Energy Firm Starts Tests at Sensitive Israel-Lebanon Border Gas Field

London-based Energean's drill ship begins drilling at the Karish natural gas field offshore Israel in the east Mediterranean May 9, 2022. (Reuters)
London-based Energean's drill ship begins drilling at the Karish natural gas field offshore Israel in the east Mediterranean May 9, 2022. (Reuters)
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Energy Firm Starts Tests at Sensitive Israel-Lebanon Border Gas Field

London-based Energean's drill ship begins drilling at the Karish natural gas field offshore Israel in the east Mediterranean May 9, 2022. (Reuters)
London-based Energean's drill ship begins drilling at the Karish natural gas field offshore Israel in the east Mediterranean May 9, 2022. (Reuters)

London-listed firm Energean on Sunday began testing pipes between Israel and the Karish offshore gas field, a key step towards production from the eastern Mediterranean site, a source of friction between neighbors Israel and Lebanon.

Israel has maintained that Karish falls entirely within its territory and is not a subject of negotiation at ongoing, US-mediated maritime border talks with Lebanon.

The two countries remain technically at war.

Beirut has reportedly made claims to parts of Karish, and the Iran-backed Shiite group Hezbollah party in Lebanon has previously threatened attacks if Israel began production from the field.

In a statement Sunday, Energean said that "following approval received from the Israeli Ministry of Energy to start certain testing procedures, the flow of gas from onshore to the FPSO has commenced", referring to the Karish floating production storage offloading facility.

The tests, set to take a number of weeks, were "an important step" towards extracting gas from the Karish, Energean said.

Lebanon and Israel have engaged in on-off indirect talks since 2020 to delineate their Mediterranean border, which could allow both countries to boost offshore natural gas exploration.

A draft agreement floated by US envoy Amos Hochstein aims to settle competing claims over offshore gas fields and was delivered to Lebanese and Israeli officials in recent days.

Israel had welcomed the terms set out by Hochstein and said they would be subjected to legal review, but gave no indication if it sought substantive changes.

Lebanon presented its response to Washington's proposal on Tuesday.

Israel said two days later that it planned to reject a proposed Lebanese amendment, even if that jeopardizes a possible agreement.

Israel reiterated this week that production at Karish would begin as soon as possible, regardless of Lebanon's demands.

Two Lebanese officials involved in the talks told AFP on Sunday the US mediator had informed Beirut that the operation at Karish was only a test.

Negotiations on the maritime border are still going on, one official said.

On Saturday, the French foreign ministry said Paris was "actively contributing to the American mediation".

Under the terms of the US draft agreement leaked to the press, all of Karish would fall under Israeli control, while Qana, another potential gas field, would be divided but its exploitation would be under Lebanon's control.

French company Total would be licensed to search for gas in the Qana field, and Israel would receive a share of future revenue.



World Bank Looking to Free up Emergency Funds for Lebanon, Managing Director Says

 A plume of smoke billows following an Israeli air strike on the village of Khiam in southern Lebanon near the border with Israel on October 7, 2024. (AFP)
A plume of smoke billows following an Israeli air strike on the village of Khiam in southern Lebanon near the border with Israel on October 7, 2024. (AFP)
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World Bank Looking to Free up Emergency Funds for Lebanon, Managing Director Says

 A plume of smoke billows following an Israeli air strike on the village of Khiam in southern Lebanon near the border with Israel on October 7, 2024. (AFP)
A plume of smoke billows following an Israeli air strike on the village of Khiam in southern Lebanon near the border with Israel on October 7, 2024. (AFP)

The World Bank is looking to free up emergency funds for Lebanon, potentially including up to $100 million through the use of special clauses in existing loan deals, its managing director of operations told Reuters.

The Washington-based development lender currently has $1.65 billion in loans to the country including a $250 million loan approved this week to help connect dispersed renewable energy projects in the country.

Amid fighting across southern Lebanon, the bank was currently discussing ways in which it could help support the economy, including through the use of so-called Contingent Emergency Response Component (CERCs) clauses.

"We can use our existing portfolio and free up some money for really critical, short-term liquidity needs," Anna Bjerde said.

CERCs are present in around 600 of the bank's existing projects, globally, and allow it to redirect funds that have yet to be disbursed, if requested to by a government, for example after a health or natural disaster, or during conflict.

Lebanon has yet to make such a request, Bjerde said.

After a year of exchanges of fire between Hezbollah and Israel mostly limited to the frontier region, the conflict has significantly escalated in Lebanon.

Hezbollah fired rockets at Israel's third largest city Haifa on Monday, while Israeli forces looked poised to expand ground raids into south Lebanon on the first anniversary of the Gaza war, which has spread conflict across the Middle East.

Lebanon's government could choose to use an existing social protection program that was put in place during the COVID-19 pandemic that allows for financial support to be sent to individuals, Bjerde said.

"It has the benefit of being totally digital so you can reach people, plus it can be verified a bit... so we will also probably use that to top up the social safety net for those that are particularly affected."

Up to 1 million people have been internally displaced in the country, she added: "So it's important we focus on that".

Lebanon's finance ministry and economy ministry did not immediately respond when asked for comment.