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French Version

Egypt to help Lebanon in oil-and-gas exploration

Cairo could send team to repair refineries

Egypt signed an agreement Wednesday to open talks on providing Lebanon with technical expertise and know-how to prepare the country for oil-and-gas offshore exploration. "This will probably involve delineating sea blocks for companies to buy, defining the legal framework of the subsequent purchase-sharing agreements, training the necessary staff, and preparing for the possible international bid," an industry source said, a claim echoed by Lebanese Energy Minister Mohammad Fneish at the signing of the protocol.

The industry source added these potential state-to-state consulting services would be provided free of charge, if the agreement is implemented.

The protocol signed with Egypt also involved sending an Egyptian team to rehabilitate Tripoli and Al-Zahrani's Lebanese refineries, studying possibilities for Egyptian LNG exports to Lebanon, and creating a joint Egyptian-Lebanese firm that would work on building LNG networks in the country.

Egypt started producing offshore gas in the 1990s and now exports to Jordan via pipelines and to Europe with LNG ships.

Three different seismic firms (Geopracla, Spectrum and TGS) conducted studies, which covered 11,000 kilometers cut along 120 two-dimensional (2D) seismic lines, collected useful data showing that Lebanon's shore is petroliferous.

A number of firms are already waiting for Lebanon to implement the legal framework in order to begin drilling operations.

Several companies such as Shell, Occidental, Total Elf Fina, Petrocanada and others have bought the 2D seismic study and showed interest in bidding for offshore drilling once the legal framework is ready.

But several industry sources said that Lebanon would need a higher quality 3D seismic study in order to proceed further. Such studies were conducted by all regional offshore oil and gas producers - Egypt, Israel and Gaza - before awarding contracts.

According to these industry sources, conducting such a study will give the government leverage to ask for a much higher price in the bidding round for possible exploration.

These same sources said that PGS is currently negotiating with the Lebanese government the possibility of doing the 3D study.

Fneish has been shuffling back and forth between negotiation rooms in order to find appropriate solutions to the country's endemic energy problem.

Beirut,10 10 2005
Bechir Saade
The Daily Star
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