(Bloomberg) -- Lebanon and Israel have signed a US-brokered deal that ends a dispute over gas-rich waters in the Mediterranean, paving the way for the development of energy resources.
Lebanese President Michel Aoun signed the deal followed by Israeli Prime Minister Yair Lapid later on Thursday.
The agreement will allow international companies to begin exploring for natural gas in previously-contested waters, potentially leading to more energy exports to Europe in the coming years.
Lebanon and Israel have no diplomatic relations and are technically still at war. While the deal is unlikely to herald significantly closer political ties, it's a boost for the US, which has lobbied for years for the two sides to settle on a maritime boundary.
The dispute delayed exploration work in the eastern Mediterranean and escalated tensions.
US President Joe Biden said this month that an agreement would โset the stage for a more stable and prosperous region, and harness vital new energy resources for the world.โ
Iran-backed Hezbollah, a militant group in Lebanon opposed to Israel's existence, has said it would accept the deal. Lebanese officials have cautioned, however, that it won't mean they recognize Israel.
Gas Plays
Now that the countries have agreed a maritime border, a TotalEnergies SE-led consortium will be able to start drilling in the Kana prospect, most of which lies in Lebanese territory. If gas is produced, both countries would be entitled to payments.
Gas production from Kana is far from certain. Since no exploration wells have been drilled, the presence and quality of resources is unknown.
According to an agreement signed with the Lebanese government in 2018, Total and Eni SpA are committed to drilling just one well in Block 9, where the Kana prospect is located. If results are unfavorable, they may abandon it.
Gas production has started at the Karish field on the Israeli side of the border, field developer Energean said on Wednesday.
Hezbollah and Israel fought a 34-day war in 2006. The two still, from time to time, exchange fire along the border.ย
--With assistance from and .
(Updates with signing details in second paragraph, map.)
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