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Sleiman: Start gas auction with just one block

  • President Michel Sleiman speaks during the Lebanese Excellency Awards ceremony in Baabda on Tuesday March 11, 2014. (The Daily Star/Mohammad Azakir)

BEIRUT: President Michel Sleiman said Tuesday that he preferred to auction just one of the 10 gas blocks off the Lebanese coast instead of tendering all 10 blocks initially.

“We should not auction four or 10 blocks. If we can auction one block in the beginning, then this will be a good start,” the president said.

He stressed that he had reached this view after consulting with some oil experts on the matter.

The president’s remarks came during the ceremony to honor industrialists and businessmen with Lebanese Excellence Awards at Baabda Palace.

Sleiman’s statements seem to be in line with the position of former Energy and Water Minister Gebran Bassil, who favors an initial offering of only five blocks with one being selected by the firms for auction.

But Speaker Nabih Berri has repeatedly called for offering all 10 of the blocks off Lebanon’s coast and letting the companies choose five in order to generate the best offers.

Bassil originally postponed the auction from Dec. 10 to Jan. 10 and a second time to April 10. The new energy minister, Arthur Nazarian, is unlikely to change his predecessor’s last amendment, but many experts say the date is unreasonable.

Industry insiders say that the Cabinet should delay the auction for another two or three months at least to give firms more time to examine conditions and make their offers.

Sleiman also voiced his support for giving the Petroleum Administration more authority in the matter, praising its members.

The Petroleum Administration has been unable to act or negotiate any deal with the companies without first receiving Bassil’s approval.

The president warned against exploiting the issue of oil and gas exploration ahead of the presidential election a clear allusion to Bassil.

“We must not count on one company only, and the revenues from oil should not exceed 30 percent of the country’s GDP,” Sleiman said.

He said oil revenues exceeding 30 percent could hurt the economy, based on previous experiences in oil-producing countries.

 
A version of this article appeared in the print edition of The Daily Star on March 12, 2014, on page 5.
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Summary

President Michel Sleiman said Tuesday that he preferred to auction just one of the 10 gas blocks off the Lebanese coast instead of tendering all 10 blocks initially.

Sleiman's statements seem to be in line with the position of former Energy and Water Minister Gebran Bassil, who favors an initial offering of only five blocks with one being selected by the firms for auction.

The president warned against exploiting the issue of oil and gas exploration ahead of the presidential election a clear allusion to Bassil.


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