LONDON – With attractive exploratory potential, the Levant basin, offshore Lebanon, presents an opportunity in the promising eastern Mediterranean region, says an analyst with research and consulting firm GlobalData.
According to Rabie Khellafi, GlobalData’s lead analyst covering upstream oil and gas in the Middle East and North Africa region, both opportunities and challenges exist in the exploration of offshore Lebanon. The country’s first bidding round has been postponed for the fourth time, and the number of bids received when the round closes on Aug. 14 will show how interesting the area is to IOCs.
The analyst notes that the ongoing delay experienced in launching the first international bidding round is the result of unresolved political instability in Lebanon, which has been typical of the last four decades and proves that future political disagreement may interfere further with exploration and production activities in the country.
The analyst says: “Lebanon’s offshore blocks boast large sizes varying from 486 sq m (1,259 sq km) to 917 sq mi (2,375 sq km), but it is not unusual for frontier countries, or even producing countries, to offer blocks of such sizes to fuel investor interest. IOCs are ultimately attracted by blocks with large acreages, as this allows them to explore different zones under the same contract or permit, and increases exploration success probabilities.”
“The delimitation of the Exclusive Economic Zone with Israel is another difficulty for Lebanon in its offering of blocks 8 and 9, where disputes over the maritime borders have recently arisen between the two countries,” Khellafi says. “As no progress has been made toward resolving this issue, it may take years or even decades to conclude. A heightened security risk of conflict may also present itself if the zones closer to the disputed area prove prolific.”