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A dream turns to shame

Corruption is already making its way into the oil and gas sector

by Yasser Akkaoui

This month’s oil and gas special report was painful to write. What started as an exciting research project on what promises to be the industry that could break the vicious cycle of corruption and cronyism ended up being a reality check that thrusts the truth in our face again. The oil and gas industry won’t be governed any differently from any other public institution in Lebanon.

The level of murkiness that this magazine’s top investigative journalists witnessed while trying to gain access to accurate information confirmed our suspicions that the system in place was designed to accommodate our politicians’ revolting dishonesty. Corruption should not make its way into the oil and gas sector, but sadly, we don’t see how the system in place will promote transparency and accountability for the people’s benefit.

Similar to the Gulf leaders who became intoxicated on oil and gas fumes — leaving their peoples underdeveloped, unemployed and uncompetitive — our own princes, dictators and thieves will not act better. Any riches that might emanate from our untapped natural resources will go directly into their pockets instead of being invested in Lebanon’s entrepreneurship and human capital.

To combat this, the public must know the terms of oil and gas contracts before they are signed. When consortia of oil and gas companies finally begin operations here, ideally, why not make them list on the Beirut Stock Exchange and float at least 60 percent of their shares? The public is a partner in this new enterprise and should be treated as such. Forcing companies to list would also give the bourse a much needed boost. Perhaps most importantly, it would force the consortia to be up front about their commitment to best practices financially, environmentally, socially and in terms of governance.

We should also begin planning how to use physical gas deliveries — potentially part of the state’s royalty payments — to benefit local industry. After the Civil War, and particularly between 2000 and 2010, Lebanese industry began diversifying and increasing output. Four years ago, industry was starting to compete in the high quality products clusters. We were beginning to look more like Europe than Africa. Since 2011, we’re trending down again, both in terms of production numbers and product class, mainly due to the price and availability of electricity. If we don’t plan how to use oil and gas to benefit local industry, we’ll be throwing away a golden opportunity. 

For now, the view is dim. Our fears that mismanagement will rule the nascent oil and gas industry are repeatedly being confirmed. At least we have local wines, arak and a growing range of beers to help us drown our sorrows and hope for a better day.

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Yasser Akkaoui

Yasser Akkaoui is Executive's editor-in-chief.

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