Lebanon to become an Oil and Gas producing country

[AmeriLEB]

Lebanon May Auction Oil, Natural Gas Exploration Contracts Within a Year
By Nayla Razzouk - Aug 16, 2010 10:28 AM ET
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Lebanon may auction rights within the next 12 months for undersea oil and natural-gas exploration, spurred by energy projects in the waters off neighboring Israel, an adviser to the country’s parliament speaker said.

Lebanon’s parliament is likely to approve a law on offshore exploration as early as tomorrow, Ali Hamdan said in a telephone interview from Beirut. “There is a big chance for the law to be voted tomorrow, and it will be an important step to start the process of organizing tenders for interested companies within a year,” he said.

Once the law is ratified, Lebanon will define its maritime border and send the relevant documents to the United Nations Security Council, Hamdan said. Parliament Speaker Nabih Berri and his allies in the Hezbollah militant organization, which fought a war with Israel in 2006, have urged the energy law’s prompt adoption.

“We are in a hurry because Israel is in a hurry and is exploring near our border, and we are afraid that it will steal our wealth,” Hamdan said.

Large discoveries of gas off Israel’s Mediterranean coast have sparked a debate between the neighbors over their respective rights to energy resources in the area. While Lebanon has not officially accused Israel of exploring for gas outside its territorial waters, the issue has inflamed tensions because the two states are technically at war.

Israel Warns

Israel’s Minister of National Infrastructures Uzi Landau said on June 23 that his government was willing to use force to protect its undersea gas finds.

To help speed up passage of the law on undersea exploration, Lebanon’s political parties agreed to consider separately the establishment of both a committee to oversee offshore exploration and production and a fund for the government’s share of any potential revenue, Hamdan said.

The sea off Lebanon and the nearby island of Cyprus may prove to be “an exciting new province for oil and gas,” Norway-based Petroleum Geo-Services, the world’s third-biggest surveyor of oil and gas fields, said in October in a statement on its website.

U.S.-based Noble Energy Inc. and Israeli companies have announced two offshore gas discoveries in the past 18 months. Noble has said these deposits may hold 24 trillion cubic feet of gas, or twice the size of Britain’s proved gas reserves in 2009, according the CIA’s World Factbook.

Lebanon Responds

Lebanese Energy Minister Gebran Bassil said on June 17 that his government had warned Noble not to work near Lebanon’s maritime economic zone. He said his country would not allow Israel or a company working on its behalf “to take any amount of our gas that is falling in our zone.”

Israel’s exploration for gas has aggravated divisions within Lebanon, with the Hezbollah-led opposition accusing the government of pro-Western Prime Minister Saad Hariri of neglecting the country’s offshore energy potential. Meetings of parliamentary committees over the last few months have failed to to make progress toward ratification of the law because of disputes between the two sides.

“We don’t want issues related to the overseeing committee or the fund to stall the exploration process,” Hamdan said. “These anyway take time and can be voted later on.”

Hamdan said revenue from any offshore gas finds could help finance development projects and repay Lebanon’s public debt, which totalled $52 billion at the end of February, or about 147 percent of the country’s gross domestic product.

[AmeriLEB]

Lebanon hopes to start gas exploration in 2012
Tenders of interested bidders will be announced in october
By The Daily Star

Friday, August 20, 2010

BEIRUT: Lebanon is keen to start all-out offshore gas and oil exploration by the start of 2012 once interested companies submit their bids next year, Energy and Water Minister Jebran Bassil said on Thursday.

Speaking during a news conference, Bassil stressed that the oil law which was approved by the Parliament two days ago should be seen as a big achievement for Lebanon.

Bassil and other officials also touched on the deteriorating electricity conditions in most parts of the country and Electricite du Liban (EDL) reiterated that the problem will get worse if the government does not allocate additional funds to build more electricity plants that can cover the growing demand of the market.

He emphasized that water demarcation, to determine offshore Lebanese boundaries, must begin as soon as possible.

“The passage of the law is the first step which will put Lebanon on the road of oil industry. We can’t claim that we have become an oil producer but rather a state with crude resources and this is a serious test for our capability,” Bassil said.

There is no official accurate data on the actual size of the gas and oil reserves both offshore and on shore. But some experts believe that Lebanon may be sitting on oil and gas reserves valued at more than $1 trillion.

“The first thing we should do is to work closely with companies that have financial means in addition to vast experience. These two elements are lacking in Lebanon,” Bassil said.

He added that Lebanon will split profits with companies that explore for oil and gas offshore.

Bassil said the law would operate on the principle of “production-sharing.”

And while Lebanon has passed the law, it still has a long way to go before catching up with the Israelis. It must identify blocs, supply data to interested investors, and select bidders to start exploration work, while the Israelis already have firms drilling for gas.



Bassil said that the oil project will create additional jobs for the Lebanese.

He said that a conference would be held in Lebanon in October of this year that will include all the companies that are interested in bidding.

“We welcome any assistance from all the countries and companies that desire to explore for gas,” Bassil said.

Bassil and EDL director Kamal Hayek attributed the severe electricity rationing to the growing energy consumption this summer.

They highlighted that Lebanon produces 1,600 MW of electricity while the actual demand is more than 2,500 MW.

Hayek said that EDL has adopted a series of emergency measures this summer to ensure that consumers get enough electricity.

He added that Lebanon must build 700 MW of power plants and has asked French Consultant Company EDF to prepare a tender proposal for firms interested in building more power plants in the country.

According to Hayek, the best way to address the electricity shortage in the short and medium term is to lease powerful electricity generator ships or to lease electricity from private generator companies.

But the EDL official admitted that the option of buying electricity from private generators may be more expensive then building power plants.

He added that all these proposals need political consensus and if this is done then EDL can embark on a workshop to carry out reforms in the electricity sector. – The Daily Star

[AmeriLEB]

Eni CEO, Lebanon President Discuss Possible Gas Cooperation
Thursday, Sep 02, 2010

ROME (Dow Jones)--Eni SpA (E)Eni SpA (E)Loading... Chief Executive Paolo Scaroni met Thursday Lebanon's President Michel Suleiman to discuss possible areas of cooperation in the development of the natural gas sector in the Middle Eastern country, said Italy's biggest energy company by market value.

In a statement, EniEniLoading... said Scaroni met Suleiman in Beirut, where the two also discussed possible areas of cooperation in the development to the Lebanese electricity sector.

-By Liam Moloney, Dow Jones Newswires; +39 06 6976 6924; liam.moloney@dowjones.com

(END) Dow Jones Newswires

02-09-10 1534GMT

[AmeriLEB]

Bassil: International companies want to invest in Lebanese oil projects
September 14, 2010

In an interview with Al-Hayat newspaper published on Tuesday, Energy Minister Gebran Bassil said that his ministry is receiving offers from international companies that are interested in investing in a project to run oil refineries and deal with crude oil in Lebanon.

He also said that his ministry set a plan to launch a project on offshore oil exploration starting November.

The parliament ratified on August 17 the draft bill on offshore oil exploration.

-NOW Lebanon

Bassil: Israel Will Not Dare Touch our Oil Wealth

Energy and Water Minister Jebran Bassil annaounced a plan to launch a workshop to obtain laws relating to oil extraction which will kick start in November.

A conference under the participation of international countries and companies will convene to launch the project, Bassil said in an interview published Tuesday by pan-Arab daily Al-Hayat.

He pointed out that the refineries have started functioning anew and work is underway to ensure that Lebanon will regain its role as a storage center of oil derivatives in the region.

"Israel will not dare touch our oil wealth because this would threaten its interests," Bassil said.


Lebanon Gets Oil & Gas Exploration Offers - Report

Tuesday, Sep 14, 2010

BEIRUT (Zawya Dow Jones)--Lebanon is receiving offers from several international companies seeking to participate in the country's planned offshore oil and gas exploration operations, pan-Arab Al Hayat daily reports Tuesday citing the Lebanese minister of energy and water Gibran Bassil.

These companies are interested in signing agreements and memoranda of understanding as well as setting up representative offices in Lebanon, Bassil told the paper, adding that the likelihood of discovering natural gas in the country's territorial waters is very high.

In related news, Bassil said according to the daily that his ministry plans to re-start the local refineries and the two crude oil pipelines on its territories and is in talks with companies and countries for this purpose.

The ministry is deploying efforts so that Lebanon regains its role as an oil storage center in the eastern Mediterranean because its geographical position qualifies it for such role.

[youssefkaram]

What do they mean by "regaining its role as an oil storage center"? What is a regional oil storage center and when were we one??

[melkart]

in the 60's and 70's a great portion of the oil from the middle east via Iraq and Saudi Arabia the oil was refined in Lebanon and reexported abroad.

[youssefkaram]

Originally Posted by melkart

in the 60's and 70's a great portion of the oil from the middle east via Iraq and Saudi Arabia the oil was refined in Lebanon and reexported abroad.

really? i never knew!! Thanks

[Abdallah K.]

Lebanon and Iran agree on future oil, gas cooperation
Deal could include imports, building of refineries
By The Daily Star

BEIRUT: Iran and Lebanon reached several agreements outlining potential future cooperation in the oil and gas sectors, the Iranian oil minister announced in Tehran, according to Iranian media reports.

Several Iranian news agencies quoted Iranian Oil Minister Masoud Mir Kazemi as saying that the two sides agreed in principle on building oil refineries and exporting gas to Lebanon.

The Iranian minister also said that Lebanon is interested in buying oil-based products from Iran, adding that Beirut needs Tehran’s help for building oil refineries.

Kazemi added that Lebanon was keen on joining forces with Iran on oil and gas deals on a long-term basis, the Iranian Oil Ministry’s Petroenergy Information Network reported.

For his part, Lebanese Energy Minister Jibran Bassil noted that Iran has considerable experience in making oil-based products and could help his country in this regard.

He also voiced Beirut’s interest in Tehran’s expertise in the oil and gas industry and asked for aid from Iran in building gas pipelines and oil refineries in his country.

“Lebanon is interested [in benefiting from] the scientific and technical capacities of Iran’s oil industry in the construction of gas pipelines and oil refineries,” the Lebanese minister was quoted as saying.

The agreement discussed in Tehran follows huge gas finds off Israel’s Mediterranean coastline over the past two years.

In recent months various Lebanese officials have warned that Israel could seek to exploit part of the massive gas finds, which they say stretch into Lebanese territories.

Bassil said on Monday that Tehran would be ready to help Beirut increase the productivity of its power plants and decrease power waste across the state in order to overcome its chronic electricity problems. He did not elaborate on how Iran would provide such assistance.

Iran’s Energy Minister Majid Namjoo also said that Iran was ready to offer such assistance to Beirut. The Fars news agency reported that Namjoo announced that prior to President Ahmadinejad’s visit to Beirut, expected to take place between October 13-14, a technical team would be dispatched from Iran to Lebanon to examine the appropriate measures for providing Lebanon with its needs concerning electricity.

He added that the Iranian government could provide Iranian companies, which are keen to make investments in Lebanon, with services including finance and incentives.

Lebanon has long suffered from chronic power shortages as a result of enormous deficits incurred by the state-run Electricity du Liban, which loses about $1 billion per year.

At present, Lebanon’s total electricity output is less than 1,600 MW but the actual need of the country is more than 2,400 MW. Most of the country’s power stations are either outdated or need maintenance, but successive governments have failed to solve the chronic electricity crisis.

In other developments, Kazemi said on Tuesday that Tehran would soon host a meeting between Iran, Iraq, Syria and Lebanon to discuss the details of future gas agreements with the Islamic Republic. He said the four-party meeting would take place soon.

Baghdad in August agreed to the terms of a pipeline that would deliver Iranian gas to Syria through its territory. The pipeline could carry around 3.8 billion cubic feet of gas per day through Iraq. – The Daily Star



Read more: http://dailystar.com.lb/article.asp?...#ixzz11WUHy2g0
(The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)

[AmeriLEB]

Bloomberg
Iran Seeks to Export Gas to Lebanon, Revamp Refineries
October 07, 2010, 9:24 AM EDT

By Nayla Razzouk

Oct. 7 (Bloomberg)-- Iran and offered to rehabilitate Lebanon’s refineries and invest in water projects and gas supplies in the east Mediterranean country and officials from the two countries will discuss the offer today, the Lebanese energy minister’s senior adviser said.

Lebanese Energy Minister Gebran Bassil, a member of a political bloc that is supported by Iran, is due to meet his Iranian counterpart Majid Namjoo in Beirut today to discuss cooperation, Raymond Ghajar said in an interview in Beirut.

“They are interested to further investigate what they can do in the water sector, the dams, the electricity sector, gas supplies and the rehabilitation of the refineries,” Ghajar said. “These are massive, mega projects,” he said, without explaining the nature of the envisaged cooperation.

Lebanon has two main political blocs -- one backed by Iran and Syria and is led by the Hezbollah group, which controls much of southern Lebanon and has representatives in the country’s government and parliament, and another alliance has U.S. and Saudi Arabian backing. Lebanon continues to suffer from power shortages that can reach 15 hours a day since the 15-year civil war that ended in 1990 and the war with Israel in 2006.

Iranian officials said they were looking into helping with the rehabilitation of Lebanon’s two refineries, which currently are only used for storage, he said. Iran has also proposed to supply Lebanon with natural gas, in cooperation with neighboring Syria and Turkey, said Ghajar.

“The gas will probably go through Iraq and Syria, or through Iraq, Turkey and Syria,” he said.

Iranian embassy officials were not available for comment when contacted by Bloomberg today.

Iraq agreed in August to allow Iran to export natural gas through pipelines running across its territory toward Syria.

Lebanon currently imports natural gas from Egypt, he said.

Natural gas imported from Egypt is not covering demand. Shortages this summer encouraged Lebanon to seek alternative sources for natural gas, he said.

Lebanon’s energy minister was in Tehran a few days ago where he discussed energy cooperation with Oil Minister Masoud Mir Kazemi.

In 2009, Lebanon’s average capacity and imports were 1,500 megawatts, while demand peaked in the summer at 2,450 megawatts, according to a government report.

--Editors: Inal Ersan, Alex Devine

[AmeriLEB]

Lebanon Aims to Ease Blackouts With Tenders for LNG Pipeline, Terminal
By Nayla Razzouk - Oct 10, 2010 7:27 AM ET


Lebanon will offer tenders next month for the construction of its first pipeline for liquefied natural gas, part of a strategy to revamp the country’s power industry and curtail electricity outages.

The energy ministry is completing preparations to invite companies to bid for work on the pipeline, which would link power stations along the country’s coast, said the minister’s senior adviser, Raymond Ghajar. The ministry will offer other tenders later for related facilities, including a terminal for receiving shipments of imported LNG.

“We plan to have a working LNG terminal by 2012,” Ghajar said in Beirut on Oct. 7.

A ministry plan for overhauling the energy industry, approved by the government in June, urges power plants to burn less heavy fuel oil and diesel and to use more less-polluting LNG. The plan also emphasizes a need to explore for offshore gas deposits, increase power-generating capacity, restore two refineries that are closed and upgrade the state electricity company, which now loses more than $1.5 billion a year.

Lebanon suffers from blackouts lasting up to 15 hours a day, and 25 percent of the electricity it generates is lost to theft, tampering and customer non-payment, Ghajar said.

“Invitation to tender for the pipeline will be before the end of the year. It should be in November,” he said.

LNG Imports

The ministry plans separate tenders for supplies of LNG and a terminal to receive imports of the fuel. It doesn’t expect to be able to produce offshore gas for several more years so is planning to import LNG, possibly from Qatar, the world’s biggest producer of the fuel, Ghajar said.

In addition, about 64 local and foreign companies are seeking prequalification to participate in a tender for a privatized “distribution system” for the state electricity company. This phase of the bidding is scheduled for January, the adviser said.

Blackouts have been a problem for Lebanon since the 15-year civil war that ended in 1990. Average generating capacity plus electricity imports were 1,500 megawatts last year, while demand peaked last summer at 2,450 megawatts, according to a government report.

[AmeriLEB]

Lebanon setting offshore boundaries for oil -PM
Thu Oct 21, 2010 12:17pm GMT

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NICOSIA Oct 21 (Reuters) - Lebanese Prime Minister Saad Hariri said on Thursday the country would soon define its offshore boundaries with Cyprus and Syria and would move ahead with licensing exploration for oil and gas.

Lebanon has said it hopes to launch a licensing round for offshore gas exploration at the beginning of 2012.

"We are finalising the economic zones with Syria, and hopefully soon we will be sending to parliament the whole area for ratification," Hariri told reporters in Cyprus.

"At some point we had some differences on the agreement with Cyprus; we had some differences with Syria. Now we have a much better relationship with Syria, and we are negotiating the economic zone," Hariri said.

Cyprus has a conclusive agreement with Egypt defining its sea boundaries, has signed an agreement pending ratification with Lebanon and is holding talks with Israel.

Cyprus, which lies to Lebanon's west, carried out one licensing round for deepwater exploration in the eastern Mediterranean in 2007, despite objections from Turkey, its northern neighbour with which it has no diplomatic ties.

Turkey earlier on Thursday said it planned to begin work on oil exploration around Cyprus but did not specify where. [nIST007300].

The southern rim of the island, controlled by Cyprus's internationally recognised government, has already divided up 13 sea plots, which it is offering for exploration.

U.S.-based energy company Noble (NBL.N: Quote) has exploration rights to one of Cyprus's plots, while the island plans a second licensing round soon. Energy officials say they want to conclude talks with neighbouring countries before proceeding with another round.

(Writing by Michele Kambas, editing by Jane Baird)

[AmeriLEB]

Thought we already did a 3d

Iran Ready to Start Offshore Exploration in Lebanon’s Waters
Posted by Samuel D Smith on November 3rd, 2010
Offshore oil rig

News-worthy.info — Iranian Ambassador to Lebanon Ghazanfar Roknabadi declared on Monday that Iran is ready to begin offshore explorations to find oil and gas reserves in an area controlled by both Lebanon and Israel.

As the first step, he said, Iran would conduct 3D seismic survey to find possible oil and natural gas-bearing structures.

Roknabadi gave his statement in accordance with the Iranian government’s announcement before that Iran would help Lebanon to find oil and gas reserves in the area under Lebanon’s control. Earlier last month, Iran announced its agreements with Lebanon to develop its own oil and gas fields as well as a local refining industry.

Quoting Rokhnabadi, the Iranian Labor News Agency said that, “Lebanon has [an] oil field shared with Israel. Threequarters of this field belongs to Lebanon and a quarter of the field belongs to the occupying regime [Israel].”

January last year, Israel had found large deposit of natural gas in its own territory under the Mediterranean Sea near Haifa. The site (named Tamar), held enough gas to allow Israel to be self-sufficient in energy for more than two decades. Several months later, another huge deposit of energy – this time oil – was also found near the Haifa coast. The oil site, called Leviathan, was estimated to contain 4 billion barrels of oil.

[Abdallah K.]

Plan to raise oil storage capacity to 1.5 million cubic meters
November 07, 2010
http://www.iloubnan.info

The Ministry of Energy & Water announced plans to increase Lebanon's oil storage capacity from 0.35 million cubic meters currently to 1.5 million cubic meters through the restoration and upgrade of the Zahrani and Tripoli oil storage facilities, and the building of new storage facilities at the two locations. It said the project would be awarded through an international tender to bidding companies.

It estimated the project's cost at $60m, which would be financed in part by the government and in part by the multinational firms that would win the tender. It estimated annual revenues from the new facilities at $50m, with a payback period of 14 months for the project.

It considered that storage capacity can be further increased at a later stage to reach two or three million cubic meters. The ministrysaid the expanded capacity aims to meet demand for oil storage by multinational firms, given the strategic location of Lebanon.

[AmeriLEB]

From todays Dailystar. Hariri makes a play for restoration of Iraqi oil exports thru Lebanon

Hariri also received the first deputy head of OAO LUKOIL Company, Sergey Chaplygin. Talks focused on ways to expand the firm’s investments in Lebanon, as well as the issues of rehabilitating the Tripoli oil refinery, and transporting oil from Iraq to Lebanon for export it to other countries. Lukoil is Russia’s biggest oil firm.

[AmeriLEB]

Lebanon Seeks Advice On Implementing Hydrocarbon Law
By Massoud A. Derhally - Dec 6, 2010 4:57 AM ET


Lebanon is seeking advice on implementing its offshore hydrocarbon law, Energy and Water Minister Gebran Bassil said.

The government is seeking proposals from consulting firms with “proven extensive experience,” in the oil and gas exploration and production industry, the minister said in an announcement published today in the Daily Star newspaper.

It said the shortlisted consulting firm would provide advisory services and assistance as well as the preparation and promotion of the first licensing round.

Consulting firms have until Dec. 23 to submit their proposals to the energy ministry.

Lebanon’s parliament approved Aug. 17 a law that opens its offshore areas for the first time to oil and natural-gas exploration.

[Rabih]

Moscow and Ankara move in on Lebanon's offshore energy potential
DEBKAfile Exclusive Report December 8, 2010, 9:56 AM (GMT+02:00)

With his sharp instincts for chances in the field of energy, Russian Prime Minister Vladimir Putin was stirred into discreet action by Israeli entrepreneurs' discovery in the past year of a gas bonanza - three fields, dubbed Tamar, Dalit and Leviathan, off Israel's Mediterranean coast, debkafile's Moscow sources report. Their currently estimated reserves of 25 trillion cubic feet would more than cover Israel's energy needs and enable it to become a gas exporter, revolutionizing an economy which has developed despite a paucity of natural resources.
Neither did Putin miss Beirut's claim that Israel was "looting" Lebanese gas resources, or that Lebanese Prime Minister Saad Hariri had encountered a polite rejection when travelled to Nicosia on Oct. 21 to ask Cypriot President Dimitris Christofias for help in mapping the borders of oil and gas fields in the Mediterranean.

Moscow accordingly went into action by inviting Hariri for a visit, which took place Nov. 16-17.

With his back to the wall in a life-and-death struggle to save his government from falling into the hands of Hizballah, the Lebanese prime minister was granted the rare honor of an elaborate welcome by both Putin and President Dmitry Medvedev. The Russian prime minister then pitched into his spiel: Moscow could help Lebanon place itself on the map of oil and gas fields and pipelines in the eastern Mediterranean. But to exploit its oil and gas wealth under the sea, Lebanon needed Russia as energy partner and provider of funds, equipment and skilled labor.

Russia would reciprocate with heavy investments in the Lebanese economy that would restore Beirut to its former prestige as financial capital of the Middle East and an assured supply of advanced weapons at token prices to secure those investments.

None of this prevented the Russian prime minister from sending a delegation to Tel Aviv last week to sound out Israel's gas new tycoons for opportunities. On offer were Russian investments in funds and equipment and a Russian-Israeli partnership in laying the gas pipeline which Israel and Greece are planning as part of their evolving strategic alliance

The Lebanese prime minister left Moscow with an understanding in his pocket on three points. As a mark of Russian goodwill, he was promised the gift of six MI 24 helicopters 31 T-72 tanks, 36 130 mm cannons complete with half a million shells and thirty thousand artillery shells – an unprecedented donation to a country outside Moscow's sphere of influence.
Their understanding extended to three key areas:

1. They would discuss big Russian firms building a number of gas-powered electricity plants in Lebanon, backed by Kremlin guarantees and financing – against a Lebanese guarantee to purchase their output over a 30-year period.

2. The Russian-built Arab Gas Pipeline Project Phase II, designed to bring gas from Egypt and run through Jordan, Syria, Lebanon and Turkey, would grow a Lebanese branch. On Dec. 5, a Kremlin official said: “We want to study a possibility of gas shipment from Syria to Lebanon, for example, by using the Arab Gas Pipeline capacity.”

3. Moscow offered to build three nuclear power plants in Turkey.

The second understanding was the real reason for Turkish Prime Minister Tayyip Erdogan's visit to Beirut Wednesday, Nov. 24 and his talks with Hariri. Erdogan now has a new interest in defusing the tensions in Lebanon and keeping Hariri in power.

debkafile's military sources say that, in addition to his abiding interest in energy, Vladimir Putin keeps his eye on the big Russian naval base going up in Tartous, Syria. As headquarters of the Russian Black Sea and Mediterranean fleets, this base will also guard Moscow's investments and holdings in gas and oil fields in the Mediterranean.

http://www.debka.com/article/20435/

[AmeriLEB]

Lebanon Invites Proposals for Two Energy Projects
By Nayla Razzouk - Dec 15, 2010 10:31 AM ET
Lebanon invited companies to submit proposals for onshore scanning and the development of storage facilities for refined oil products, an adviser to the country’s energy minister said today.

Lebanon already announced a strategy to revamp the country’s power industry, which is draining state coffers, and curtail widespread blackouts. Its parliament approved a law on Aug. 17 to open offshore areas to oil and natural-gas exploration for the first time.

The ministry is now seeking proposals for onshore scanning services for Lebanon’s oil reserves, Cesar Abou Khalil said in a telephone interview from Beirut. Companies have until Jan. 25 at 2pm, Beirut time, to submit proposals.

The ministry also issued a request for information to companies interested in a project to add storage for refined oil products in the northern city of Tripoli, Khalil said. These proposals should be submitted by Jan. 31 at noon, Beirut time.

“These two calls are in addition to the previous call for proposals for consulting services for the implementation of the energy law,” he said.

Lebanon called earlier for proposals for legal consulting services to help it put the offshore hydrocarbon law into effect and to prepare and promote a first auction of exploration licenses. Consultants have until Dec. 23 at 2pm, Beirut time, to submit their proposals, according to an e-mailed copy of the announcement.

LNG Terminal

A ministry plan to overhaul the energy industry, approved by the government in June, emphasizes the need to explore for offshore gas deposits. Lebanon has announced a plan to have its first liquefied natural gas terminal operating by 2012.

The plan also stressed the importance of increasing power- generating capacity, restoring two refineries that are closed and upgrading the state electricity company, which loses more than $1.5 billion a year.

Blackouts have been a problem for Lebanon since the 15-year civil war that ended in 1990. Average generating capacity plus electricity imports was 1,500 megawatts last year, while demand peaked last summer at 2,450 megawatts, according to a government report.

[Abdallah K.]

Bassil unveils ambitious gas pipeline project
By The Daily Star

Thursday,
December 23, 2010

BEIRUT: Energy and Water Minister Jibran Bassil disclosed Wednesday a $350 million gas pipeline draft project along the Lebanese coast, a plan the minister hopes would cut the energy bill by $740 million annually.

Speaking at a news conference at the ministry in the presence of senior officials, Bassil said this project, which still needs the approval of the Cabinet, involves the installation of 174 kilometers of gas pipeline from Dier Ammar power station in Tripoli all the way to Tyre in the south.

The project is part of the so-called Arab gas pipeline that links Turkey with Russia and other former Soviet republics. The project is expected to be completed in 2012. In the first phase, the gas, in principle, will come from Egypt crossing through Jordan and Syria.

Bassil said that once Lebanon starts exploring gas off the coast in few years, then the country will be able to channel the gas through the new pipeline.

“This project is part of the plan which was submitted to the Cabinet a few months ago to restructure the electricity sector. The companies which won tenders to carry out the research on this project were ACE in collaboration with IMEG. The cost of the study was $1.05 million,” he announced.

Lebanon has incurred billions of dollars in losses due to the sharp cost of fuel oil and gas oil that runs most of the country’s aging power stations.

The Finance Ministry estimated the annual deficit in the electricity sector at more than $1.5 billion each year and the bulk of this money goes to cover the cost of fuel oil.

Experts and all former energy ministers have called on the government to find cheaper source of energy to reduce mounting losses. However, none of the ministers were able to implement their plans to restructure the electricity sector due to the sharp political differences and the occasional security setbacks. The Cabinet of Prime Minister Saad Hariri approved Bassil’s energy plan in June of this year.

Bassil has warned earlier that his ambitious $5 billion plan to restructure the electricity sector would fail if any of the project’s clauses were amended or delayed in the implementation phase.

“This document will lead to a solid electricity sector with more than 4,000 MW of power up to 2014 and 5,000 MW after 2015. We are talking about a stable and secure distribution and transport network,” Bassil said.

Under the plan, the government will allocate $1.550 billion while $2.320 billion will come from the private sector and the remaining $1 billion will be in the form of donations and soft loans from donor countries that took part in Paris III conference in 2007.

The minister explained that the pipeline will be built next to the railway track along the Lebanese coast.

He added that so far 19 companies have been qualified to build the gas pipeline, stressing that most of these firms have good experience in this field.

The minister added five of these companies have expressed readiness to finance this project. He emphasized that Lebanon will be able to pay off the total cost of the project in less than six months.

Bassil also said the Finance Ministry had failed to pay for the Egyptian gas which operates Dier Ammar power plants in the north.

He cautioned that Lebanon could lose up to $270 million in the current oil prices if Dier Ammar returns to the more expensive fuel oil. – The Daily Star

[Hassoun]

Lebanon will benefit from oil and gas discovery
Government must pursue U.N. convention on Law of the Sea to delineate offshore economic zone
By Osama Habib
Daily Star staff
Wednesday, January 05, 2011

Editor’s note: The Daily Star talks to energy expert Roudi Baroudi regarding the prospect of tapping the energy resources off Lebanon’s coast, as well as the benefits, risks and challenges involved in such an endeavor.


Q. What, in your view, are the risks in Lebanon moving ahead with its oil and gas potential?

A: The real risks stem not from action but rather from inaction because Lebanon is still putting its energy house in order. Thanks to Parliament Speaker Nabih Berri, who is always a staunch defender of Lebanon’s vital energy interests, in 2010 we enacted a key piece of legislation, one of several milestones Lebanon has needed since 2000.

Now, to diminish any tensions or risks Lebanon could face, the government will have to follow up with the U.N. under the U.N. Convention on the Law of the Sea (Unclos), to which the E.U. has adhered, for the delineation of Lebanon’s offshore exclusive economic zone. Cyprus already has delineation deals with Israel and Egypt, and its pact with Lebanon awaits ratification by Parliament. Relying on Unclos will highlight Lebanon’s rights and responsibilities relating to our natural marine resources in what is officially known as the Levant Basin Province; specifically, it will define Lebanon’s rights to exploration and drilling activities. This will leave Lebanon with properly demarcated borders, leaving no contention, especially in our patch of the Eastern Mediterranean.


Q. What is the role of the United Nations? Is it true that UNIFIL should have an active role in this field?

A: One way or the other, Lebanon has to use U.N. mechanisms, including the Unclos pact and filing a complaint at the U.N. Security Council. Unifil was created in 1978 by a Security Council resolution that was also supposed to confirm the withdrawal of the Israeli occupation forces from Lebanon. After the 2006 war, a maritime task force was added to Unifil’s role to prevent seaborne illegal arm shipments, but right now I don’t believe the force and its dozen or so vessels have a mandate to protect any hydrocarbon reserves off Lebanon’s coast. Whatever the eventual case, given that the economic stakes are so high, Lebanon has to continue to define its territorial sea and contiguous border through Unclos, which we have been party to since 1995, but which Israel has not yet joined. Diplomacy offers the most logical solutions for any potential problems in this area, and we should exhaust this option before considering any other options.


Q. What if it turns out that the Leviathan Gas Field lies within both Lebanon and Israel’s offshore economic zones?

A: It looks like this huge field could well straddle our maritime borders with Israel – and possibly Cyprus too. Disputes over oil and gas fields are not new, they exist all around the globe, and there will be more disputes to come. For example, Argentina has gone to the United Nations to defend its rights over Britain’s drilling off the Falkland Islands. A dispute recently arose between Iran and Iraq over a small oil field near the southern portion of their shared border. China and Japan are also at odds over an East China Sea gas field. And an oil-rich region in South Sudan is seeing the same kind of political feuding with the central government in Khartoum.

The most important step was when Berri came out and said we should move forward by following up on our hydrocarbon act, enact the relevant downstream laws, invite international oil and gas firms, establish a national oil company, and develop a coherent government energy policy. He was right. This is the only way we can achieve the right fiscal and regulatory environment, and start tendering for blocks in offshore areas not subject to dispute, not to mention some of our onshore prospects as well.

Parallel to these efforts, we should also use every diplomatic tool at our disposal, assisted by our major allies in the Arab world, in Europe, and even the United States to define our maritime boundary and to force the Israelis to respect UNCLOS, even if they aren’t members of it.


Q. What about Israeli advantages?

A: You have to be objective here; the Israelis have had a head-start in their hydrocarbon geology and assessment. Their drilling and exploration activities started in the early 1960s, becoming even more active in the 1970s, to the point where their offshore seismic exploration and other testing has already covered 450 wells. When Lebanon should have been catching up, especially when this most lucrative of commodities could be a veritable savior for the national economy, it became mired in a civil war that ended only in 1990, and has spent much of the time since mired in unfortunate political skirmishing. Nonetheless, with the right policies that create incentives and a transparent business environment, there is no reason why we can’t start making up for lost time in short order.


Q. What are in your views the benefits to Lebanon?

A: The economic benefits to Lebanon would be in a typical evolution process; first, once all the fiscal, legal and business environment parameters are defined, Lebanon will first benefit from being able to go ahead with an international licensing round and the boost of its infrastructures. This could be in a typical exploration; drilling and production process could vary between $1-1.5 billion.

The second evolution process would tackle the international service companies which through their foreign direct investments, could reach between $200-250 million for each exploration block they are working on.

Finally, once you reach the production level, if we consider the productive life of some of the fields that have been prospected is in the range of 20-25 years each. Today’s average oil price is quoted around $92/barrel, considering our basin/fields have a potential reserve of 85,000-88,000 of T.O.E. (Tons of Oil Equivalent), we should consider that the treasury should attain an income $3-$3.5 billion a year for the next 20-25 years.

The benefits to Lebanon go beyond the fiscal. It will meet all Lebanon’s local energy demand and will insulate the country from volatile energy prices.


Q. What would you recommend in this regard?

A: Lebanon’s onshore and offshore provinces are definitely positive economic factors to Lebanon’s economic development. I still strongly believe that Lebanon needs political consensus to bring serious thinking on Lebanon energy security and to ensure the appropriate production of our hydrocarbon wealth. Dialogue and diplomacy should protect any future disputes and attract enough capital from international oil and gas companies for this massive program implementation.


Roudi Baroudi is energy and privatization expert. He could be reached at roudi.baroudi@yahoo.com

[AmeriLEB]

Originally Posted by Hassoun

Lebanon will benefit from oil and gas discovery
Government must pursue U.N. convention on Law of the Sea to delineate offshore economic zone
By Osama Habib
Daily Star staff
Wednesday, January 05, 2011

Editor’s note: The Daily Star talks to energy expert Roudi Baroudi regarding the prospect of tapping the energy resources off Lebanon’s coast, as well as the benefits, risks and challenges involved in such an endeavor.


Q. What, in your view, are the risks in Lebanon moving ahead with its oil and gas potential?

A: The real risks stem not from action but rather from inaction because Lebanon is still putting its energy house in order. Thanks to Parliament Speaker Nabih Berri, who is always a staunch defender of Lebanon’s vital energy interests, in 2010 we enacted a key piece of legislation, one of several milestones Lebanon has needed since 2000.

Now, to diminish any tensions or risks Lebanon could face, the government will have to follow up with the U.N. under the U.N. Convention on the Law of the Sea (Unclos), to which the E.U. has adhered, for the delineation of Lebanon’s offshore exclusive economic zone. Cyprus already has delineation deals with Israel and Egypt, and its pact with Lebanon awaits ratification by Parliament. Relying on Unclos will highlight Lebanon’s rights and responsibilities relating to our natural marine resources in what is officially known as the Levant Basin Province; specifically, it will define Lebanon’s rights to exploration and drilling activities. This will leave Lebanon with properly demarcated borders, leaving no contention, especially in our patch of the Eastern Mediterranean.


Q. What is the role of the United Nations? Is it true that UNIFIL should have an active role in this field?

A: One way or the other, Lebanon has to use U.N. mechanisms, including the Unclos pact and filing a complaint at the U.N. Security Council. Unifil was created in 1978 by a Security Council resolution that was also supposed to confirm the withdrawal of the Israeli occupation forces from Lebanon. After the 2006 war, a maritime task force was added to Unifil’s role to prevent seaborne illegal arm shipments, but right now I don’t believe the force and its dozen or so vessels have a mandate to protect any hydrocarbon reserves off Lebanon’s coast. Whatever the eventual case, given that the economic stakes are so high, Lebanon has to continue to define its territorial sea and contiguous border through Unclos, which we have been party to since 1995, but which Israel has not yet joined. Diplomacy offers the most logical solutions for any potential problems in this area, and we should exhaust this option before considering any other options.


Q. What if it turns out that the Leviathan Gas Field lies within both Lebanon and Israel’s offshore economic zones?

A: It looks like this huge field could well straddle our maritime borders with Israel – and possibly Cyprus too. Disputes over oil and gas fields are not new, they exist all around the globe, and there will be more disputes to come. For example, Argentina has gone to the United Nations to defend its rights over Britain’s drilling off the Falkland Islands. A dispute recently arose between Iran and Iraq over a small oil field near the southern portion of their shared border. China and Japan are also at odds over an East China Sea gas field. And an oil-rich region in South Sudan is seeing the same kind of political feuding with the central government in Khartoum.

The most important step was when Berri came out and said we should move forward by following up on our hydrocarbon act, enact the relevant downstream laws, invite international oil and gas firms, establish a national oil company, and develop a coherent government energy policy. He was right. This is the only way we can achieve the right fiscal and regulatory environment, and start tendering for blocks in offshore areas not subject to dispute, not to mention some of our onshore prospects as well.

Parallel to these efforts, we should also use every diplomatic tool at our disposal, assisted by our major allies in the Arab world, in Europe, and even the United States to define our maritime boundary and to force the Israelis to respect UNCLOS, even if they aren’t members of it.


Q. What about Israeli advantages?

A: You have to be objective here; the Israelis have had a head-start in their hydrocarbon geology and assessment. Their drilling and exploration activities started in the early 1960s, becoming even more active in the 1970s, to the point where their offshore seismic exploration and other testing has already covered 450 wells. When Lebanon should have been catching up, especially when this most lucrative of commodities could be a veritable savior for the national economy, it became mired in a civil war that ended only in 1990, and has spent much of the time since mired in unfortunate political skirmishing. Nonetheless, with the right policies that create incentives and a transparent business environment, there is no reason why we can’t start making up for lost time in short order.


Q. What are in your views the benefits to Lebanon?

A: The economic benefits to Lebanon would be in a typical evolution process; first, once all the fiscal, legal and business environment parameters are defined, Lebanon will first benefit from being able to go ahead with an international licensing round and the boost of its infrastructures. This could be in a typical exploration; drilling and production process could vary between $1-1.5 billion.

The second evolution process would tackle the international service companies which through their foreign direct investments, could reach between $200-250 million for each exploration block they are working on.

Finally, once you reach the production level, if we consider the productive life of some of the fields that have been prospected is in the range of 20-25 years each. Today’s average oil price is quoted around $92/barrel, considering our basin/fields have a potential reserve of 85,000-88,000 of T.O.E. (Tons of Oil Equivalent), we should consider that the treasury should attain an income $3-$3.5 billion a year for the next 20-25 years.

The benefits to Lebanon go beyond the fiscal. It will meet all Lebanon’s local energy demand and will insulate the country from volatile energy prices.


Q. What would you recommend in this regard?

A: Lebanon’s onshore and offshore provinces are definitely positive economic factors to Lebanon’s economic development. I still strongly believe that Lebanon needs political consensus to bring serious thinking on Lebanon energy security and to ensure the appropriate production of our hydrocarbon wealth. Dialogue and diplomacy should protect any future disputes and attract enough capital from international oil and gas companies for this massive program implementation.


Roudi Baroudi is energy and privatization expert. He could be reached at roudi.baroudi@yahoo.com

Hellllllllooooooooo Lebanon!!!!! Yes