U.S. firm to conduct onshore gas survey

U.S.-based NEOS GeoSolutions will conduct an onshore oil and gas survey in Lebanon to complete its data acquisition despite the lack of political will to remove all hurdles before launching a licensing round, insiders and a lawmaker said.

“The U.S. company intends to conduct a 2-D seismic onshore survey in some Lebanese regions within 10 days after [it] completed [its aerial] survey. This process will continue until we gather good data on the possible size of oil and gas,” a source told The Daily Star.

In December 2014, U.S. NEOS GeoSolutions completed its aerial oil and gas survey of most Lebanese territories with the support of its local partner Petroserv.

The company, which deployed two Cessna planes fitted with sophisticated sensors, covered 6,000 square kilometers, including the onshore northern half of the country and the transition zone along the Mediterranean coastline.

The U.S. firm said it would provide the data to the Lebanese authorities and interested parties in May of this year after the experts analyze the information the planes collected.

But despite the enthusiasm of the U.S. firm and the Petroleum Administration to put Lebanon on the map of oil producing countries, some powerful political groups seem reluctant to authorize their ministers in Cabinet to pass two crucial decrees that set the number of blocks for auction and establish a mechanism for revenue sharing.

“We have 24 ministers in this Cabinet and if one of them refuses the two decrees under a different pretext then we will go back to square one,” lawmaker Mohammad Qabbani told The Daily Star.

He added that the failure to elect a president has further complicated the oil licensing issue.

Prime Minister Tammam “Salam can’t put this issue of the two decrees to a vote in the Cabinet. We have to run from one powerful political party to another to persuade them that Lebanon cannot afford further delays in approving the two decrees,” Qabbani said.

A person familiar with the offshore gas licensing round argued that the politicians were wrangling over the oil file in a bid to secure a share from this wealth.

“We are talking about tens of billions of dollars and some politicians seem eager to take a [slice] from this cake,” he added.

The person said political discord and greed were among the main reasons delaying the approval of the two decrees.

“Regrettably, this political class, or some of them, are not too concerned about the well-being of the Lebanese,” he added.

Salam’s media adviser told The Daily Star that the prime minister had not put the two decrees on the agenda of the next Cabinet meetings.

“I still have no idea if the premier will raise the issue of the two decrees anytime soon. Salam is preoccupied with other important matters but he will bring up the subject of gas in due time,” the adviser explained.

He added that some ministers were still going through the details of the two decrees and would not pass them until they got satisfactory answers from the Petroleum Administration.

Speaker Nabih Berri has warned that Israel is siphoning off gas from one of the offshore reserves within Lebanese territorial waters, and has urged officials to speed up the launch of the gas licensing and demarcate the Free Economic Zone.

The licensing round was scheduled for Feb. 14 of this year but Energy and Water Minister Arthur Nazarian will most likely delay it for at least another six months.

A source involved in efforts to expedite the approval of the two decrees said the Petroleum Administration was about to complete the tax proposal for gas and oil wealth.

“The Petroleum Administration is coordinating with the Finance Ministry to complete the tax proposal, which will hopefully be done in a couple of weeks,” the source said.

He added that the Public Works Ministry had asked the Petroleum Administration to push back the oil platforms 5 kilometers off the Lebanese coast instead of 3, according to the original proposal.

The source stressed that a single block of gas off Lebanon’s coast could potentially meet all of Lebanon’s needs for years to come.

“Apart from the revenues the country will get from exports, the gas can change the face of Lebanon if all the power plants, cars and households are run on this substance. This will bring in investments and growth to all sectors,” the source said.

He added that the licensing round would be delayed for at least another six months if the two decrees are passed, brushing off arguments that international oil companies would not invest any more money due to the drop in the price of crude.

“Oil firms … work on long-term projects. The oil price could rise again by the time] Lebanon starts drilling for gas seven years from now.”