Last month, the Israeli company that was authorized to drill in the $320 million Hatrurium oil reservoir in the Dead Sea confirmed that the find sat completely within the Israeli maritime zone.
Some estimates say that when drilling starts, the crude oil and gas recovered from the well could make the net energy-importer Israel completely energy independent, especially since the country authorized Houston-based Noble Energy and Israeli partner Delek to develop the massive Leviathan gas field—an offshore play located in the increasingly prolific Levant basin of the Mediterranean Sea.
Israel shares access to the basin—estimated by the 2010 United States Geological Survey to hold 1.7 billion barrels of recoverable oil—with Lebanon, Syria and Cyprus.
Earlier this year, Cyprus offered licensing tenders for 12 blocks of maritime space in the basin.
The Syrian Civil War and the infiltration of the Islamic State and other terrorist groups have kept Syria too occupied to think about pricey new offshore drilling ventures.
But what has been keeping Lebanon from reaping the benefits of the “underexplored” oil in the sea right in its backyard?
Reports suggest the delays have not been caused by Lebanon’s territorial disputes with Israel over the waters of the Mediterranean Sea, but rather, the lack of stable executive leadership needed in order to ensure foreign companies are offered tenders in a timely manner and that their work is properly monitored by local agencies.
Last July, the U.S. Department of State’s special envoy and coordinator for international energy affairs, Amos Hochstein, made a special trip to Beirut to encourage natural gas exploration in Lebanon.
After his meetings with Prime Minister Tammam Salam, parliament Speaker Nabih Berri, Foreign Minister Gebran Bassil and Energy Minister Arthur Nazarian, Hochstein publicly urged the Lebanese government to ramp up exploration efforts.
Al Monitor confirmed that talks included two finer points of discussion: Lebanese-Israeli borders that create exclusive maritime zones for the neighboring countries, and methods for the exploration and extraction of natural gas—which will likely to see a particularly high demand as 195 nations adopt environmentally-friendly energy sources after signing the Paris climate change accord.
The issues discussed have plagued proposed energy ventures in Lebanon for years, according to an anonymous ministerial source, who also told Al Monitor that Hochstein’s predecessor had been working on resolving the technical gaps in the Middle Eastern country as well.
But Bassil, who served as Lebanon’s oil minister before taking charge of the country’s foreign affairs, said the issues introduced by the American envoy had not been the cause of the industry’s developmental delays.
The Lebanese Energy Ministry had completed maritime surveys of 80 percent of the country’s exclusive economic zone, where no disputes with Israel exist, by February 2014, Bassil explained. Related: Shell Unveils New Strategy: ‘Leaner and Deeper’
In addition, the ministry drafted the Exploration and Production Agreement and 43 international oil majors had submitted bids for “promising” finds in Lebanese waters.
But when Mikati resigned from his office as Prime Minister in March 2013, the whole process halted.
Mikati’s government had been slated to sign the last two documents necessary to approve the international tender a few days before his resignation, according to Bassil.
There had been minimal progression on the issue since 2013, but a couple of weeks ago, a forum asking the Lebanese people to support the oil and natural gas industry occurred.
Headed by politician-turned-businessman Fouad Makhzoumi, the forum and its leader supported the country’s oil and natural gas regulator. Related: The Oil Futures Market Tells Us The Glut Is Over
“Today, we have started with the municipal elections, which is an indication that people are saying enough is enough,” Makhzoumi said. “If we can help them to organize themselves because of the cause of oil and gas … [to] come down the day of [parliamentary] elections rather than sit and talk, I think we can make a difference.”
Of course, it remains unclear if the new oil and gas push will propel the twin industries in Lebanon as Prime Minister Tammam Salam has proven to be particularly slow-acting – politically and economically.
Until then, Israel is winning an energy game that is of major geopolitical proportions by sheer default, while Lebanon falls dismally behind and fails to take advantage of the riches the Levant Basin has to offer its economy.
By By Zainab Calcuttawala for Oilprice.com
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