshore oil and gas exploratory licensing round. Drilling contracts were to be awarded by the end of 2012 and it was forecast that production could start as early as 2017.

Significant progress was made over subsequent months, including the prequalification of 45 companies such as UK/Dutch Shell, the US’ Chevron and Norway’s Statoil.

However, work towards the bidding round came to an abrupt halt in mid-2013, after the resignation of Lebanon’s cabinet, which was announced by Prime Minister Najib Mikati on 22 March.