Companies in the oil and gas business in Lebanon have generally been at a standstill following the resignation of Prime Minister Najib Mikati's government on March 22, 2013. The oil and gas sector returned to the spotlight in recent months only to have the curtain soon close again.
Foreign Minister Gebran Bassil told Al-Monitor that when he served as energy minister in Mikati's government, he had responsibility for every matter related to gas reserves in the maritime economic areas belonging to Lebanon in the Mediterranean Sea. When Mikati resigned, his Cabinet had some unfinished business related to oil and gas, namely passing two crucial decrees to begin the licensing process, which was scheduled for August 2013, Bassil said. One decree provided for putting Lebanon’s 10 offshore blocks up for bidding and outlining technical details for a model contract to be signed between the state and the winning bidders. The other decree was the draft law on the taxes oil companies will be required to pay. But the licensing process has never begun.
The government's resignation left a political vacuum that lasted until Feb. 15, 2014, when the current government, headed by Tammam Salam, was formed. During the vacuum, all business related to oil and gas came to a halt, and the situation remained unchanged after the formation of the new government. Nevertheless, on April 6, 2014, Salam announced the formation of a ministerial committee to look into the matter, considered of paramount importance to Lebanon’s economy and prosperity. Yet, the ministers on the committee, including Bassil and Arthur Nazarian, the current energy minister, told Al-Monitor that the committee has not convened since its formation two years ago because Salam has not summoned it to do so.
It appeared, however, that a new agreement on oil and gas had been reached in the late spring of this year, whereby work would shortly be resumed. This development occurred after Bassil paid a visit to parliament Speaker Nabih Berri on June 1. Following the meeting, Bassil held a joint press conference with Finance Minister Ali Hassan Khalil, a member of Berri’s Liberation and Development bloc in parliament. The two ministers announced that an agreement on oil and gas had been reached between Amal, led by Berri, and the Free Patriotic Movement, headed by Bassil. This would accelerate the necessary steps for relaunching licensing to select companies and subcontractors.
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