Lebanon Approves its First Offshore E&P Plan

Lebanon has approved an offshore oil and gas exploration plan for two lease blocks, defying warnings from Israel.

In a televised address, Lebanese energy minister Cesar Abi Khalil said that the government had signed off on a plan submitted by leaseholders Total, Eni and Novatek. The approval opens the way for work to begin, and drilling in Block 4 is expected to commence early next year. The consortium signed with Lebanon for the two lease blocks in February, the first offshore exploration license in the nation's history. 

Khalil added that Lebanon is preparing for a second licensing round, and hopes to solicit bids towards the end of this year or in early 2019. 

Israel objects to drilling in Block 9, as it borders Israeli waters and contains a small disputed area at its southernmost end. The consortium says that it intends to stay well away from the contested maritime border. "Given that the main prospects are located more than 25 km (15.5 miles) from the disputed area, the consortium confirms that the exploration well on Block 9 will have no interference at all with any fields or prospects located south of the border area,” Total said in a statement in February.

Israeli Defense Minister Avigdor Lieberman has previously denounced Lebanon's exploration program as "provocative." However, the Israeli government did not immediately issue a statement in response to Khalil's announcement Tuesday. 

The stakes for Lebanon could be significant. Israel, Cyprus and Egypt have all found major reserves of gas in their portions of the Eastern Mediterrranean, raising the possibility that Lebanon could have large gas resources in its EEZ as well. According to seismic data firm Spectrum Geo, Lebanon's offshore shelf holds geologic structures bearing resemblance to Israel's productive Tamar field, but larger. "These structures are bigger and less complex than those associated with the recent gas discoveries offshore Israel," the firm wrote in an assessment.