Lebanon Years Away From Gas Riches Despite Israel Deal, Analysts Say

Israeli tourists seen near the northern border wall with Lebanon, close to the Israeli settlement of Shtula JALAA MAREY AFP
Israeli tourists seen near the northern border wall with Lebanon, close to the Israeli settlement of Shtula JALAA MAREY AFP
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Lebanon Years Away From Gas Riches Despite Israel Deal, Analysts Say

Israeli tourists seen near the northern border wall with Lebanon, close to the Israeli settlement of Shtula JALAA MAREY AFP
Israeli tourists seen near the northern border wall with Lebanon, close to the Israeli settlement of Shtula JALAA MAREY AFP

Lebanon is nearing agreement with Israel over a maritime dispute involving offshore gas fields, but the cash-strapped country still faces an uphill struggle towards unlocking potential hydrocarbon riches, analysts said.

"A deal would mark one step forward but it does not mean that Lebanon has become a gas- or oil-producing country," said Marc Ayoub, an associate fellow at the American University of Beirut's Issam Fares Institute.

"We are talking of a timeline of five to six years... before the first gas" if commercially viable reservoirs are in fact found, the energy expert told AFP, describing the timeframe as "optimistic".

With the demand for gas rising worldwide because of an energy crisis sparked by Russia's invasion of Ukraine, Lebanon hopes that an offshore discovery would ease its current unprecedented financial downturn.

But more than a decade since it declared its maritime boundaries and an Exclusive Economic Zone, it still has no proven natural gas reserves.

One well drilled in 2020 by a consortium of energy giants TotalEnergies, Eni and Novatek showed only traces but no commercially viable gas deposits.

Further test drilling, in a block near the border, has been hampered by the maritime border dispute between Lebanon and Israel, which are technically still at war.

Following years of US-mediated negotiations, the rival states now appear to be nearing agreement after a draft proposal from Washington at the weekend was welcomed by both sides.

A deal would allow "offshore exploration activities to continue, but that doesn't mean that Lebanon has become rich... or that its crisis has been solved", Ayoub said.

- 'First gas'

A 2012 seismic study of a limited offshore area by the British firm Spectrum estimated recoverable gas reserves in Lebanon at 25.4 trillion cubic feet (tcf).

The authorities in Lebanon have announced higher estimates.

Block 9 near the border with Israel contains the so-called Qana field or Sidon reservoir, and will be a major zone for offshore exploration by TotalEnergies and Eni that were awarded a contract in 2018.

After being partly claimed by Israel, the Qana field is expected to fall entirely to Lebanon as part of the maritime border agreement, according to Lebanese officials.

"This time next year, we should know if there is a commercial discovery in Qana or not," Ayoub said.

"If we have a discovery, it will take... no less than three to five years after exploration" before production could start.

This time frame, according to Ayoub, assumes there are no delays by Lebanese authorities who are widely blamed for the corruption and mismanagement behind the country's financial crash.

It took months for the Lebanese Petroleum Administration (LPA) regulatory body to name its board after it was formed in 2012, because of political disputes over nominations.

Several bidding rounds for offshore gas and oil licenses have been hit by delays since they began in 2013.

Already, Lebanon lags far behind Israel which has been investing in the offshore Karish field for years and is expecting its first gas within weeks.

Roudi Baroudi, an energy consultant, said that gas or oil production could start within three years if commercially viable reservoirs are found.

But to attract energy firms and benefit from potential discoveries, Lebanon desperately needs to undergo reforms, he told AFP.

"Lebanon is not a good investment unless the government implements reforms," the energy expert said.

Reforms would provide "the basic assurances that international companies need to work with less risk".

State institutions in Lebanon have collapsed under the weight of the crisis, with strikes by civil servants adding to the paralysis.

An economic recovery plan has yet to take off more than three years since the financial downturn began, despite mounting pressures from foreign donors and the International Monetary Fund.

And political gridlock has caused a months-long delay in forming a new government amid fears of a presidential vacuum after Michel Aoun's mandate expires at the end of October.

With a bankrupt state unable to deliver more than an hour or two of mains electricity a day, energy firms may choose to work on their Lebanon projects out of Cyprus, according to Baroudi.

"With no rule of law, Lebanon is a jungle," he said.

"It's absolute chaos, whether judicially, financially or in terms of regulatory" bodies.



A Year Ago, Russian Mercenary Chief Yevgeny Prigozhin Challenged the Kremlin with a Mutiny

People walk past at a makeshift memorial to Yevgeny Prigozhin near the cafe he owned in Saint-Petersburg on June 20, 2024. (AFP)
People walk past at a makeshift memorial to Yevgeny Prigozhin near the cafe he owned in Saint-Petersburg on June 20, 2024. (AFP)
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A Year Ago, Russian Mercenary Chief Yevgeny Prigozhin Challenged the Kremlin with a Mutiny

People walk past at a makeshift memorial to Yevgeny Prigozhin near the cafe he owned in Saint-Petersburg on June 20, 2024. (AFP)
People walk past at a makeshift memorial to Yevgeny Prigozhin near the cafe he owned in Saint-Petersburg on June 20, 2024. (AFP)

On a lazy summer weekend a year ago, Russia was jolted by the stunning news of an armed uprising. The swaggering chief of a Kremlin-sponsored mercenary army seized a military headquarters in the south and began marching toward Moscow to oust the Defense Ministry’s leaders, accusing them of starving his force of ammunition in Ukraine.

Yevgeny Prigozhin and his soldiers-for-hire called off their "march of justice" only hours later, but the rebellion dealt a blow to President Vladimir Putin, the most serious challenge to his rule in nearly a quarter-century in power.

Prigozhin’s motives are still hotly debated, and the suspicious crash of the private jet that killed him and his top lieutenants exactly two months after the rebellion remains mired in mystery.

A look at the mutiny and its impact:

Who was Yevgeny Prigozhin? Prigozhin, an ex-convict, owned a fancy restaurant in St. Petersburg where Putin took foreign leaders. That earned Prigozhin the nicknamed of "Putin’s chef." Those ties won him lucrative government contracts, including catering for Kremlin events and providing meals and services to the military.

He founded the Wagner Group, a private military contractor, in 2014, using it to advance Russia's political interests and clout by deploying mercenaries to Syria, Libya, the Central African Republic and elsewhere. Wagner fighters provided security for African leaders or warlords, often in exchange for a share of gold mines or other natural resources.

Prigozhin gained attention in the US, where he and a dozen other Russians were indicted by the Justice Department for creating the Internet Research Agency — a "troll farm" that focused on interfering in the 2016 US presidential election. The case was later dropped.

What was Wagner's role in Ukraine? After Putin invaded Ukraine in 2022, Wagner emerged as one of the most capable of Moscow’s fighting forces. It played a key role in capturing the eastern stronghold of Bakhmut in May 2023.

Prigozhin was allowed by the Kremlin to swell Wagner's ranks with convicts, who were offered amnesty after serving six months on the front line. He said 50,000 were recruited, and 10,000 of them died in the ferocious battle for Bakhmut.

The war added to Wagner's reputation for brutality. In a video that surfaced in November 2022, a former Wagner mercenary who allegedly defected to the Ukrainian side but later was captured by Russia, was shown being beaten to death with a sledgehammer, the mercenary group's symbol.

What led to the uprising? For months in 2023, Prigozhin complained bitterly about the military brass denying his forces the needed ammunition in Ukraine. In open political infighting, he blasted then-Defense Minister Sergei Shoigu and General Staff chief Gen. Valery Gerasimov in profane rants on social media, blaming them for military setbacks and accusing them of corruption.

The Defense Ministry's order for Wagner to sign contracts with the regular military appeared to be the final trigger for Prigozhin's extraordinary rebellion on June 23-24.

His mercenaries swiftly took over Russia’s southern military headquarters in Rostov-on-Don, reportedly hoping to capture Shoigu and Gerasimov. But they weren't there.

Prigozhin ordered his forces to roll toward Moscow, saying it wasn't a military coup but a "march of justice" to unseat his foes. The mercenaries downed several military aircraft en route, killing over a dozen pilots. Security forces in Moscow went on alert and checkpoints were set up on the southern outskirts.

At the height of the crisis, Putin went on TV and called the rebellion by his onetime protege a "betrayal" and "treason." He vowed to punish those behind it.

But Prigozhin abruptly aborted the march hours later in an amnesty deal brokered by Belarus President Alexander Lukashenko. The mercenary forces were offered a choice of moving to Belarus, retiring from service or signing contracts with the Russian Defense Ministry.

Prigozhin later said he launched the uprising after he "lost his temper" in the infighting with his foes. Some commentators said he apparently hoped to persuade Putin to take his side against the military brass — a grave miscalculation.

What was Prigozhin's fate? On Aug. 23, two months to the day after the rebellion, a business jet carrying Prigozhin, 62, and his top associates crashed while flying from Moscow to St. Petersburg, killing all seven passengers and a crew of three.

State investigators have yet to say what caused the crash.

A preliminary US intelligence assessment concluded there was an intentional explosion on board. Western officials pointed to a long list of Putin foes who have been assassinated.

The Kremlin has denied involvement and rejected Western allegations that Putin was behind it as an "absolute lie."

Prigozhin was buried in his hometown of St. Petersburg in a private ceremony.

What has happened to Wagner? Several thousand Wagner mercenaries moved to a camp in Belarus after the mutiny. Soon after Prigozhin's death, most left that country to sign contracts with the Russian military to redeploy to Africa or return to fighting in Ukraine. Only a handful stayed in Belarus to train its military.

Russian authorities formed a Wagner successor, Africa Corps, using it to expand military cooperation with countries there. Moscow has emerged as the security partner of choice for a number of African governments, displacing traditional allies like France and the United States.

Elements of Wagner and other private security companies continue to operate in Ukraine under the control of the Defense Ministry and the Russian National Guard.

"Despite the spectacular demise of Prigozhin himself and the problems that Wagner got itself into as a result of that, the model — the idea of a private company profiting from this war — is one that is attractive to a lot of people in Russia," said Sam Greene of the Center for European Policy Analysis.

How has Putin responded since the uprising? Prigozhin’s demise sent a chilling message to Russia's elites, helping Putin contain the damage to his authority inflicted by the rebellion.

A crackdown continued on his political foes, with many either fleeing the country or ending up in prison. His biggest opponent, Alexei Navalny, died in an Arctic penal colony in February.

In a stage-managed election in March, Putin won another six-year term. In a subsequent Cabinet shakeup, Putin dismissed Prigozhin’s archfoe, Shoigu, as defense minister, replacing him with Andrei Belousov, an economics expert. Shoigu, who had personal ties with Putin, was given the high-profile post of secretary of Russia’s Security Council.

"If Shoigu’s new job had been too junior, it would have been humiliating, and could have triggered such criticism of the outgoing minister as to highlight the army’s weaknesses: something to be avoided in wartime," Tatiana Stanovaya of the Carnegie Russia Eurasia Center, said in a commentary.

At the same time, Shoigu's entourage faced purges. A longtime associate and deputy, Timur Ivanov, and several other senior military officers were arrested on corruption charges, and other senior Defense Ministry officials lost their jobs.

Gerasimov, the chief of the General Staff and another Prigozhin foe, has kept his job so far.

Gen. Sergei Surovikin, who reportedly had close ties with Prigozhin, was stripped of his post as deputy commander of forces in Ukraine and given a ceremonial position. Surovikin, credited with creating the multilayered defensive lines and fortifications that blunted Ukraine’s offensive a year ago, wasn’t dismissed altogether, and some observers suggest he could eventually be given a new military post.