While Lebanon Sinks into Stagnation, Israel Expands Its Oil and Gas Exploration

The war Israel is waging on Lebanon, Gaza and the West Bank, extending all the way to Iran, has not deterred it from working to explore for new sources of oil and natural gas beneath the waters of its exclusive economic zone in the eastern Mediterranean basin, given that natural gas constitutes a strategic resource for it.

In this context, the US company Murphy Oil has obtained 6 licences for oil and gas exploration in Zone "G" off the Israeli coast, which covers an area of approximately 1,700 square kilometres, marking the company's first entry into the eastern Mediterranean region and a notable development in gas exploration activities off Israel's coast.

It is worth noting that the US company Murphy Oil, also in the context of expanding its exploration activities, contracted with Mauritania's Ministry of Energy and Petroleum for production sharing in "Block C-10" and the "Tiof Field", in the Mauritanian coastal basin in the Atlantic Ocean, off the coast of the capital, Nouakchott.

The area for which the US company obtained licences lies about 25 kilometres southwest of the Leviathan field, which is considered one of the largest natural gas fields in the eastern Mediterranean, plays a major role in Israeli gas exports, and represents a primary source of gas supplies to its domestic markets and a number of neighbouring markets, foremost among them Egypt and Jordan.

Under the agreement, Murphy Oil's stake stands at 50%, while the remaining 50% stake goes to the Israeli company Ratio Energies. The two companies will conduct further research and assessments to determine the area's underlying potential, ahead of exploring oil and gas opportunities there. Operation of the new licences will be handled by a subsidiary of "Murphy Oil". Ratio Energies' ownership of a 15% stake in the Leviathan field lends particular significance to its participation in these licences.

The granting of the new licences comes as part of Israel's effort to fulfil its commitments to Egypt, as natural gas export deals from Israel to Egypt rank among the most prominent pillars of economic and strategic cooperation between the two countries. Under an agreement renewed in December 2025, Israel is committed to supplying around 130 billion cubic metres of natural gas to Egypt until 2040, or until the agreed quantities are completed, representing roughly double the amount stipulated in the original 2019 agreement.

The source of the bulk of this gas is the offshore Leviathan field in the eastern Mediterranean, which represents one of the main pillars of plans aimed at increasing Israeli gas exports to Egypt by injecting new investments designed to raise its production capacity and provide additional supplies to importing markets.

At the beginning of this year, the licence holders in the Leviathan field decided to increase investments in it by approximately $2.36 billion, with the aim of raising the field's annual production capacity. Production from the expansion is expected to begin during 2029, reaching around 21 billion cubic metres, allowing both domestic demand and export commitments to be met.

By contrast, Egypt seeks, through this agreement with Israel, to bridge the deficit gap between its natural gas production and its need to meet growing consumption, particularly as this production has declined recently, in addition to ensuring the continued operation of Egyptian liquefaction plants and consolidating Egypt's position as a regional energy trading hub.

It is worth noting that there is talk of another deal to export around 80 billion cubic metres of Israeli gas to Egypt from the Tamar field, valued at up to $20 billion, starting in 2031 and running until 2038, under a memorandum of understanding signed by the Israeli company "Isramco", which holds a 28.75% stake in the Tamar gas field, with the Emirati company "Mubadala Energy", an 11% partner in the field.

Israeli gas export agreements to Egypt allow flexibility in handling the contracted quantities, including reselling the gas outside the domestic market and directing it to the two liquefaction plants in Idku and Damietta ahead of re-exporting it to global markets, particularly European ones, thereby strengthening Egypt's role as a regional hub for gas trading and liquefaction in the eastern Mediterranean, drawing on the infrastructure available to it.

Increasing Israeli gas exports to Egypt requires expanding infrastructure, foremost among which is raising the capacity of pipelines, including the Nitzana pipeline, the Arab Gas Pipeline via Jordan, and the offshore pipeline between Ashdod and Ashkelon, which recently entered service to boost gas export capacity to Egypt.

By contrast, Lebanon remains at the stage of exploring its potential resources, without achieving a commercial discovery that would allow a transition to production. Drilling operations in Blocks 4 and 9 did not lead to commercial discoveries, while the agreement Lebanon signed with the consortium of "TotalEnergies", "Eni" and "QatarEnergy" to explore Block 8, in January 2026, includes an initial programme providing for a three-dimensional seismic survey to assess its potential over three years.

The comparison reveals a difference in the level of progress and priorities of the sector; Israel has come to treat gas as an existing resource to meet domestic demand and strengthen exports and regional economic relations, as shown in the decision to expand the Leviathan field linked to increasing supplies to Egypt. Lebanon, meanwhile, still faces the task of proving the existence of commercially viable resources before talking about their revenues or allocating them to address its financial and economic crises.

Yet that does not absolve Lebanon of the responsibility to ensure continuity of work, accelerate procedures, and strengthen transparency and regulatory stability to attract investments. What is needed is a realistic approach that takes the file out of the circle of promises of unproven wealth into a regular exploration programme linking any future discovery to a clear plan to serve the economy and energy security.

As for the expansion of gas exploration across the region, it shows a continued bet on natural gas as an economic resource and a tool to strengthen regional relations, despite the wars and turmoil gripping the region. However, turning licences, investments and agreements into actual, stable supplies remains tied to the success of exploration and expansion operations, the readiness of infrastructure, and the ability to secure production facilities and export routes in an environment of growing security risks.

Translated from Arabic with AI. Read it in Arabic