Oil exploration file: TotalEnergies return to Lebanon dependent on security and reform efforts

2^min

Report by Bassam Abou Zeid, English adaptation by Yasmine Jaroudi

President Joseph Aoun has urged his French counterpart, Emmanuel Macron, to push for the resumption of TotalEnergies' oil exploration activities in Lebanon's Block 9.

However, analysts suggest that the company's return or other global firms' involvement in Lebanon's licensing round is contingent on political stability and the implementation of crucial reforms within state institutions.

Sources familiar with the matter indicate that the presence of Hezbollah's military infrastructure remains a major obstacle to advancing exploration and drilling operations. Given the persistent threat of conflict, investors are reportedly reluctant to engage in such projects.

The maritime border agreement with Israel was initially expected to create stability in Lebanon's southern waters.

Nonetheless, Hezbollah's actions, including its failed attempts to target the Karish gas field during the recent war, have reinforced concerns over security risks. The full implementation of U.N. Resolution 1701 and the disarmament of Hezbollah south of the Litani River are seen as key factors in reviving Lebanon's oil and gas sector.

International stakeholders closely monitoring Lebanon's energy sector emphasize the importance of comprehensive reforms, particularly in combating corruption.

Given Lebanon's track record with successive governments and parliaments, foreign investors remain wary. These stakeholders have communicated to Lebanese officials that the oil and gas sector must remain free from quotas and financial gains for select groups. They have stressed that the management of oil revenues through the proposed sovereign wealth fund must be conducted with complete transparency.

Moreover, concerns extend to Lebanon's national oil company, which will be established later on, with international actors insisting that it should not become a vehicle for political or personal enrichment.

They further underline the necessity of reforming the public sector and judiciary to prevent potential obstacles, protect Lebanon's rights in any disputes, and ensure a credible and investment-friendly environment.