As Lebanon starts exploratory drilling for oil and gas, after a major agreement settled its maritime border with Israel, experts have warned that any bonanza would not benefit ordinary Lebanese unless reforms take place.

Drilling in the country's offshore Block 9 began on Thursday, with a consortium led by France's TotalEnergies and including Italian company ENI and QatarEnergy.

While result are due in 67 days, experts say Lebanese struggling with among the worst financial economic crises since the mid-19th century should not pin their hopes on hydrocarbons solving their problems.

“It is essential to differentiate between the interests of Lebanon as a nation and the objectives of the political class, which, so far, are the ones benefiting from the entire process”, said energy policy expert Laury Haytayan.

Caretaker Energy Minister Walid Fayad told The National that while the drilling commencement was a positive step, any discovery of reserves would not in itself drag Lebanon out of its economic crisis – especially if no reforms are implemented.

As for Hezbollah, the deal is viewed as a way to lift Lebanon out of its financial woes without an International Monetary Fund deal – and the critical reforms it involves, Ms Haytayan said.

“Unfortunately, this situation will likely perpetuate the status quo, injecting dollars to prop up the system, while fuelling corruption networks and maintaining a facade of stability that undermine the general interest”, she added.

A long way ahead
It is not certain if any natural gas reserves will be discovered.

And if they are found, that would lead to further investigations about the quality and whether the quantity is viable.

“In the oil and gas industry, predicting the content of a well is inherently uncertain,” said Marwan Abdallah, executive director of the Organisation for Petroleum and Energy Sustainability, a group that seeks to promote good governance and transparency in Lebanon's oil and gas sector.

“Currently, discoveries have been made in Israel and Cyprus, suggesting potential in Lebanon's vicinity.”

“If gas is found, there are multiple scenarios, one where the quantities only meet local needs and another one where there are enough available for export.”

Mr Abdallah said that export, given the status of war with Israel and the sanctions on neighbouring Syria, would be complicated for Lebanon, although not impossible, if exemptions were negotiated.

In any case, this would need investment to build the infrastructure necessary for domestic gas use and, if Lebanon were to export, to build new pipelines.

Mr Abdallah asked: “Who will invest and how would Lebanon attract foreign investment?”

He estimates that it would take about five years for Lebanon to start producing oil and gas, if commercially viable reservoirs are discovered.

Source: The National (UAE)