Second oil licensing round by year end. Good appetite from international companies - Lebanon

Second oil licensing
round by year end
Good appetite from international companies
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The Ministry of Energy and Water is preparing to launch the prequalification period as part of the second oil and gas licensing round by the end of 2018 or early 2019.

“Oil companies should know from now about the second round so that they secure personnel and budgets when they are planning the annual budget,” said Cesar Abi Khalil, Minister of Energy and Water (MoEW). The decision to open a second round was encouraged by the rising oil prices.

The Lebanese Petroleum Administration (LPA) has proposed a timeline for the upcoming process, to be approved during the next Cabinet session.

Wissam Chbat, member of LPA, said: “Among the milestones included in the timeline is integrating the lessons learned during the first round, with regards to the legal procedures such as prequalification, bidding, tender protocol and exploration and production agreements.”

He said that preparations also include the type of state participation. “There are several models through which the state can be involved in the round. It could be through a national oil company or by a financial institution with a limited number of technical employees,” he said.

It has not been decided whether to open blocks before or after prequalification is launched. “We want to attract a large number of companies but we do not want to compromise the state’s share,” Chbat said. The LPA will likely hold talks with interested companies to judge their appetite for certain blocks before they are open for bidding.

“We should be done with all preparations in the next five to six months,” he said.

The LPA expects good interest from international oil companies, especially in light of the ongoing licensing round and the approval to launch a tender for floating storage and regasification units.
Reported by Yassmine Alieh
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Date Posted: May 17, 2018