Former Energy Minister Nada Boustani postponed the deadline for the submission of applications for Lebanon’s second oil and gas exploration licensing round three months, to April 30, 2020.
The initial deadline had been Jan. 31, however an Energy Ministry statement said that international oil companies had requested an extension so that they could fulfil the requirements to put forward applications.
Lebanon signed its first offshore oil and gas exploration and production agreements in February 2018 with a consortium of Total, Eni and Novatek, to drill in Block 4 off the coast of Beirut and southern Block 9.
LOGI believes that the postponement of the licensing round is a signal of a loss of appetite from international oil companies, who need stability in Lebanon in order to put forward serious offers.
“This is a sign that the new government needs to get things moving and initiate reforms so they can begin attracting serious investors" Diana Kaissy, executive director of LOGI said.
For example, the Lebanese Petroleum Administration is currently working in a caretaker capacity, raising serious questions about its legal legitimacy.
The government should take advantage of this extension period to quickly pass much needed measures including the appointment of a fully-empowered LPA, endorsing the petroleum registry and fully disclosing subcontracts and beneficial owners of companies across the supply chain.
Additionally, mechanisms for oversight of the procurement process need to be in place to ensure equal economic opportunity and to safeguard the sector against politically exposed people.
LOGI’s full recommendations around improving transparency in the subcontracting process can be found here
Photo by Petroleum Economist