BEIRUT: Caretaker Energy Minister Gebran Bassil postponed the oil and gas auction from Dec. 10, 2013, to Jan. 10, 2014, after Lebanon failed to endorse two decrees needed to assign the oil blocks for companies.
The decrees, demarcating 10 maritime oil exploration blocks and establishing a revenue-sharing model, require Cabinet approval before oil and gas contracts can be awarded.
This was the second postponement issued by Bassil this year.
In a statement to the press, Bassil said he had sent letters to both President Michael Sleiman and caretaker Prime Minister Najib Mikati, urging them to hold an extraordinary Cabinet session to endorse the two decrees in order to preserve and protect the country’s gas and oil wealth.
The minister underlined the importance of speeding up the endorsement of the decrees to avert any Israeli exploitation of Lebanon’s gas off the coast.
Some media reports have said that Israel intends to block any plan by Lebanon to exploit its gas and oil wealth in the disputed Exclusive Economic Zone.
The size of the disputed maritime area is around 850 kilometers and is said to be rich in natural gas resources.
Despite political obstacles, Lebanon managed to attract 46 Arab and international oil companies in the second prequalification round of the bidding process.
Parliament Speaker Nabih Berri urged Sleiman and Mikati to hold an urgent Cabinet meeting and assign all 10 of the blocks to the oil companies.
Berri and many Lebanese politicians have expressed concern that Israel could try to siphon off some of the Lebanese blocks off the coast. The Israelis will start extracting gas in less than three years.
Sources told The Daily Star that the acute political discord among the political class was the main reason for the delay in endorsing the two decrees.
“Some politicians do not really have much faith in Bassil and for this reason they are not too eager to pass the two decrees,” a source close to one of the main political parties told The Daily Star.
But the source concurred Lebanon needed to take quick measures to exploit its gas wealth before Israel put its hands on some of these blocks.
The British-based company Spectrum, which carried out the 3-D seismic survey over 3,000 kilometers off the southern coast of Lebanon, estimated Lebanon’s offshore gas wealth to be at least 25 trillion cubic feet.
Officials at the company told The Daily Star earlier that initial findings showed that Lebanon may be sitting on more natural gas than Israel and Cyprus combined.
They added that the geological structure of the territory was not too complicated and that this meant oil companies did not have to dig too deep to extract gas.
Bassil argued that the presence of American companies could deter Israel from attacking the Lebanese gas blocks off the coast.