Lebanon seeks clarification after Israel’s offshore award to Halliburton

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The newly appointed Lebanese Prime Minister Najib Mikati has asked for clarification after the Greek energy company Energean received a drilling contract for offshore work in an Israeli block bordering the two countries’ disputed territorial waters.

The two countries contest hydrocarbon exploration rights in the Eastern Mediterranean, which have led to some significant gas discoveries in recent years.

“We will not give in or give up Lebanese rights on this issue,” Mikati said in a statement.

On Saturday, Energ awarded the US energy services company Halliburton the contract to drill three to five wells in the Karish North gas field, which is near Israel’s controversial maritime border with Lebanon.

The offshore block is estimated to contain up to 1.14 trillion cubic feet of gas.

“We are excited to build on our strong relationship with Energean and are honored to be selected again to offer integrated project management services that maximize the value of their offshore Mediterranean wells,” said Ahmed Kenawi, Senior Vice President of Europe, Eurasia and Sub-Saharan Africa near Halliburton.

The company did not respond to the Lebanese Prime Minister’s statement.

Lebanon, with an energy deficit, has previously unsuccessfully launched offshore oil and gas exploration licensing rounds to meet its growing fuel needs.

However, political instability, the lack of effective government over long periods of time, and poor credit ratings have thwarted the country’s plans to become a regional producer.

In October, there were signs that Israel and Lebanon might be quiet about their controversial offshore exploration blocks. However, little progress has been made between the warring nations to reach an agreement.

Lebanon and Israel claim 800 square kilometers of territorial waters that are expected to contain significant gas reserves.

While the latest estimates of the potential for Lebanese gas discoveries remain unclear, previous government data suggests that territorial waters could contain up to 100 trillion cubic feet of natural gas and 865 million barrels of oil.

Previous Lebanese attempts to search for oil and gas have also been thwarted by Israel, which has threatened arbitration if Beirut were to drill near its own blocks.

Lebanon awarded offshore units 4 and 9 to a consortium led by Total, Russia’s Novatek and Italy’s Eni during its first round of licensing.

Early exploration attempts proved unsuccessful and Lebanese officials went angry after Israel announced plans to drill near Block 9 in 2020.

Energean, which is listed on the London Stock Exchange, has previously considered buying a 45 percent stake in Gaza Marine’s offshore gas block.

The field, discovered in 2000, falls under the jurisdiction of the Palestinian Authority, which governs the West Bank. The discovery of the field, estimated to hold up to a trillion cubic feet of gas, had raised hopes for peace over a possible gas exchange deal between Israel, Palestine and Egypt, which lies south of the bloc.

However, its development has stalled due to political differences between the Palestinian Authority and Israel.

Updated: September 19, 2021 at 1:49 p.m.


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