Lebanese Energy Minister details plans for offshore petroleum drilling
Yesterday, the Lebanese Minister of Energy and Water, Gebran Bassil, visited Georgetown University and presented the status of Lebanon’s offshore drilling operations. In 2008, geological surveys of the seafloor in Lebanese waters discovered tremendous deposits of natural gas. Further surveying confirmed that the value of this gas is in the hundreds of billions of dollars. Lebanon has since made plans to extract these precious resources as soon as possible.
Bassil began by explaining just how important these resources are to Lebanon’s future prosperity. Lebanon has had scarce natural resources throughout its history, and is an energy importer, he said.
“Our energy bill today stands at 15 percent of our GDP. Our strategic location in the Middle East and the Mediterranean has been both a blessing and a curse. Maritime routes to the West and pipelines to the East have ensured our supply in peace time, and have threatened our energy security in times of crisis.”
Utilizing the rich natural gas deposits would enrich Lebanon’s government and also provide security through closer ties to Western nations whose oil companies will soon be purchasing rights to access the gas. Lebanon has the aims “of any other nation: achieve self-reliance in energy matters and avoid the factors of the geopolitics of the region,” Bassil said.
Bassil identified the three main components needed to make this project a success. First, the natural gas deposits must be identified via surveying, and the extraction rights for specific areas must be sold off to foreign companies. According to Bassil, Lebanon has accomplished the first part of this phase.
“We have gathered all geophysical data pertinent to the subsea of our exclusive economic zone. We have become one of the few countries in the world which has covered all of its maritime waters, over 14,000 square kilometers, with scans and surveys. Dozens of international oil companies have already bought this data.”
The official auction for drilling rights, however, is delayed until Lebanon’s new Petroleum Administration is formed. Bassil commented that the formation of the PA has thus far been slow because his government wants each member to be as carefully chosen as possible. The process should be completed by the end of 2012. He also pointed out that the American companies in particular have demonstrated the most interest in the natural gas.
The second step towards full natural gas production entails the construction of gas pipelines. These pipelines will travel east, and will link up with the existing Arabian Gas Pipeline system present in other Middle Eastern countries. Bassil could only speak of plans for such a gas pipeline, but, according to his estimates, it will save Lebanon over one billion dollars per year in transportation costs. Given that it will be several years before any gas is actually acquired, there is plenty of time for the construction of such a pipeline.
And finally, Lebanon needs storage facilities and refineries for the natural gas. Fortunately for Lebanon, it already has such infrastructure, although currently in a dysfunctional state. But foreign investment will soon fix them, says Bassil.
“We have accomplished the study for the rehabilitation and development of the two storage facilities in our country, and are receiving expressions of interest from international oil companies to invest in these facilities.”
Although the logistics for a successful natural gas industry all seem to be falling into place, outside factors, possibly interference, must also be considered. Bassil recognized that the world’s ever-decreasing energy sources, in addition to conflicting interests with neighbor states like Israel, may someday put pressure on Lebanon’s new operations. The Minister remained hopeful, however, and stressed that Lebanon will seek peace and cooperation with its neighbors in the coming years.
Photo by Richard De La Paz