Following the signing of the maritime boundary agreement with Lebanon, Israel signed a framework agreement yesterday with French company TotalEnergies and Italian company Eni, which hold the license to explore the Block 9 gas prospect in Lebanon. TotalEnergies holds 60% of the rights and Eni 40%.
The document outlines the principles for joint work by the parties until the signing of a detailed document that will include the financial consideration. Since no exploration has yet been carried out in the Qana/Sidon prospect, which straddles the agreed boundary, and the parties do not know how much gas it contains, if any, the framework agreement sets guidelines for determining the financial consideration, but not the consideration itself. Under the maritime boundary agreement, all of the rights in the prospect belong to Lebanon, but Israel is to be paid a share of royalties through a side agreement with TotalEnergies and Eni.
With the signing of the framework agreement, the TotalEnergies-Eni consortium will begin exploration in Block 9, and, if gas is discovered, they will draw up a program for development of the reservoir. When that stage is complete, a detailed agreement will be signed with Israel, setting out the financial consideration that Israel will receive, and only then will commercial development of the reservoir go ahead.
Ministry of National Infrastructures, Energy and Water Resources director general Lior Schillat said, "Following the diplomatic agreement between Israel and Lebanon, we have acted to secure Israel’s economic rights in the potential reservoir. The framework agreement that we have signed, and the detailed agreement that will come after it if natural gas is discovered in the prospect, will enable a reservoir straddling the border of two countries that are enemies to each other to be developed, an extraordinary event in the global energy market."
TotalEnergies chairperson and CEO Patrick Pouyanné said, "TotalEnergies, as the operator of block 9, is proud to be associated with the peaceful definition of a maritime border between Israel and Lebanon. By bringing our expertise in offshore exploration, we will respond to the request of both countries to assess the materiality of hydrocarbon resources and production potential in this area."
Published by Globes, Israel business news - en.globes.co.il - on November 15, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.