LPA to prep for second gas licensing round

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Energy and Water Minister Cesar Abi Khalil said Tuesday that he had instructed the Lebanese Petroleum Administration to prepare for the second offshore gas licensing round.

“This is not the launch of the licensing round, but the beginning of the preparations that will benefit from the experience gained from the preparations and management of the first round. The Lebanese Petroleum Administration will start by organizing a workshop to put [together] a plan for the second licensing round and its launch date, to benefit from the results of the first well drill,” the minister told participants in Lebanon International Oil and Gas Summit held at the Hilton Habtoor Grand Hotel.

Lebanon has signed contracts with the French company Total, Italian company Eni and Russian firm Novatek, to extract gas in blocks 4 and 9 in Lebanon’s maritime borders.

The companies have recently submitted to the Lebanese Petroleum Administration their exploration plan, their work program and their budget for exploration, which is strictly confidential until approved by the minister, according to Abi Khalil. The plans submitted are being reviewed and the minister intends to reply to the consortium this week with some tweaks and requests for clarification before submissions are accepted. Exploration is expected to start at the beginning of 2019.

Walid Nasr, chairman of the board of directors and head of the strategic planning department of the Lebanese Petroleum Administration, also commented in his speech about the minister’s initiative.

“In the coming month, we will be assessing the results of the first round and going into details of the tender protocol and the model agreement that we have used, doing additional benchmarking and additional consultation, to check whether anything needs to be amended in the prequalification process and the tender protocol process and the model agreement.

“The results of our assessment will be presented to the minister along with a plan of action with main milestones for a licensing round to be implemented. With a new government in place this will be presented to the new government for a decision to be made [as to] whether Lebanon would launch a second licensing round and what is the best timing to do so,” Nasr explained.

“Looking ahead, we stand at the dawn of a new era – a new era of unlimited opportunities for high-quality service providers and a new era of job opportunities, skill transfer and knowledge-building for the Lebanese people,” Abi Khalil said.

He added that jobs “will be

created within the industry but [many] more jobs will be indirectly created through the suppliers, service providers and vocational professionals.”Besides employment, Abi Khalil said that the economy is “set to benefit from the value-added generated industries other than oil and gas.

“Positive spillover will touch each and every sector of the economy despite all the hurdles,” he added.

International companies in the oil and gas sector have already started moving to Lebanon, the minister said, hiring employees and spending money in the country to prepare for the plans.

While the developments are currently restricted to the energy community, “this will spread wider and wider as we approach the 2019 exploration dates,” he added while speaking to reporters on the sidelines of the event.

The Lebanese Petroleum Administration and the ministry are also working with a logistical mission to decide on a location for the onshore supply base. Options are being considered with the consortium to determine the best location and a decision should be made in the coming month.

Tripoli, Beirut and Sidon are among the options for the base but several other options are being considered, according to the minister.

With the upcoming elections, there are some concerns surrounding the sector. “What is at stake is the approval of the exploration plan, the work plan and the exploration budget,” the minister said.

“Afterwards, we will not be needing the Council of Ministers’ approvals until the development of the fields,” he said. In response to questions on whether the approvals are expected to come before or after the elections, the minister said the approvals could come before.