BEIRUT: Caretaker Energy and Water Minister Gebran Bassil is set to postpone an auction for the licensing of offshore gas exploration following a failure to pass two decrees on revenue sharing and the number of blocks to be auctionedoff, industry sources said Tuesday.
Bassil is expected to hold a news conference Wednesday to disclose the latest developments on the auction, which was scheduled for Jan. 10.
“The minister will postpone the date of the auction in his news conference but we are not sure when the next round will take place,” one oil company source told The Daily Star.
He added that it was illogical to hold the auction on Jan. 10 after the caretaker Cabinet refused to convene a special session to pass two important decrees pertaining to the number of blocks on the table and other important financial and technical matters.
Bassil’s office declined to comment on the matter.
The caretaker minister has lobbied hard to persuade President Michel Sleiman and caretaker Prime Minister Najib Mikati to hold a special session to endorse the two decrees.
“I can’t imagine any oil company will submit a tender if they don’t know how many blocks will be put up for auction. I assume Bassil will seek an extension of the auction until the decrees are passed by the new Cabinet,” the source explained.
But on Dec. 4, 2013, Bassil told a conference on oil and gas that he was determined to hold the auction on Jan. 10 although he admitted some politicians in Lebanon were refusing to pass the two decrees.
The minister has urged all politicians not to involve the oil and gas issue in their bickering for the country’s sake.
The Energy Ministry estimates that Lebanon has at least 95 trillion cubic feet of gas and 750 million barrels of oil in 45 percent of the country’s surveyed territorial waters.
Some politicians who back Bassil warn that any further delay in the licensing auction would allow Israel to siphon off the country’s gas wealth in the disputed territorial waters.
International oil companies have also urged Lebanese politicians not to delay the auction any longer.
The industry source was confident that the oil firms would submit their tenders again once the new Cabinet passed the two decrees.
“They [oil companies] have not given up on Lebanon despite the constant delay in holding the auction. We hope a new Cabinet is formed soon so we can go back to business,” the source added.
The second prequalification tender round drew 46 international oil companies interested in the country’s hidden wealth.
“It is a pity to see countries like Cyprus, Israel and even Syria signing contracts to explore gas and oil offshore while Lebanon has yet to decide [on] a date for the auction,” the source said.
London-based Spectrum has conducted a 3-D seismic survey of some 3,000 kilometers of Lebanon’s territorial waters and sold nearly $100 million worth of data to international oil firms. The company also conducted a 2-D seismic onshore survey four months ago for potential oil reserves.