Lebanon extends deadline of second offshore gas licensing round by six months

Country received no applications, source says

London-based Energean’s drill ship in the east Mediterranean on May 9. Reuters

Lebanon’s energy minister has signed a ministerial decision extending by six months the deadline for companies to participate in the country’s second offshore oil and gas licensing round.

The initial deadline was scheduled for Wednesday but was pushed back to December 15 “to allow additional companies not currently operating in Lebanese waters to prepare their files and studies and participate in this round,” Walid Fayad's office said in a statement on Wednesday.

The delay will “allow for the creation of an acceptable level of competition among international oil and gas companies”.

The statement was published shortly before the official 4pm deadline and did not indicate how many, if any, companies had participated in the bid.

A source with close knowledge of the bidding process, however, told Reuters the extension was granted because Lebanon had received no applications.

“It was expected, and we weren't shocked given the political situation and the maritime issues,” the source said.

Analysts previously told The National they expected the licensing round to be delayed because of uncertainty caused by Lebanon’s economic collapse, a problem that has been compounded by tensions between Israel and Lebanon.

The two countries, technically at war since 1948, are locked in a maritime border dispute that flared up in recent weeks following the arrival of a vessel operated by London-based Energean to exploit a gasfield known as Karish.

Israel says Karish is in its exclusive economic zone, but Lebanon says the field is in contested waters and should not be developed until the two countries conclude talks to delineate their maritime boundary.

US energy envoy Amos Hochstein, who arrived in Beirut on Monday for a two-day visit to mediate the dispute, said on Tuesday that Lebanese officials had made a proposal that would “enable negotiations to go forward.” Mr Hochstein did not give any details.

Unnamed Lebanese officials told AFP they would drop claims to Karish as long as Lebanon kept the whole of the nearby Qana field instead.

Lebanon had initially demanded 860 square kilometres of territory in the disputed maritime area, including part of Qana. It then asked for an additional 1,430 square kilometres, also taking in part of Karish.

A consortium led by French energy company Total won the first licensing round in 2018 but found no commercially viable amount of hydrocarbons.