Lebanon – First licensing round:
According to the Offshore Petroleum Resources Law, companies wishing to acquire an exploration license should constitute consortiums of three companies, one of which an operator, and jointly submit a bid. On 11/06, TPAO’s acting president and chief executive, Besim Sisman, announced that the Turkish company is partnering with Royal Dutch Shell. On 10/04, Turkish Energy Minister Taner Yildiz told reporters that Turkey, and TPAO, are determined to “participate in the Lebanon project.” Local anger towards Turkey for its perceived role in the kidnapping of nine Lebanese Shiite pilgrims by Syrian rebels is mounting, but hostile actions against Turkish interests in Lebanon (including protests in front of the Ministry of Energy and Water demanding TPAO to be excluded from the tender) have been temporarily contained, pending the results of the latest round of negotiations taking place in Turkey to free the hostages.
Partnerships between some of the biggest companies planning to participate in the first licensing round are starting to take shape: In addition to Royal Dutch Shell and TPAO, in April, Rosneft announced that it is partnering with ExxonMobil, and in March LukOil announced it is teaming up with Total. It is worth to note that none of the Russian companies have applied to participate as operators, and partnerships with western companies might help them secure a stake in East Mediterranean gas without provoking western powers that are traditionally influential in Lebanon. From a Lebanese perspective, involving western and Russian companies in gas exploration and production would provide additional reasons for their countries to maintain Lebanese stability. On the other hand, the events in Turkey, might affect Turkey’s image as a strategic partner, from an Arab and Lebanese perspective.
Lebanon – Seismic surveys:
Caretaker Energy Minister Gebran Bassil launched onshore seismic surveys on Saturday 15/06 in a public event held in Batroun, a coastal city and qadaa (district), 50 Km north of Beirut, which also happens to be the minister’s home region, and where he is expected to run for Parliament (Bassil was also candidate in 2005 and 2009, but did not succeed to get elected). The event was attended by members of the Petroleum Administration and UK ambassador Tom Fletcher [There was a first announcement, back in February, in a ceremony attended by British Foreign Secretary William Hague]. The actual 2-D surveys, which will be conducted by Spectrum, are scheduled to start by the end of June 2013, in Ebrine, where surveys have been conducted in the past. Bassil also highlighted the advantages of onshore resources, much easier to recover than offshore resources, but he also made sure to say that “we can’t say at this stage that we have petroleum resources inland, we only have promising signs.” Preliminary results of the 2-D surveys will be available by the end of the year.
Lebanon – Academic formation and programs:
As MESP has previously announced, Université Saint Joseph (USJ), one of the leading universities in Lebanon, and Total have concluded a partnership on 07/06, in presence of Arnaud Breuillac, President of Total E&P in the Middle East, and the University’s Rector, Father Salim Daccache. The first outcome of this partnership is an Oil & Gas Master, proposed by the Faculty of Engineering, in partnership with the Institut français du pétrole (IFP School). Although USJ is a french-language university, courses for this Masters degree will be provided in English to attract a larger number of students, not only from Lebanon, but also from neighboring countries. MESP has repeatedly advocated for concluding this type of partnerships between local universities and international companies seeking to acquire an exploration and production license in order to maximize benefits for both sides [see “Lebanon – Academic formation and programs” in our March 4, 2013 roundup; and “Lebanon – Offset” in our January 14, 2013 roundup].
Eastern Mediterranean – Energy geopolitics:
The energy dimension is increasingly being highlighted by the Iran/Syrian Regime/Hezbollah axis. In an interview published by Lebanese daily al-Akhbar on 10/06, Syrian President Bashar al-Assad said that western countries are offering to invest tens of billions of dollars in post-war reconstruction on condition their oil companies get a stake in Syrian offshore petroleum resources. Assad said he rejected the offer (including a $21 billion loan from the World Bank), and announced that he awarded a production license to a Russian company. Four days later, on 14/06, al-Akhbar reported that al-Assad is insisting, during his meetings, on the challenges that the discovery of petroleum resources poses for Lebanon and Syria, and the need to “protect the oil.” According to the Syrian president, the next battle will be the “battle of oil” since the oil and gas wealth in the Gulf is controlled by the US, and is being used to “destroy our countries”. He added that Lebanese and Syrian offshore and onshore resources must be protected, and their proceeds must be used to ensure development and to finance the conflict with Israel. In a televised speech aired on 10/06, Hezbollah leader Hassan Nasrallah emphasized the role of the resistance group in protecting Lebanon and its resources, a fact that will allow the country to exploit its oil and gas wealth in the near future. If it weren’t for the Resistance, he said, Lebanese gas would have been under Israeli control.
Explaining political events through the prism of energy geopolitics and magnifying the energy dimension is popular in the Middle East. The Syrian conflict is no exception. The Iran/Syrian Regime/Hezbollah axis accuses western powers (including the US, GB, France and Israel) of aspiring to control local people’s wealth, and their opponents accuse Russia of a new form of imperialism and wanting to get a hold on east Mediterranean gas resources.
Previous reports:
Lebanon: The Oil & Gas Week, June 10, 2013
Lebanon: The Oil & Gas Week, June 03, 2013
Lebanon: The Oil & Gas Week, May 27, 2013
Lebanon: The Oil & Gas Week, May 20, 2013
Lebanon: The Oil & Gas Week, May 13, 2013