Page 9 - MEOG Week 35 2022

MEOG PROJECTS & COMPANIES MEOG

Novatek withdraws

from Lebanese offshore

LEBANON RUSSIA’S Novatek has withdrawn from a con- licensing round, which has been delayed by
sortium that controls two Lebanese licences, the more than two and a half years already.
latest in a string of disappointments and delays In June, the Lebanese Petroleum Adminis-
for Beirut as it looks to explore for resources tration (LPA) extended the deadline for the bid
offshore. round from June 15 until December 15. The
Energy Minister Walid Fayad said that original bidding deadline was January 31, 2020
Novatek had cited “economic and financial and this was extended first to April 30, then June
[issues and] political risks” as its reasons for 1 amid the coronavirus (COVID-19) pandemic
dropping its 20% stake in the consortium with and falling oil and gas prices. The deadline was
TotalEnergies of France and Eni of Italy, both of then moved to the end of 2021, with the process
which own stakes of 40%. relaunched in December 2021 with a view to
The consortium was awarded the blocks 4 closing this summer.
and 9 in 2018. The group drilled their first well in The government said that it had extended the
Block 4 in early 2020 but reported that no com- auction “based on the recommendation of the
mercial discovery had been made. With around LPA.” It added that the delay was “necessary to
7-9% of Block 9 overlapping with a triangle of allow additional companies not currently oper-
territory disputed with Israel, which condemned ating in the Lebanese offshore to prepare their
any efforts to explore the concession, TotalEner- files and studies and participate in the second
gies said the consortium would seek to drill as far licensing round, thus allowing an acceptable
from the offending area as possible, but work in level of competition among international oil and
the licence remains suspended. gas companies.”
While Novatek’s withdrawal is perhaps Middle East Oil & Gas (MEOG) understands
unsurprising given challenges it is facing closer that that no bids were submitted, which should
to home, it raises questions about the future of perhaps come as little surprise given the coun-
the consortium. Speaking to L’Orient, Lebanese try’s ongoing political and economic woes in
energy expert Laury Haytayan said: “All provi- addition to the maritime border dispute.
sions, whether the law, the signed decrees or the The second bid round comprises blocks 1, 2,
signed exploration deal, say that there have to be 3, 5, 6, 7, 8 and 10. Blocks 1, 8 and 10 were those
at least three companies in the consortium.” She not awarded in the first round between February
noted that the Lebanese authorities must replace and November 2017, while blocks 2 and 5 were
Novatek or redraft the country’s energy laws. added to the final cabinet-approved list later,
Attracting another company may prove chal- with blocks 3, 6 and 7 added in late 2021. The
lenging for Beirut, which has struggled to gar- Lebanese EEZ is delineated into 10 concession
ner sufficient interest to proceed with its second areas.™

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