QatarEnergy instead of Novatek will develop deposits in Lebanon

The Qatari QatarEnergy, instead of the Russian Novatek, has joined a consortium that will develop oil and gas fields in two blocks on the coast of Lebanon on the Mediterranean shelf, informed newspaper Asharq Al-Awsat, citing the Lebanese Ministry of Energy.

QatarEnergy plans to acquire a 30% stake in the development, thus the other members of the consortium – the French TotalEnergies and the Italian Eni – will each have 35%. The relevant agreements will be signed on January 29, the publication clarifies.

Lebanese Minister of Energy and Water Resources Walid Fayyad expressed hope that the conclusion of the agreement will speed up the start of exploration work. Previously, the development was hampered by the dispute over the maritime border between Lebanon and Israel, but with the mediation of the United States, the parties managed to reach an agreement.

The consortium won tenders for the development of two blocks in 2017.”Novatek» came out from its composition in August 2022. Novatek’s subsidiary Novatek Lebanon SAL informed the country’s authorities of its intention to withdraw from the projects after the completion of the first exploration period, that is, until October 22, 2022. Novatek transferred its share to the Lebanese government. The head of QatarEnergy in October 2022 said that the company intends not only to receive a share of Novatek, but also to increase it to 30%, wrote TASS.

The terms of the agreement provide for geological exploration for five years with a possible extension for the same period, and in the event of the discovery of commercial hydrocarbon reserves, the consortium’s exclusive right to develop them for 25 years with a possible extension for another five years.

The Lebanese media estimated the consortium’s investment in exploration at $240 million. In January 2018, Novatek’s deputy chairman Mark Gytway said that the company could invest about 40 million euros in the project.

As Vedomosti wrote in February 2018, the interest of oil and gas companies in the Lebanese shelf is due to the fact that the gas reserves of the Levantine Basin located in the eastern Mediterranean Sea, according to expert estimates, can be up to 3.5 trillion cubic meters. m. The potential reserves of the Lebanese shelf can be up to 700 billion cubic meters. m.