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Lebanon Delays First Energy Bidding Round

Lebanon Delays First Energy Bidding Round
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Πεμ, 5 Σεπτεμβρίου 2013 - 17:59
Lebanon has delayed the first oil and natural gas licensing round in its Mediterranean coastal waters as the government failed to vote on decrees needed to start the bidding process, said energy minister Gebran Bassil.
Lebanon has delayed the first oil and natural gas licensing round in its Mediterranean coastal waters as the government failed to vote on decrees needed to start the bidding process, said energy minister Gebran Bassil.

The licensing round was deferred to Dec. 10 from Nov. 4 and could face another delay if the cabinet fails to approve the necessary decrees by Oct. 2, Mr. Bassil said, in a statement posted on his official website late Wednesday.

"What happened is neither a disaster nor the end of the road for us, but it is a big loss for us because it affects our credibility...This delay could make some companies hesitate or withdraw from the bid," the minister said.

Lebanon has already shortlisted 46 international oil firms for the licensing round.

U.S. giant ExxonMobil Corp. (XOM), Chevron Corp. (CVX), France 's Total SA (TOT), Norway 's Statoil ASA (STO), Royal Dutch Shell PLC (RDSA) and Italy 's Eni SpA (E) are among 12 firms that have been pre-qualified as operators, according to the Petroleum Administration.

The administration also shortlisted 34 firms for non-operator status, including Korea National Oil Corp., or KNOC, Russia's OAO Rosneft (ROSN.RS) and Japan's Inpex Corp. (1605.TO).

The delay, which comes after a meeting between the energy minister and caretaker Prime Minister Najib Mikati failed to approve a special government session for the vote, "gives an advantage to Israel which is looking for market share for its gas exports," Mr. Bassil said.

However, if the government can vote on the decrees by Oct. 2, Lebanon can sign the energy contracts by March 31, next year, he said.

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 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.

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

Insecurity related to threats from across the borders of its neighbors Syria and Israel , and internal political and security instability that could jeopardize foreign investments and tourism, have all contributed to the country's hardships.

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

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