Just days before the end of President Michel Aoun's term, and in a race against time, Lebanon and Israel signed a maritime border demarcation agreement after months of difficult negotiations, which nearly fell apart in the last days before American negotiator Amos Hochstein returned to Beirut with the draft of the agreement, resulting in its signing in late October. Lebanon's dream was realized, and in 2022 it became an oil-producing country. However, the actual transformation of Lebanon into a state benefiting from its oil wealth requires multiple steps and time, beginning with the initiation of drilling operations by exploration companies to extract gas. What new developments will 2023 bring in this regard? What is required from Lebanon to do?
Lama Hariz, an expert in oil and gas laws, revealed that "Qatar Energy will purchase the stake of Novatek that was acquired by the Lebanese state in January 2023." She added that "the consortium of companies, through Total, will undertake the following tasks: providing an exploration plan, conducting an environmental impact study for the intended drilling site in Block 9, contracting with service companies for drilling operations that will in turn contract secondary contractors for services, hiring administrative staff, engineers, and Lebanese workers, drilling an exploratory well, preparing reports on drilling results, and deciding whether to continue operations and drill another well."
On a governmental level, the Lebanese state needs to take several measures. Hariz noted in an interview with MTV that the state must appoint new members to the Petroleum Administration after the expiration of its term, especially after three out of six members resigned and the chairperson took a long leave. Hariz emphasized the necessity of "enacting a law to amend the powers of the administration to enhance its authority, granting it the power to make decisions and elevate them to the minister and the Council of Ministers, enacting a law to prohibit the use of oil revenues before the sovereign fund is established and operational, and enacting a law for the sovereign fund that is to consist of three portfolios dedicated to savings, foreign investment, and domestic investment exclusively in productive sectors, namely agriculture, industry, technology, and alternative energy. It should have real independence enabling it to prepare investment mandates and manage oil revenues."
Additionally, Hariz called for the state to establish a vision outlining its project regarding equipping a port for petroleum activities, constructing the necessary infrastructure, and signing preliminary agreements for gas export, alongside approving a professional approach to train a Lebanese workforce and enhancing oversight and transparency in the contracting and employment processes conducted by Total.
Thus, there remains a long path ahead for Lebanon to meet all oil specifications, while information indicates that drilling and exploration operations may begin in Spring 2023, after which the timeline for commencing gas extraction will become clearer.
