On September 21, 2016, La Maison du Futur in cooperation with the Konrad Adenauer Stiftung published a 24-page policy paper authored by Lebanon’s former Minister of Economy and Trade, Dr. Nasser Saidi. In his paper titled “Lebanon’s Oil and Gas Wealth: Policy Recommendations for Escaping the “Devil’s Excrement” Curse” Dr. Saidi addresses two key questions:

1. How realistic are the expectations that Lebanon could become an energy exporter and drive significant economic growth?
2. and what should be done to effectively manage Lebanon’s prospective energy wealth?

Highlights from the whitepaper include:

Four risks to Lebanon’s ability to tap into its petroleum wealth:

1. Volatile and unsustainable commodity prices
2. Uncertainty of Lebanon’s oil and gas reserves and production
3. Geopolitical and legal risk – driven by maritime border disputes between Lebanon and its neighbours
4. Domestic political risks - driven by dysfunctional politics and dismal governance

It is essential that three basic questions be publicly debated and include civil society:

1. How fast should Lebanon’s oil and gas reserves be depleted?
2. How much should be saved annually?
3. What should be done with the revenue?

Policy recommendations to establish the building blocks of good governance and sound management of Lebanon’s oil and gas wealth:

1. The Government of Lebanon should formally join the Extractive Industries Transparency Initiative (EITI) in order to ensure transparency and disclosure of governance and management of its natural resources.
2. Lebanon should adopt and comply with the precepts of the Natural Resource Charter.
3. Lebanon should establish an Independent Energy Regulator. The Lebanese Petroleum Administration should be made independent from the Ministry of Energy and Water (MEW) and legally transformed into a regulatory body for the oil and gas sector with a widened mandate for the administration and management of Lebanon’s natural resources. The separation and independence from the MEW is important to protect management and decision-making from political interference.
4. Lebanon should adopt a Fiscal Responsibility Law and a Fiscal Rule.
5. Lebanon should setup a Sovereign Wealth Fund that would manage and invest oil and gas wealth

For more details, please read the full English and Arabic versions of the whitepaper.
 

Jamil Hijazi is a volunteer at LOGI completing his Master in Oil and Gas Economics at the Centre for Energy, Petroleum and Mineral Law and Policy, Dundee University, Scotland.