52 firms bid for oil, gas licences in Lebanon

ZAWYA DOW JONES

DUBAI

LEBANON’S pre-qualification round for its first oil and natural gas licences in its Mediterranean coastal waters has attracted 52 oil firms from 25 countries including US giant ExxonMobil Corp, Chevron Corp, and France’s Total, the Petroleum Administration said.

Fourteen firms applied to qualify as operators including Norway’s Statoil, Royal Dutch Shell and Italy’s Eni the administration said on its website.

It added that 39 firms applied for non-operator status including Korea National Oil Corp., or KNOC, Russia’s Rosneft and Japan’s Inpex Corp.

Lebanon, which passed an oil law in 2010 and formed a petroleum board last year, is opening prospects for exploration because it hopes sizeable discoveries could bring in funds to help cut its high level of government debt and to meet its domestic power demands.

Geophysical data covering the exploration area in the eastern Mediterranean already indicate that the region contains several trillion cubic feet of natural gas. Last month, the country’s energy minister, Gibran Bassil, said in an interview with Dow Jones Newswires that the country plans to award the contracts in February next year.

A list of qualified explorers, who will be allowed to do exploration work in waters close to Israel and Cyprus, will be issued April 21 and bids can be placed by May 2, Bassil said. Once qualified, companies will have to form consortia comprising at least three members to participate in the licensing round.

Lebanon, a tiny Mediterranean country, faces economic and fiscal challenges that are contributing to its climbing public debt.

Insecurity related to threats from across the borders of its neighbors Syria and Israel, and internal political and security instabilities that threaten foreign investments and tourism have all contributed to the country’s fiscal hardships.

By the end of July last year, Lebanon’s gross public debt stood at $55.4 billion or 136.4 percent of the country’s gross domestic product, according to the Association of Banks in Lebanon.