The recent ratification of two long-delayed oil and gas decrees by the Lebanese government represents the first major step in the country’s long journey to exploring its offshore wealth. The decrees clarified the laws surrounding upstream investment in the country, delineated Lebanon’s waters into ten blocks, and opened a secondary round of pre-qualification for interested non-operators. Importantly, it also set September 2017 as the date for the country’s first bid round, offering five of its ten blocks (numbers 1, 4, 8, 9 and 10).

Lebanon’s geological data has been available for purchase for a number of years, but the definition of the blocks now enables interested oil companies to properly assess their investment decisions. Exploratory drilling in the deep waters of the East Mediterranean is an expensive venture, and the risk involved is significant given the unproven nature of the reserves and the lack of any well data.

The sudden and sustained drop in oil prices late 2014 led to great cuts in the amounts international oil and gas companies were willing to spend on exploration. However after two years of minimal expenditure, investment is beginning to return as these companies face the need to book new reserves. Available budgets are still relatively small, and investors have a number of different opportunities available to them.

A recent infographic published by IHS Markit, a business intelligence and consulting firm, compared various oil and gas investment opportunities around the world using the latest fiscal, political, and upstream data available. The infographic begins by describing recent changes and trends in fiscal terms around the world, ranking them by favorability to investors. It then goes on to map some of the opportunities available, before concluding by taking a closer look at five selected countries.

On the map of global opportunities, Lebanon is labeled as a “tentative round” as the government had not yet passed the decrees confirming the upcoming bid round this year. In the final graphic, Lebanon is given a low overall rating, but the country is said to be regarded as “high potential” by the industry.

What does this all mean?

Lebanon’s overall rating is brought down significantly by its E&P Rating. This rating seems to be based predominantly on having proven reserves, and administrative structures that have track records in working with oil companies (i.e. experienced oil ministries). This is evidenced by Iran and Iraq’s high E&P Ratings, despite the fact that their national oil companies play an outsized role in any local upstream developments. Lebanon’s rating will improve if the oil and gas sector grows smoothly, but this will take time. Passing the decrees was a step in the right direction, and it is sure to have improved Lebanon’s rating moderately.

There may be other, more attractive opportunities available to international oil companies today, but Lebanon’s potential is slowly being recognized. If the bid round in 2017 proves to be premature by attracting fewer bidders than hoped, it will at least grow Lebanon’s reputation as a country ready for investment, and interest will follow in its own time.