Lebanon’s parliament approved a law to tax revenue from oil operations, weeks before its first sale of offshore energy exploration rights to interested companies like Total SA and Exxon Mobil Corp.
Lawmakers approved the petroleum tax law in a vote on Tuesday, the state National News Agency reported. The law is a cornerstone for prospective bidders in the planned auction of rights to five offshore areas, Wissam Zahabi, a member of the Lebanese Petroleum Administration, said earlier this month.
Authorities extended the bidding deadline to October 12 from September 15 to give companies more time to understand the tax law and organise their bids, Zahabi said then. The draft law called for a 20 per cent income tax, along with a stamp-duty fee fixed at 5 million Lebanese pounds ($3,311). NNA didn’t specify if parliament amended the draft law before adopting it.
Lebanon is seeking to develop its energy assets after lagging behind Cyprus, Egypt and Israel in exploring for oil and natural gas in the eastern Mediterranean. Exxon Mobil, Chevron Corp, Royal Dutch Shell Plc and Eni SpA are among 46 companies that qualified in 2013 to bid to operate blocks. Suncor Energy Inc., Rosneft PJSC and Qatar Petroleum are among others that qualified to bid as non-operators, according to the energy ministry’s website.
Lebanon, which is struggling with power shortages and hosting more than a million refugees, needs revenue to reduce its public debt. The energy auctions have been delayed due to internal political disputes since 2013.