Lebanon pins hopes on offshore oil exploration amid economic collaps
In the midst of Lebanon’s most devastating economic crisis in recent history, the arrival of a drilling rig off its coastline last week ignited a glimmer of possibility in a country long accustomed to navigating tumultuous waters. For years, Lebanon has harbored dreams of tapping into its offshore oil and gas reserves, fueled by regional dynamics and a desire to diversify a chronically fragile economy.
Last Wednesday, a drilling rig reached Lebanon, intending to initiate offshore oil-and-gas exploration later this month, as the French energy group TotalEnergies stated.
The commencement of offshore drilling activities in Lebanon comes after a significant agreement facilitated by the United States last year. This historic agreement established a maritime boundary between the waters of Lebanon and Israel, marking the first time such a distinction has been set.
TotalEnergies spearheads a consortium for the offshore venture, identified as Block 9, which comprises the participation of Italian oil group ENI and state-owned QatarEnergy.
How much gas or oil Block 9 holds – if any at all – is still unclear.
Lebanon’s interest in offshore exploration took root in the early 2000s as the country embarked on the journey of uncovering its hydrocarbon potential. Nestled between oil-rich neighbors, the allure of delving into offshore oil-and-gas discoveries captivated Lebanon’s aspirations, holding the prospect of attaining economic self-sufficiency and liberation from the shackles of external pressures.
However, the complex geological conditions, deep water depths, technical challenges and the relatively small size of Lebanon’s potential reserves presented multiple obstacles to development.
The country’s efforts to develop its oil-and-gas sector were also influenced by domestic political challenges, including governance issues, administrative delays, institutional weaknesses and corruption. These hurdles impacted the ability to attract investments and develop a robust regulatory framework for the industry.
Further adding to the complexity of the endeavor were the intricate geopolitics of the region. Lebanon’s offshore discovery has been entangled in disputes over maritime borders with neighboring countries, stirring diplomatic tensions that could spark instability.