- 10:40
Desperately seeking solutions to its deepening economic and energy crises, Lebanon once envisioned its territorial waters as a strategic asset, with potentially vast offshore gas reserves offering a lifeline. However, hopes for a swift exploitation of Block 9 – developed in partnership with a consortium led by French oil giant TotalEnergies – are now being undermined by growing tensions. The relationship between Lebanon’s Ministry of Energy and TotalEnergies appears to be deteriorating, creating a deadlock that, instead of unlocking gas production, is drowning the country’s economic recovery hopes.
The relationship between the Lebanese Ministry of Energy and the French oil giant TotalEnergies seems to be on the brink of collapse. The issue lies in a report on the drilling of Block 9 that has not been submitted to the Lebanese authorities.
In 2023, TotalEnergies announced the start of drilling in Block 9, off the Lebanese coast, as part of its commitment to explore this potentially gas-rich area.
As is known, Lebanon had delineated several exploration blocks in its territorial waters, including Block 9, a strategic zone extending over about 1,000 square kilometers. This block was particularly interesting due to its potential gas resources, which could have represented a boon for Lebanon, seeking to exploit its energy resources to secure its energy supply and revive its economy.
In 2018, TotalEnergies signed a contract with Lebanon for the exploration of Block 9, in partnership with other companies. As the consortium's main operator, TotalEnergies is responsible for conducting research, including drilling and the necessary geological studies to determine gas reserves, and for preparing reports.
However, in recent days, caretaker Minister of Energy Walid Fayad publicly accused TotalEnergies of “negligence regarding its contractual obligations.”
In an interview with This is Beirut, Wissam Chbat, a member of the Lebanese Petroleum Administration's (LPA) board of directors, confirmed that “the issue between the Ministry of Energy and TotalEnergies concerns the report that the oil company has not submitted at the end of the drilling of Block 9.”
The agreement signed between the two parties is structured in two phases, Chbat explained. The first phase extends over three years and the second over two years. The first phase, corresponding to Block 9, was extended by parliamentary decision until March 21, 2025, due to the COVID-19 pandemic. TotalEnergies must therefore decide before this date whether it will proceed to the second phase or return the block.
However, before the end-of-year holidays, Parliament decided to extend all contractual work periods due to the war. This decision also applies to TotalEnergies, which suspended its operations on October 8, 2023. As a result, this first phase now extends until November 13, 2026, adding 540 days beyond the regulatory end.
“If TotalEnergies leaves things as they are without studies or a report, it means we will lose 540 days. We just want to know if TotalEnergies wants to continue the studies or hand over Block 9 to us,” Chbat said. He recalled that the report should have been submitted in April 2024.
What does the French oil giant say in response? The Lebanese delegation sent to France was told that “the report was not provided by management, and that it wouldn't change anything since the gas is nonexistent.” As for the Ministry, it has certified that it needs this report, especially since the document is mentioned in the contract.
Case Submitted to the Council of Ministers
Chbat affirms that the agreement's clauses must be respected, like the article in the 2010 law concerning the deletion of information. Non-compliance with this article may lead to the contract's revocation. Especially as the LPA “feels responsible” for the work's execution. It has therefore submitted two recommendations to the Minister of Energy: request contract termination with a 90-day period to “correct the mistake,” or submit this revocation for the Council of Ministers' approval with the same grace period.
Minister Fayad chose the second option, “given that this is a strategic decision with a significant impact.” He has therefore sent a letter in this regard to the Council of Ministers. This issue is expected to be addressed by the Executive once a new government is formed.
However, Chbat expressed hope that with the improvement of the situation in Lebanon, the oil giant will take a positive step by submitting the report, conducting studies, or making an offer for Blocks 8 and 10.
TotalEnergies has refrained from commenting publicly on the matter.
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