It is a crucial deal for Lebanon, which is facing its worst economic downturn in decades, and for settling disputes over its maritime borders with Israel. A move that allows Beirut to begin exploration in the potential Cana gas field, part of which is located in the Jewish state’s sovereign waters, despite the war between the two countries.
Indeed, on Sunday Qatar announced its entry as a partner of France’s TotalEnergies and Italy’s Eni in the consortium set to initiate hydrocarbon exploration in a sea block off southern Lebanon bordering Israel. The Arabian Peninsula will replace Russia’s Novatek, which withdrew in 2022, through its national oil company QatarEnergy, and will hold 30 percent of the shares (compared to 35 percent for TotalEnergies and 35 percent for Eni), Lebanese Prime Minister Najib told Mikati , before the signing ceremony this Sunday.
Agreement on the maritime borders between Lebanon and Israel
The announcement comes after a major breakthrough in the maritime border dispute between Lebanon and Israel after mediation by the US. Indeed, on October 27, the two neighbors, still at war since Israel’s founding in 1948, signed a historic agreement defining their Mediterranean borders. Previously, no country was able to exploit the region’s natural resources due to disagreements over the location of the border. Hezbollah, Lebanon’s powerful militant and political group, even threatened to attack Israel if it extracted gas ahead of a deal.
The situation has therefore evolved: under the agreement negotiated by the United States, Israel thus received all rights to the Karish offshore gas field, while recognizing Lebanon’s rights to another gas field called Cana. And that’s not all: Beirut has accepted that some potential proceeds from Qana, part of which lies in Israeli waters, will go to Israel. Ultimately, the company that operates Cana pays Israel “for its rights to any deposits,” according to the contract, with the Israeli government estimating its share at about 17%.
exploration campaign
What “to give new impetus to the exploration of the potential of hydrocarbons in the country”, welcomed the CEO of TotalEnergies, Patrick Pouyanné. The goal of this new consortium would be to drill the Cana well “as soon as possible in 2023”. Specifically, Lebanon has divided the exclusive maritime economic zone into ten blocks, and block 9, which houses Cana, was part of the disputed zone with Israel prior to the October deal. The consortium is also responsible for the exploitation of Block 4 off the coast of central Lebanon where exploration has not resulted in the discovery of commercial quantities.
Against this background, TotalEnergies and Eni had already signed a framework agreement with Israel last November to start prospecting. With this new step, the consortium will now be able to explore “a previously identified prospect that could extend both in Block 9 and into Israeli waters south of the recently established maritime boundary,” according to the French group. In detail, the prospecting should end “in the next 12 months”, emphasized Sunday Patrick Pouyanné. The gas find could therefore be announced at this point in time. The potential Cana deposit has already been identified by seismic analysis of the rock and needs to be confirmed by this exploration campaign.
Israel and Lebanon are nearing a border deal to boost gas production in the Mediterranean
Nonexistent infrastructure
However, analysts agree that in the event of a commercial discovery, it will be several years before Beirut enters the exploitation phase.
“The problem is that you need infrastructure to export the gas, which doesn’t currently exist. And if the gas is going to be used for local consumption in Lebanon, where power plants are almost idle due to the economic crisis, “a coastal pipeline will have to be built to feed those power plants,” AFP told AFP. Energy expert Naji Abi Aad.
Israel, for its part, has already started extracting gas and is supplying it to its Jordanian and Egyptian neighbors. Last June, it signed an agreement to liquefy its gas in Egypt in order to ship it to Europe.
Qatar’s growing influence
This new partnership expands the exploration collaboration between TotalEnergies and QatarEnergy, bringing the number of countries in which the two companies are partners to nine. During a press conference, the Qatari minister viewed his country’s entry into the consortium as “an opportunity to support development in Lebanon under these difficult circumstances”. But the peninsula obviously finds its interest there:
” This involvement is a new step in Qatar’s expansion of its international dominance in natural gas with the Russo-Ukrainian war, but also in the growing international interest to conduct more exploration in the Mediterranean to offset gas disruptions, particularly in Europe,” says Laura Sayah, Assistant Professor at Lebanese University, quoted by Doha News.
Indeed, Qatar has been coming to the aid of Europe for several months as Vladimir Putin cuts gas supplies. hitherto trapped in its extreme dependence on Russia. So much so that the country regained its place as the world’s top LNG exporter, ahead of the United States and its abundant shale gas, according to data from S&P Global Commodity Insights last April. In a world of conflicting orders, the call by the International Energy Agency (IEA) in 2021 to immediately abandon any new oil or gas exploration project in order to limit global warming to +1.5° does not seem to offer any resistance to economic and political interests .
LNG: Qatar’s plan to strengthen itself in Europe
(with agencies)