Oil & Gas

Walid Fayyad, the Lebanese caretaker Minister of Energy, has confirmed that the French energy company Total has failed to meet the terms of its agreement regarding gas exploration in Lebanon. During televised comments on January 24, Fayyad stated that he had formally requested the Lebanese government to cancel the contract with Total due to its failure to fulfill its contractual obligations. He explained that while the company had halted exploration when the war began in Lebanon, Total’s overall failure to adhere to its commitments has raised serious concerns.

Fayyad further criticized Total's lack of clarity on the matter, noting that the company’s position remains ambiguous and is seemingly awaiting a political decision. He emphasized the need for Lebanon to adopt a unified stance when engaging with Total to ensure that clear and definitive actions are taken regarding the gas exploration issue.

Fayyad also pointed out the influence of larger geopolitical forces, such as French policy, which he believes affects Total's operations, as the company’s decisions are closely tied to the French government’s priorities.

In his remarks, Fayyad compared Lebanon's situation with that of neighboring countries, highlighting how foreign investments in Israel’s energy sector have advanced its exploration efforts. He argued that smaller, more specialized companies could explore gas at a lower cost and with higher efficiency, and suggested that Lebanon should prioritize such companies for future exploration. He also expressed frustration over Total's failure to provide requested reports on Block 9, which has further fueled calls for the cancellation of their agreement.

Regarding the broader context of gas exploration in Lebanon, Fayyad noted that despite initial hopes, the results from drilling in Block 9, particularly the Qana field, have shown no commercially viable discoveries. As Lebanon continues to navigate these challenges, Fayyad hinted at the possibility of renewing deadlines for the second licensing round, which might involve new companies entering the bidding process. He reiterated the need for a transparent and unified approach from the Lebanese state to address the ongoing issues with Total and move the energy sector forward.