QatarEnergy signed an agreement with TotalEnergies SE and Eni SpA to search for natural gas in Lebanese waters, including in a previously-contested area with Israel.
(Bloomberg) —
QatarEnergy signed an agreement with TotalEnergies SE and Eni SpA to search for natural gas in Lebanese waters, including in a previously-contested area with Israel.
Under the exploration and production agreement, the state-run Qatari company will hold 30% in offshore blocks 9 and 4 and the French and Italian energy giants will now hold 35% each, caretaker Prime Minister Najib Mikati said in a statement.
The US brokered last year a historic accord that ended a dispute between long-time foes Lebanon and Israel over a potentially gas-rich area in the Mediterranean waters. Both countries had laid claim to an area covering 860 square kilometers (330 square miles).
Israel Approves Qatar Option to Join Lebanon Offshore Drilling
The pact allows international companies to begin exploring for natural gas in offshore Block 9, potentially leading to more energy exports to Europe in the coming years.
“Lebanon’s geographic location will allow it to play a vital role, along with friendly states in the region, to supply gas to Europe and it will encourage international companies to take part in the second licensing round,” Mikati said.
A discovery would primarily help fuel power plants that run on natural gas in Lebanon, which has suffered from chronic power rationing for decades.
The TotalEnergies-led consortium, which included Eni and Novatek PJSC, won a bid to explore in the two blocks in late 2017. The group began drilling in Block 4 in 2020 but disappointing results halted further development. Russia’s Novatek withdrew last year from the exploration efforts.
A discovery would be welcome economic news for Lebanon, which is in a deepening financial crisis. It may also provide additional resources for Israel as it would be entitled to payments if hydrocarbons are produced from the prospect.
Gas production has started at the Karish field on the Israeli side of the border, field developer Energean has said.
Lebanon delayed the closing date for its second licensing round for the rest of its offshore blocks to June 30.
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