“Oil and Gas Lebanon: Governance and Integration” was the title of the conference held on June 8, 2015 at ESA (Ecole supérieure d’administration). Organized by Front Page Communication and Forum for National Dialogue, A Makhzoumi Initiative. This conference was the second Forum about Lebanon’s National Wealth, as introduced by Mr. Mustapha Assaad, CEO of Front Page communication.
This Forum which received prominent personalities aimed, according to the organizers, at “providing the media, the academic youth, the civil society, the economic and financial sectors with dialogue platforms around this wealth, while involving local and international experts and key players in the field.”
Trillions of cubic feet of gas are hidden underneath of our seawater leading to a controversy and hope. Many problems arise that may pave the way to disputes with neighboring countries and with key players within Lebanon. Lebanese citizens are the owners of this wealth, which some, while talking about it, consider it their own.
This situation is not specific to Lebanon. Unfortunately, oil and gas had been in many countries called by academics “the curse of the resource- rich country”. Oil revenue brings wealth for a few but allows greed, corruption, and environment degradation (the case of some African and Arab countries). It could ruin the infrastructure of any country due to lack of transparency, accountability and good governance.
If the Norwegian Model should not be dismissed, it cannot be adopted and implemented as the only recipe. Each country has its own specificity, especially Lebanon where efficient institutions are almost absent and corruption at its peak, as mentioned by several speakers.
The future generation fund and a national oil company also occupied the platform, their pros and cons were discussed by esteemed personalities, among them their Excellency Dr. George Corm and Dr. Nasser Saidi. According to IMF, around 5% of the Lebanese GDP would be from oil and gas, but this is still uncertain, until we begin extracting. It was highly agreed that the gas extracted and produced should first serve the internal market to produce electricity, before thinking about exportation. Dr. Saidi revealed the importance of securing a democratic system through an institution framework, a petroleum law tax, an inter-generation equity, and abiding by the highest standards.
Some speakers were very enthusiastic and positive regarding the future wealth awaiting Lebanon, while others showed skepticism. Former minister of finance Dr. Georges Corm stressed on the importance of investing in people and technology. Thus, an environment that secures investment by setting legal and fiscal conditions is crucial. We notice the value of the legal framework in energy policy, when we study the rules in some countries, such as France.
France is a minor producer of oil and gas but with laws that reveal the importance of this sector (Dr. Ali Baydoun). Yet, the legal framework of this sector needs to be developed, to cover, besides the offshore extraction law, the onshore law (Me Christina Abi Haidar).
The LPA (Lebanese Petroleum Administration) was represented by its President Mr. Gaby Daaboul and Mr. Wissam Zahabi. They covered the work of the institution, which implemented a very progressive financial and legal system that should serve Lebanon and help in its development. The importance of this administration resides in its independence; it is not subject to influence from other branches of government or private sectors.
The representatives of the administration stressed on the positive impact of the oil and gas for Lebanon, especially at a time when the IMF and the World Bank consider its debt to GDP, one of the highest in the World. If a part of this wealth should be for internal use the other part must serve to pay a part of the debt. Even if many were pessimistic concerning this issue due to the corruption and lack of transparency, some former skeptics expressed their satisfaction after having visited the LPA. They noticed a high level of professionalism, transparency and serious work that boost confidence in this institution (Mr. Fouad Makhzoumi).
While some consider that good strategies are the best way to improve our incomes, it is essential to keep this sector independent (Former minister of finance Jihad Azour), it is, thus, crucial to enhance accountability and transparency. The importance of joining the EITI (Extraction Industries Transparency Agency) was approved by the whole audience.
The last word was for the youth, students of different universities. This young generation is the main owner of this wealth. Those students who tried to understand during this long day a matter that concerns them directly expressed both their optimism and skepticism regarding this issue, but proved to be more dynamic, efficient and ready for the changes waiting for them than their older compatriots.
Author: LebanonGasNews Editor