Lebanon needs to be quick in gas exploration: expert
11 May 2017
BEIRUT: Lebanon must start its offshore gas and oil exploration by no later than mid-2018 to benefit from the low cost of oil services, a senior energy expert said Wednesday. “Nobody can predict if prices will change soon or not but Lebanon must benefit from the low cost of oil services available in the market today by starting drilling soon,” Marwan Moufarrej, senior adviser to the chairman and CEO at Schlumberger told The Daily Star on the sidelines of Lebanon’s International Oil and Gas Summit.
The two-day summit, which was held by Global Event Partners at the Hilton Beirut Grand Habtoor hotel, aimed at discussing topics related to the oil and gas industry in Lebanon.
Moufarrej said that the Lebanese market is as attractive as any other offshore market in the Mediterranean. “But if we move quickly into a phase where we can award and start operations, the market will be even more attractive due to the low cost of oil services,” he said.
A prequalification round for oil and gas exploration on Lebanon’s offshore started on Feb. 2 and continued until March 31. Around 51 companies were pre-qualified and companies that are willing to take part in the tender will be able to submit bids on the open blocks until Sept. 15.
The LPA will then assess applications submitted by oil companies and will send a report to the Cabinet, which will decide by Nov. 15 on the companies that will win the tenders, and the first contract will be awarded before the end of the year.
Moufarrej said that Lebanon made all the required efforts to deliver its work on the sector in a timely manner. “Lebanon is doing everything that is right to deliver,” he said.
He added that even though there has been a delay in Lebanon to start with operations in the oil and gas field, the country will still be able to export its produce because the world demand for oil and gas will remains very high until 2040.
“In 2016 the world powers convened in France and they all committed to lower the carbon footprints of this world and one of the things that needs to be done is to stop burning coal and start burning gas to generate electricity,” he said.
Moufarrej’s comments were reiterated by Rafic Koussa, general manager at Energy One, who said that Lebanon is in a very good position to move forward in the oil and gas sector and attract investment.
He explained that if discoveries were made on Lebanon’s offshore, then companies can start producing oil and gas and the entire process would take between 7 to 10 years.
But Koussa said that this won’t be a problem as natural gas and oil will still constitute 50 percent of the feedstock needed to produce energy.
He quoted Chevron CEO John Watson as saying that oil and natural gas are indispensible for the foreseeable future. “Although the use of renewables will grow ... we see oil and natural gas are forecast to account for 50 percent of global energy demand by 2040,” he said.
Koussa said that the private sector would benefit from great advantages and opportunities in the oil and gas industry in Lebanon.
“For instance, the procurement of services and goods shall be done through public tender and preferential treatment will be given to the procurement of Lebanese originating goods and services – manufactured, constructed or performed in Lebanon, by Lebanese or by an entity owned and controlled by Lebanese,” he said.
Koussa noted that oil and gas discoveries will enable Lebanon to become energy independent. “The structural shift will carry cumulative benefits to stakeholders who chose to get involved early at the pivotal point where demand for goods and service remain relatively unsophisticated,” he said, adding that stakeholders who place themselves at the forefront of this structural shift will affect key decision-making and help guide the industry forward.
Koussa explained that the GCC experience suggests that late stage entrants are gradually exposed to higher barriers to entry and also increased costs associated with entering a more competitive market.© Copyright The Daily Star 2017.