On Friday 15 February the Lebanese authorities announced the launch of a
pre-qualification round for those IOCs interested in its offshore
acreage. The statement came after news that up to 675 million barrels
(MMB) of oil and 16 trillion cubic feet (TCF) of gas have been
discovered in Lebanese waters adjacent to its northern maritime border
with Cyprus and Syria. So far up to 30 IOCs have expressed their
interest with contracts due to be signed in 12 months and drilling to
begin at the end of 2015.
Despite the obvious potential, as witnessed by the US Geological
Survey's (USGS) 2010 estimate that the Levant Basin as a whole could
contain two billion barrels of oil and up to 123 TCF of gas, it has
taken over two years for the government in Beirut – which has been
dogged by slow-motion politics, neighbouring conflicts, and sectarian
divides - to establish a Petroleum Administration to handle applications
from IOCs bidding on exploration blocks. The delay has been compounded
by the issue of the region's unresolved maritime border disputes.
In 2007 a bilateral agreement was signed between Lebanon and Cyprus on
the delimitation of the former's Exclusive Economic Zone (EEZ) but, in
protest at the 2010 bilateral agreement between Cyprus and Israel, it
has never been ratified by the Lebanese government. There is a disputed
area of 874 km2, as Israel began its maritime border with
Cyprus at Point 1 which coincided with the final point demarcated
between Lebanon and Cyprus. Beirut argues, however, that this final
coordinate was deliberately chosen because it was in uncontested
Lebanese waters and that the de jure border should actually lie 17 kms
further at Point 23. This dispute, as well as Turkish political pressure
on Lebanon, has also held up the ratification of the 2007
Lebanese-Cypriot agreement, despite the existence of clauses in these
agreements to accommodate for amendments.
In a move to hasten the acceptance of an agreement and strike an accord
between Lebanon and Israel, which technically still remain in a state of
war, Cyprus' outgoing President Demetris Christofias signed a
memorandum of understanding with Lebanon's President Michel Sleiman in
January 2013 to “ to increase co-operation to agree on principles and
sound means that would allow us to extract this resource.” This latest
discovery, plus the huge discoveries already made in both uncontested
Israeli and Cypriot waters, have put fresh impetus on all sides to come
to an agreement which will enable the whole of the Levantine Basin to be
explored without violating each other's maritime sovereignty.
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