Lebanon moves ahead with offshore gas pact

Lebanon is set to formalise an offshore gas exploration agreement with a consortium led by QatarEnergy alongside TotalEnergies and Italy’s Eni, according to cabinet statements, marking a significant step in efforts to revive the country’s energy sector and attract long-term foreign investment.

The signing, scheduled for Friday, follows months of negotiations over technical terms and fiscal conditions and comes as Beirut seeks to stabilise an economy strained by prolonged financial crisis, infrastructure decay and chronic power shortages. Officials say the deal will grant the consortium rights to explore designated offshore acreage under a production-sharing framework overseen by the Ministry of Energy and Water, with the state retaining a majority interest should commercial discoveries be made.

The agreement builds on Lebanon’s gradual re-entry into Eastern Mediterranean energy activity after years of delays linked to political deadlock and maritime boundary uncertainty. Progress accelerated after a UN-mediated understanding with Israel clarified the southern maritime line, allowing companies to proceed without the legal ambiguity that had discouraged drilling. While exploration does not guarantee production, policymakers view the move as essential to re-establishing credibility with international energy firms.

QatarEnergy’s participation is seen as particularly consequential. The state-backed company has expanded its global upstream footprint over the past decade, pairing capital strength with technical expertise. Its involvement alongside TotalEnergies, which has maintained a presence in Lebanon’s offshore sector, and Eni, a major Mediterranean producer, signals confidence in the geological potential of Lebanese waters despite mixed exploration results elsewhere in the basin.

Energy officials say the consortium will conduct seismic analysis followed by an exploratory drilling programme once regulatory approvals are completed. Timelines are expected to span several years, reflecting the technical complexity of deep-water operations and the need for environmental assessments. Any commercial output would come later, subject to market conditions and infrastructure development, including pipelines or floating production facilities.

For Lebanon, the strategic importance extends beyond hydrocarbons. Chronic electricity shortages have forced households and businesses to rely on costly private generators, weighing on productivity and living standards. Authorities argue that even the prospect of future gas revenues could improve investor sentiment and support negotiations with international financial institutions by demonstrating a pathway to structural reform and growth.

Critics caution against inflated expectations. Exploration success rates in frontier basins are uncertain, and the country’s governance record raises concerns about revenue management. Civil society groups have urged the government to strengthen transparency mechanisms, including adherence to international extractive-industry standards, to ensure any future proceeds are channelled into public services and debt reduction rather than lost to mismanagement.

Regional dynamics also shape the project’s outlook. The Eastern Mediterranean has emerged as a competitive gas province, with producers in Egypt, Israel and Cyprus advancing exports through liquefied natural gas facilities and regional pipelines. Lebanon, entering later, faces the challenge of aligning potential output with existing infrastructure and long-term demand, particularly as Europe accelerates its transition toward lower-carbon energy.

Industry analysts note that the consortium’s composition balances risk. TotalEnergies brings experience navigating complex political environments, Eni offers operational depth in offshore development, and QatarEnergy provides financial resilience. This combination could help sustain the project through market volatility and regulatory hurdles, provided domestic political stability holds.