Lebanon's new government on Wednesday passed two decrees concerning oil and gas exploration blocks, meaning a tender process for offshore reserves, stalled since 2013, can begin.
Beirut estimates it has 96 trillion cubic feet of natural gas reserves and 865 million barrels of oil offshore, but squabbling between parties has prevented it from kick-starting exploration and development of the sector.
"The two oil decrees have been decided in the first achievement for the government," Foreign Minister Gibran Bassil wrote on Twitter during the first meeting of the new cabinet under Prime Minister Saad Hariri. The decrees define the blocks and specify conditions for production and exploration tenders and contracts. Full details of these model exploration and production agreements have not yet been published.
The cabinet also agreed to form a ministerial committee to study the tax regime needed for the hydrocarbon industry, and another committee to study a draft hydrocarbon law, Information Minister Melhem Riachi said after the meeting.
In 2013, 46 companies qualified to take part in bidding for oil and gas tenders, 12 of them as operators, including Chevron, Total and Exxon Mobil.
Jeremy Arbid of the Lebanon Oil and Gas Initiative, a non-governmental organization promoting transparency and policy development in the hydrocarbon sector, said it appears those 46 companies will now be able to enter a bidding process. He said the situation will be clearer when the full decrees are published.
Beirut hopes exploiting the hydrocarbon reserves will help tackle its debt and power shortages, which see most homes go without electricity or rely on generators for many hours a day.
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