Lebanon: Oil tax law approved, Offshore Gas Blocks Round in October
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Country set Oct. 12 as extended deadline for bids to explore offshore
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Lebanon seeking to catch up with neighbors in oil, gas search
Lebanon’s parliament approved a law to tax revenue from oil operations, weeks before its first sale of offshore energy exploration rights to interested companies like Total SA and Exxon Mobil Corp.
Lawmakers approved the petroleum tax law in a vote on Tuesday, the state-run National News Agency reported. Energy minister Cesar Abi Khalil called on qualified companies to take the new tax law into consideration when bidding for the upcoming energy auction, the agency said.
The draft law called for a 20 percent income tax on petroleum operations, along with a stamp-duty fee fixed at 5 million Lebanese pounds ($3,311), Wissam Zahabi, a member of the Lebanese Petroleum Administration, said by phone. Authorities had extended the bidding deadline to Oct. 12 from Sept. 15 to give companies more time to understand the tax law and organize their bids, Zahabi said earlier this month.
Lebanon is seeking to develop its energy assets after lagging behind Cyprus, Egypt and Israel in exploring for oil and natural gas in the eastern Mediterranean. Exxon Mobil, Chevron Corp., Royal Dutch Shell Plc and Eni SpA are among 46 companies that qualified in 2013 to bid to operate blocks. Suncor Energy Inc., Rosneft PJSC and Qatar Petroleum are among others that qualified to bid as non-operators, according to the energy ministry’s website.
Lebanon, which is struggling with power shortages and hosting more than a million refugees, needs revenue to reduce its public debt. The energy auctions have been delayed due to internal political disputes since 2013.