SECOND LICENSING ROUND
On the 17th of May 2018, the Council of Ministers (CoM) approved the recommendation of the LPA to undertake the preparations for a second offshore licensing round scheduled to be officially launched in the first quarter of 2019.Lebanon has successfully completed its first offshore licensing round that resulted in the award of two licenses in blocks 4 and 9 earlier this year. The aim of the second licensing round is to build on the results of the first licensing round and further accelerate exploration activities across the Lebanese Exclusive Economic Zone (EEZ) with the goal of achieving commercial discoveries.
The official launching of the bid round scheduled to take place in the first quarter 2019, will include the opening of some attractive blocks for a competitive and open tendering process.
According to the Offshore Petroleum Resources Law, companies willing to participate in the tendering process must be prequalified as either operators or non-operators. The prequalification requirements will be announced in due time and will cover legal, technical, commercial, quality, health, safety and environment aspects. A tentative four months duration will be reserved for interested companies to submit their prequalification applications.
Prequalified companies interested to participate in the licensing round are required to form consortia composed of at least three companies, one of them at least prequalified as operator. A Tender Protocol (TP) detailing the bid round conditions, the biddable items and the evaluation methodology will be posted in due time. Interested companies will be able to choose their partners and prepare their bids over a duration of at least six months. Once bids are submitted, the LPA will evaluate them and prepare a recommendation to the Minister of Energy and Water about the potentiality of licensing certain blocks.
Lebanon adopts a model Exploration and Production Agreement (EPA) that specifies the provisions governing the relation between the right-holders and the State. In particular, Lebanon adopts a production-sharing system with royalty and taxes. The model EPA issued for the first licensing round is accessible at the following link. The model EPA for the second licensing round will be posted in due time. Subject to the Council of Ministers approval, the Minister of Energy and Water will sign EPAs with the winning consortia on the awarded blocks.