French Total to drill exploratory well off Lebanese coast

BASSEM MROUE
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Lebanon

In this photo released by Lebanon's official government photographer Dalati Nohra, Lebanese President Michel Aoun, center, heads the cabinet meeting, at the presidential palace, in Baabda, east of Beirut, Lebanon, Tuesday, Feb. 25, 2020. French oil giant Total and the Lebanese government said Tuesday the drill ship that will carry operations of the first exploration well off the Lebanese coast has arrived where it will start drilling later this week. The arrival of the drill ship comes at a time when Lebanon is passing through its worst economic and financial crisis in decades and harsh liquidity shortage. (Dalati Nohra via AP)

BEIRUT (AP) — A ship that will set up the first oil and gas exploration well off the Lebanese coast has arrived in Lebanon where it will start work later this week, French oil giant Total and Lebanon's government announced Tuesday.

The arrival of the drill ship comes at a time when Lebanon is going through its worst economic and financial crisis in decades and a severe liquidity shortage. Many hope oil and gas will be discovered off the Lebanese coast and in the future reduce the country's massive debt as well as create jobs in the energy field.

Information Minister Manal Abdul-Samad quoted President Michel Aoun as saying during a Cabinet meeting Tuesday that drilling will begin "within the next 48 hours."

Total said the drill ship Tungsten Explorer is now in the Exclusive Economic Zone of Lebanon for the drilling operations of the first exploration well on Block 4, located approximately 30 kilometers (18 miles) offshore from the capital Beirut.

In 2017, Lebanon approved the licenses for an international consortium led by Total, Italy's ENI and Russia's Novatek to move forward with offshore oil and gas development for two of 10 blocks in the Mediterranean Sea, including one that is partly claimed by Israel.

Total said the first well will be drilled at a depth of 1,500 meters (4,920 feet). The exploration well aims at exploring targets located more than 2,500 meters (8,200) below the sea bed. The drilling of the well is estimated to last two months, after which the drill ship will leave Lebanon, Total said.

"Total is pleased to start exploration operations on Block 4, which is the first deep water exploration well in Lebanon," said Ricardo Darré, general manager of Total Exploration & Production Lebanon.

At a later stage that hasn't yet been scheduled, drilling should begin in Block 9, part of which Israel also claims. A major find in Lebanon's southernmost waters could raise the possibility of a dispute with Israel.

The U.S. has been mediating between Lebanon and Israel over the nearly 860 square kilometers (330 square miles) of the Mediterranean Sea claimed by both countries.

Also on Tuesday, Lebanon took another step to try and deal with a massive debt that stands at more than $87 billion or more than 150% of the GDP.

Abdul-Samad, the information minister, said the government has agreed to appoint Cleary Gottlieb Steen & Hamilton LLP as a legal adviser on the country's Eurobond debt. She added that the government also agreed to appoint financial advisory and asset management firm Lazard as a financial adviser.

The minister gave no further details but the announcement comes at a time when Lebanese officials are debating on whether to pay a $1.2 billion Eurobond payment that will mature on March 9, or default for the first time in Lebanon's history.