Lebanon: TotalEnergies, Eni and QatarEnergy Sign Block 8 Exploration Agreement

The Lebanese government has formally awarded exploration rights for Block 8, located in the country’s southern maritime zone, to a consortium comprising TotalEnergies (operator, 35%), Eni (35%), and QatarEnergy (30%). This decision, ratified by the Cabinet on January 8, 2026, comes amid acute economic crisis and political reconfiguration. The Lebanese pound has lost more than 98% of its value since 2019, falling from an official rate of 1,507 LBP per dollar to approximately 89,000 LBP/USD on the market. Nominal GDP, which exceeded $50 billion before the crisis, reportedly reached approximately $43 billion in 2025 according to available estimates.

A Cautious Contractual Mechanism

The agreement includes a “Drill or Drop” mechanism structuring the oil companies’ commitment. During an initial three-year phase (2026-2029), the consortium commits only to conducting 3D seismic studies and geological analyses. At the end of this period, operators will decide whether to proceed to the drilling phase or relinquish the block. This clause protects companies from an investment estimated at approximately $100 million for a potentially unproductive well.

QatarEnergy’s entry into the Lebanese offshore sector dates back to January 2023, following Russian group Novatek’s withdrawal. The Qatari group would provide substantial financial capacity and serve as a regional diplomatic facilitator, according to sector analyses. This consortium configuration combines French technical expertise, Italian carbonate geology competencies, and Gulf geopolitical weight.

A History of Exploration Failures

Previous exploration campaigns off Lebanon’s coast have yielded disappointing results. The Byblos-1 well, drilled in Block 4 in April 2020, confirmed the presence of a petroleum system but did not encounter the expected reservoir sands. The consortium abandoned this block in October 2023. In Block 9, the Qana 31/1 well, drilled in late 2023, revealed good quality reservoirs according to the Lebanese Petroleum Administration, but filled with water rather than gas.

These failures led to a strategic repositioning toward Block 8. Its geographical proximity to the Israeli Karish gas field, operated by Energean and located between 4 and 10 kilometers from the Lebanese border according to available seismic data, constitutes the main geological argument. The anticlinal structures hosting Karish would extend northward into Block 8, offering potentially more favorable structural traps than the Qana well’s stratigraphic traps.

A Stabilized Diplomatic Framework

The agreement falls within a context of clarified Lebanese maritime borders. The Israeli-Lebanese agreement of October 2022, negotiated under American mediation, established “Line 23” as the permanent boundary. A confidential clause would provide a royalty-sharing mechanism for cross-border reservoirs, managed by the operator. In October 2025, the government of President Joseph Aoun and Prime Minister Nawaf Salam ratified the maritime delimitation agreement with Cyprus, initially signed in 2007. This ratification would allow the consortium to use Cyprus as a logistics hub for its Lebanese operations.

Energy Minister Joe Saddi, appointed on February 8, 2025, cancelled the authorization previously granted to Norwegian company TGS to conduct a multi-client seismic study on Block 8. This decision prompted TGS to file a claim for $4.5 million. The administration reportedly determined that integrating seismic studies directly into the consortium agreement would accelerate the investment process.

Outlook and Operational Timeline

The projected timeline spans several years. Seismic acquisition would occur between 2026 and 2027, followed by data interpretation in 2028. The drilling decision would be made in 2029, with a first well possible from 2030 onward. Priority geological targets include Oligo-Miocene turbidites, analogous to the Tamar and Leviathan field reservoirs, as well as Mesozoic carbonates, similar to Egypt’s Zohr discovery made by Eni.

The presence of international majors in this border zone constitutes a form of internationalization of Lebanon’s southern maritime security. For a state whose banking sector remains in what analysts describe as a “zombie” state and where public electricity operates only a few hours per day, this option on potential gas resources represents one of the few assets capable of restoring some form of sovereign credibility.