"Neither Cyprus nor Lebanon have this money today," he said. Cyprus is reeling from Europe's financial crisis, its economy is projected to shrink by half a percentage point of GDP this year and unemployment is hitting record highs.
Lebanon has one of the highest percentage debts in the world, amounting to about $55 billion or 130 percent of the country's GDP.
Lebanon Finance Minister Mohammed Safadi said his ministry's taxation plan "would actually make a program of how to repay all our debt, and all the other money will go for investment."
Some 15 firms have expressed interest to drill in waters off the coast of Cyprus as part of a second licensing round, despite Turkey's objections.
Turkey does not recognize Cyprus as a sovereign country. Cyprus was split into Greek and Turkish zones in 1974 after an invasion by Turkey.
Lebanon has been recently moving forward toward oil exploration. In 2010, its parliament passed a law allowing oil and gas exploration off its coast after years of delays. Last month Lebanon appointed a six-member Petroleum Administration board to organize bids for the country's first offshore oil and natural-gas exploration licenses.
Cesar Abou Khalil, an adviser to Energy and Water Minister Gibran Bassil said that "by the beginning of 2013, we will have a complete legal package to be shared with the industry prior to the launch of the first licensing that shall be announced by minister Bassil in the very, very near future."
Israel has been exploring extensively in Mediterranean waters off its coast and is developing large natural gas fields. Two of its fields are due to start producing soon. Experts say their estimated combined reserves of 8.5 trillion cubic feet of natural gas can cover Israel's energy needs for the next two decades.