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Energy investors nervous about Lebanon

Aug. 16, 2013 at 9:17 AM   |   Comments

BEIRUT, Lebanon, Aug. 16 (UPI) -- Energy investors are frustrated Lebanon hasn't been able to form a new government since the prime minister resigned in March, an executive said.

Lebanon in May started the process to put its energy reserve areas on the auction block for explorers. The process has since stalled because Prime Minister-designate Tammam Salam has been unable to form a new government.

An energy company executive told The Daily Star the industry was frustrated by the political stalemate.

"This frustration prompted some of the firms to withdraw their pre-qualification bidding, and I am afraid others may do the same if the political crisis continues," he said Friday on condition of anonymity.

Prime Minister Najib Mikati, a Hezbollah ally, resigned in March because of differences between the pro-western March 14 coalition and the March 8 slate, which includes Hezbollah.

Lebanon is eager to attract investors to its fledgling oil and natural gas sector. Israel, meanwhile, is looking to capitalize on the natural gas prospects from its offshore Leviathan and Tamar natural gas fields.

Hezbollah last year warned Israel to stay away from Lebanon's offshore reserves because of border issues. The movement took credit for an explosion last week that injured four Israeli soldiers near the land border.

"Would you invest $180 million in a [reserve area] under these circumstances?" the source asked.

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