Lebanese lobby group pushes gas governance
on 5/29/2015

This article was originally published by Interfax Global Energy, and can be accessed on this link.

Lebanese energy experts frustrated with the political deadlock surrounding the stalled hydrocarbons sector are building the country’s first gas-specific lobby group to try to force progress on the issue.

The Lebanese Oil& Gas Initiative (LOGI) is raising an initial $10,000 via crowdfunding website Zoomaal to create a network of experts to advocate, develop policy, build technical capacity and ultimately help the country avoid the ‘resource curse’, according to co-founder Karen Ayat.

Her fear is that – with future gas prices uncertain and regional deals under discussion between Egypt, Israel and Cyprus – a late entry into export markets would leave Lebanon with problems finding regional customers.

Co-founder Georges Sassine, a strategist for GE, said on his blog that informing citizens and influencing decision-makers were key reasons for LOGI’s foundation.

“There is also an urgent need to prudently manage expectations of Lebanese citizens and government officials. Oil and gas discoveries often trigger an explosion of unrealistic expectations and require a communication strategy that builds a critical mass of citizen understanding through easy-to-grasp facts,” he said.

Lebanon’s energy sector has been plagued by political instability and its parliament’s inability to elect a new president. This haseffectively stalled the sector since early 2013, when the government failed to launch the first licensing round after being unable to issue two decrees essential for tendering offshore blocks: one outlining the blocks open for bidding and the other laying out a model for future exploration and production agreements.

Government estimates put Lebanon’s potential reserves at as much as 708 billion cubic metres, but the country currently relies on energy imports.

Public progress

With governance the key issue holding back gas exploration, the LOGI founders’ goals include empowering the public to demand progress on the issue.

One project it has already launched is ‘Lebanon Oil and Gas 101’, which aims to explain issues such as how much potential lies in Lebanon’s offshore fields, how it would translate in terms of actual revenues, how those revenues could be used, and whether the country’s neighbours can steal its gas – as was claimed bythe parliament’s speaker in December.

Ayat said LOGI has completed a project assessing Lebanon’s export options and is working with other organisations such as SKeyes Media to promote public awareness and restore confidence in the government’s ability to develop an industry as important as oil and gas.

“A track record of corruption and lack of transparency has made people sceptical that the government will be able to manage the process in an efficient and transparent manner and (it is also) not accustomed to effective civil society involvement in the country,” she said. “We want to eliminate false rumours, increase the public’s knowledge and its capacity to follow Lebanon’s hydrocarbon progress closely, so that people are equipped with the right tools to question the government, demand solid answers and suggest positive change.”

How effective the new NGO will be at pushing the sector forward is difficult to assess. There is little non-governmental oversight of Lebanon’s oil and gas processes as yet: a partnership between the Lebanese Center for Policy Studies and industry regulator the Petroleum Administration is the only other local initiative to appear.

Mona Sukkarieh, co-founder of Beirut-based consultancy Middle East Strategic Perspectives, said the impact of NGOs on public life and institutional reform in Lebanon is limited, but the Petroleum Administration is showing “an unusual degree of openness towards civil society” compared with the country’s other public bodies.

“We certainly hope the fact civil society has been preparing for the possible development of an oil and gas industry early on in the process, in the pre-licensing phase, would give it enough lead to make a difference, in a country suffering from a deficiency of transparency at all levels,” Sukkarieh told Interfax.

But even if legislative processes and commercial contracts run smoothly from now on, Lebanon is unlikely to see its gas sector launch production before 2025 at the earliest, Bassam Fattouh, director of the Oxford Institute for Energy Studies, said in March.

Ayat hopes the government will be able to break the political deadlock this year to allow a licensing round to open and exploration to begin, but does not expect Lebanon to begin producing within 10 years, especially given the extra time it has taken Cyprus and Israel to try to turn their discoveries into producing fields.


Source: Interfax

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