In Oil & Companies News 11/07/2016
Lebanon is expected to offer all of its 10 offshore blocks for bidding international oil companies following an agreement between two main political parties, a source close to Parliament Speaker Nabih Berri said Friday. “Amal and the Free Patriotic Movement have agreed in principle to offer all of the 10 blocks in the next offshore gas licensing round so that international companies can select two or three of them,” the source told The Daily Star.
Last week Berri convinced Foreign Minister Gebran Bassil to drop the FPM’s reservations against on offering all of the 10 blocks for interested companies.
Bassil, who was the energy and water minister, has previously insisted that Lebanon should only offer five of the 10 available blocks for interested companies.
The Petroleum Administration, which was set up to regulate, supervise and award contracts to oil companies, presented an original plan that called for auctioning off blocks, 1,4,5,6 and 9.
A source close to the Petroleum Administration told The Daily Star that all of the international oil companies that took part in the pre-qualification round only expressed interest in the five blocks.
The new agreement between Amal and FPM has not yet been conveyed to the Petroleum Administration and all the concerned parties.
A geological and interpretation report submitted to Prime Minister Tammam Salam, Berri and some ministers showed that Lebanon shares potential gas reserves with Israel in the south and this has prompted the speaker to press the government to approve two decrees delineating the blocks and set conditions for revenue sharing before Israel starts drilling in the Lebanese side.
Salam has yet to call for a ministerial committee meeting to go through the two decrees before sending them to the Cabinet for final approval.
The premier wants to ensure all the ministries submit their views and remarks on the two decrees before discussing them at the Cabinet.
MP Mohammad Qabbani told The Daily Star this week that most if not all ministers will eventually pass the two decrees because they realize any further delay could jeopardize the chances of Lebanon drilling for gas in the coming few years.
Berri, according to sources close to him, is keen to offer all the blocks in the southern territorial waters for bidding for fear Israel may siphon off gas from the 870-kilometer disputed zone in the south.
However, U.S. officials and oil experts argue that no international oil company would even consider exploring for gas in any disputed zone in order to avoid lawsuits by the countries sharing this zone.
The United States sent an envoy to Lebanon and Israel last year to mediate between the two countries on the best solution to end the row over the disputed zone.
Bassil estimated that Lebanon could be sitting on 96 trillion cubic feet of gas off the Lebanese coast; a figure that has yet to be substantiated by the oil companies.
A source close to the Petroleum Administration said companies that collected data from the 3-D seismic survey try to offer different probability of the existence of gas in Lebanon.
“No one can give official figures on the gas reserves without offering first probability of success. The Petroleum Administration gave probability of success from 15 percent up to 35 percent and these probabilities are usually encouraging to oil companies.
He added that 15 percent in the oil industry “is a go.”
The source explained that some oil companies may go for the 15 percent probability because they have financing at a low cost.
He said that the 3-D seismic survey conducted by international companies have covered 80 percent of Lebanon’s territorial waters.
“Only block 8 needs 3-D seismic survey before we have full data on the hydrocarbon size. We can even award contracts to companies on block 8 and 9 even if the survey is not completed,” the source said.
Source: Albawaba
