Lebanese speculate about oil and gas riches but politics remains the same

Energy sector may be in process of transforma­tion but its politics remains the same.

Workers conduct an onshore gas and oil inspection in B atroun, northern Lebanon.

2016/07/17 Issue: 64 Page: 20

The Arab Weekly
Mohamad Kawas

London - Nothing explains the in­creasing importance of energy resources than the curious intersection of ties between Turkey, Russia and Israel due to oil and gas discoveries in the Mediterranean and speculation of a new pipeline that would export gas from Israel via Turkey into Europe.

This is an issue that is also be­coming increasingly important for Beirut, following new movement on Lebanon’s offshore gas and oil discoveries.

This was confirmed at the head­quarters of Lebanese parliamen­tary Speaker Nabih Berri during a meeting with Finance Minister Ali Hassan Khalil and Foreign Minis­ter Gebran Bassil. The meeting of Lebanese political heavyweights — and rivals — sought to reach a quick decision on technical and tax issues related to Lebanon’s energy sector at a time when the country remains without a president and is mired in political deadlock.

Geology Professor Marcelle BouDagher-Fadel of University Col­lege London professor said there was a report published more than a decade ago confirming significant undiscovered oil and gas reserves in Lebanese waters. She said the Lebanese government at the time decided to bury the report and not seek to extract this resource while the country was under Syrian tute­lage.

With Syrian troops forced to leave Lebanon in 2005, movement on the issue is overdue, but none has come.

Lebanon’s political factions were divided on how to move forward on offshore gas exploration, some­thing that has begun in neighbour­ing Israeli and Cypriot waters. This is not just due to the technicalities of the issue but also due to the ab­sence of a green light from the in­ternational community.

It had been thought that noth­ing could be done until the political future of Lebanon, which has been without a president since May 2014, became more certain. Lebanon is still facing an uncertain political future but perhaps not in terms of energy.

US Assistant Secretary of State Daniel Glaser visited Lebanon in May to discuss American sanctions on Hezbollah. US Assistant Secre­tary of State for Energy Amos Hoch­stein was visiting Lebanon at the same time and Beirut newspapers speculated that he was discussing the extent of US influence on Leba­non, not just in politics, but also in energy.

Hochstein met with a number of senior Lebanese figures and spoke publicly about Washington sup­porting Beirut to activate its energy sector. He said the United States was keen to see an end to Leba­nese-Israeli disputes over maritime zones. Hochstein completed his visit without announcing any offi­cial breakthrough.

It now seems there was one, with Lebanon’s offshore oil and gas exploration moving forward sig­nificantly following an agreement among Lebanon’s divided political factions. Lebanon is set to offer all of its offshore oil blocks for inter­national bidding, according to local media.

Popular Lebanese Forces MP An­toine Zahra has demanded to know the “secret” behind this new move­ment and precise details of any agreement between the country’s various political parties, particular­ly Berri’s Amal Movement and the Free Patriotic Movement, which is led by presidential contender Michel Aoun.

There are questions whether the previous lack of movement can be traced to Bassil — a former En­ergy minister and Aoun’s son-in-law. This is a demand that is being backed by the Lebanese street.

Whatever issue was holding things up has been resolved and the Lebanese people can only be shocked by the political paralysis that gripped this issue given the po­tential oil and gas reserves in ques­tion and what this could mean for the country’s economy. That only leaves the international dimension, and the various agreements, or dif­ferences, between Israel, Russia, and Turkey.

Energy expert Nicolas Sarkis said there could be as much as 800 mil­lion barrels of oil and 25 trillion-30 trillion cubic feet of gas beneath Lebanon’s territorial waters. Other estimates are much higher.

“Lebanon can expect gas produc­tion worth approximately $400 bil­lion-$500 billion based on the glob­al prices that prevailed before the 2014 market collapse. As for Leba­non’s expected revenues… this can be estimated at between $150 bil­lion-$200 billion,” Sarkis said.

To demonstrate the significance of these figures for Lebanon, this would be four times the domestic national product and allow Leba­non to pay off its public debt twice over. Lebanon’s current exports stand at $3 billion-$4 billion.

A green light from the interna­tional community would allow Lebanon to benefit from this great wealth. Paradoxically, Lebanese citizens do not seem to be over­joyed by this news and instead are concerned about scandal and cor­ruption and wondering why it took so long for Lebanon to exploit this wealth.

Lebanon’s energy sector may be in the process of transforma­tion but its politics remains the same.

Mohamad Kawas is a Lebanese writer.

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