Qatar, TotalEnergies, and Eni Partner to Invest in Lebanon's Gas Blocks

QatarEnergy recently entered into a contract with TotalEnergies SE and Eni SpA to explore for natural gas in Lebanese waters, including a region that has been the subject of a dispute with Israel.

According to a statement from caretaker Prime Minister Najib Mikati, a state-run Qatari company will possess a 30% stake in offshore blocks 9 and 4, while French and Italian energy giants will each own 35%.

In the previous year, the United States facilitated a momentous agreement that put an end to the disagreement between Lebanon and Israel concerning a region in the Mediterranean Sea that could be rich in gas. Both nations had asserted authority over an area of 860 square kilometers (330 square miles).

The Israeli government has given the green light to Qatar's proposal to join Lebanon in offshore drilling operations. This decision marks a significant step forward in the two countries' relationship and could potentially lead to further economic cooperation.

An agreement has been made that will enable international businesses to start searching for natural gas in offshore Block 9, which could result in more energy exports to Europe in the near future.

Mikati stated that Lebanon's strategic position in the region will enable it to be a key contributor to supplying gas to Europe, in collaboration with other friendly nations. This will also motivate international firms to participate in the second licensing round.

A breakthrough could potentially provide a solution to the long-standing electricity shortage in Lebanon by powering natural gas-run power plants. This would be a major step forward for the country, which has been dealing with power rationing for many years.

In late 2017, a consortium led by TotalEnergies, with Eni and Novatek PJSC as members, was successful in their bid to explore two blocks. In 2020, the group began drilling in Block 4, but the results were not satisfactory, leading to the suspension of further development. Novatek then withdrew from the exploration efforts in the following year.

The potential discovery of hydrocarbons in Lebanon could be a much-needed boost to the country's economy, which is currently in a state of financial distress. Additionally, if the prospect is successful, Israel may be entitled to payments from the production of the hydrocarbons.

Energean, the field developer, has announced that gas production has begun at the Karish field located in Israel.

The government of Lebanon has pushed back the deadline for its second licensing round for the remaining offshore blocks to June 30.