[Oil & Gas Updates]: Weekly Roundup, March 18, 2013

Lebanon – Denmark:

A few months before he leaves Lebanon to Saudi Arabia, Danish ambassador Jan Top Christensen has rarely been that busy. Two Danish companies, Dong and Maersk Oil, are reportedly interested in the upcoming first licensing round, and indeed both have bought the seismic data and analysis covering Lebanon’s EEZ [see “Lebanon – Pre-licensing round arrangements” in our March 11, 2013 roundup]. The ambassador met with the Petroleum Administration’s board members on 12/03. The following day, he met with Finance Minister Mohammad Safadi along with a delegation representing Maersk Oil, confirming Denmark’s interest in investing in the Lebanese oil and gas sector.

Lebanon – United States:

As we have mentioned in a previous report, high-level diplomatic activity is expected in Beirut, ahead of the launching of the first licensing round in May 2013. After UK Foreign Secretary William Hague’s visit on 21-22/02 and Hungary’s Prime Minister Viktor’s visit on 27-28/02, a senior State Department delegation comprising Deputy Assistant Secretary of State for Energy Diplomacy Amos Hochstein and Acting Deputy Assistant Secretary of State for Near Eastern Affairs Lawrence Silverman arrived to Beirut on 11/03. They met with President Michel Slaiman, Speaker Nabih Berri, Prime Minister Najib Mikati, Minister of Energy and Water Gebran Bassil and former Prime Minister Saad Hariri’s adviser Mohammad Shatah. During their meetings, they confirmed once again U.S. support to the government’s effort in moving forward with oil exploration. This is an interesting position considering the U.S. has been wary of the current government ever since it was formed in June 2011, perceiving it as “Hezbollah-dominated.” The U.S. seems to be responding favorably to Bassil, who has persistently invited and encouraged American companies to be involved in the exploitation of the country’s resources, despite his political alliance with Hezbollah. Bassil’s work seems to be appreciated, and foreign delegations visiting Lebanon have reportedly been inquiring on the possibility that he would retain his position as Minister of Energy after the parliamentary elections or in case of cabinet reshuffle.

Once again, military assistance and energy cooperation are associated [see “Lebanon-Hungary” in our March 4, 2013 roundup]. The delegation confirmed U.S. commitment to providing aid to the Lebanese army, and to the country’s stability in general, which seem to have became even more important now that a considerable oil and gas wealth possibly lies in Lebanese waters. The maritime border dispute with Israel was on the menu of discussions. A delegation from the Lebanese army headed by Brig. Gen. Abdel-Rahman Shahaytili explained to Hochstein and Silverman the mechanisms and techniques adopted by the army to delineate the country’s maritime borders, but the Americans didn’t seem to have anything to add to their previous initiative, put forward by former Special Coordinator for Regional Affairs at the State Department Frederic Hoff.

Lebanon – Civil society:

The Skeyes Center for Media and Cultural Freedom, in cooperation with the Global Center for Journalism and Democracy, organized a workshop on 15-17 March, in Beirut, to train  economic journalists in Lebanon on how to cover the oil and gas sector [click here to see the agenda; and here to view the full report]. Lebanon’s main business magazines were represented at the workshop, in addition to several daily newspapers. This is the first such training to be held in Lebanon, highlighting at the same time the rising enthusiasm generated by the potential discovery of large oil and gas reserves off the Lebanese coasts and the need to have a better coverage in order to raise awareness among citizens and stakeholders on the need to understand and monitor all aspects related to the oil and gas sector.

Middle East Strategic Perspectives was represented by Mona Sukkarieh who gave an overview of the emerging Lebanese oil and gas sector, covering the legal and institutional framework, and the preparations for the country’s first licensing round in May 2013. Speakers and trainers included: Chris Huntington (a Partner with New Energy Fund Advisors and a former CNN Financial News Correspondent and Producer from 1989 to 2006 during which time he reported extensively on global energy trends), Claude Salhani (a journalist, author and political analyst who specializes in Middle East politics), Jessy Trad Kastoun (a senior producer and business news anchor on Lebanon’s MTV channel), T.K. Maloy (in the journalism/media profession for more than 20 years, focusing among other things on emerging markets and covering the oil-based economic boom in the autonomous Kurdistan region in northern Iraq), Laury Haytayan (MENA Senior Associate at the Revenue Watch Institute), Diana Kaissy (MENA coordinator for Publish What You Pay), Kris Van Orsdel (a government affairs specialist and policy analyst who has worked in natural resource management, environmental protection, health care and disaster recovery) and Ben Van Heuvelen (managing editor of Iraq Oil Report).

Lebanon – Private sector:

The Lebanese economy has been going through a series of setbacks in the past couple of years, heavily impacted by the Syrian crisis. But this is not preventing businessmen from projecting themselves a few years forward to evaluate the business opportunities that could arise from developing the oil and gas sector. Many are pinning hopes that, in addition to job opportunities directly related to the sector, a parallel business environment could also prosper, catering to the needs of the oil and gas industry. These includes logistics, transportation from and to offshore platforms, private security, food catering etc. The private sector, which only a few months ago seemed unimpressed with the news that Lebanese waters may hold considerable amounts of oil and gas [see “Lebanon – Private sector” in our December 17, 2012 roundup], is now starting to make plans and is gradually showing signs it intends to play an active part in the country’s emerging oil and gas industry.

Lebanon – Naval activity:

As a follow-up to our update “Eastern Mediterranean – Naval activity” published in our March 4, 2013 roundup in which we indicated that naval patrols are likely to become more frequent in the Eastern Mediterranean with the discovery of large oil and gas reserves and the unstable political and security situation in some of the bordering countries, a patrol ship and two large landing ships of the Russian Baltic Fleet arrived to Beirut on 15/03. The French helicopter carrier Le Tonnerre and a Georges Leygues class frigate will also be arriving to Beirut shortly, as part of the Jeanne d’Arc 2013 mission.