Following the recent appointment of the board members of the Lebanese Petroleum Sector Administration Authority (the "Petroleum Authority''), the Lebanese Ministry of Energy is pushing ahead aggressively with plans to launch the First Licensing Round before the end of the year.
All eyes are now focused on the Petroleum Authority's task of preparing the implementing decrees and model Exploration & Production Agreement needed to complete the framework set by the Offshore Petroleum Resources Law (132/2010). These decrees are needed to set the terms of Lebanese offshore E&P and enable the licensing round to attract quality industry players.
Implementing Decrees: the key implementing decrees requiring priority can be grouped into the following 4 categories:
a. Technical Parameters: Decrees setting the technical parameters of E&P, such as the delimitation of the plays into individual blocks.
b. HSE: Decrees setting the rules and regulations for Health, Safety & Environment requirements.
c. Fiscal & Financial Terms: Decrees dealing with the management of revenue, fiscal and financial terms, such as state participation, royalties, cost oil & profit oil.
d. Corporate Administration Matters: Decrees setting the requirements for foreign companies to participate in consortia, management of E&P companies, and the creation of a Petroleum Rights Registry.
Model EPA: the Petroleum Authority is also entrusted with the task of preparing the form of the model Exploration & Production Agreement which is based on a hybrid type of petroleum agreement.
The terms of the model EPA will be crucial to the success of the licensing rounds, and will form the basis for tender bid preparations by prospective E&P companies.
Seismic Surveys: the Lebanese Ministry of Energy is pressing ahead with undertaking seismic surveys of another 1000 sq kms of the Lebanese exclusive economic zone (EEZ) with the aim of having acquired 3D seismic for over 60% of the EEZ by the end of February 2013.
Lebanon International Oil & Gas Summit: with expectations running high ahead of the First Licensing Round, the Lebanon International Oil & Gas Summit in December 2012 (LIOG 2012) has attracted key industry players keen to follow the progress of Lebanon's resource potential. Niazi Kabalan will be speaking at the LIOG 2012 conference and sharing his expertise on investment protection in the oil & gas sector.
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