In June 2018, The Norwegian Agency for Development Cooperation (Norad) and the Lebanese
Ministry of Foreign
Affairs
(MoFA) entered into a third phase of agreement regarding the Oil for Development (OfD)
programme. During
this period,
Lebanon has continued to follow up on the exploration activities undertaken by the right
holders in blocks 4
and 9
with
the aim of conducting first exploratory drilling in 2019. In parallel, and implementing the
decision of the
Council
of
Ministers, the LPA started carrying out preparatory activities for the second offshore
licensing round
launched in
2019.
These operational developments reflected in the activities achieved under the OfD Programme
which covered
the following:...
2019
In 2019, Lebanon continued to follow up closely on exploration activities carried out by Right Holders in Blocks 4 and 9. Efforts were exerted to complete the necessary logistical preparations for the first drilling in Block 4 together with the issuance of the Application for Drilling Permit for the first well in Block 4.
In parallel the LPA finalised the updates of the legislative framework for the second licensing round that was later approved by the Council of Ministers. The LPA and the Minister of Energy and Water conducted marketing activities for the second licensing round and communicated with potentially interested companies.
Given this context, the OfD activities focused to support the development stages of the sector targeting the following
the areas:...
- Supporting Lebanese institutions in carrying out their duties with respect to exploration activities:
- Application for Drilling Permit (ADP): The collaboration between Lebanese and Norwegian institutions through the OfD Programme helped mobilise Norwegian experts to review the ADP for block 4, which was approved on December 2019 hence initiating spud date as initially planned.
- Completion of Draft EIA Guidelines for Reconnaissance and Exploration: Through the support provided from the Norwegian Environmental Agency (NEA) to the Ministry of Environment, draft EIA guidelines for the reconnaissance and exploration phase was completed. The guidelines were used by the Right Holder Operator when preparing the EIA study.
- Improving the capacities of Lebanese institutions in various areas of relevance to the development of the sector:
- Acquiring and using the combined package of Petrel software: Through the support of the OfD Programme, the LPA acquired four modules of the combined package of Petrel software. The acquired modules have enabled the LPA to:
o Build conceptual models for targeted prospects offshore Lebanon.
o Calculate estimates of the hydrocarbon in place for targeted prospects.
o Run a sensitivity analysis on the uncertainty associated with the volumetric input parameters.
- Carbonate modeling and interpretations: Before 2015 the creaming curve of the Levant basin was flattening. This means that the Oligo-Miocene four-way dip closure play (sandstone) was mature with no more significant discoveries except in areas already explored. With the Zohr carbonate discovery and subsequently Calypso and Glaucus discoveries in Cyprus drilled in the past five years, reserves in the East Med amounted to more than the reserves in the last 20 years. Therefore, there was a drive for IOCs to target such high-risk-reward targets. Through support from the Norwegian Petroleum Directorate (NPD), the LPA was able to reduce the risk associated with identified carbonate targets offshore Lebanon, and more importantly formulate questions to address to IOCs before drilling.
- Providing legal and strategic support for the sector:
- Development of Focused Scenarios: As a continuation of the previous work that the LPA conducted with the support of NPD on high level scenarios for the development of the upstream petroleum sector in Lebanon, focused scenarios targeting short term decisions with long term impacts were developed. Several topics were addressed with considerable depth such as the development of the Lebanese local market, regional markets and the factors that can contribute to chances of the presence of liquid hydrocarbons. Ripple effects of these scenarios on employment and value addition were also estimated. The results of these studies contribute to defining the focus areas for further capacity building and preparedness for the LPA over the coming years.
2020
In 2020, the world and Lebanon witnessed major developments that affected the sector. The Covid-19 pandemic, and the drop in oil prices slowed down petroleum activities worldwide including Lebanon, which postponed the deadline to submit application for the second offshore licensing round and the drilling of the first exploration well in block 9. Despite that, a successful drilling campaign took place in block 4 and the first exploration well ever drilled in Lebanese waters was safely completed in May 2020.
Disruptions caused by the pandemic, travel bans, and lockdowns took their toll on scheduled OfD activities for 2020. However, active planning and coordination between relevant parties allowed the resumption of scheduled activities online where possible while some other activities have been postponed for 2021.
The main achievements for 2020 are the
the following:...
- Assisting in interpreting and analyzing geological data, and enhancing competence in resource/reservoir management:
- Understanding data acquired from the first exploration well: Through the support provided by NPD, an activity focused on generating a full understanding of the data acquired from the first exploration well in block 4 and its implications on the basin were undertaken. A full petrophysical assessment was generated and the full composite log from the well drilled in block 4 was imported and compared to cross-plots related to specific lithologies that confirm the calcareous source of the rocks. Relevant tools that better suit the analysis of a carbonate sequence were identified.
- Preparations for drilling in Block 4: Support from Norwegian counterparts in preparation for the first well in block 4 was instrumental in ensuring sufficient preparedness for petroleum activities. This was mainly achieved through close follow up with the Petroleum Safety Authority (PSA) with respect to the Operator’s emergency plans including blow up contingency plan, oil spill contingency plan, emergency plan and Medevac as well as PSA’s support in designing preliminary emergency response arrangements.
- Assisting in developing internal procedures for handling environmental studies, plans, reports etc.:
- Environmental database: Significant progress has been undertaken towards the development of an Environmental Database by the LPA and the NEA where the database architecture drafting has been completed and the background software for its operation procured. Operationalisation of the database is expected to be finalised with the support from NEA in 2021.
- Assisting in developing and updating other legislations, regulations, plans and strategies:
- Strategic review of the Second Licensing Round conditions: Due to the major developments that took place in 2020 and that affected upstream oil and gas activities worldwide, a project was undertaken between NPD and the LPA to reassess global trends in the petroleum industry and its repercussions on countries similar to Lebanon. The study also proposed specific interventions that can shape the conditions of the second licensing round.
