Lebanese speculate about oil and gas riches but politics remains the same
London - Nothing explains the increasing importance of energy resources than the curious intersection of ties between Turkey, Russia and Israel due to oil and gas discoveries in the Mediterranean and speculation of a new pipeline that would export gas from Israel via Turkey into Europe.
This is an issue that is also becoming increasingly important for Beirut, following new movement on Lebanon’s offshore gas and oil discoveries.
This was confirmed at the headquarters of Lebanese parliamentary Speaker Nabih Berri during a meeting with Finance Minister Ali Hassan Khalil and Foreign Minister Gebran Bassil. The meeting of Lebanese political heavyweights — and rivals — sought to reach a quick decision on technical and tax issues related to Lebanon’s energy sector at a time when the country remains without a president and is mired in political deadlock.
Geology Professor Marcelle BouDagher-Fadel of University College London professor said there was a report published more than a decade ago confirming significant undiscovered oil and gas reserves in Lebanese waters. She said the Lebanese government at the time decided to bury the report and not seek to extract this resource while the country was under Syrian tutelage.
With Syrian troops forced to leave Lebanon in 2005, movement on the issue is overdue, but none has come.
Lebanon’s political factions were divided on how to move forward on offshore gas exploration, something that has begun in neighbouring Israeli and Cypriot waters. This is not just due to the technicalities of the issue but also due to the absence of a green light from the international community.
It had been thought that nothing could be done until the political future of Lebanon, which has been without a president since May 2014, became more certain. Lebanon is still facing an uncertain political future but perhaps not in terms of energy.
US Assistant Secretary of State Daniel Glaser visited Lebanon in May to discuss American sanctions on Hezbollah. US Assistant Secretary of State for Energy Amos Hochstein was visiting Lebanon at the same time and Beirut newspapers speculated that he was discussing the extent of US influence on Lebanon, not just in politics, but also in energy.
Hochstein met with a number of senior Lebanese figures and spoke publicly about Washington supporting Beirut to activate its energy sector. He said the United States was keen to see an end to Lebanese-Israeli disputes over maritime zones. Hochstein completed his visit without announcing any official breakthrough.
It now seems there was one, with Lebanon’s offshore oil and gas exploration moving forward significantly following an agreement among Lebanon’s divided political factions. Lebanon is set to offer all of its offshore oil blocks for international bidding, according to local media.
Popular Lebanese Forces MP Antoine Zahra has demanded to know the “secret” behind this new movement and precise details of any agreement between the country’s various political parties, particularly Berri’s Amal Movement and the Free Patriotic Movement, which is led by presidential contender Michel Aoun.
There are questions whether the previous lack of movement can be traced to Bassil — a former Energy minister and Aoun’s son-in-law. This is a demand that is being backed by the Lebanese street.
Whatever issue was holding things up has been resolved and the Lebanese people can only be shocked by the political paralysis that gripped this issue given the potential oil and gas reserves in question and what this could mean for the country’s economy. That only leaves the international dimension, and the various agreements, or differences, between Israel, Russia, and Turkey.
Energy expert Nicolas Sarkis said there could be as much as 800 million barrels of oil and 25 trillion-30 trillion cubic feet of gas beneath Lebanon’s territorial waters. Other estimates are much higher.
“Lebanon can expect gas production worth approximately $400 billion-$500 billion based on the global prices that prevailed before the 2014 market collapse. As for Lebanon’s expected revenues… this can be estimated at between $150 billion-$200 billion,” Sarkis said.
To demonstrate the significance of these figures for Lebanon, this would be four times the domestic national product and allow Lebanon to pay off its public debt twice over. Lebanon’s current exports stand at $3 billion-$4 billion.
A green light from the international community would allow Lebanon to benefit from this great wealth. Paradoxically, Lebanese citizens do not seem to be overjoyed by this news and instead are concerned about scandal and corruption and wondering why it took so long for Lebanon to exploit this wealth.
Lebanon’s energy sector may be in the process of transformation but its politics remains the same.