Lebanon – Russia:
Lebanese President Michel Slaiman paid a 5-day visit to Russia on 19-23/01. The purpose of the visit was to receive the annual prize of the International Foundation for the Unity of Orthodox Christian Nations for his services in the promotion and strengthening of Christian values in the modern world. Despite the private character of the visit, Slaiman was able to schedule meetings with President Vladimir Putin and Prime Minister Dimitri Medvedev. Beside the Syrian crisis, Slaiman’s discussions with Russian officials focused on military assistance and energy cooperation. Once again, we note an inconsistent delegation that was not formed according to the visit’s needs. Slaiman was accompanied by a delegation that included deputy Prime Minister Samir Moqbel. The absence of the Defense Minister and the Energy Minister was notable. This is the third time, since we started publishing the oil & gas weekly roundups on November 26, that we note the absence of Energy Minister Gebran Bassil from delegations accompanying either the President or the Prime Minister in major trips abroad, all of which featured energy cooperation as a priority. This seems to reinforce our initial assessment of a fragmented approach to the energy sector, that is indicative of a lack of a coordinated vision and a result of local rivalries. The exploitation of offshore resources is rapidly making its way as a key element in public debate, and Slaiman, like others, is looking to score points ahead of the upcoming parliamentary elections (which, if not postponed, is expected to be held in June 2013).
It is worth to note that before and during the visit, it was the Lebanese side that focused on energy cooperation, while the Russians seemed to give importance to other types of cooperation, particularly in the defense sector. Over the past few years, several military assistance agreements between Lebanon and Russia were aborted (the decision to equip the Lebanese Army with MiG-29s fighters, later substituted with Mi helicopters), which lead us to ask if cooperation in other strategic issues would face the same fate.
President Putin also stressed on boosting trade and business ties between both countries. At a time of economic hardships, this was very well received by the Lebanese business community. Jacques Sarraf, former Chairman of the Association of Industrialists who accompanied the President to Moscow, announced that a delegation of Russian businessmen will visit Lebanon in the coming week to boost trade and business cooperation between both countries. The head of the Economic Committees Adnan Kassar, often seen as a potential candidate for premiership, praised Slaiman’s visit to Moscow and called on Russian businessmen to increase their investments in Lebanon.
Cyprus – Second licensing round:
On 24/01, Cyprus issued three separate licenses to a consortium made up of Italy’s ENI and South Korea’s KOGAS for offshore gas exploration in blocks 2, 3 and 9. Cyprus, which awaits bailout, will earn a badly-needed €150 million with the signature of the production sharing contracts. The licenses cover a period of three years and can be renewed after relinquishment of 25% of the area. The blocks lie to the north of Block 12, where US firm Noble Energy reportedly discovered between 5 and 8 trillion cubic feet of natural gas. Two of these blocks, block 3 and 9, are adjacent to the Lebanese borders. ENI Vice President for Eastern Europe, Valerio Bracaccia, said industry officials recognized that the waters between Cyprus, Lebanon and Israel hold significant gas deposits.
Lebanon – First licensing round:
Vagit Alekperov, head of Russian firm LUKoil, declared that his company is considering expanding its operations to Lebanon and is interested in participating in the country’s first licensing round. After failing to get a stake in the Israeli Leviathan gas field and exploration rights in offshore Cypriot blocks, Russia was expected to turn to Lebanon as a possible option for securing a stake in the Eastern-Mediterranean’s gas potential. Interestingly, the announcement was made on 24/01, at the World Economic Forum in Davos, Switzerland, and not during President Michel Slaiman’s visit to Russia on 19-23/01.
Lebanese daily Assafir was quick to note on 26/01 [Link in Arabic] that LUKoil might also cooperate with Israeli company Givot Olam in developing onshore oil fields in Israel, and wondered if the company would be able to operate in both countries at the same time.
Lebanon – Diplomatic activity:
Parliament Speaker Nabih Berri received the newly-appointed Brazilian Ambassador Emilio Massato (اتونسو ايميليو الينكاسترو ماساتو) on 22/01. Brazilian companies are also reported to be interested in Lebanese offshore resources. In March 2012, a delegation from Petrobras headed by the company’s President Pedro Augusto met with President Michel Slaiman to brief him on the company’s work and explore possible areas of cooperation. According to our information, a Brazilian company is currently in negotiations with a local oil and gas company to form a consortium ahead of the first licensing round.