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Q1. What is a license?
An exploration and production license is given to a consortium of national and/or international oil companies that would allow them to search for commercially feasible deposits for the extraction of petroleum resources in a given geographical area or block.
Q2. What type of contract did Lebanon adopt?
The Exploration and Production Agreement (EPA) is a contract between the State and the international or national oil companies, providing the companies with the right to explore, develop and produce oil and gas offshore Lebanon’s Exclusive Economic Zone. Once the companies sign the EPA, they are required to comply with the Offshore Petroleum Resources Law (OPRL) and the Petroleum Activities Regulations (PAR), as well as other applicable Lebanese laws and Decrees. Click here for more information. Click here
for more information.
Q3. How are licenses awarded?
Companies that are interested in acquiring an Exploration and Production Agreement (EPA) in Lebanon first need to undergo a pre-qualification process, which is based on clear technical, legal, financial and Quality, Health, Safety and Environment (QHSE) criteria. Click here
to view the pre-qualification process results.
Companies that are pre-qualified will then be invited to participate in an open and competitive licensing round, which is defined by the Tender Protocol. The Tender Protocol describes in details the licensing round bidding and evaluation processes. Pre-qualified companies would provide a commercial and a technical proposal that the LPA would assess. More specifically, the LPA would undertake the proposals evaluation based on criteria published in the Tender Protocol. The best offers that result from the evaluation process will be presented to the Minister of Energy and Water who in turn will be charged to present them to the Council of Ministers for approving the licenses. The Tender Protocol and the Model EPA will be published after the Council or Ministers’ approval.
Q4. How many companies have been pre-qualified?
Following the first pre-qualification round, 46 companies have been pre-qualified out of which 12 right-holders “operators” and 34 right-holders “non-operators”. Click here
for more info.
Q5. What is the difference between an operator and a non-operator?
The Offshore Petroleum Resources Law (OPRL) defines the Exploration and Production Agreement (EPA) as an agreement concluded between the Lebanese state and at least three Right Holders. The EPA regulates the relationship between the state and the Right Holders for the performance of exploration and production activities within a defined area subject to Lebanese Law. When awarding an EPA, the Council of Ministers, based on a proposal by the Minister in consultation with the Petroleum Administration, approves the appointment of an Operator amongst Right Holders. No change of Operator may take place without the approval of the Council of Ministers.
The Right Holder Operator manages the day-to-day field operations on behalf of other Right Holders through handling the design and execution of the exploration programme; the well design, drilling, completion and production; and the engineering, infrastructure and facilities construction and maintenance.
The Right Holders ensure that the Operator conducts prudent Petroleum Activities, and they participate in the Managing Committee of the Consortium along with the Operator and other Right Holders in such a way to provide co-financing for the project, and to undergo commercial and marketing activities in addition to technical inputs.
Q6. What are the stages of petroleum activities?
Petroleum activities can be divided into six phases: Reconnaissance/seismic acquisitions (2-5 years); exploration (3-6 years); appraisal (1-2 years); development (1-4 years); production (up to 30 years); and abandonment.
Q7. When would Lebanon start having revenues flowing?
Based on the stages of petroleum activities, revenues would start flowing once production starts – that is once a commercial discovery is made i.e. it can be produced economically, approximately 8 to 10 years after the start of the exploration activities.
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