In December 2017, then-MP Mohammad Qabbani submitted to Parliament a draft law aimed at regulating the onshore petroleum activities in Lebanon.
The draft Onshore Petroleum Resources Law was preceded by parliament's approval in 2010 of a law regulating the offshore petroleum activities.
In July, LOGI organized a meeting of experts to conduct an article-by-article assessment of the draft law, issuing recommendations for improvement.
LOGI spoke to some of the experts for this month’s newsletter in order to provide context for the draft law and raise key questions on the process surrounding it.
A brief history of onshore petroleum activities in Lebanon
The history of oil and gas exploration in Lebanon dates back to the period of French Mandate. In 1926, the French High Commissioner for Lebanon, Henry de Jouvenel, issued a decision to examine the prospects for oil and minerals exploration.
Several wells were drilled onshore in the mid 1900’s, beginning in North Lebanon’s Terbol Mountain in 1947. Wells followed in the Bekaa areas of Yohmor, Sohmor, Tal Znoub and Al-Qaa, as well as Adloun in the south. The last well was drilled in Aabrine in 1967, after which exploration activities came to a halt due to adverse security conditions associated with the Lebanese Civil War (1975-1990), Ahmad Chawk, a petroleum engineer with 30 years experience in the region told LOGI.
Additional onshore surveying was carried out in 2014 covering much of Northern Lebanon and the coast, but was hampered by war in neighboring Syria.
Main differences between onshore and offshore
The two main differences between the onshore and offshore oil & gas sectors lie in the cost and the timeline for production.
Due to the complexity of offshore oil and gas production, it is more cost intensive and takes longer to produce results. That being said, offshore wells generally tend to produce larger volumes for longer periods of time than those on land.
Key concerns on the prospective sector
There are a number of concerns associated specifically with onshore petroleum activities that are particular to Lebanon.
Lebanon is a small country that has since the mid to late 1900’s witnessed rapid urbanization and loss of green and forested areas. It suffers from a host of environmental issues, including those tied to mismanagement of garbage disposal, and it’s state institutions, including those tasked with oversight, are weak.
Before any law on onshore petroleum activities is ratified by Parliament, an open, lively debate should be held on whether it makes sense for Lebanon to use its scarce land for a sector that produces a polluting hydrocarbon.
While Lebanon is more likely to find natural gas offshore, its onshore hydrocarbons are likely to come in the form of oil, which is far more polluting than gas.
“When everyone is talking about energy transition and renewables, and thinking about how to save the planet, should we really go into such a polluting sector?” Laury Haytayan, an oil and gas expert in the Middle East and North Africa, told LOGI.
Additionally, onshore exploration and production may conflict with the rights and interests of a number of stakeholders including local communities and landowners, as well as those who use land for a wide array of activities such as agriculture, industry, or commerce.
There are many land uses that may serve a greater public interest than petroleum activities, be it for archeological and cultural purposes or for environmental conservation.
Key concerns on the process surrounding the law
Today, the onshore draft law is being discussed while Lebanon has no comprehensive energy policy that sets out clear, coherent goals for the country’s desired energy mix.
It is unclear how the government wants sources of energy such as potential onshore and offshore hydrocarbons to play in.
In lieu of a clear policy, the government has shown that it is looking to potential revenues from oil and gas primarily as a boon to state coffers at a time when its finances are saddled by crushing debt.
“The enthusiasm about oil and gas is tied to the economy and the state’s finances,” Haytayan said.
This raises the fear that potential proceeds from this finite sector, rather than being invested wisely in the country’s future, could be wasted on unproductive uses.
This issue has however been near-absent from official public debate.
Official discussions on the onshore law have narrowly focused on the issue of the extent of Parliament’s powers, including in the approval of contracts.
A debate on this matter during a legislative session in March ended with Prime Minister Saad Hariri and Foreign Minister Gebran Bassil requesting to further study and amend the law.
Speaker Nabih Berri gave ministers one month. The law has not since returned to Parliament.
The current debate on Parliament’s role has been opaque, insofar as it has been taking place largely behind closed doors and with little transparency, including in the relevant parliamentary and ministerial committees.
LOGI has attempted to garner expert opinions on the law in general, namely during its July expert meeting. Given that the nature of the debate so far about the role of the parliament in approving licenses seems to follow a usual political discourse based on divisions of powers, this state does not correspond to LOGI and Kulluna Irada’s approach. Further clarifications and discussions are still needed around many pending issues related to the onshore petroleum activities.