In an move welcomed by observers and oversight actors, the regulatory body overseeing the Lebanese oil and gas sector has published exploration and production agreements by the government and a consortium for two offshore blocks.
Many Lebanese civil society actors view this decision as the product of years of concerted efforts and activism. These efforts led to the March launch of the 13-member Lebanese Coalition for Good Governance in Extractive Industries (LCEI).
During an inaugural press conference, LCEI reiterated its commitment to cooperating with and acting as an active partner to the parliament and government to support transparent sector management, which “can shape Lebanon’s future.” LCEI representatives highlighted transparency, accountability, inclusivity and rule of law as pillars to good governance of the natural resource sector. They also emphasized the role of civil society as a partner and an actor with oversight of government decisions.
NRGI is one of four international members of LCEI. The organization supports Lebanese civil society initiatives and is committed to adopting a multi-stakeholder approach to shaping public debate around the nascent oil and gas sector. NRGI has previously provided training to representatives of several LCEI member organizations, mainly through an annual course in the region.
NRGI Middle East and North Africa regional program manager Laury Haytayan has spearheaded the organization’s efforts in Lebanon. I spoke with Laury last month about major challenges the country faces as it develops its extractives sector.
Hanen Keskes: How has political volatility affected Lebanon’s progress toward becoming a natural resource producer?
Laury Haytayan: Political risks are high in Lebanon and have definitely affected sector progress. The first licensing round was launched in 2013, but did not materialize because of a political deadlock that lasted more than three years. The sector kicked off again when the political parties were able to reach a deal to elect a president. In 2017, the oil and gas market changed, commodity prices were lower than in 2013 and the appetite we saw in 2013—with 46 companies pre-qualified for the bid—was lost. Only one consortium applied for two blocks. Five were open to bidding.
Political deadlock and instability clearly harms the sector. Going forward, the Lebanese government must draw lessons from this experience. Its political parties must ensure an enabling environment for oil and gas investment in the future.
Describe NRGI’s role in supporting the various players in Lebanon’s natural resource sector.
In 2014, NRGI established the Middle East and North Africa Regional Extractive Industries Knowledge Hub in Beirut in partnership with the Lebanese Center for Policy Studies. More than 50 of the 120 hub participants since 2014 have been Lebanese, including civil society activists, journalists, researchers, advisors to political parties and ministry employees.
We have provided technical assistance to the government since 2014, when we produced an Extractive Industries Transparency Initiative (EITI) feasibility study upon the Lebanese Petroleum Administration’s (LPA) request. We have also facilitated discussions between the LPA and the EITI Secretariat. After meetings in Beirut and Oslo, Lebanon declared its intention to join EITI in 2017. NRGI will to continue to provide technical support to the LPA through the process of EITI accession and implementation.
NRGI provides support through grants and through capacity building activities to local organizations in Lebanon. We are also supporting media work through a grant to Maharat, a media development organization, to monitor coverage of the sector, and to provide the necessary support to media outlets in need of capacity building.
In addition, NRGI supports organizations that work on parliamentary capacity building in Lebanon. We collaborate with organizations such as the Westminster Foundation for Democracy, which supports the parliament on oil and gas matters.
What are the major governance challenges (and opportunities) facing Lebanon’s oil and gas sector?
As I mentioned, Lebanon is politically unstable. It has weak institutions and scores very low in Transparency International’s Corruption Perceptions Index 2017. Parliament lacks the necessary capacities to pass legislation that would enable a trustworthy management of the sector. The public is wary of missteps lawmakers could make in resulting legislation. However, the Ministry of Energy and Water adopted a transparent approach along the bidding process, regularly updating the public. The government ultimately published the contracts. These are positive moves that should be encouraged.
Transparency is not enough if there is no vision or strategy or public consultation for the use of natural resource revenues for sustainable development. These are the main issues now. LCEI is aware and pushing to start a discussion about the energy vision and strategy and to pass laws ensuring public consultation in this sector.
NRGI and its local partners pushed for contract disclosure and that has now come about. Now it’s LCEI’s job to get familiarized with these contracts, set a monitoring plan and hold the government accountable. Also, LCEI must make the contract information understandable and disseminate it to the public.
How will NRGI’s membership in LCEI and future activities in country be geared toward supporting civil society and improving transparency?
In addition to our support to Lebanese media through our grant to Maharat, we are producing a report on the first licensing round that LCEI can use to inform its demands for improvement in the next licensing process.
Hanen Keskes is a MENA regional associate with the Natural Resource Governance Institute (NRGI).