• 11 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 11 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 12 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 13 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 13 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 14 hours VW Fails To Secure Critical Commodity For EVs
  • 15 hours Enbridge Pipeline Expansion Finally Approved
  • 16 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 17 hours OPEC Oil Deal Compliance Falls To 86%
  • 1 day U.S. Oil Production To Increase in November As Rig Count Falls
  • 1 day Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 2 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 2 days Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 4 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 5 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 5 days Husky Energy Set To Restart Pipeline
  • 5 days Russia, Morocco Sign String Of Energy And Military Deals
  • 5 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 6 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 6 days District Judge Rules Dakota Access Can Continue Operating
  • 6 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 7 days Oil M&A Deals Set To Rise
  • 7 days South Sudan Tightens Oil Industry Security
  • 7 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 7 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 7 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
IEA: Oil Prices To Hit A Ceiling In 2018

IEA: Oil Prices To Hit A Ceiling In 2018

Global oil markets appear to…

Global Risk Insights

Global Risk Insights

GlobalRiskInsights.com provides the web’s best political risk analysis for businesses and investors. Our contributors are some of the brightest minds in economics, politics, finance, and…

More Info

Lebanon Facing Uphill Battle To Develop Energy Resources

Estimates show that Lebanon has significant offshore energy reserves, including more than 120 trillion cubic feet of natural gas. International firms have lined up to begin exploration into these energy fields, but political deadlock continues to stymie progress.

Initial 3-D seismic surveys off the coast of Lebanon suggest a high probability that there are vast natural fields of oil and gas supplies. These resources could gross over $100 billion in revenues over the next 20 years for the country.

International companies have lined up and are waiting to explore the underwater energy reserves, but they continue to wait with frustration as Lebanese lawmakers are slow to set the necessary licensing regulation needed to begin exploration.

To boost an already stagnating economy, lawmakers have an opportunity here to diversify the country’s energy sector.

Exploration rights in offshore reserves

Lebanon relies heavily on energy imports to meet domestic demand. In 2010, for instance, the country imported120,000 barrels per day (bbl/d) of refined oil products which accounted for over 90% of total primary energy demand in the country.

The discovery of indigenous energy reserves could transform Lebanon from being so highly dependent on energy imports and allow the nation to be a potential regional exporter of gas.

Samer Abbas Khalaf, an energy expert with GPB Neftegaz Services, a gas consultancy, emphasizes the significance of allowing international companies to explore these underwater energy fields:

“They prequalified, formed a consortium and began PR work in a clear sign that they intended to participate in the Lebanese bid round. This in itself would have given Lebanon a much needed economic boost with foreign direct investment and employment, and provided it with its best chance to efficiently explore for hydrocarbons. None of Lebanon’s neighbors had received the same interest from oil majors.”

Related: Oil Prices Changing The Face Of Global Geopolitics

Political disagreements and lack of urgency amongst Lebanese lawmakers, however, is inhibiting proper exploration of these potential oil reserves. International oil companies have waited in frustration for more than a decade for the Lebanese government to issue licenses to drill for oil and gas.

The hold-up is due to the fact that the cabinet committee headed by Prime Minister Tammam Salam says it is “still reviewing” the details of the decrees with the National Petroleum Administration. Government officials also disagree on the final date for the decrees to be approved, causing further delay.

Energy and Water Minister Arthur Nazarian has said:

“Once the decrees are passed, I will invite the companies to bid for the offshore gas five to six months from the date of approval. But frankly, I don’t have a clue when these decrees will be passed.”

Regional obstacles

In addition to internal political challenges, there are also bigger regional obstacles Lebanon would need to overcome to compete as an energy-exporting nation.

Israel, for example, has already begun to secure the regional export market for natural gas, negotiating long-term agreements with Jordan and Egypt for its East Med Gas company to supply them with gas from the Leviathan field. Israel is also working with Cyprus on establishing a unified gas strategy, and is also in discussions with Greece and the EU for a possible pipeline to Europe.

Related: Huge Development In Leviathan Gas Field Story

In the event that Lebanon is able to extract and produce natural gas, it would need to find alternative markets for its exports.

Additionally, Lebanon and Israel would need to work together to solve the current dispute over territorial rights to natural gas reserves that stretch across both waters. Strong tensions between the two nations only complicate the supply issue even further.

Reasons for optimism

Despite the internal and external challenges regarding Lebanon’s offshore energy supplies, there are reasons to be optimistic that these obstacles could one day be overcome.

On January 27, officials from Norway and Lebanon signed a three-year agreement to cooperate in further developing Lebanon’s oil and gas sector. Norwegian officials have said they will offer technical support to the Lebanese Petroleum Administration and pertinent ministries, including the Energy, Environment and Finance ministries.

The United States has also offered its assistance in helping Israel and Lebanon solve their natural gas dispute. In December 2014, US Ambassador to Lebanon David Hale told Speaker Nabih Berri that the “United States remains committed to supporting Lebanon’s efforts to make the transformation to an oil and gas producing country.”

The Lebanese themselves are also raising greater awareness towards advancing the nation’s energy sector. The 5th International Trade Exhibition for Power, Electrical Engineering, Alternative Energy, Lighting, HVAC, Water and Environmental Technologies to be held in Beirut in June this summer is currently set to host 473 exhibitors offering new technological insights into energy development.

These positive developments will at least continue to push the offshore oil and gas agenda in front of lawmakers in the coming months. Government officials should seize this opportunity to advance Lebanon’s energy sector and open the way for greater foreign direct investment.

By Madeleine Moreau for http://globalriskinsights.com/

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News