Analysis of recently completed seismic data by top multinational companies showed that Lebanon's gas wealth could exceed that of Israel.
Mr Salah Khayat said CEO of Lebanon's upstream oil and gas company Petroleb said that "Analysis of 3-D seismic data by our partners [top international oil firms] suggests that offshore gas reserves in Lebanon could be by far more significant than discoveries in occupied Palestine. Despite suggesting that it was premature to give accurate estimates for the value of the potential reserves."
Mr Khayat said that "The 3-D data provided by Spectrum and Petroleum Geo Services suggest that we have gas and oil resources valued in tens of billions of dollars when extracted over the next four decades."
Petroleb, which was established in mid-2011, has finalized agreements for a consortium with a major international oil and gas companies. However, Mr Khayat refused to disclose the identity of the companies, which remains confidential under the terms and conditions of the consortium.
He said that the agreements have paved the way for Petroleb to jointly bid for the first round of licenses for offshore hydrocarbons exploration expected to take place in early 2013. The companies are expected to jointly invest hundreds of millions of dollars in the related exploration and development projects. Petroleb will be recruiting the best Lebanese talents in the sector.
Mr Khayat said that the partners of Petroleb's consortium include those with top know how in offshore deep sea drilling and exploration, key to tap into Lebanon's natural gas wealth located in deep sea reservoirs. Potential gas reserves are located well below our sea bed which starts from around 1,000 meters to reach 2,500 meters. You need very strong operators to tap into that wealth Most probably the first round of licensing would not award all the sea blocks but will leave several blocks for a second or third round, when conditions of contracting would be more favorable to Lebanon."
He said that the measure is vital to shorten time needed to materialize revenues and increase transparency. Following Norway's example, channeling oil and gas revenues for a sovereign fund would also be highly beneficial to Lebanon's economy. Initial investments are in hundreds of millions of US dollars by the consortium per year over the next years. But once discoveries are found, investments would quickly multiply into billions of dollars. Some international companies, he added, are considering moving their Middle East headquarters to Beirut, once awarded.
Mr Khayat said that a conflict with Israel over the Exclusive Economic Zone could be nearing resolution at the United Nations. The government is working hard for a deal to be reached very soon to secure Lebanon's rights completely. The contested 830 square kilometer area has significant reserves.
He said that expected returns on investments are very encouraging and attractive for investors Lebanon is positioning itself as a much more competitive producer than Israel and Cyprus, where the government share of revenues is much higher. Significant investments in infrastructure projects, including pipelines and liquefied natural gas plants are desperately needed for Lebanon to tap export markets.
He added that Lebanon has been known as a touristic country. But in the future we will a unique country that is both a tourist destination and a major gas producer. This is really important for the coming generations.
