The signing of a gas exploration agreement with Total, QatarEnergy, and Eni marks a pivotal step for the country’s economy.

LPA member, Wissam Chbat: Gas production, consumption, and export could take 5 to 7 years.
Member of Parliament Ibrahim Mneimneh: Financial reforms must be completed to ensure proper use of gas revenues.
Energy expert Anas Alhajji: Gas reserve estimates in Lebanon are exaggerated, and there are risks regarding exploration feasibility.

Lebanon’s completion of maritime border demarcation with Cyprus at the end of last year helped provide a secure legal environment for international energy companies to begin gas exploration. This reflects technical confidence in the presence of promising reserves in a country that currently imports gas, as the government seeks to transform Lebanon from an energy-importing state suffering from a severe electricity crisis into a gas-producing nation.

Asharq reviewed, in a special episode titled “Lebanon Between Banking Restructuring and Gas Exploration,” the current state and future of Lebanon’s energy sector, particularly in the border block that has now become the focus of attention.

Earlier this month, Lebanon took a decisive step by signing a natural gas exploration agreement for “Block 8” offshore with a consortium comprising France’s Total, QatarEnergy, and Italy’s Eni.

Under the agreement, a 3D seismic survey will be conducted over 1,200 square kilometers in preparation for drilling an exploratory well during the second exploration phase, as announced by the head of Lebanon’s Petroleum Sector Management Authority, Gaby Daaboul.

Lebanon’s Ministry of Energy previously estimated natural gas reserves in its territorial waters at 30 trillion cubic feet, in addition to 660 million barrels of oil.

Will “Block 8” Succeed Where “Block 9” Failed?

The key question remains: will “Block 8” succeed where “Block 9” fell short? The answer lies deep beneath the sea and within the technical reports expected in the coming months. For now, the only certainty is that Lebanon’s gas file has emerged from stagnation and entered a phase of serious technical work, amid public anticipation that this potential wealth could be the last lifeline for the struggling economy.

Engineer Wissam Chbat, Head of the Geology and Geophysics Unit at the Petroleum Sector Management Authority, said that exploration in “Block 8” will soon begin with 3D seismic surveys to decode the geological layers beneath the seabed, expecting the first well to be drilled within three years.

He added that the economic impact on Lebanon would begin once natural gas reserves are confirmed. However, the direct impact—namely gas production, domestic consumption, or export—would take 5 to 7 years from the time of discovery, potentially around 2033.

These developments come as Lebanon faces a chronic electricity crisis, worsened by Israeli attacks since 2023. The government has imposed strict energy rationing for decades amid stalled reform plans, with the crisis peaking after the financial collapse that struck the country in 2019.

Priority to Financial Reforms

At the parliamentary level, governance and oversight are emerging as top priorities in managing anticipated national resources. As legislative discussions continue over establishing a sovereign wealth fund to preserve and manage energy revenues, parliamentary views differ on ensuring the fund’s independence and transparency standards. The focus is on oversight mechanisms to protect these assets from current financial challenges and to ensure they are employed within a long-term economic strategy serving future generations.

Regarding the proposed laws and their ability to provide institutional guarantees aligned with international standards for managing sovereign wealth, Lebanese MP Ibrahim Mneimneh said that the country’s current priority is to complete economic and financial reforms to ensure the proper use of revenues from natural resources, particularly the expected gas discoveries offshore.

Lebanon aims to intensify exploration activities and achieve a commercial discovery to support the economy, especially electricity generation. Efforts are underway to update the rules and conditions for granting exclusive petroleum licenses in Lebanese offshore waters.

Are Gas Reserve Estimates Exaggerated?

A fundamental question arises regarding the real value of Lebanese gas within the global energy map, beyond local optimism. Amid rapid changes in international energy markets and fierce competition in the Eastern Mediterranean basin, the economic feasibility of Lebanese discoveries remains subject to supply-demand dynamics and complex extraction costs.

On the realism of betting on this wealth to create a genuine breakthrough in the financial crisis—and Lebanon’s ability to secure a competitive position in the global gas market—Anas Alhajji, editorial advisor at the specialized Energy Platform, presented an analytical view of the sector’s future. He argued that there are significant exaggerations regarding Lebanon’s natural gas reserves, as well as uncertainties about the commercial viability of exploration and whether the available quantities would be economically feasible given potentially high extraction costs.

Alhajji noted that both Lebanon and Syria lack basic energy infrastructure, which raises the cost of utilizing and trading natural gas. He suggested that Total’s participation in the consortium was intended to mitigate high risks, and that the involvement of other companies encouraged Total to sign the exploration contract offshore Lebanon.

Under the recently signed agreement, QatarEnergy will hold a 30% stake in the offshore exploration area, while TotalEnergies (as operator) and Eni will each retain a 35% stake.

Energy and Water Minister Joe Saddi previously told Asharq that the agreement confirms the consortium’s commitment to continue exploration activities in Lebanon despite all challenges, reflecting ongoing confidence in the petroleum potential of Lebanese offshore waters.

He added: “We are about to launch the fourth licensing round to attract international companies for the remaining blocks within months,” noting that it is easier to attract additional companies when others are already operating in territorial waters. “This encourages further activity and also helps reinforce Lebanon’s gradually improving stability.”

Gaby Daaboul, head of the Petroleum Authority, said in previous remarks to Asharq that the initial exploration period is three years. “We are holding talks with companies to begin work immediately to complete the surveys and then analyze them. The surveys are expected to be completed quickly within no more than three years, but we will work to accelerate the process with the consortium.”

“Block 8” is located approximately 70 kilometers offshore Lebanon in waters ranging between 1,700 and 2,100 meters deep.

Source: Asharq Business
Article Link in Arabic + Videos