Lebanon’s Border Crises and its Petroleum Sector

Carla Rizk Analysis, Conflict & Security, Economics, Middle East Leave a Comment

In late 2017, Lebanon issued licenses for oil and gas exploration and production in Blocks 4 and 9 of its maritime territory to a consortium of three major energy companies, French firm Total S.A, Italian firm Eni International, and Russian firm Novatek. After Lebanon outlined a plan to begin offshore exploration in 2019, disputes over the confines of the surrounding territorial waters, specifically the overlapping block 9 with Israel, have reignited more fiercely.

After years of restrictive discussions, Lebanon is undertaking a huge initiative that, if run smoothly, will likely strengthen its suffering economy. With access to natural gas, Lebanon can reduce dependence on imported energy, generate power domestically and more sustainably, and most importantly create a flourishing oil and gas sector (O&G) that will generate more revenue and help ease high public debt. But it will face many obstacles as preparations begin, particularly the Lebanese-Israeli border disputes and internal corruption.

The Origins of the Maritime Dispute

Discoveries of oil and gas fields in the eastern Mediterranean Sea began in 2009, intensifying the interdependence between the surrounding nations, namely Lebanon, Israel, Syria, Cyprus, and Egypt. There is an estimated 122 trillion cubic feet of recoverable gas and 1.7 billion barrels of recoverable oil in the stretch of water from coast to coast. As each state adjacent to the Levant Basin tries to get a piece for itself, clear delineation of maritime borders has been a top security priority. Unfortunately, the region’s history of clashes over territories, water, and other essential resources has made this process very difficult and tense.

Lebanon’s territorial waters border against Israel’s from the South and are divided into ten blocks. It has an Exclusive Economic Zone (EEZ), the territorial waters of a state wherein resources can be exploited, of 22,700 km2. But there’s a disputed ownership claim between Israel and Lebanon over a triangular area of approximately 850 km2, which stretches along the edge of the southernmost blocks (8, 9, and 10). The current dispute is over an area of 150 km2 of block 9 (see image below).

Lebanon’s Maritime Boundaries

Source: Lebanese Petroleum Administration

The dispute is in part instigated by inconsistent and one-sided demarcation agreements with Cyprus that produced inconsistent laws on border delineations between Israel and Lebanon. To put what follows into context, in international law, a state must draw its own maritime borders in accordance with specific guidelines and in agreement with adjacent and potentially affected states. These border delineations must be ratified into law in the respective state and declared to the UN to become official.

So, in 2007, Lebanon and Cyprus, without Israel, agreed on delineated borders, but more accurate EEZ borders were later sent to the UN and ratified into law. In 2010, disregarding any future amendments to the borders made by Lebanon, Cyprus and Israel signed a separate and contradictory agreement, which was later ratified in the Israeli Parliament. The result was stretching its own territorial waters north and crossing Lebanon’s declared boundaries, creating the overlapping blocks.

Since there is a short distance from the shorelines of the surrounding states, EEZ boundaries are open to interpretation, challenging the legality of which laws or treaties govern the borders of their respective territorial seas. In this scenario, states are expected to cooperate on fair and decisive lines, but given their enduring rivalry, Lebanon and Israel have failed to take each other into account. Following these confusions, they are now left with another border crisis, as both sides refuse to yield or find a practical solution.

(For a full discussion on the origins of and current legal dispute and an explanation of Maritime laws, refer to UNDP’s report or ASDEAM’s report).

The Original Border Crisis: Israel’s Border wall

In retaliation to Lebanon’s plans for natural gas exploration in the disputed territorial waters, Israel  started  construction  to rebuild a wall along the Lebanese-Israeli land border. The border, first demarcated by France and Britain in 1923, and later by the UN following Israel’s withdrawal from Lebanon in 2000, is now termed the ‘Blue Border Line’. Expectedly, both parties find faults in the Blue Line and where exactly the demarcation points lie.

Similar to the maritime blocks in the Eastern Mediterranean Sea, there are thirteen points still heavily disputed by both sides. The wall, originally built in 2012 to supplement the insufficient fence, is 7-10 meters high and spans an area of 1-2 kilometers. The new wall is supposed to be higher and is supposed to cover a much larger area. Lebanon claims that recent construction threatens to infringe on these thirteen points, while Israel claims that the regions are within its boundaries.

Both states have vowed to defend their sea and land territories militarily. But armed clashes, even minor ones, have yet to occur. Contradicting all previous threats, Israel has sent word to Lebanon promising “that Israel does not want escalation” and that they “do not want to see the situation inflamed,” while Lebanon invited Israel to deal with the problem diplomatically through arbitration.

Indeed, both parties have been regularly taking part in talks, first mediated by the U.S and now mostly by the United Nations Interim Force in Lebanon (UNIFIL) after U.S. efforts failed. So far, according to the spokesperson for UNIFIL, the talks, which take place at UN positions in the South, have been civil. However, such talks in the Middle East rarely lead to diplomatic solutions, especially as military threats continue on both sides; that is, negotiations do not necessarily indicate a positive development in the crisis.

Prospect of War and the Future of O&G in Lebanon

Considering these developments alone, war is unlikely to erupt as the dispute is not over a significant stretch of land and water. At present, Lebanon is also distracted by its Parliamentary elections (among other internal crises) and the new prospect of an O&G sector, while Israel is distracted by clashes in Syria and recent Palestinian protests in Gaza. Lebanon also fears a cut in U.S. aid if clashes were to break out, while Israel claims that its northern border is unprepared for war.

Additionally, the three major oil companies, along with the interests of their respective countries, are now implicated in the conflict—meaning restraint will probably be exercised. An outbreak of war could damage each of their O&G explorations and drilling efforts, considering that resources might be the first targets in a military confrontation and that companies might once again distance themselves from the region. This is why it is risky and ill-advised for both sides to enter into a conflict unnecessarily.

However, the dispute over the land border is not only about the overlapping points. The war in Syria and Israel’s persistent fear of Iran potentially building missile factories near the Blue Line have escalated tensions between Israel and Iran-backed Hezbollah. So, it is not unreasonable to think that clashes or another war could break out—despite efforts to prevent such a scenario. Given the history between the two parties, the sensitivity, and the nationalistic aspect of the current issue, even a minor clash could escalate the crisis.

The ongoing rivalry with Israel, initiated in 1948, is unlikely to be resolved in such a short period of time. A solution is especially unlikely over a dispute concerning essential resources. So, Lebanon should focus on keeping the situation relatively calm so that it can start its explorations without external conflict.

In spite of these risks, Lebanon’s main priority, second to actual oil exploration, should concentrate on building a corrupt-free environment in which an O&G sector can strive without leading to debilitating war. Internal turmoil and corruption are even more detrimental than the border crisis to Lebanon’s O&G sector.

Sectarian divisions, several armed political parties, and a corruption problem have set Lebanon behind all the other states surrounding the Eastern Mediterranean Sea. Israel, Egypt, and Cyprus have started drilling long ago, with Israel almost completely sustaining its energy needs internally.

To offset this disadvantage, Lebanon needs to tackle its internal issues fast and focus on them as much as it focuses on the border disputes. While one is justifiably inclined to think that Lebanon’s political situation is an unsolvable enigma, and while it might be so, the country has recently shown initiative to make some changes.

These changes have come with the election of President Michel Aoun in 2016, as he began addressing some of Lebanon’s most pressing concerns. The steps taken to initiate O&G exploration, along with the ratification of its electoral system to a more democratic, representative, and proportional system is testament to these initiatives. The fast-paced manner in which the changes were implemented is very rare in Lebanese politics, as discussions for both schemes have technically been taking place for almost a decade (or more in the case of amending the electoral system).

If the Lebanese government focuses on building a corrupt free O&G sector, it might still emerge as an economically beneficial industry instead of a source of conflict. While risky and despite high tensions with Israel, Lebanon’s only option is to continue efforts to explore its territorial sea.

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