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The drilling ship Tungsten Explorer is seen off the coast of Beirut, Lebanon, Wednesday, Feb. 26, 2020. The vessel is scheduled to start later this week the first oil and gas exploration drills off the Lebanese coast, the French oil giant Total and Lebanon’s government announced Tuesday. The arrival of the drill ship comes at a time when Lebanon is going through its worst economic and financial crisis in decades.

February 27, 2020

Beirut — Lebanon’s president Thursday inaugurated the Mediterranean country’s first offshore exploratory drilling for oil and gas, calling it a “historic day” for the cash-strapped country.

Michel Aoun spoke aboard the drill ship Tungsten Explorer, which will be conducting the drilling operations of the first exploration well, located approximately 30 kilometers (18 miles) offshore from the capital Beirut.

“Today is a happy day for us and for all Lebanese, and we hope the dream we’ve all imagined is realized today. It is a historic day,” he said.

The ceremony at sea contrasted sharply with Lebanon’s crippling financial and economic crisis, including a deepening liquidity crunch and soaring public debt. The limits have prompted protests against the financial institutions — including violent attacks on ATM machines and some bank branches.

Lebanon has one of the highest debt to GDP ratios in the world, standing at about $87 billion or more than 150% of the country’s GDP. Teetering on economic and financial collapse, the Lebanese government is now considering whether to pay or default on its $1.2 billion Eurobond debt, which matures next month.

Lebanon has never defaulted on its debt payments. Defaulting could be costly to the national economy and banking system, which until the recent financial crisis was considered one of Lebanon’s most profitable and reputable sectors.

Experts say it would be years before the country could start extracting and reaping the benefits of any oil found in its waters, should any be found.

On the ship, Prime Minister Hassan Diab said the exploratory drilling “offered a ray of light amid the darkness” and hoped it was the beginning of a transformation that would see Lebanon become an oil country. Read more