well as gas exploration progress made by neighboring countries, according to Ayat. “The discoveries made in neighboring countries, namely Israel, Cyprus and Egypt … have been a great motivation for Lebanon to search its waters, even more so that it fears it might lose its share of the regional market,” she said. “While the motivation to search for gas has always been there, the main obstacle has been the absence of a political consensus to launch exploration activities. If something is changing now, it may be the political momentum,” added Ayat. Notwithstanding optimism that a faster legislative process could see the award of licenses and commencement of drilling within the next 12 months, a number of downside risks to creating a vibrant domestic energy sector remain. Lebanon’s maritime border dispute with Israel and the ongoing civil war in Syria both have the potential to delay gas exploration or scare off the foreign expertise and investment necessary to commence production. Another prominent risk is Lebanon’s uncertain political environment, which may yet impede implementation of the recent deal between rival parliamentary parties or create an uncertain regulatory environment for prospective international oil company partners. According to Sukkarieh, from Middle East Strategic Perspectives, the July 2016 political agreement “should be perceived as a preliminary deal, laying the ground for a broader, national deal. Once this is achieved, we can move forward with the oil and gas file. “Higher country risk does not conceal Lebanon’s energy potential. Oil and gas companies are used to operating in areas where political and country risks are high,” she added. Notwithstanding lingering uncertainties, future development of Lebanese offshore hydrocarbon deposits will remain an attractive proposition for international oil companies, with the potential to transform the undeveloped domestic economy through export revenues at the same time. While requiring much foreign investment, the lack of existing infrastructure may also increase opportunities for the project cargo community, with the need to construct pipelines, LNG processing plants and refineries, as well as other transport
linkages with destination export markets. “There certainly are various obstacles to the efficient development of our resources, political, technical maybe, and geopolitical, but we are optimistic that the substantial interest in Lebanon’s resources will not go to waste and the recent efforts
to launch the explorations will come to fruition,” said LOGI’s Ayat. BB Mark Willis is a Dublin, Ireland-based freelance journalist specializing in politics and economics.
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