In an official step, the first of its kind after signing the maritime border demarcation agreement between Lebanon and Israel on October 27, French company TotalEnergies announced its agreement with its partner ENI, the Italian hydrocarbon company, to implement the agreement with Israel. TotalEnergies is the operator of exploration block number 9 in Lebanon, holding a 60% stake alongside ENI, which holds a 40% stake.
It is expected that the partners will soon begin exploration in block number 9 following the framework agreement, as announced by TotalEnergies, citing "exploration operations for an area that potentially contains gas" previously identified. This area may extend into both block number 9 and Israeli waters south of the recently defined maritime border. Preparations for exploration activities will now begin, including team arrangements and the purchase of necessary equipment, as well as procuring a drilling vessel.
For Lebanon, TotalEnergies has not yet submitted a work plan to the Ministry of Energy to commence oil exploration, which requires team preparation and the appointment of engineers. There are several phases that must follow after the initial framework agreement following the border demarcation, as outlined by oil and gas governance expert Lori Hayaian to "A Call to the Homeland." These phases include:
- The company developing a work plan for exploration and agreeing with a drilling company to then announce a start date for drilling operations.
- If gas is discovered in block 9 and extends into Israeli exclusive waters, the framework agreement will be activated, leading to further details regarding the potential development of the Qana field and Israel's share following the discovery. A decision will then be made on whether to develop the field and commence the production phase.
Regarding the post-work plan phase, Hayaian noted that "after notifying TotalEnergies of the work plan, the Lebanese Energy Ministry will begin announcing jobs and purchasing equipment for the exploratory phase as was done in block number 4." She emphasized the need to identify the company that will carry out the drilling operations, noting that in block 4 the digging was contracted to Vantage Drilling, and the drilling vessel was the Tungsten Explorer.
Speaking about the phases leading up to and following exploration, Hayaian stated, "The initial exploration phase requires starting drilling in an exploratory well. If quantities of gas are identified, the well is closed to prepare studies or assessments for future drilling operations, during which the size of the well is estimated followed by the feasibility of development and production."
In addition, she clarified, "The return value will be assessed, considering whether it will cover the investment costs incurred by the company, taking into account infrastructure costs, and the drilling to discover oil; hence, it is called an exploratory well. They will then conduct evaluation studies before it turns into a producing well."
Regarding the timescale for reaching the drilling stage in the Qana field, Hayaian said, "In block 4, it took two years from the contract signing to the arrival of the drilling vessel. In our current situation, it could take months or a year and a half, and at most three years before the initial exploration phase concludes." Even if Lebanon secures full exploration and exploitation rights for the Qana field, it will still take years before the field enters operational phase and begins benefiting from its revenues, especially since the operating company for the Qana field will pay Israel its estimated share of 17%.
