Lebanon’s energy minister has provided the clearest hint yet that he expects a delay to the bidding process for the country’s offshore oil and gas, ahead of a Monday deadline.
In an interview with Executive, Minister of Energy and Water Gebran Bassil said that a “minor” delay was possible as the country’s political situation was preventing the signing of key decrees.
In order to continue with the process, Lebanon’s caretaker cabinet must meet before Monday to sign two laws regarding the oil and gas sector. One of these confirms the terms of agreement between the government and international oil companies, while the other formally demarcates the offshore blocks that companies can bid on.
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These decrees were supposed to be agreed in July, but the fall of the government in March has led to a political stalemate, with the country’s oil and gas prospects being the victim.
Bassil said that he was still hopeful that the laws would be passed, but that there was a possibility that an extension would be necessary. “We have to recognize that the government resigned and that there was no new government until now,” he said. “This could be a reason for a delay that I would describe, if it happens, [as] minor. It can happen in any bidding round to have a minor delay or extension. What matters is not to have it major.”
Asked to speculate on the potential length of the delay, the minister declined. However, industry insiders have suggested that the bidding would be opened for at least a month longer, with the potential for it to be extended for a number of months. If the process were delayed, it would be the first time that Bassil has failed to hit his self-made targets.
Bassil denied, however, that it was now too late for a deal ahead of Monday’s deadline, saying that the laws were ready to be signed immediately if the caretaker Prime Minister Najib Mikati and President Michel Sleiman agreed on it. “It can happen in two minutes by convening the Council of Ministers (cabinet) – the decrees are there, they [have been] ready a few months, we have the approval of the Shura (Council). It is a two-minute meeting, we say ok and we move on.”
Bassil said the situation was all the more urgent as Lebanon’s neighbors Israel and Cyprus have continued to improve their relations with regard to offshore oil and gas. Earlier this month the two countries and Greece signed a deal to cooperate over energy policy. This followed a memorandum of understanding between Larnaca and Tel Aviv to establish a liquified natural gas plant in Cyprus which both countries would use.
Asked if he was concerned that any delays to the bidding process would mean Lebanon falling further behind its neighbors, Bassil said: “If it is long enough yes. If it is long enough, let's say we will stay for a few more years doing nothing, yes. This is the aim of Israel, to delay us. So the big question for our politicians is do they want to help Israel by giving Israel more time?”
The interview will appear in full as part of a report on oil and gas in Executive's October edition