(Adds detail, analyst quotes)
By Lisa Barrington
BEIRUT Jan 4 Lebanon's new government on
Wednesday passed two decrees concerning oil and gas exploration
blocks, meaning a tender process for offshore reserves, stalled
since 2013, can begin.
Beirut estimates it has 96 trillion cubic feet of natural
gas reserves and 865 million barrels of oil offshore, but
squabbling between parties has prevented it from kick-starting
exploration and development of the sector.
"The two oil decrees have been decided in the first
achievement for the government," Foreign Minister Gibran Bassil
wrote on Twitter during the first meeting of the new cabinet
under Prime Minister Saad Hariri.
The decrees define the blocks and specify conditions for
production and exploration tenders and contracts. Full details
of these model exploration and production agreements have not
yet been published.
The cabinet also agreed to form a ministerial committee to
study the tax regime needed for the hydrocarbon industry, and
another committee to study a draft hydrocarbon law, Information
Minister Melhem Riachi said after the meeting.
In 2013, 46 companies qualified to take part in bidding for
oil and gas tenders, 12 of them as operators, including Chevron
, Total and Exxon Mobil.
Jeremy Arbid of the Lebanon Oil and Gas Initiative, a
non-governmental organisation promoting transparency and policy
development in the hydrocarbon sector, said it appears those 46
companies will now be able to enter a bidding process.
He said the situation will be clearer when the full decrees
Ayham Kamel, Middle East director for the political risk
group Eurasia, said delays in oil and gas licensing had
undermined confidence in Lebanese policymaking.
"Lebanon had to demonstrate that it is extremely
business-friendly and that political issues will not represent a
real obstacle," he said.
"The Lebanese Petroleum Administration (regulatory body) is
proving responsive to international dynamics but the body needs
political support to manage the process and broaden interest in
the Lebanese energy sector," Kamel said.
Beirut hopes exploiting the hydrocarbon reserves will help
tackle its debt and power shortages, which see most homes go
without electricity or rely on generators for many hours a day.
Political paralysis left Lebanon without a president for
more than two years. The government was unable to tackle
long-pending economic and development issues such as garbage
disposal, electricity, water and stock market privatisation.
The country is also bearing the costs of hosting more than 1
million refugees from neighbouring Syria's civil war.
In October, Michel Aoun was elected president in a deal that
saw Hariri become prime minister.
(Reporting by Lisa Barrington; Editing by Mark Heinrich and