TotalEnergies says it will explore Lebanon waters for gas

French firm TotalEnergies has signed a contract to begin drilling and exploring for gas this year in waters off crisis-hit Lebanon, the company said in a statement Tuesday.

"TotalEnergies in agreement with its partners Eni and QatarEnergy has signed a firm contract with Transocean to hire the drilling rig that will drill an exploration well on Block 9 offshore Lebanon, as soon as possible in 2023," the group said.

"This is a new key step in the preparation of the operations," TotalEnergies added.

The announcement follows the signing in October of a landmark maritime border agreement between Lebanon and Israel that opens up lucrative offshore gas fields for the eastern Mediterranean neighbours.

Beirut divided its exclusive economic zone at sea into 10 blocks, and Block 9 was part of the area disputed with Israel.

Block 9 contains the so-called Qana field or Sidon reservoir.

There are still no proven gas reserves in the field that straddles the maritime border, but a 2012 seismic study by the British firm Spectrum estimated recoverable gas reserves in Lebanon at 25.4 trillion cubic feet.

Lebanese officials have announced higher estimates.

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Many politicians in Lebanon have pinned hopes of a way out of crisis on gas exploration, but analysts have said Beirut, which is in deep financial crisis, cannot count on gas alone to bail it out.

In January, the Lebanese government had said that Qatar entered a consortium with Italy's Eni and TotalEnergies to explore for offshore gas in waters near Israel.

The deal saw the gas-rich Gulf country's state-run QatarEnergy receive a minority 30 percent stake in two blocks of Lebanon's exclusive economic zone, Lebanese caretaker Prime Minister Najib Mikati had said at the time.

Eni and TotalEnergies will both retain 35 percent shares in the blocks after Russia's Novatek relinquished its minority stake in 2022.

Lebanon has been caught in an economic quagmire that has locked people out of their bank savings and plunged many into poverty. This crisis has been described by the World Bank as one of the worst in modern history.