Oil exploration could uncover opportunities for Lebanon

30 January 2013

Lebanon has been making efforts to move ahead with exploration efforts at both onshore and offshore sites and is attracting interest from many oil firms

Lebanon has no proven oil and gas reserves, but there are hopes that some may be discovered in the coming years. The government has been making efforts to move ahead with exploration efforts at both onshore and offshore sites, spurred on by recent Israeli discoveries in the eastern Mediterranean, including the Tamar and Dalit gas fields, where significant reserves were announced in 2009, and the Leviathan gas field, which was discovered in the following year.

Significant interest

The government says it hopes to launch its first offshore licensing round before the end of 2012 and has opened a data room for interested firms at the Ministry of Energy & Water. Speaking at Georgetown University in the US on 2 October, Energy and Water Minister Gebran Bassil said a significant number of foreign oil companies have bought survey data from the ministry, with US firms foremost among them.

Lebanon key figures
Territorial waters22,730 sq km
Offshore 2D seismic survey scans completed14,000 km
Offshore 3D seismic survey scans completed10,000 sq km
Offshore wells drilled0
Onshore wells drilled7
Sq km=Square kilometres. Source: Ministry of Water & Energy

He added that the government is in the final stages of setting up a Petroleum Administration, which will manage the offshore licensing process. A strategic environmental assessment study has also been completed, as have model contracts for exploration and production and joint operating agreements. The delineation of the offshore blocks is also ready.

None of Lebanon’s 22,730 square kilometres of territorial waters has previously been licensed for oil and gas exploration, but much of the area has already been surveyed. The Ministry of Energy & Water says it has 2D data for more than 14,000 linear km of its maritime waters and more than 10,000 square km of 3D data.

Lebanon major projects
ProjectClientSectorValue ($m)
New refineryMinistry of Energy & Water (MEW)/Qatar Petroleum InternationalOil refining/ processing2,000
Zahrani and Tripoli refinery upgradesMinistry of Industry & PetroleumOil refining/ processing500
Beddawi to Al-Zahrani gas pipelineMEWGas pipeline/ transmission200
For further information visit www.meedprojects.com

Bassil also said during his speech that a deal has been signed by the ministry to acquire onshore survey data. To date, no oil or gas wells have been drilled offshore, although seven onshore wells have been drilled, he said.

Until any economically viable discoveries are made, the country will continue to import all of its energy needs. Oil imports amounted to 120,000 barrels a day in 2010, according to the US’ Energy Information Administration (EIA) and, according to the World Trade Organisation, fuel imports cost about £Leb3.67bn ($244m) in 2010 and 2011.

These figures are significant for an economy the size of Lebanon. The Washington-based IMF estimates that oil imports accounted for about 20 per cent of Beirut’s total goods imports during 2009-10, or almost 10 per cent of gross domestic product.

Lebanon tenders
TenderClientClosing date
First licensing round (offshore)Ministry of Energy & Water Q4 2012
For further information visit www.meed.com/tenders

The country is also looking to diversify its import options. A design study has been completed to connect its coastal power plants and industrial sites with the Arab Gas Pipeline and a feasibility study has also been carried out to build a degasification terminal so it can import liquefied natural gas.

There are also plans to rehabilitate and further develop oil storage facilities at Zahrani in the south and Tripoli in the north to give Lebanon a greater cushion of supply in the event of geopolitical problems – something it has often been affected by in the past.

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