Drilling Rig Arrives in Lebanon’s Block 9

On August 16, the TransOcean Barents drilling rig, operated by France’s TotalEnergies, Italy’s ENI, and Qatar’s QatarEnergy, arrived in Lebanon’s Block 9 to begin exploration activities. Answers regarding a discovery are expected to be reached by the end of the year. Regional sources evaluate the impact of this development within Lebanon: 

Lebanese Minister of Public Works and Transport, Ali Hamie, on Wednesday, announced via X: “The TransOcean Barents drilling rig arrived in Lebanon’s Block 9.” Asharq Alwasat notes: “A mechanism for the consortium to exploit possible discoveries that extend south from Block 9 past that border was also established.”

“The drilling became possible after the United States mediated a deal that set a maritime border between Lebanese and Israeli waters for the first time,” reports Al-Arabiya. “Lebanon does not recognize Israel’s right to exist and still considers itself at war with its neighbor, with laws barring contact with Israeli officials.”

Upon the November 2022 signage of a framework agreement for implementing the maritime boundary accord, The National News disclosed: “The disputed waters will be divided along a line that straddles the Qana prospect gasfield. Production and exploration will be based on the Lebanese side, but Israel will be compensated for any gas extracted from its side of the line.”

Al Jazeera explains that although a royalties system has been established for Israel, experts believe that “the absence of specific criteria for profit distribution is one of the biggest loopholes in the deal in the event of cross-border deposits being identified.”

The drilling deal was signed in January between “Lebanon, ENI, TotalEnergies and state-owned oil and gas company Qatar Energy.” Notably, Qatar Energy is replacing Russian gas producer Novatek, which was previously a part of “licences for an international consortium including France’s TotalEnergies, Italy’s ENI and Russia’s Novatek” in Lebanon. The Khaleej Times outlines that under the new deal, “Qatar Energy will take Novatek’s 20 per cent stake in addition to 5 per cent each from ENI and TotalEnergies, leaving the Arab company with a total stake of 30 per cent. Total and ENI will each have 35 per cent stakes.”

Lebanon’s Energy Minister Walid Fayyad told Ahram that “the results of the drilling are expected in two or three months.” He also expressed aspirations that “Lebanon will become an oil state.” 

ENI CEO Claudio Descalzi echoes the Minister’s optimism and claims “that he was ‘positive’ about a discovery there.” The Jerusalem Post analyzes: “Lebanon hopes gas and oil discoveries will help it reverse a crippling economic crisis that has cost the local currency more than 98% of its value, eroded the country's foreign reserves, and caused rolling blackouts across towns and cities.”

(Image: ANWAR AMRO / AFP)