By Maha El Dahan DUBAI, (Reuters) – A consortium led by TotalEnergies (TTEF.PA) will start drilling for oil and gas off the coast of Lebanon at the beginning of September, the country’s caretaker energy minister Walid Fayyad said on Tuesday. The consortium, which includes Italy’s partners ENI (ENI.MI) and QatarEnergy [RIC:RIC:QATPE.UL], has assigned a rig for the offshore southern bloc known as Bloc 9. “The rig will start working in Lebanon in September … before the end of the year we will know if there is a discovery,” Fayyad told reporters on the sidelines of the World Utilities Congress in Abu Dhabi. The minister said he was hopeful that if a discovery was made, it would unlock more investments in Lebanon’s offshore oil and gas sector.

Fayyad said a potential discovery could impact whether a deadline for applications to explore in eight additional offshore blocs is extended yet again, past June. “I have been hearing from players in the field that they are keen to see the result of the drilling in Bloc 9 before they make decisions as to further investments or commitments in Lebanon,” he told reporters. “In the end if we don’t have enough interest and players, we must adapt,” Fayyad said. The minister said a World Bank-funded deal to receive electricity from Jordan and gas from Egypt through Syria had yet to progress as the financing body had requested more reforms before committing. But he said Lebanon would aim to boost imports from Iraq by bumping up the volume of an existing swap deal and through new commercial agreements.

Lebanon and Iraq have already renewed an annual deal that allows Beirut to import 1 million tonnes of heavy fuel oil per year that it then swamps for gas. In exchange, Iraq has access to Lebanese healthcare and other services. “We are talking about hopefully increasing the quantity, and hopefully another contract whereby we would procure fuel from Iraq on a commercial basis with deferred payment terms,” said Fayyad. Public provision of electricity in Lebanon has been poor since the country’s 1975-90 civil war but has worsened over the last three years as a financial crisis has hit the government’s ability to secure fuel. Reporting by Maha El Dahan; Writing by Tala Ramadan