Lebanon passes oil tax law ahead of first energy-rights auction
Lebanon’s parliament has approved a law to tax revenue from oil operations, weeks before its first sale of offshore energy exploration rights to interested companies like Total and ExxonMobil.
Lawmakers approved the petroleum tax law in a vote on the 19th September, 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 from the 15th September to the 12th October to give companies more time to understand the tax law and organise their bids, Mr Zahabi said.
The draft law called for a 20% income tax, along with a stamp-duty fee fixed at five million Lebanese pounds (US$3,311). NNA did not 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.
ExxonMobil, Chevron, Royal Dutch Shell and Eni are among 46 companies which qualified in 2013 to bid to operate blocks. Suncor Energy, Rosneft PJSC and Qatar Petroleum are among others which 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.