BEIRUT (Reuters) – Lebanon’s search for offshore oil and gas will begin on Thursday, President Michel Aoun said, as the country grapples with an unprecedented financial crisis.
The results from the first exploratory well are expected in the next two months, the chairman of the Lebanese Petroleum Administration (LPA) said earlier on Wednesday.
Lebanon is on the Levant Basin in the eastern Mediterranean, where a number of big sub-sea gas fields have been discovered since 2009, including near the disputed marine border with Israel.
A consortium of France’s Total, Italy’s Eni and Russia’s Novatek signed an agreement with Lebanon in 2018 to explore for oil and gas in two offshore blocks.
An energy discovery would be a major boost for the battered Lebanese economy but it could take several years for revenues to reach the treasury.
“We are going through the harshest economic and financial crisis of Lebanon’s modern history,” Aoun said in a televised address to the nation on Wednesday night.
Aoun hailed the country’s first exploration as a “historic” step that would “represent a cornerstone to rise from the abyss” and transform the economy.
“Our will is to…revive (confidence) and restore the cycle of life to normal,” he said.
The much-delayed search will start with the first well to be drilled in Block 4 and preparation is underway to drill wells in Block 9 later this year.
“We’ll get results in the next two months. If they are positive, we’ll move to the second phase of appraisal,” LPA Chairman Walid Nasr said during a press conference earlier at the presidential palace with a delegation from Total.
Raymond Ghajar, the energy and water minister, said good results will be positive for Lebanon’s ratings but noted it could be years before any find can be extracted.
“There are too many ifs. First, we need to drill, then find (oil or gas), then see the amount, then see what we can extract after two, three or four years,” he said.
(Reporting by Dala Osseiran; Editing by Tom Perry, Bernadette Baum and Alexandra Hudson)