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French energy group TotalEnergies (NYSE:TTE) has set the first drilling rig at its location in the Mediterranean Sea off Lebanon’s coast near Israel’s border with the country looking to commence operations in the coming weeks to search for gas. The cash-strapped nation hopes that future gas sales could help the country pull out of its deep financial crisis that has seen the local currency lose more than 98% of its value.
"The arrival of the equipment marks an important step in the preparation of the drilling of the exploration well in Block 9, which will begin towards the end of August 2023," TotalEnergies said in a statement. TotalEnergies leads a consortium of energy companies working on the offshore project, which includes Italian oil and gas giant Eni S.p.A.(NYSE:E) as well as state-owned QatarEnergy.
The drilling operations come after a landmark U.S.-brokered agreement last year that saw Lebanon and Israel establish a maritime border for the first time ever. Back in May, Lebanon’s Energy Minister Walid Fayad said they hope to determine whether the exploratory block has recoverable gas reserves by the end of the current year.
"This is survival (for Lebanon). Hopefully before the end of the year there will be positive results and Lebanon becomes an energy producer. This offers a glimmer of hope," Hamie said.
Levant Basin Province, home to the giant Leviathan Natural Gas Field, straddles the
sea borders of Israel, Lebanon, Palestine, the Republic of Cyprus and the Turkish Republic of Northern Cyprus. With 22.9 trillion cubic feet of recoverable gas, Leviathan is the largest natural gas reservoir in the Mediterranean, and one of the largest producing assets in the region. The 330 square kilometer field was discovered in December 2010 by NewMed Energy (OTCPK:DKDRF), Chevron Corp.(NYSE:CVX) and Ratio Oil Corp. NewMed is Leviathan's main operator with a 45.3% working interest; Chevron has a 39.7% working interest while Ratio has a 15%.
Unfortunately, Lebanon does not recognise Israel's right to exist, and still considers itself at war with its much more affluent and powerful neighbor.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.