Lebanon Ready to Drop Claim for Disputed Gas Field Off Israeli Coast, Officials Say

Lebanon is preparing to offer a compromise to U.S. energy envoy Amos Hochstein to resolve a dispute with Israel over maritime gas resources, three Lebanese officials with knowledge of the negotiations told Reuters.

Hochstein landed in Beirut on Monday at the invitation of the Lebanese government, which had objected to the arrival of a vessel operated by London-based Energean (ENOG.L) off the Mediterranean coast on June 5 to develop a gas field known as Karish.

Israel says Karish is part of its exclusive economic zone, but Lebanon says the field is in contested waters and should not be developed until the two countries conclude their indirect talks to delineate their maritime borders.

A Haaretz investigation based on satellite images and official documents Lebanon submitted to the UN found that the rig was further south than the area claimed by Beirut.

Those talks fizzled out last year after Lebanon pushed its claim in the disputed zone from a boundary known as "Line 23" further south to "Line 29," adding around 1,400 square km (540 square miles) to its claim, including part of Karish.

To overcome the impasse, Hochstein proposed a field-swap that would create an S-shaped boundary instead of a straight line, but Lebanon did not officially agree to the proposal, official sources said.

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Lebanon has insisted on renewing the indirect talks, but has not yet publicly announced whether it would stick to Line 29 as a starting position for those negotiations.

The U.S. considers Line 29 a "non-starter," according to sources.

Three Lebanese officials with knowledge of the internal process to finalize a government stance said that Lebanon would drop claims to Line 29.

The sources said President Michel Aoun would meet Hochstein on Tuesday morning and propose "Line 23, plus a little more."

One of the officials specified that Aoun's position would be a claim to Line 23 in addition to 300 km sq that includes the Qana field, but not Karish.

Aoun would demand that indirect talks resume as soon as possible and that Israel stop all works at Karish until negotiations are concluded, two of the officials said.

MP Mark Daou, who visited Aoun on Monday as part of a group of independent parliamentarians, said the president told the lawmakers he "cannot insist on Line 29" as a starting point.

"President Aoun told us that Lebanon does not have the technical foundations on which to construct a case for Line 29 because previous governments had failed to produce formal documentation to maintain this position," Daou told Reuters.

Alain Aoun, a lawmaker from the Free Patriotic Movement which was founded by the president, said Lebanon would be making a counter-offer to Hochstein's proposal but did not give details.

Hochstein met with caretaker energy minister Walid Fayad and deputy speaker of parliament Elias Bou Saab on Monday but made no public comments.