BEIRUT — Lebanon's caretaker cabinet approved a decision Wednesday to waive TotalEnergies' (TTEF.PA) 40 percent stake in a consortium to explore the country's maritime Bloc 9.
TotalEnergies was leading a consortium of three companies to explore two maritime blocs off the Lebanese coast for possible natural gas.
Russian firm Novatek, which had a 20 percent stake, pulled out in October and talks were underway to find a replacement partner. In the interim, the 20 percent stake had been absorbed by the Lebanese government.
Under the new arrangement spelled out in Wednesday's cabinet decision, TotalEnergies' share will go to firm DAJA 215 while the Lebanese state’s share will temporarily go to DAJA 216.
Caretaker Energy Minister Walid Fayyad said the decision was a "transition, during which we will negotiate the integration of an international operator."
Bloc 9 lies mostly in Lebanese waters but a segment lies south of the newly delineated border with Israel.
Lebanon and Israel struck a maritime deal earlier this month which marks a significant compromise between neighbors with a history of war and hostility, opening the way for offshore energy exploration and easing a source of recent tensions.
The agreement set a border between Lebanese and Israeli waters for the first time and stipulated that Israel would get partial royalties from TotalEnergies’ exploration of the portion of Bloc 9 that lies within its waters.
It is unclear how Wednesday's decision would impact the royalty arrangement.
The caretaker government has also asked the consortium, of which Italy's Eni is also a member, to deposit 80 percent of the training fees needed to upskill public sector workers in the energy sector into the Lebanese central bank at the beginning of the financial year.
Reporting contributed by Maya Gebeily.