BEIRUT: Political differences that have long delayed offshore oil and gas exploration in Lebanon's exclusive economic zone (EEZ) appear to have been resolved as the Cabinet is readying to tackle the issue in its first meeting in 2017.
The first licensing round for offshore oil and gas exploration has been postponed several times over the past years due to political disagreements over two decrees pertaining to the designation of blocks that would be open for bidding and the terms of a draft on the Exploration and Production Agreement (EPA).
The ratification of the two decrees in addition to the submission of two draft laws to parliament including one pertaining to the taxation of energy companies and another relating to onshore petroleum exploration will top the agenda of the Cabinet when it meets on Wednesday.
The Cabinet's agenda, which has been agreed upon between President Michel Aoun and Prime Minister Saad Hariri, was distributed to ministers Saturday.
Earlier this year, Aoun's Free Patriotic Movement and Speaker Nabih Berri's Amal Movement reached an agreement over contentious issues that have delayed the issuance of the two decrees.
The FPM and the Amal Movement have long disagreed over whether to license all blocks at once, as Berri proposed, or to adopt a gradual licensing approach as suggested by the Lebanese Petroleum Administration (LPA), a regulatory body in charge of managing the petroleum sector in Lebanon.
Reportedly, Berri and FPM President Gebran Bassil reached an agreement to gradually license blocks.
The gradual licensing of blocks would, according to the LPA, enable Lebanon to negotiate better terms in future licensing rounds.
Lebanon's potential offshore natural gas reserves are estimated at 25 trillion cubic feet.
Industry sources had previously warned that some international companies that prequalified for the first licensing round were re-evaluating the situation in light of the repeated delays as a result of the government's failure to issue the two decrees.
Out of the 52 companies that applied for prequalification, 46 were accepted and of those 12 can bid as operators and 34 as non-operators.
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