Beyond Magazine Issue 23 Spring 2017

39 qualification round that would be entitled to bid. Then from April 15 until September 15 is the timeframe for submitting the applications. During this time companies who bid buy the seismic data, analyze data, and submit their proposals. Until October 15 we are assessing these proposals followed by reporting them to the Minister.

Next, everything goes to the Council of Ministers to decide which blocks will be awarded in the first bid round, which should take place by mid-November of this year. If things go as planned with no major setbacks, we should be able to award by the end of 2017.

Potential oil and gas revenue for Lebanon We know that Lebanon is part of the Levantine Basin and thus far studies on paper show good potential, which has been confirmed by good discoveries. In Lebanon’s case we have undiscovered resources estimated on paper from the seismic data. However, since we are in a basin that has had good discoveries we can assume this too in our blocks, but we do not know yet about volume. We are looking at an exploration area of 22,700 square kilometers (almost double the area of Lebanon). Definitely we are seeing something prospective, so the next step is to have a commercial discovery. For that there are risks we have to mitigate, such as geological and exploration and so forth, so it’s still early to estimate revenue.

How oil compares to gas There are two ways to deliver natural gas: either via pipeline or to liquefy it and send it by ships. With oil, since it’s a fluid, you can deliver it via pipelines or you can store it in tankers; therefore it is easier to process and deliver. Also it is sold as “spot contracts,” which means that your ship can be sailing and you may get a request for oil that you can immediately deliver to the client. Oil as a commodity is preferred because it is easier to sell. Gas however, is strategic because both the increase in environmental requirements and the demand for hydrocarbon fossil fuels can no longer be met by oil alone. We have reached a certain ceiling or saturation in oil production, whereas with gas we are still a long way from the saturation point.

Maritime space disputes with hydrocarbon neighbors There are always issues at the borders that both sides won’t agree on. With Cyprus to the west, we both have the same legal bases – both nations have approved the United Nations Convention of the Law of the Sea (UNCLOS) and a median line has followed. The northern border to Syria has been done the same way taking the equidistant median line. To the south however there is an area of 860 kilometers, which is for Lebanon but the Israelis are claiming it to be theirs. However, Israel and Syria did not sign the UNCLOS agreement. As usual in cases like these a third party has been involved and a U.S. envoy has been mediating this issue.

Drilling distance from the coast and environmental protection measures We have our maps with our targets indicating where drilling could be, which are at least 15-20 kilometers away.

We also created a buffer zone, which is about 6-9 kilometers along the coast for touristic purposes and fishing so there can be no conflict. The operation will be set with floaters and rigs at one to two thousand meters water depth. Law No. 132, along with our decrees, are very strict on environmental protection, plus the Ministry of the Environment has its own regulations, so we have covered this the best we can before the offshore work begins.

The hydrocarbon industry and creating jobs for the Lebanese There would be job creation but most of the roles would not be in the exploration phase but in the production and the industries resulting from that, such as construction, facilities, and petrochemicals. So for every engineer I would say in the field, during exploration and production, if you follow all the business cycle and have people working in all the business cycle of oil from upstream to downstream and you have proper planning and energy strategy for the state and you manage to intensify the returns to the Lebanese public - it will create eight to 10 jobs between technicians, assistants, and so forth. So most of the jobs will not only involve the actual production of the hydrocarbons but also how to use the oil and gas, in making fertilizers, in petrochemicals, in processing, in the shipping and the piping, and so forth.