France's TotalEnergies and its Italian partner Eni have signed a "framework agreement" with Israel, to implement the maritime boundary accord that was agreed between Israel and Lebanon last month.
In Lebanon, TotalEnergies is the operator of the exploration Block 9, and holds a 60 per cent interest, alongside its partner Eni's 40 per cent, the companies said on Tuesday.
Lebanon and Israel, who have no diplomatic ties, finalised a US-brokered maritime demarcation deal on October 27.
Under the agreement, the disputed waters will be divided along a line that straddles the Qana prospect gasfield. Production and exploration will be based on the Lebanese side, but Israel will be compensated for any gas extracted from its side of the line.
“Following the signature of this Framework Agreement, the Block 9 partners will initiate the exploration of an already identified prospect, which might extend both in Block 9 and into Israel waters south of the recently established maritime border line,” TotalEnergies said.
Preparation of exploration activities will start with the mobilisation of the teams, the purchase of required equipment and the procurement of a drilling rig, the company said.
“TotalEnergies, as the operator of Block 9, is proud to be associated with the peaceful definition of a maritime border between Israel and Lebanon,” said Patrick Pouyanne, chairman and chief executive of TotalEnergies.
“By bringing our expertise in offshore exploration, we will respond to the request of both countries to assess the materiality of hydrocarbon resources and production potential in this area.”
Lebanon is enduring its worst economic crisis in decades. The country's economy is saddled with debt that ballooned to more than $100 billion, or about 212 per cent of gross domestic product, in 2021.
Lebanon's economy collapsed after it defaulted on about $31bn of Eurobonds in March 2020, with its currency sinking more than 90 per cent against the dollar on the black market.
The country suffers from hyperinflation, which rose to about 162 per cent in August from the same month a year earlier, according to Lebanon's Central Administration of Statistics' Consumer Price Index.
Politicians have yet to form a government after parliamentary elections were held in May, which is scuttling the implementation of reforms that need to be implemented for the country to unlock a $3bn bailout package from the International Monetary Fund.