Lebanon Upbeat On Oil And Gas Exploration Despite Political Deadlock, Says Official
The Petroleum Administration of Lebanon (PAL) remains positive on oil and gas exploration despite a political impasse and security impediments in the Mediterranean nation, according to a senior official.
“The deadlock and the security situation in Syria are problematic when it comes to attracting investors. However, the potential for exporting gas to Europe, via a possible connection to the Arab Natural Gas Pipeline, a 1,200km pipeline that runs from El-Arish in Egypt's Sinai Peninsula to Aqaba in Jordan, and ends close to the Syrian-Turkish border, was enticing enough," Nasr said.
“A new draft law for onshore exploration is waiting ratification from parliament. However – the Offshore Petroleum Resources Law 2010 – provides the framework for investment in an area of great significance.”
Lebanon is thought to have considerable offshore energy resources, including over 100 trillion cubic metres of natural gas but political deadlock including the appointment of a new president are cited as considerable hurdles. The country has been without a head of state since President Michel Sleiman's term ended in May 2014.
Furthermore, Lebanon's offshore Exclusive Economic Zone (EEZ) is disputed by Israel and Cyprus, with both nations conducting prospections of their own. Israel is already producing natural gas from the region's Tamar field.
PAL has ten exploration blocks encompassing an offshore prospection area of 22,730 square km on its books, but has been unable to provide a timescale over which fresh exploration licences would be opened up for bidding.
Nasr declined comment on a possible timescale as well, but added that country had over 100 offshore prospects. “The priority is to reduce imports, go down the exporting path and boost the economy. We are hoping that would be the motivation for legislators. Proposals include royalties [set from 4% for gas and on a sliding scale for oil] going to a sovereign wealth fund and taxes to the exchequer.
” A compelling package, should the political impasse end, would also see operators recruiting Lebanese nationals first off boosting the jobs market and incentives for sourcing materials locally; not that procuring talent or materials from overseas would be a considerable barrier.
- Digital Look
- Published on:
- October 8, 2015
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