Lebanon grants oil, gas exploration license for waters bordering Israel

Israel and Lebanon are in dispute over where the line between their exclusive economic zones lies.

Cables descend into Lebanese waters for gas exploration (photo credit: MOHAMED AZAKIR / REUTERS)
Cables descend into Lebanese waters for gas exploration
(photo credit: MOHAMED AZAKIR / REUTERS)
The Petroleum Administration in the Lebanese Ministry of Energy and Water has announced that an international consortium won two licenses for exploration for oil and gas, one of which borders on Israel's exclusive economic zone.
Israel has not yet decided how to respond to this development, against the background of the border dispute between the two countries that has continued since Israel withdrew from its security zone in Lebanon in 2000.
According to the Lebanese Petroleum Administration announcement, two bids were accepted in an auction of oil and gas exploration licenses in Lebanon's exclusive economic zone. Both bids were submitted by a consortium comprising French company Total S.A, Italian company Eni unit International BV, and JSC Novatek from Russia. The consortium will receive blocks 4 and 9. Ten blocks were offered in the auction, but only the two bids from this consortium were received, which represents partial failure for the Lebanese government.
The southern perimeter of block 9 borders the line separating Israel and Lebanon's exclusive economic zones. The two countries are in dispute over where precisely the line should be drawn. As a result, a disputed area exists forming a triangle of which the apex is at Rosh Hanikra (on the Israeli side of the Lebanon-Israel border) and of which the base borders the exclusive economic zone of Cyprus. Attempts have been made to mediate between the sides, among other things through a US envoy to the region, but, according to Israel, a compromise proposed four years ago was rejected by Lebanon.
The potential of block 9 is still unclear, as seismic tests and exploratory drillings have not yet been carried out, but preliminary estimates are that there is a geological structure in the block that could hold gas in similar quantities to those in the Tamar reservoir in Israeli waters.
In the past, Israel suspended the Alon D license, which borders block 9 on its northern edge, but two months ago Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz decided to return the license to its original holders, Delek Group Ltd. (TASE: DLEKG) and Noble Energy, for a further 32 months.