TotalEnergies Drills Lebanon’s Qana Prospect Amid New Global Interest in EastMed Gas

Abstract

_ As of September, TotalEnergies together with partners Eni and QatarEnergy will have spud exploration well 31/1 on Block 9 of Lebanon’s Qana prospect. It is the consortium’s second attempt in 6 years to strike gas in the EastMed where upstream riches at the crossroads of markets east and west struggle against the fiercest of global geopolitical headwinds. Lebanese media hailed the 16 August arrival of the Transocean Barents semisubmersible drilling platform at Block 9 with guarded optimism, reporting on the Barents journey from the North Sea like a sports play-by-play, detailing the landing of the first crew transport helicopter and the offloading of pipe and other equipment delivered by ship to the Port of Beirut. The Lebanese Petroleum Administration busily dotted the i’s and crossed the t’s on the drilling license application that TotalEnergies EP Lebanon had submitted in June while MP Ibrahim Kanaan, head of the parliament’s finance and budget committee, announced creation of the Lebanese Sovereign Fund for Oil and Gas to protect future revenues from political interference. “The rig will start working in Lebanon in September ... before the end of the year we will know if there is a discovery,” Lebanon’s caretaker Energy Minister Walid Fayyad told Reuters at an event earlier this summer in Abu Dhabi. Built to operate in harsh environments the Barents will drill in deep water, its crew hoping to hit the sweet spot that is the Tamar Sands Formation from which Israel, Cyprus, and Egypt are already producing gas for domestic needs and for export. Assuming commercial gas reserves are confirmed in Qana, Lebanon will join the club of EastMed gas producers—a development that would ease Beirut’s seemingly endless energy crisis, give the financially bankrupt country a share of revenues for gas exported to Europe and Asia, and attract further global investment. The World Bank has described Lebanon’s economic collapse as possibly one of the top three most severe worldwide since the 1850s. But while all seems like business as usual, this is the EastMed where political and military conflicts that dog oil and gas projects throughout the world can escalate quickly, driven by political fragmentation and violence within and across borders of countries with the most to gain from big international projects. What might be called a harsh environment in the UK sector of the North Sea where the Barents worked most recently differs greatly from what can be called harsh in the EastMed where technology can’t solve all of a hydrocarbon project’s problems. Drawing Lines in the Sand Beirut awarded exploration licenses in 2017 to drill on its offshore Blocks 4 and 9 to the Total-lead consortium with Eni and, at the time, Russia’s independent gas producer and LNG exporter Novatek. This past January, QatarEnergy farmed in for a 30% stake after Novatek exited. TotalEnergies and Eni each now hold 35%. In the 6 years following the license award, the consortium drilled only one well on the Lebanese shelf—a dry hole on Block 4 in 2020. Though data suggested that the Qana prospect in Block 9 might be different, TotalEnergies delayed further appraisal drilling pending settlement of the maritime boundary between Israel and Lebanon.