Lebanon entered 2012 with the resolute promise to tap “huge wealth” from offshore hydrocarbons. Determined to ride in the new year on a wave of applauding headlines, the Minister of Energy and Water Gebran Bassil announced the creation of the Petroleum Administration, paving the way for the sector’s evolution.
In January the ministry announced that the board of the Petroleum Administration would be made public by the end of the month, the first licensing round for exploration launched within three months and the first contracts inked on paper by the end of the year. The bulk of the nation’s press obliged the minister, lauding a new page in Lebanon’s history, drunk on the promise of energy independence and untold wealth. However, as 2012 draws to a close the rhetoric rings hollow and the lofty plans remain stuck in the starting blocks.
The initial clamor was not without some justification. The odds are stacked in favor of the prospect that Lebanon is sitting on a tidy offshore treasure trove. A 2010 report by the United States Geological Survey estimated an average of 1.7 billion barrels of recoverable oil and 3.5 trillion cubic meters of recoverable gas in the Levant Basin Province, a geological formation in the Eastern Mediterranean extending from Syria to the Sinai.
What’s more, Israel and Cyprus have made impressive discoveries in recent years, which will have considerably whetted the appetite of international oil companies to tap into Lebanon’s seabed. In 2009, Tamar, a 237 billion-cubic-meter (BCM) gross natural gas field, was successfully drilled off the coast of Israel, and an additional 453 BCM of natural gas were discovered in the Leviathan field in late 2010 — the world’s largest deep water gas discovery in the last 10 years. In December 2011, the Cypriots tapped into what could amount to 226 BCM of natural gas in the Aphrodite field.