LEBANON is struggling to keep the lights on. Daily three-hour blackouts already afflict those who can’t afford their own generator. Electricité du Liban, the state power company, says lack of funds from the ministry of finance means it can’t pay for recent shipments of fuel oil to fire its power stations. More gloom is on the way.
This will all end soon, believes Lebanon’s energy ministry. Buried offshore in the country’s section of the Mediterranean are 96 trillion cubic feet of natural gas and 850m barrels of oil: enough to end power shortages, wipe out Lebanon’s rapidly rising public debt and revive its economy.
At least that’s what Gebran Bassil, the energy minister thinks. Oil and gas revenue would bring “economic independence” to his country, creating jobs and spreading wealth. Lebanon would “definitely enter the club of oil states”, he said at an energy industry conference in Beirut on December 4th.
Not everyone welcomes that prospect. Some Beirutis are sceptical that oil revenue would be spread fairly. Lebanon scores badly on corruption rankings. Transparency International, an advocacy group, ranked it 127th in its most recent list of 177 countries—on a par with Russia, Mali and Pakistan.
Nor does anyone yet know whether Lebanon will actually have any oil or gas to sell. Some seismic surveying of its portion of the Levant basin suggests the geology is prone to hydrocarbons. Large gas discoveries in nearby Israeli waters give an inkling of what could be in store. But no one has drilled any wells or brought in a rig to do so. Until they do, the reserves estimates are educated guesswork.
Drilling is a long way off, too. The government passed legislation in 2010 to spur offshore exploration. But two key parts of it were left unsigned when Prime Minister Najib Mikati and his cabinet resigned in March this year. Mr Bassil has urged the caretaker cabinet to sign the decrees. It hasn’t. An auction of exploration blocks to drillers has already been delayed and will probably be postponed again.
As with everything else in Lebanon, Syria’s civil war, which has exposed once more the factionalism in Lebanese politics, hangs over even this technocratic matter. Opponents of Mr Bassil, son-in-law of Michel Aoun, leader of the Free Patriotic Movement, Lebanon’s largest Christian party and part of the alliance that was ruling the country until the spring, don’t wish to give him a victory—even one that might bring wealth to the country. Energy could one day be a lucrative business in Lebanon and each faction wants a piece of it.
But the time for Lebanon to lure investors on good terms may be ending. The influx of Syrian refugees and violence between Hezbollah supporters of Syrian President Bashar Assad and their Lebanese Sunni rivals threaten further fragmentation and bloodletting. Even oil companies flinch at making deals against that kind of backdrop. If the politics worsen, the contract terms will have to get more generous. For now, that is academic. Before it starts drilling for oil and gas, Lebanon needs a government.