Political disputes, insecurity stymie Lebanese bid round

For a promising natural gas resource off Lebanon, the only reportable discoveries are of ways to defer exploration.

The large gas finds of recent years off Israel, Gaza, and Cyprus enhance prospects for the country’s Mediterranean shelf. And since pipeline deliveries of Egyptian gas ceased in late 2010, Lebanon has had extra incentive to develop domestic supply.

Prompted by nearby discoveries, in fact, the government enacted a petroleum law, created the Lebanese Petroleum Administration, published oil and gas regulations, and held a prequalification round that attracted strong interest from international operators.

Since 2013, however, progress has stalled.

Formation of a fragile government took most of that year and part of 2014, and the country hasn’t had a president since the end of last May. Deep-seated factionalism confounds decision-making, aggravated by growing instability along the border with Syria.

Security threats, which include Syrian jihadism in Lebanon’s northern Beqaa region, overshadow the need for two decrees essential to an offshore licensing bid round. One would address a marine territorial dispute with Israel, with which Lebanon technically is at war. The other would specify terms of exploration and production agreements.

Those decrees must come from the cabinet, members of which are appointed by the prime minister and president and answerable to Parliament.

Last month, the cabinet missed two meetings because ministers couldn’t agree on how decisions should be made.

To manage ministerial discord, Prime Minister Tammam Salam, who serves on an acting basis because his position depends on appointment by the nonexistent president, wants to limit the next cabinet session to 3 hr.

A Mar. 12 article in Lebanon’s Daily Star newspaper quoted “a source close to Parliament” as saying, “You can’t discuss a sensitive issue like oil and gas in only 3 hr.”

That issue might be moot. Salam, according to Energy and Water Minister Arthur Nazarian, also quoted in the article, hasn’t put the decrees on the cabinet’s agenda.

So when might the cabinet act?

“I don’t have any idea,” Nazarian said.

(From the subscription area of www.ogj.com, posted Mar. 13, 2015; author’s e-mail: [email protected])