Qatar replaces Novatek and becomes a partner of TotalEnergies and ENI
It is a crucial deal for Lebanon, which is facing its worst economic recession in decades, as well as resolving maritime border disputes with Israel. The move allowed Beirut to begin exploration at the potential Jana gas field, part of which lies in the Jewish state’s territorial waters, despite the war between the two countries.
Indeed, Qatar announced on Sunday that it has joined a consortium that is to begin hydrocarbon exploration in the offshore block south of Lebanon, bordering Israel, as a partner of France’s TotalEnergies and Italy’s Eni. Through the national oil company QatarEnergy, the Arabian Peninsula thus replaces Russia’s Novatek, which withdrew in 2022, and will hold a 30% stake (35% for TotalEnergies and 35% for Eni), Lebanese Prime Minister Najib said. Mikati, before the signing ceremony this Sunday.
Agreement on maritime boundaries between Lebanon and Israel
The announcement followed major progress in the maritime border dispute between Lebanon and Israel following US mediation. Indeed, the two neighbors, still at war since Israel’s creation in 1948, signed a historic treaty on October 27 that defined their borders in the Mediterranean Sea. Before that, no country could use the region’s natural resources due to disagreements over the location of the border. Hezbollah, a powerful militant and political group in Lebanon, even threatened to attack Israel if it produced gas before the deal.
The situation therefore developed: under a US-negotiated agreement, Israel thus acquired all rights to the offshore Karish gas field, while Lebanon’s rights to another gas field, called Jana, were recognized. And that’s not all: Beirut has acknowledged that some potential revenue from Ghana, part of which is in Israeli waters, goes to Israel. Finally, Israel will be rewarded by the firm that manages Cana.” for their rights on any deposits According to the text of the agreement, the Israeli government estimates its share at around 17%.
What about” will give a new impetus to the exploration of the country’s hydrocarbon potential “, welcomed Patrick Pouyanné, CEO of TotalEnergies. With this new consortium, the goal could be achieved ” As soon as possible in 2023 », Digging the Cana well. Specifically, Lebanon has divided its offshore exclusive economic zone into ten blocks, and Block 9, where Canaan is located, was part of the disputed zone with Israel before the October agreement. The consortium is also responsible for the operation of block 4, which faces the coast of central Lebanon, where exploration has not led to the discovery of commercial quantities.
With this in mind, TotalEnergies and Eni signed a framework agreement with Israel last November to begin exploration. With this new step, the consortium will now be able to “explore” The already identified prospect may extend both in Block 9 and in Israeli waters south of the recently established maritime border. “, according to the French group. In detail, the exploration must end” in the next 12 months “Said Patrick Pouyanné on Sunday. Thus, the discovery of gas can be announced at this moment. The potential field of Cana has already been highlighted by seismic analyzes of the rock and must be confirmed by the exploration campaign.
However, analysts agree that in the event of a commercial discovery, it will take several years for Beirut to enter the operational phase.
“The problem is that infrastructure is needed for gas export, which is currently not available. In Lebanon, where power plants are almost at a standstill due to the economic crisis, if gas is used for local consumption, “a coastal pipeline will be needed to supply these power plants,” AFP told AFP. expert Naji Abi Aad.
For its part, Israel has already started producing gas and supplies it to its neighbors Jordan and Egypt. Last June, it signed a contract to liquefy its gas in Egypt for shipping to Europe.
Qatar’s growing influence
This new partnership expands the exploration cooperation between TotalEnergies and QatarEnergy and brings the number of countries in which the two companies are partners to nine. During the press conference, the Qatari minister considered that his country’s entry into the consortium was “organizing”. opportunity to support development in Lebanon in these difficult circumstances “. But the peninsula clearly finds its interests there:
” The involvement is a new step in Qatar’s expansion of its international dominance in natural gas amid the Russia-Ukraine war, as well as growing international interest in doing more exploration in the Mediterranean region, particularly to compensate for gas outages in Europe. Laura Sayah, associate professor of Lebanon University, said Doha News.
Indeed, with Vladimir Putin cutting off gas supplies, Qatar, which pioneered a model of high-volume, low-cost, long-term liquefied natural gas (LNG) supplies to many Asian customers, has been coming to Europe’s aid for months. which until now has been trapped by its excessive dependence on Russia. According to reports, the country regained its position as the world’s leading LNG exporter last April, ahead of the United States and its abundant shale gas. S&P Global Commodity Insights. In a world of conflicting guidelines, the International Energy Agency’s (IEA) call to immediately abandon any new oil or gas production projects in order to limit global warming to +1.5° in 2021 is, in any case, economically and does not resist the political situation. interests.