Photo: Illustration; Source: TotalEnergies

TotalEnergies and Eni to embark on hydrocarbon exploration in Mediterranean’s gas-rich waters

Following the agreement on the maritime border line between Israel and Lebanon, two oil and gas majors – TotalEnergies and Eni – are gearing up to launch exploration activities in an offshore block located in the Lebanese waters.

A dispute between Lebanon and Israel over an area in the Mediterranean – covering 860 square kilometres (330 square miles), which is allegedly gas-rich – ended on 27 October 2022 with the signing of a U.S.-brokered deal, which is expected to pave the way for the development of energy resources in this part of the Mediterranean.

Thanks to this deal, international oil and gas companies will now be able to explore natural gas plays in previously-contested waters, which could lead to more energy exports in the coming years, especially to Europe, bolstering its energy security.

In line with this, France’s TotalEnergies disclosed on Tuesday, that it has signed a framework agreement with Israel, together with Italy’s Eni, to implement the maritime boundary agreement that was finalized between Israel and Lebanon.

Source TotalEnergies
Source: TotalEnergies

Back in 2017, the TotalEnergies-led consortium, which included Eni and Novatek PJSC, won a bid to undertake exploration activities in Blocks 9 and 4. The drilling in Block 4 was carried out in 2020, however, due to disappointing results further development was halted and Russia’s Novatek withdrew from the exploration efforts this year.

Currently, TotalEnergies is the operator of Block 9 in Lebanon and has a 60 per cent stake in this asset alongside its partner Eni, which holds the remaining 40 per cent.

Following the signing of this framework agreement, the Block 9 partners will start the exploration of an already identified gas prospect – Qana – that could extend both into Block 9 and into Israeli waters south of the newly established maritime border.

The French energy giant confirmed that the preparation of exploration activities will start immediately with the mobilisation of teams, the purchase of the necessary equipment and the mobilisation of a drilling rig.

Patrick Pouyanné, Chairman and CEO of TotalEnergies, remarked: “TotalEnergies, as the operator of Block 9, is proud to be associated with the peaceful definition of a maritime boundary between Israel and Lebanon. By mobilising our expertise in offshore exploration, we will respond to the request of both countries to evaluate the materiality of hydrocarbon resources and their productive potential in this area.”

Furthermore, the TotalEnergies-led consortium may get a third partner, according to Reuters, as Qatar is in talks with the French and Italian oil majors for a 30 per cent stake in this exploration block.

If the drilling of the Qana prospect, which lies mostly in the Lebanese territory, results in a hydrocarbon discovery, both Israel and Lebanon would be entitled to payments, if gas is produced.

When it comes to TotalEnergies’ most recent activities, it is worth noting that the French energy giant strengthened its balance sheet and doubled its profit in the third quarter of 2022 on a year-on-year basis.

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This was driven by the firm’s LNG business and higher gas prices due to the Ukraine crisis.