First licensing round for gas exploration is due to be held in late 2011

In December Gebran Bassil, the energy and water minister, said that the first round of licensing for offshore gas exploration would take place in late 2011. Lebanon is one of the few Middle Eastern countries with no proven hydrocarbons reserves. However, a large discovery of offshore gas by Israel in the eastern Mediterranean basin, reported in June 2010, created huge new interest in the sector. (September 2010, Economic policy). Legislation was rushed through parliament in August 2010, authorising the state to issue licences for offshore exploration, and enshrining production-sharing agreements. In December Mr Bassil said that an announcement about the requirement for companies to qualify and details of tendering for exploration licences would be made in November 2011. He released no other details.

Before exploration work can begin, Lebanon needs to clarify its maritime boundaries, identify blocks, supply data to investors, select bidders and authorise drilling. In December attention remained focused on defining its maritime boundaries with Israel, Cyprus and Syria, none of which were previously defined. Lebanon is technically at war with Israel, and is looking to the UN to clarify the location of its boundary. Ali al-Shami, the foreign minister, wrote to the UN secretary-general, Ban Ki-moon, asking him to "exert every possible effort to prevent Israel exploiting Lebanon's maritime hydrocarbons resources which fall within its exclusive economic zone". Michael Williams, the UN special co-ordinator for Lebanon, said in early January that there may be scope for UN discussion over border delineation.

Mr Bassil also announced that a US$350m gas pipeline is to be built along the Lebanese coast. At the end of December he said that 19 companies had been pre-qualified for the construction of the pipeline. The pipeline would run for 174 km and feed the main industrial areas of the country. By connecting to international gas networks, Lebanon would be able to diversify its source of energy away from a large reliance on Egyptian gas and source more from Russia or the Caucasus. However, notwithstanding the political risks of a major construction project in Lebanon, bidders for the pipeline may be hoping that the exploration of the Lebanese coast is successful in helping to attract more financing for the project.